Affirmative Action Essays (1461 words) - Social Inequality, Politics

Affirmative Action Affirmative Action Treating people differently because of the color of their skin used to be called discrimination, but today it's called affirmative action (Amselle 177). Affirmative action today, is considered to be one of the most controversial dilemma facing our equal status of individual rights. As we all know, affirmative action was implemented with the idea and hope that America would finally become truly equal. So far, it has lasted for thirty years and had not solved any of our current problems concerning equal rights ? it made things worse. It was created with the intention of using reverse discrimination to solve the problem of discrimination. In that, minority groups are being chosen over the qualifications of other workers. This intention creates a mainstream of problems. Some find it very unfair in using its practices, some find it very helpful. The portion of the group that stands with affirmative action, are usually in a situation in which they actually benefited from it. They have their reasons as to why they support the action. Based on the general public as to why they acknowledge affirmative action is usually based of the fact that it establishes a situation where equal opportunity is distributed among minorities for jobs. Prior to affirmative action ? city, state, and government jobs were almost completely closed off to minorities and women. In our present day, minorities and women have gained a tremendous increase in the application of jobs in those workplaces. Unlike the days before affirmative action, where job opportunity was mostly given to the Americans, now jobs are being given to minorities and women due to the quota system. Suppose that a American male and a minority (Hispanic, Afro-American, woman, etc.) are applying for the same job, the American male is much more qualified than the minority, there! fore, logically, the American should be hired. Due to the quota system, the company, in order to meet that quota, must hire the minority. Which is for the better, because, in that sense, were are slowly but surely making some advancements in solving the problem of racial inequality in America's workplace. Affirmative action is also very influential in the educational system. Minority students who before never had a chance in being accepted into a decent college, are now being accepted. They are given the chance to prove that, with the help of affirmative action, they could, in turn, get more education and end up with a decent job after graduating. All hopes are to end racism in school campuses, to have diversity between students. The constitution says that we the people of the United States of America are all created equal. Therefore, since that we are all equal, shouldn't we all have the same opportunity as everyone else. Equal opportunity is achieved when people of lower standards in life are given chances to succeed in life. To start to achieve a better life, one must have proper education, because education is the key to our future. Therefore, though education, minorities must be given the chance to get a good start at securing their future. Critics of affirmative action argue that this quota is unfair. White males are being forced to pay a price that their ancestors have done wrong in the past. Knowingly that it was a long time ago, and that now, it is a dawn of a new era. White males should not be given this burden of something that their ancestors have done. While the minorities enjoy the benefits such as jobs and education. Especially, to give favor to males or to females, to whites, to blacks or to persons of any color because of their sex or color is morally wrong because doing so is intrinsically unfair. Color, nationality, sex are not attributes that entitle anyone to more (or less) of the good thing of life, or to any special favor (or disfavor). When in the past whites or males did receive such preference that was deeply wrong; it is no less wrong when the colors or sexes are reversed. (Cohen 183) In the workplace, critics argue that because of affirmative action, now they are being treated unequally. Jobs in which they are more likely to succeed in

germ line gene therapy essays

germ line gene therapy essays Whether it is referred to by its scientific term "syngamy" or by the general term "conception", the moment a sperm cell unites with an egg cell stirs, both in the scientist and the layperson, much awe and reverence. It is the point at which a new and unique genome is created. To some it is the instant a new person comes into existence. Such a union has been repeated for billions of years since its advent in the first, simple organisms. It is a means by which evolution can exert its influence. When the genetic material of two individuals combine in sexual reproduction, any variations between the two inherited sets of genes may result in offspring that are more or less suited to its environment. Human beings have come to a point in this process where we can now, to an extent, shape the environment to suit our needs. The evolution of intelligence in our specie is the characteristic that has had the most profound impact on our planet and on us. This intelligence, among other things, allows us to understand and combat some genetic diseases. Inventions such as spectacles to correct our vision or drugs that fight heart disease and cancer have extended and improved the lives of individuals who, in a more Darwinian world, would have otherwise been eliminated by natural selection. Cheating this process, however, has allowed a multitude of genetic diseases such as Tay Sachs and hemophilia to propagate in our gene pool. But researchers are taking the field of medicine to a new frontier that promises to eliminate genetic diseases. New technology is being developed that will allow scientists to alter or replace defective genes in germ-line cells (egg and sperm cells). In a literal sense it will allow us to control the evolution of our specie as these alterations may be passed on from generation t o generation. The implications are profound for the individual and for society. Above it all the specter of eugenics, the process of se...

Read story and answer question Case Study Example | Topics and Well Written Essays - 250 words

Read story and answer question - Case Study Example She appears to be irritated by the way some ignorant people try to trace her roots, not to the country or culture, but to the person in the family who was originally fair complexioned. The stylistic devices used in the essay are irony and conflict to deepen the meaning. â€Å"We mixed-raced people know what you really mean. You dont want to know where we were born or where we grew up. You dont want to know what kinds of regimes we lived under or what languages we speak. You want to know who in our family isnt white.†What might have been an inquisitive person’s innocuous question aimed at knowing the person better is taken as an offense by the author. â€Å"Yet because my skin isnt white, some people think its entirely acceptable to hound me about my so-called identity. People who dont know me, dont want to know me, who will never see me again. People who just need to know so that they know. And if youre one of these people, Ill tell you that Im from Vanya.† This sentence clearly reflects the conflict in the mind of the author. The author should have the necessary confidence to brush these remarks casually and go on with life, rather than allow ing such remarks or incidents to hurt

Chronic Kidney Disease Term Paper Example | Topics and Well Written Essays - 2500 words

Chronic Kidney Disease - Term Paper Example For these reasons, chronic kidney disease is considered a disease because it affects the health of an individual. Chronic kidney disease is a chief health concern problem because the prevalence of the disease grows at a yearly rate of 8%, and expends 2% of the worldwide health spending (Là ³pez-Novoa, Martà ­nez-Salgado, Rodrà ­guez-Peà ±a, & Là ³pez-Hernà ¡ndez, 2010). In the United States, about 13% of the populace suffers from this condition. As the prevalence of chronic renal disease rises, health care providers are tasked with the management of the multifaceted medical complications that patients with CKD face. This paper takes a detailed look at the pathophysiology, causes, symptoms and management of chronic kidney disease. The central role of the kidney is to sift nitrogenous wastes from ingested food and metabolic activities, as well as surplus fluids from the blood. The kidneys, therefore, play an important role in fluid and electrolyte balance. The nephron is the elementary working component of the kidney. A normal kidney has about one million nephrons. Each nephron possesses a clump of glomerular capillaries called the glomerulus where the filtration of blood takes place. The nephron also has a lengthy tubule where the filtered fluid is transformed into urine as it is transported into the pelvis (Guyton & Hall, 2006). The renal arteries branch into interlobar arteries and two other arteries and finally into afferent arterioles that supply the glomerulus in the nephron through the glomerular arterioles, which join together to form the efferent arterioles that exit the glomerulus. Urine, which carries the waste products filtered by the kidney is produced in three main phases namely ultrafiltration, reabsorption and secretion. The kidneys also excrete strange chemicals, drug substances and metabolites produced from hormones. Such substances include urea from the metabolism of amino acids and creatinine

Assignment Essay Example | Topics and Well Written Essays - 1250 words - 3

Assignment - Essay Example Still, the Police may be able to pin both of the individuals for drug trafficking and possession if they have seen marijuana in plain sight and if it is not the case then, the seizure and search took place in the given scenario is not admissible to the court of law. The couple can only be prosecuted for violating customs check. Q.2 The need to practice due diligence is applicable in this case because Tangelo was well aware of the dangers that were associated with watching a baseball game (Jennings pp.300). Additionally, she had read the statement behind the tickets which relieved the organization from any kind of liability for an incident that may take place during the games and that formed a tort. Furthermore, the featured organization had taken preventive measure in order to contain the ball and the punching of a hole in the net can be identified as a mere coincident. The whole incident can be presented as a consequence of a decision to go and watch a game while; the injured party was having knowledge of the risks and therefore, cannot claim successfully for damages in the court of law. The court might decide to apply ordinary damages in this regard. Q.3 The purchaser has already conditionalized its performance with a favorable outcome of an event and therefore, the condition of obtaining a loan from the bank was a valid part of the contract that was signed by both parties (Jennings pp.35). The claim of specific performance is invalid because the purchasing party stated a condition that has to be fulfilled before a contract can be practiced. The seller however, can claim damages and specific performance against the involved bank whose manager did not supply the seller with a loan on a personal conflict. If the bank’s incapacity to loan the seller is legally justified then the charges will be dropped. Q.4 The environmental laws are growingly applied in order to preserve natural habitat of earth and therefore, the companies are strongly being recommended to take stronger measures towards returning to the environment what they have taken from it previously. Additionally, the companies that have become sensitive in the direction of preserving natural environment over the past few years are now adding environmental costs while, performing strategic decision making (Esty pp. 25). The governments on the hand are applying environmental taxation on firms that are known to pollute the environment in abundance. Finally, the companies like Herman Miller, FedEx and McDonalds have been cited in the book with the title of â€Å"Green to Gold† for their exceptional level of strategic dedication for environmental safety. Q.5 The companies are liable for the safety of their employees under the US labor law. The excuse that Nick was operating the crane in an inappropriate way means that he is either incapable or poorly trained. In both of the cases organization is at fault because either they are making an untrained or poorly trained person to run the crane. The company should have known about Nick’s poor ability to manage crane. Based on the above argument, Nick is fully capable and eligible to receive damages and treatment expenses from his employer. Q.6 The pay structure is determined on the basis of one’

Impacts on Agency Cost Theory

Impacts on Agency Cost Theory The main purpose of this research is to investigate how the determinants of the capital structure (leverage) and the dividend payout policy impact the agency cost theory. Literature review part picked up the relevant material related to agency theory, leverage, and dividends payout policy. The literature review section goes through the agency cost literature, and explores the financial policies; the capital structure (leverage), and the dividend payout policy and that these policies would influence the agency cost theory. 2.1 Agency theory Literature The notion of the agency theory is widely used in economics, finance, marketing, legal, and social sciences; Jensen and Meckling (1976) initiated and developed it. Capital structure (leverage) for the firms is determined by agency costs, i.e., costs related to conflict of interests between various groups including managers, which have claims on the firm’s resources (Harris and Raviv, 1991). Jensen and Meckling (1976) defined the agency relationship as â€Å"a contract under which one or more persons (the principal) engage another person (the agent), to perform some service on their behalf which involves delegating some decision making authority to the agent† pp.308. Assuming that both parties utility maximizes, the agents are not possible to act in the best interest of the principal. Furthermore, Jensen and Meckling (1976) contended that the principal can limit divergences from his interest by establishing appropriate incentives for the agent, and by incurring monitoring costs (pecuniary and non pecuniary), which are designed to limit the aberrant activities of the agent. Jensen and Meckling (1976) argued that the agency costs are unavoidable, since the agency costs are borne entirely by the owner. Jensen and Meckling (1976) contended that the owner is motivated to see these costs minimized. Authors who initiated and developed the agency theory have argued that if the owner manages a wholly owned firm, then he can make operating decisions that maximise his utility. The agency costs are generated if the owner manager sells equity claims on the firms, which are identical to his.  It also generated by the divergence between his interest and those of the outside shareholders, since he then bears only a fraction of the costs of any non-pecuniary benefits he takes out maximizing his own utility (Jensen and Meckling, 1976). Jensen and Meckling (1976) suggested two types of conflicts in the firm; First of all, the conflict between shareholders and managers arises because managers hold less than a hundred percent of the residual claim. Therefore, they do not capture the entire gain from their profit enhancement activities, but they do bear the entire cost of these activities. For example, managers can invest less effort in managing firm resources and may be able to transfer firm resources to their own, personal benefit, i.e., by consuming â€Å"perquisites† such as a fringe benefits. The manager bears the entire cost of refraining from these activities but captures only a fraction of the gain. As a result, managers over indulge in these interests relative to the level that would maximize the firm value. This inefficiency reduced the large fraction of the equity owned by the manager. Holding constant the manager’s absolute investment in the firm, increases in the fraction of the firm financed by debt increases the manager’s share of the equity and mitigates the loss from conflict between the managers and shareholders. Furthermore, as pointed out by Jensen (1986), since debt commits the firm to pay out cash, it reduces the amount of free cash flow available to managers to engage in these types of interests.  As a result, this reduction of the conflict between managers and shareholders will constitute the benefit of debt financing. Second, they also suggested that the conflict between debt holders and shareholders arises because the debt contract, gives shareholders an incentive to invest sub optimally. Especially when the debt contract provides that, if an investment yields large returns, well above the face value of the debt, shareholders capture most of the gain. However, if the investment fails, debt holders bear the consequences. Therefore, shareholders may benefit from investing in very risky projects, even if they are under valued; such investments result in an adverse in the value of debt. Lasfer (1995) argued that debt exacerbates the conflict between debt holders and shareholders. Shareholders will benefit from investments in risky projects at the expense of debt holders.  If the investment yields higher return than the face value of debt, shareholders capture most of the gain, however, if the investment fails, debt holders lose, given that. Therefore, shareholders protected by the limited liability. On the other hand, if the benefits captured by debt holders reduce the returns to shareholders, then an incentive to reject positive net present projects has created. Thus, the debt contract gives shareholders incentives to invest sub optimally. In addition, Myers (1977) argued that the firms with many growth opportunities should not be financed by debt, to reduce the negative net value projects.   Furthermore, some of arguments have been debated that the magnitude of the agency costs varies among firms. It will depend on the tastes of managers, the ease with which they can exercise their own preferences as opposed to value maximization in decision making, and the costs of monitoring and bonding activities. Therefore, the agency costs depend upon the cost of measuring the manager’s performance and evaluating it (Jensen and Meckling, 1976). (Jensen, 1986) either points out that when firms make their financing decision, they evaluate the advantages that may arise from the resolution of the conflicts between managers, shareholders and from long run tax shields.   In addition, Lasfer (1995) argues that debt finance creates a motivation for managers to work harder and make better investment decisions. On the other hand, debt works as a disciplining tool, because default allows creditors the option to force the firm into liquidation. Debt also generates information that can be used by investors to evaluate major operating decisions including liquidation (Harris and Raviv, 1990). Jensen (1986) debated that when using debt without retention of the proceeds of the issue, bonds the managers to meet their promise to pay future cash flows to the debt holders. Thus, debt can be an effective substitute for dividends. By issuing debt in exchange for stock, managers are bonding their promise to pay out future cash flows in a way that cannot be accomplished by simple dividend increases. Consequently, managers give recipients of the debt the right to take the firm to the bankruptcy court if they do not maintain their commitment to make the interest and principle payments. Thus, debt reduces the agency costs of free cash flow by reducing the cash flow available for spending at the discretion of managers. Jensen (1986) claimed that these control effects of debt are a potential determinant of capital structure. In practice, it is possible to reduce the owner manager non pecuniary benefits; by using these instruments external auditing, formal control systems, budget restrictions, and the establishment of incentive compensation systems serve to identify the manager’s interests more closely with those of the outside shareholders (Jensen and Meckling, 1976). Jensen (1986) suggested that leverage and dividend may act as a substitute mechanism to reduce the agency costs. Agency cost models predict that dividend payments can reduce the problems related to information asymmetry. Dividend payments might be consider also as a mechanism to reduce cash flow under management control, and help to mitigate the agency problems (Rozeff, 1982, and Easterbrook, 1984). Therefore, paying dividends may have a positive impact on the firms value. â€Å"Agency theory posits that the dividend mechanism provides an incentive for managers to reduce the costs related to the principal agent relationship, one way to reduce agency costs is to increase dividends† Baker and Powell (1999). They also claim that firm use the dividends use as a tool to monitor the management performance. Moreover, Easterbrook (1984) and Jensen (1986) argue that agency costs exist in firms because managers may not always want to maximize shareholder’s wealth due to the separation of ownership and control. Jensen (1986) addresses the free cash flow theory, in terms of this theory the conflict of interest between managers and stockholders is rooted in the presence of informational and self interest behavior. He defines the free cash flow as â€Å"cash flow in excess of that required to fund all projects that have positive net present value when discounted at the relevant cost of capital† (Jensen,1986). Within the context of the free cash flow hypothesis, firms prefer to increase their dividends and distribute the excess free cash flow in order to reduce agency costs. Consequently, markets react positively to this type of information. This theory is attractive because it is consistent with the evidence about investment and financing decisions (Jensen, 1986, Frankfurter and Wood, 2002). 2.2 Leverage Literature This section reviews the determinants of capital structure by different relevant literatures. Titman and Wessels (1988) study is considered to be one of the leading studies in the developed markets. They tried to extend the empirical work in capital structure theory by examining a much broader set of capital structure theories, and to analyze measures of short term, long term, and convertible debt. The data covers the US industrial companies from 1974 to 1982, and they used a factor analytic approach for estimating the impact of unobservable attributes on the choice of corporate debt ratios. As a result, the study confirms these factors, collateral values of assets, non-debt tax shields, growth, and uniqueness of the business, industry classification, firm size, and firm profitability. They also found that there is a negative relationship between debt levels and the uniqueness of the business. In addition, short term debt ratios have a negative relationship to firm size. However, they do not provide support for the effect on debt ratios arising from non debt tax shields, volatility, collateral value of assets, and growth. In Jordan, Al-Khouri and Hmedat (1992) aimed to find the effect of the earnings variability on capital structure of Jordanian corporations from the period from 1980 to 1988. They included 65 firms. The study used a multivariate regression approach with financial leverage as the dependent variable measured in three ways; first, long term debt over total assets, secondly, short term debt over total assets, and finally, short term debt plus long term debt over total assets. The standard deviation of the earnings variability and the size of the firm measured as independent variables. They concluded that the firm size is considered as a significant factor in determining the capital structure of the firm, and insignificant relationship between the earning variability and financial leverage of the firm. Furthermore, they suggest that the type of industry is not considered as a significant factor in determining the capital structure of the firm. Rajan and Zingales (1995) provided international evidence about the determinants of capital structure. They examined the capital structure in other countries related to factors similar to those that influence United States firms. The database contains 2583 companies in the G7 countries. They used regression analysis with the firm’s leverage (total debt divided by total debt plus total equity) as the dependent variable. Tangible assets, market to book ratio, firm size, and firm profitability used as independent variables. They found that in market bases firms with a lot of fixed assets are not highly levered, however, they supported that a positive relationship exists between tangible assets, and firms size, and capital structure (leverage). On the contrary, they confirmed that there is a negative relationship between leverage and the market to book ratio, and profitability. From the capital structure literature, Ozkan (2001) also investigated that the determinants of the target capital structure of firms and the role of the adjustment process in the UK using a sample of 390 firms. The multiple regression approach (panel data) was used to measure the debts by total debt to total assets, on the one hand. He also used in his model, non debt tax shield, firm size, liquidity, firm profitability, and firm growth as an independent variables. He confirmed that the profit, liquidity, non debt tax shield, and growth opportunities have a negative relationship to capital structure (leverage). Finally, he supported that there is a positive effect arising from size of firms on leverage. The study provided evidence that the UK firms have long term target leverage ratios and that they adjust quickly to their target ratios. The study by Booth et al. (2001) is considered as a one of the leading studies in the developing countries. It aimed to assess whether capital structure theory is applicable across developing countries with different institutional structures. The data include balance sheets and income statements for the largest companies in each selected country from the year 1980 to 1990. It included 10 developing countries: India, Pakistan, Thailand, Malaysia, Zimbabwe, Mexico, Brazil, Turkey, Jordan, and Korea. The study used multivariate regression analysis with dependent variables; total debt ratio, long term book debt ratio, and long term market to debt ratio. The independent variables are; average tax rate, tangibility, business risk, firm size, firm profitability, and market to book ratio. Booth et al. found that the more profitable the firm the lower the debt ratio, regardless how the debt ratio is defined. In addition, the higher the tangible assets mix, the higher is the long term debt ratio but the smaller is the total debt ratio. Finally, it concluded that debt ratios in developing countries seem to be affected in the same way by the same set of variables that are significant in developed countries. Voulgaris et al. (2004) investigated the determinants of capital structure for Greek manufacturing firms. The study used panel data of two random samples one for small and medium sized enterprises (SMEs) including 143 firms and another for large sized enterprises (LSEs) including 75 firms for the period from 1988 to 1996. It used a leverage model as a dependent variable (short run debt ratio, long run debt ratio, and total debt ratio). On the other hand, It used firm size, asset structure, profitability, growth rate, stock level, and receivables as independent variables. The study suggested that there are similarities and differences in the determinants of capital structure among the two samples. The similarities include that the firm size and growth opportunities positively related to leverage. While, they confirm that the profitability has a negative relationship to leverage. Moreover, they pointed out the differences that the inventory period, and account receivables collection period have been found as determinants of debt in SMEs but not in LSEs. Liquidity doest not affect LSEs leverage, but it affects the SMEs. Finally, they also suggested that there is a positive relationship between profit margins and short term debt ratio only for SMEs. Voulgaris et al. (2004) have debated this arguments as; ‘‘the attitude of banks toward small sized firms should be changed so they provide easier access to long-term debt financing’’. In addition, â€Å"enactment of rules that will allow transparency of operations in the Greek stock market and a healthier development of the newly established capital market for SMEs will assist Greek firms into achieving a stronger capital structure’’. 2.3 Dividends payout ratio literature Dividend payout ratios vary between firms and the dividend payout policy will impact the agency cost theory. Rozeff (1982) investigated in his study that the dividends policy will be rationalize by appealing the transaction cost and agency cost associated with external finance. Moreover, Rozeff (1982) had found evidences supporting how the agency costs influence the dividends payout ratio. He found that the firms have distributed lower dividend payout ratios when they have a higher revenue growth, because this growth leads to higher investment expenditures.  This evidence supports the view of the investment policy affect on the dividend policy; the reason for that influences is that would the external finance be costly. Conversely, he found that the firms have distributed higher dividends payouts when insiders hold a lower portion of the equity and (or) a greater numbers of shareholders own the outside equity. Rozeff (1982) pointed out that this evidence supports that the dividend payments are part of the firm’s optimum monitoring and that bonding package reduces the agency costs. Moreover, if the agency cost declines when the dividend payout does and if the transaction cost of external finance increases when the dividend payout is increased as well, then minimization of these costs will lead to a unique optimum for a given firm. In addition, Hansen, Kumar, and Shome [HKS], (1994) pointed out the relevance of the monitoring theory for explaining the dividends policy of regulated electric utilities. From an agency cost perspective, they emphasized their ideas that the dividends promote monitoring of what they call the shareholders regulator conflict. Therefore, it is a monitoring role of dividends. On the contrary, Easterbrook’s (1984) has noted that the dividends monitoring of the shareholders managers conflict. They also have observed that the utilities firms have a discipline of monitoring mechanism for controlling agency cost, depending on the relative cost effectiveness of those costs (Crutchly and Hensen, 1989). The regulator process will impact the conflict between the shareholders and mangers, by mitigate the managers’ power to appropriate shareholders’ wealth and consume perquisites (Hansen et al. 1994). On the other hand, they argued this issue by the cost-plus concept, regulators may set into motion of managerial incentive structure that potentially conflicts with shareholders interests, this concept solve the shareholders-regulators concept since the sources of the conflict lies in differences in the perceptions of what constitutes fair cost plus. Therefore, the regulation can control some of the agency cost while exacerbating others. In their study, they conduct also that the managers and shareholders of unregulated firms have a several mechanisms whether, internal or external, for controlling agency cost. In addition, they observed that the dividend policy to reduce the agency theory is not limited, depending on their findings they suggested that the cost of dividend payout policy might be below the costs paid by other types of firm. In fact the utilities company maintain high debt ratio that would maintain as well as equity agency costs. Aivazian et al. (2003b) compare the dividend policy behaviour of eight emerging markets with dividend policies in the US firms in the period from 1980 to 1990. The sample included firms from; Korea, Malaysia, Zimbabwe, India, Thailand, Turkey, Pakistan, and Jordan. They found that it is difficult to predict dividend changes for such emerging markets. This is because the quality of firms with reputations for cutting dividends is somehow similar to those who increase their dividends, than for the US control sample. In addition, current dividends are less sensitive to past dividends than for the US sample of firms. They also found that the Lintner model[1] does not work well for the sample of emerging markets. These results indicate that the institutional frameworks in these emerging markets make dividend policy a weak technique for signaling future earnings and reducing agency costs than for the US sample of firms. Furthermore, Omran and Pointon (2004) investigated the role of dividend policy in determining share prices, the determinants of payout ratios, and the factors that affect the stability of dividends for a sample of 94 Egyptian firms. They found that retentions are more important than dividends in firms with actively traded shares, but that accounting book value is more important than dividends and earnings for non-actively traded firms. However, when they combined both the actively traded and non-traded firms, they found that dividends are more important than earnings. In the determinants of payout ratios, they found that there is a negative relationship between the leverage ratio and market to book ratio, tangibility, and firm size on the one hand, to the payout ratios in actively traded firms. On the contrary, they also found that there is a positive relationship between the business risk, market to book and firm size (measured by total assets) to payout ratios in non-actively traded firms. Furthermore, for the whole sample, leverage has a positive relationship with payout ratios, while firm size (measured by market capitalization) is negatively related to payout ratios. Finally, the stepwise logistic regression analysis shows that decreasing dividends is associated with lack of liquidity and overall profitability. In addition, increasing dividends is associated with higher overall profitability. 2.4 Summary In this chapter the relevant literatures addressing the reviews of the agency cost theory related to the financial policies. It also gives a theoretical background on how the conflicts of interests arise between the agents (managers) and the principal (shareholders). The second and third sections present the determinants of leverage and dividend payout policy. The following chapter will go through the description of data, and data methodology was employed for this dissertation. 3. Methodology, Research Design and Data Description The aim of the current study is to investigate firstly, the empirical evidence of the determinants of leverage and dividend policy under the agency theory concept for the period 2002-2007. The majority of the previous studies in the field of capital structure have made in the context of developed countries such as USA and UK. It is important to investigate the main determinants of leverage and dividend policy in developing countries where, capital markets, are less developed, less competitive and suffering from the lack of compatible regulations and sufficient supervision This chapter will explain the research methodology of this study. This chapter also identifies the sample of the study. Moreover, it presents an illustration of the econometric techniques that have been employed. In addition, this chapter gives a brief explanation of the specification tests used in the study to identify which technique is the best for the data set. This chapter structured as follows; Section (3.1) presents data description.  Section (3.2) presents the sample of the study. Section (3.3) discusses the econometric techniques employed in the study. Finally, Section (3.4) provides a brief summary. 3.1 Data Description The data used in the study are secondary data for companies listed at Amman Stock Exchange (ASE) for the period of 2002-2007. The data was extracted from the firm’s annual reports, and from Amman Stock Exchange’s publications (The Yearly Companies Guide, and Amman Stock Exchange Monthly Statistical Bulletins). Data is readily available in the form of CD and on the website of the Amman Stock Exchange. The reason for the study period selection was to minimize the missing observations for the sample companies. Moreover, a different reporting system has been used since 2000. The application of the new reporting system was the result of the transparency act which was launched in 1999, and forced all companies listed in Amman Stock Exchange to disclose their financial information and publish their annual reports according to the International Financial Reporting Standards. In other words, this data series for the period from 2002-2007 was chosen in terms of consistency and comparability purposes. 3.2 Sample of the study The sample of the study consists of the Jordanian Manufacturing companies listed on the Amman Stock Exchange for the period of 2002-2007. The total number of the companies listed in ASE at the end of year 2007 was 215. Officially, these companies are divided into four main economic sectors; Banks sector, Insurance sector, Services sector and finally Industrial sector. Moreover, this study is concerned only with Jordanian manufacturing companies that their stocks are traded in the organized market. It is important to note that the capital structure of financial firms has special characteristic when compared to the capital structure of non financial firms, they also have special tax treatment (Lester, 1995). On the other hand, the financial firms have a higher leverage rate, which may tend to make the analysis results biased. Moreover, financial firms their leverage is affected by investor insurance schemes (Rajan and Zingals, 1995). For these reasons, the potential sample of the study consists of non financial (Manufacturing) companies that are still listed in Amman Stock Exchange. The total number of industrial companies listed in ASE at the end of year 2007 was 88 companies, which are 40.93% of the total number of the companies listed in that market. The study conducts the following criteria in selecting the sample upon the Jordanian manufacturing companies by excluding all the firms that was incorporated after year 2002, and all the firms that have merged or acquired during this period, further, the firms have liquidated or delisted by the Amman Stock Exchange, and finally, the study have also excluded the firms that have information missing for that period. The application for those criteria has resulted in 52 samples of manufacturing companies. The data for the variables that are included in the study models is tested using three different econometric techniques which will be discuss briefly in the next sections. 3.3 Econometrics techniques Hairs et al. (1998) argued that the application of econometrics technique depends on the nature of data employed in the study, and to what extent it would be realised to the research objectives. In order to find a best and adequate data model, the current study employs pooled data technique and panel data analysis which is usually estimated by either fixed effect technique or random effects technique.  The following sections provide a brief discussion on the econometrics techniques that the current study uses to estimate the empirical models. 3.3.1 Pooled Ordinary Least Square (OLS) technique All the models used in the study have been tested by the pooled data analysis technique. The pooled data is the data that contains pooling of time series and cross-sectional observations (combination of time series and cross-section data) (Gujarati, 2003). The pooled data analysis has many advantages over the pure time series or pure cross sectional data. It generates more informative data, more variability, less collinearity among variables, more degrees of freedom, and more efficiency (Gujarati, 2003). The underlying assumption behind the pooled analysis is that, the intercept value and the coefficients of all the explanatory variables are the same for all the firms, as well as they are constant over time (no specific time or individual aspects). It also assumes that the error term captures the differences between the firms (across-sectional units) over the time. However, (Gujarati, 2003) has pointed out that these assumptions are highly restrictive. He argues that although of it is simplicity and advantages, the pooled regression may distort the true picture of the relationship between the dependent and independent variables across the firms. Pooled model will be simply estimated by Ordinary Least Square (OLS). However, OLS will be appropriate if no individual (firm) or time specific effects exist. If they exist, the unobserved effects of unobserved individual and time specific factors on dependent variable can be accommodated by using one of the panel data techniques.   According to (Gujarati, 2003) panel data is a special form of pooled data in which the same cross-sectional unit is surveyed over time. It helps researchers to substantially minimize the problems that arise when there is an omitted variables problems such as time and individual-specific variables and to provide robust parameter estimates than time series and (or) cross sectional data. All the empirical models that have been tested by using pooled data analysis and tested again on the basis of panel data analysis techniques (Fixed Effects and Random Effects).   3.3.2 The fixed effects model (FEM) Fixed effects technique allows control for unobserved heterogeneity which describes individual specific effects not captured by observed variables. According to Gujarati (2003) the fixed effect model takes into account the specific effect of each firm â€Å"the individuality† by allowing the intercept vary across individuals (firms), but each individual’s intercept does not vary over time. However, it still assumes that the slope coefficients are constant across individuals or over time. Two methods used to control for the unobserved fixed effects within the fixed effects model; the first differences and Least Square Dummy variables (LSDV) methods.  For the purposes of the current study, (LSDV) was used where; two sets of dummy variables (industry, and year dummy variables). The additional dummy variables control for variables that are constant across firms but change over time. Therefore, the combine time and individual (firm) fixed effects model eliminates the omitted variables bias arising both from unobserved factors that are constant over time and unobserved factors that are constant across firms. However, fixed effects model consumes the degrees of freedom, if estimated by the Least Square Dummy Variable (LSDV) method and, too many dummy variables are introduced (Gujarati, 2003). Furthermore, with too many variables used as regressors in the models, there is the possibility of multicollinearity. It is worth noting that OLS technique used in estimating fixed effects model. 3.3.3 The Random Effects Model (REM) By contrast, fixed effects model, the unobserved effects in random effects model is captured by the error term (ÃŽ µit) consisting of an individual specific one (ui) and an overall component (vit) which is the combined time series and cross-section error. Moreover, it treats the intercept coefficient as a random variable with a mean value (ÃŽ ±0) of all cross-sectional (firms) intercepts and the error component represents the random deviation of individual intercept from this mean value (Gujarati, 2003). Consequently, the individual differences in the intercept values of each firm are reflected in the error term (ui). On the other hand, the Generalized Least Square (GLS) used in estimating random affects model.  This is because the GLS technique takes into account the different correlation structure of the error term in the Random Effect Model (REM) (Gujarati, 2003). 3.3.4 Statistical specification tests The study uses three specification tests to identify which empirical method is the best. These tests are used for testing the fixed effect model versus the pooled model (F-statistics), the random effect model versus pooled model (Lagrange Multiplier test) (LM), and the fixed effect model versus the random effect model (Hausman test). The following sub-sections offer brief disc Impacts on Agency Cost Theory Impacts on Agency Cost Theory The main purpose of this research is to investigate how the determinants of the capital structure (leverage) and the dividend payout policy impact the agency cost theory. Literature review part picked up the relevant material related to agency theory, leverage, and dividends payout policy. The literature review section goes through the agency cost literature, and explores the financial policies; the capital structure (leverage), and the dividend payout policy and that these policies would influence the agency cost theory. 2.1 Agency theory Literature The notion of the agency theory is widely used in economics, finance, marketing, legal, and social sciences; Jensen and Meckling (1976) initiated and developed it. Capital structure (leverage) for the firms is determined by agency costs, i.e., costs related to conflict of interests between various groups including managers, which have claims on the firm’s resources (Harris and Raviv, 1991). Jensen and Meckling (1976) defined the agency relationship as â€Å"a contract under which one or more persons (the principal) engage another person (the agent), to perform some service on their behalf which involves delegating some decision making authority to the agent† pp.308. Assuming that both parties utility maximizes, the agents are not possible to act in the best interest of the principal. Furthermore, Jensen and Meckling (1976) contended that the principal can limit divergences from his interest by establishing appropriate incentives for the agent, and by incurring monitoring costs (pecuniary and non pecuniary), which are designed to limit the aberrant activities of the agent. Jensen and Meckling (1976) argued that the agency costs are unavoidable, since the agency costs are borne entirely by the owner. Jensen and Meckling (1976) contended that the owner is motivated to see these costs minimized. Authors who initiated and developed the agency theory have argued that if the owner manages a wholly owned firm, then he can make operating decisions that maximise his utility. The agency costs are generated if the owner manager sells equity claims on the firms, which are identical to his.  It also generated by the divergence between his interest and those of the outside shareholders, since he then bears only a fraction of the costs of any non-pecuniary benefits he takes out maximizing his own utility (Jensen and Meckling, 1976). Jensen and Meckling (1976) suggested two types of conflicts in the firm; First of all, the conflict between shareholders and managers arises because managers hold less than a hundred percent of the residual claim. Therefore, they do not capture the entire gain from their profit enhancement activities, but they do bear the entire cost of these activities. For example, managers can invest less effort in managing firm resources and may be able to transfer firm resources to their own, personal benefit, i.e., by consuming â€Å"perquisites† such as a fringe benefits. The manager bears the entire cost of refraining from these activities but captures only a fraction of the gain. As a result, managers over indulge in these interests relative to the level that would maximize the firm value. This inefficiency reduced the large fraction of the equity owned by the manager. Holding constant the manager’s absolute investment in the firm, increases in the fraction of the firm financed by debt increases the manager’s share of the equity and mitigates the loss from conflict between the managers and shareholders. Furthermore, as pointed out by Jensen (1986), since debt commits the firm to pay out cash, it reduces the amount of free cash flow available to managers to engage in these types of interests.  As a result, this reduction of the conflict between managers and shareholders will constitute the benefit of debt financing. Second, they also suggested that the conflict between debt holders and shareholders arises because the debt contract, gives shareholders an incentive to invest sub optimally. Especially when the debt contract provides that, if an investment yields large returns, well above the face value of the debt, shareholders capture most of the gain. However, if the investment fails, debt holders bear the consequences. Therefore, shareholders may benefit from investing in very risky projects, even if they are under valued; such investments result in an adverse in the value of debt. Lasfer (1995) argued that debt exacerbates the conflict between debt holders and shareholders. Shareholders will benefit from investments in risky projects at the expense of debt holders.  If the investment yields higher return than the face value of debt, shareholders capture most of the gain, however, if the investment fails, debt holders lose, given that. Therefore, shareholders protected by the limited liability. On the other hand, if the benefits captured by debt holders reduce the returns to shareholders, then an incentive to reject positive net present projects has created. Thus, the debt contract gives shareholders incentives to invest sub optimally. In addition, Myers (1977) argued that the firms with many growth opportunities should not be financed by debt, to reduce the negative net value projects.   Furthermore, some of arguments have been debated that the magnitude of the agency costs varies among firms. It will depend on the tastes of managers, the ease with which they can exercise their own preferences as opposed to value maximization in decision making, and the costs of monitoring and bonding activities. Therefore, the agency costs depend upon the cost of measuring the manager’s performance and evaluating it (Jensen and Meckling, 1976). (Jensen, 1986) either points out that when firms make their financing decision, they evaluate the advantages that may arise from the resolution of the conflicts between managers, shareholders and from long run tax shields.   In addition, Lasfer (1995) argues that debt finance creates a motivation for managers to work harder and make better investment decisions. On the other hand, debt works as a disciplining tool, because default allows creditors the option to force the firm into liquidation. Debt also generates information that can be used by investors to evaluate major operating decisions including liquidation (Harris and Raviv, 1990). Jensen (1986) debated that when using debt without retention of the proceeds of the issue, bonds the managers to meet their promise to pay future cash flows to the debt holders. Thus, debt can be an effective substitute for dividends. By issuing debt in exchange for stock, managers are bonding their promise to pay out future cash flows in a way that cannot be accomplished by simple dividend increases. Consequently, managers give recipients of the debt the right to take the firm to the bankruptcy court if they do not maintain their commitment to make the interest and principle payments. Thus, debt reduces the agency costs of free cash flow by reducing the cash flow available for spending at the discretion of managers. Jensen (1986) claimed that these control effects of debt are a potential determinant of capital structure. In practice, it is possible to reduce the owner manager non pecuniary benefits; by using these instruments external auditing, formal control systems, budget restrictions, and the establishment of incentive compensation systems serve to identify the manager’s interests more closely with those of the outside shareholders (Jensen and Meckling, 1976). Jensen (1986) suggested that leverage and dividend may act as a substitute mechanism to reduce the agency costs. Agency cost models predict that dividend payments can reduce the problems related to information asymmetry. Dividend payments might be consider also as a mechanism to reduce cash flow under management control, and help to mitigate the agency problems (Rozeff, 1982, and Easterbrook, 1984). Therefore, paying dividends may have a positive impact on the firms value. â€Å"Agency theory posits that the dividend mechanism provides an incentive for managers to reduce the costs related to the principal agent relationship, one way to reduce agency costs is to increase dividends† Baker and Powell (1999). They also claim that firm use the dividends use as a tool to monitor the management performance. Moreover, Easterbrook (1984) and Jensen (1986) argue that agency costs exist in firms because managers may not always want to maximize shareholder’s wealth due to the separation of ownership and control. Jensen (1986) addresses the free cash flow theory, in terms of this theory the conflict of interest between managers and stockholders is rooted in the presence of informational and self interest behavior. He defines the free cash flow as â€Å"cash flow in excess of that required to fund all projects that have positive net present value when discounted at the relevant cost of capital† (Jensen,1986). Within the context of the free cash flow hypothesis, firms prefer to increase their dividends and distribute the excess free cash flow in order to reduce agency costs. Consequently, markets react positively to this type of information. This theory is attractive because it is consistent with the evidence about investment and financing decisions (Jensen, 1986, Frankfurter and Wood, 2002). 2.2 Leverage Literature This section reviews the determinants of capital structure by different relevant literatures. Titman and Wessels (1988) study is considered to be one of the leading studies in the developed markets. They tried to extend the empirical work in capital structure theory by examining a much broader set of capital structure theories, and to analyze measures of short term, long term, and convertible debt. The data covers the US industrial companies from 1974 to 1982, and they used a factor analytic approach for estimating the impact of unobservable attributes on the choice of corporate debt ratios. As a result, the study confirms these factors, collateral values of assets, non-debt tax shields, growth, and uniqueness of the business, industry classification, firm size, and firm profitability. They also found that there is a negative relationship between debt levels and the uniqueness of the business. In addition, short term debt ratios have a negative relationship to firm size. However, they do not provide support for the effect on debt ratios arising from non debt tax shields, volatility, collateral value of assets, and growth. In Jordan, Al-Khouri and Hmedat (1992) aimed to find the effect of the earnings variability on capital structure of Jordanian corporations from the period from 1980 to 1988. They included 65 firms. The study used a multivariate regression approach with financial leverage as the dependent variable measured in three ways; first, long term debt over total assets, secondly, short term debt over total assets, and finally, short term debt plus long term debt over total assets. The standard deviation of the earnings variability and the size of the firm measured as independent variables. They concluded that the firm size is considered as a significant factor in determining the capital structure of the firm, and insignificant relationship between the earning variability and financial leverage of the firm. Furthermore, they suggest that the type of industry is not considered as a significant factor in determining the capital structure of the firm. Rajan and Zingales (1995) provided international evidence about the determinants of capital structure. They examined the capital structure in other countries related to factors similar to those that influence United States firms. The database contains 2583 companies in the G7 countries. They used regression analysis with the firm’s leverage (total debt divided by total debt plus total equity) as the dependent variable. Tangible assets, market to book ratio, firm size, and firm profitability used as independent variables. They found that in market bases firms with a lot of fixed assets are not highly levered, however, they supported that a positive relationship exists between tangible assets, and firms size, and capital structure (leverage). On the contrary, they confirmed that there is a negative relationship between leverage and the market to book ratio, and profitability. From the capital structure literature, Ozkan (2001) also investigated that the determinants of the target capital structure of firms and the role of the adjustment process in the UK using a sample of 390 firms. The multiple regression approach (panel data) was used to measure the debts by total debt to total assets, on the one hand. He also used in his model, non debt tax shield, firm size, liquidity, firm profitability, and firm growth as an independent variables. He confirmed that the profit, liquidity, non debt tax shield, and growth opportunities have a negative relationship to capital structure (leverage). Finally, he supported that there is a positive effect arising from size of firms on leverage. The study provided evidence that the UK firms have long term target leverage ratios and that they adjust quickly to their target ratios. The study by Booth et al. (2001) is considered as a one of the leading studies in the developing countries. It aimed to assess whether capital structure theory is applicable across developing countries with different institutional structures. The data include balance sheets and income statements for the largest companies in each selected country from the year 1980 to 1990. It included 10 developing countries: India, Pakistan, Thailand, Malaysia, Zimbabwe, Mexico, Brazil, Turkey, Jordan, and Korea. The study used multivariate regression analysis with dependent variables; total debt ratio, long term book debt ratio, and long term market to debt ratio. The independent variables are; average tax rate, tangibility, business risk, firm size, firm profitability, and market to book ratio. Booth et al. found that the more profitable the firm the lower the debt ratio, regardless how the debt ratio is defined. In addition, the higher the tangible assets mix, the higher is the long term debt ratio but the smaller is the total debt ratio. Finally, it concluded that debt ratios in developing countries seem to be affected in the same way by the same set of variables that are significant in developed countries. Voulgaris et al. (2004) investigated the determinants of capital structure for Greek manufacturing firms. The study used panel data of two random samples one for small and medium sized enterprises (SMEs) including 143 firms and another for large sized enterprises (LSEs) including 75 firms for the period from 1988 to 1996. It used a leverage model as a dependent variable (short run debt ratio, long run debt ratio, and total debt ratio). On the other hand, It used firm size, asset structure, profitability, growth rate, stock level, and receivables as independent variables. The study suggested that there are similarities and differences in the determinants of capital structure among the two samples. The similarities include that the firm size and growth opportunities positively related to leverage. While, they confirm that the profitability has a negative relationship to leverage. Moreover, they pointed out the differences that the inventory period, and account receivables collection period have been found as determinants of debt in SMEs but not in LSEs. Liquidity doest not affect LSEs leverage, but it affects the SMEs. Finally, they also suggested that there is a positive relationship between profit margins and short term debt ratio only for SMEs. Voulgaris et al. (2004) have debated this arguments as; ‘‘the attitude of banks toward small sized firms should be changed so they provide easier access to long-term debt financing’’. In addition, â€Å"enactment of rules that will allow transparency of operations in the Greek stock market and a healthier development of the newly established capital market for SMEs will assist Greek firms into achieving a stronger capital structure’’. 2.3 Dividends payout ratio literature Dividend payout ratios vary between firms and the dividend payout policy will impact the agency cost theory. Rozeff (1982) investigated in his study that the dividends policy will be rationalize by appealing the transaction cost and agency cost associated with external finance. Moreover, Rozeff (1982) had found evidences supporting how the agency costs influence the dividends payout ratio. He found that the firms have distributed lower dividend payout ratios when they have a higher revenue growth, because this growth leads to higher investment expenditures.  This evidence supports the view of the investment policy affect on the dividend policy; the reason for that influences is that would the external finance be costly. Conversely, he found that the firms have distributed higher dividends payouts when insiders hold a lower portion of the equity and (or) a greater numbers of shareholders own the outside equity. Rozeff (1982) pointed out that this evidence supports that the dividend payments are part of the firm’s optimum monitoring and that bonding package reduces the agency costs. Moreover, if the agency cost declines when the dividend payout does and if the transaction cost of external finance increases when the dividend payout is increased as well, then minimization of these costs will lead to a unique optimum for a given firm. In addition, Hansen, Kumar, and Shome [HKS], (1994) pointed out the relevance of the monitoring theory for explaining the dividends policy of regulated electric utilities. From an agency cost perspective, they emphasized their ideas that the dividends promote monitoring of what they call the shareholders regulator conflict. Therefore, it is a monitoring role of dividends. On the contrary, Easterbrook’s (1984) has noted that the dividends monitoring of the shareholders managers conflict. They also have observed that the utilities firms have a discipline of monitoring mechanism for controlling agency cost, depending on the relative cost effectiveness of those costs (Crutchly and Hensen, 1989). The regulator process will impact the conflict between the shareholders and mangers, by mitigate the managers’ power to appropriate shareholders’ wealth and consume perquisites (Hansen et al. 1994). On the other hand, they argued this issue by the cost-plus concept, regulators may set into motion of managerial incentive structure that potentially conflicts with shareholders interests, this concept solve the shareholders-regulators concept since the sources of the conflict lies in differences in the perceptions of what constitutes fair cost plus. Therefore, the regulation can control some of the agency cost while exacerbating others. In their study, they conduct also that the managers and shareholders of unregulated firms have a several mechanisms whether, internal or external, for controlling agency cost. In addition, they observed that the dividend policy to reduce the agency theory is not limited, depending on their findings they suggested that the cost of dividend payout policy might be below the costs paid by other types of firm. In fact the utilities company maintain high debt ratio that would maintain as well as equity agency costs. Aivazian et al. (2003b) compare the dividend policy behaviour of eight emerging markets with dividend policies in the US firms in the period from 1980 to 1990. The sample included firms from; Korea, Malaysia, Zimbabwe, India, Thailand, Turkey, Pakistan, and Jordan. They found that it is difficult to predict dividend changes for such emerging markets. This is because the quality of firms with reputations for cutting dividends is somehow similar to those who increase their dividends, than for the US control sample. In addition, current dividends are less sensitive to past dividends than for the US sample of firms. They also found that the Lintner model[1] does not work well for the sample of emerging markets. These results indicate that the institutional frameworks in these emerging markets make dividend policy a weak technique for signaling future earnings and reducing agency costs than for the US sample of firms. Furthermore, Omran and Pointon (2004) investigated the role of dividend policy in determining share prices, the determinants of payout ratios, and the factors that affect the stability of dividends for a sample of 94 Egyptian firms. They found that retentions are more important than dividends in firms with actively traded shares, but that accounting book value is more important than dividends and earnings for non-actively traded firms. However, when they combined both the actively traded and non-traded firms, they found that dividends are more important than earnings. In the determinants of payout ratios, they found that there is a negative relationship between the leverage ratio and market to book ratio, tangibility, and firm size on the one hand, to the payout ratios in actively traded firms. On the contrary, they also found that there is a positive relationship between the business risk, market to book and firm size (measured by total assets) to payout ratios in non-actively traded firms. Furthermore, for the whole sample, leverage has a positive relationship with payout ratios, while firm size (measured by market capitalization) is negatively related to payout ratios. Finally, the stepwise logistic regression analysis shows that decreasing dividends is associated with lack of liquidity and overall profitability. In addition, increasing dividends is associated with higher overall profitability. 2.4 Summary In this chapter the relevant literatures addressing the reviews of the agency cost theory related to the financial policies. It also gives a theoretical background on how the conflicts of interests arise between the agents (managers) and the principal (shareholders). The second and third sections present the determinants of leverage and dividend payout policy. The following chapter will go through the description of data, and data methodology was employed for this dissertation. 3. Methodology, Research Design and Data Description The aim of the current study is to investigate firstly, the empirical evidence of the determinants of leverage and dividend policy under the agency theory concept for the period 2002-2007. The majority of the previous studies in the field of capital structure have made in the context of developed countries such as USA and UK. It is important to investigate the main determinants of leverage and dividend policy in developing countries where, capital markets, are less developed, less competitive and suffering from the lack of compatible regulations and sufficient supervision This chapter will explain the research methodology of this study. This chapter also identifies the sample of the study. Moreover, it presents an illustration of the econometric techniques that have been employed. In addition, this chapter gives a brief explanation of the specification tests used in the study to identify which technique is the best for the data set. This chapter structured as follows; Section (3.1) presents data description.  Section (3.2) presents the sample of the study. Section (3.3) discusses the econometric techniques employed in the study. Finally, Section (3.4) provides a brief summary. 3.1 Data Description The data used in the study are secondary data for companies listed at Amman Stock Exchange (ASE) for the period of 2002-2007. The data was extracted from the firm’s annual reports, and from Amman Stock Exchange’s publications (The Yearly Companies Guide, and Amman Stock Exchange Monthly Statistical Bulletins). Data is readily available in the form of CD and on the website of the Amman Stock Exchange. The reason for the study period selection was to minimize the missing observations for the sample companies. Moreover, a different reporting system has been used since 2000. The application of the new reporting system was the result of the transparency act which was launched in 1999, and forced all companies listed in Amman Stock Exchange to disclose their financial information and publish their annual reports according to the International Financial Reporting Standards. In other words, this data series for the period from 2002-2007 was chosen in terms of consistency and comparability purposes. 3.2 Sample of the study The sample of the study consists of the Jordanian Manufacturing companies listed on the Amman Stock Exchange for the period of 2002-2007. The total number of the companies listed in ASE at the end of year 2007 was 215. Officially, these companies are divided into four main economic sectors; Banks sector, Insurance sector, Services sector and finally Industrial sector. Moreover, this study is concerned only with Jordanian manufacturing companies that their stocks are traded in the organized market. It is important to note that the capital structure of financial firms has special characteristic when compared to the capital structure of non financial firms, they also have special tax treatment (Lester, 1995). On the other hand, the financial firms have a higher leverage rate, which may tend to make the analysis results biased. Moreover, financial firms their leverage is affected by investor insurance schemes (Rajan and Zingals, 1995). For these reasons, the potential sample of the study consists of non financial (Manufacturing) companies that are still listed in Amman Stock Exchange. The total number of industrial companies listed in ASE at the end of year 2007 was 88 companies, which are 40.93% of the total number of the companies listed in that market. The study conducts the following criteria in selecting the sample upon the Jordanian manufacturing companies by excluding all the firms that was incorporated after year 2002, and all the firms that have merged or acquired during this period, further, the firms have liquidated or delisted by the Amman Stock Exchange, and finally, the study have also excluded the firms that have information missing for that period. The application for those criteria has resulted in 52 samples of manufacturing companies. The data for the variables that are included in the study models is tested using three different econometric techniques which will be discuss briefly in the next sections. 3.3 Econometrics techniques Hairs et al. (1998) argued that the application of econometrics technique depends on the nature of data employed in the study, and to what extent it would be realised to the research objectives. In order to find a best and adequate data model, the current study employs pooled data technique and panel data analysis which is usually estimated by either fixed effect technique or random effects technique.  The following sections provide a brief discussion on the econometrics techniques that the current study uses to estimate the empirical models. 3.3.1 Pooled Ordinary Least Square (OLS) technique All the models used in the study have been tested by the pooled data analysis technique. The pooled data is the data that contains pooling of time series and cross-sectional observations (combination of time series and cross-section data) (Gujarati, 2003). The pooled data analysis has many advantages over the pure time series or pure cross sectional data. It generates more informative data, more variability, less collinearity among variables, more degrees of freedom, and more efficiency (Gujarati, 2003). The underlying assumption behind the pooled analysis is that, the intercept value and the coefficients of all the explanatory variables are the same for all the firms, as well as they are constant over time (no specific time or individual aspects). It also assumes that the error term captures the differences between the firms (across-sectional units) over the time. However, (Gujarati, 2003) has pointed out that these assumptions are highly restrictive. He argues that although of it is simplicity and advantages, the pooled regression may distort the true picture of the relationship between the dependent and independent variables across the firms. Pooled model will be simply estimated by Ordinary Least Square (OLS). However, OLS will be appropriate if no individual (firm) or time specific effects exist. If they exist, the unobserved effects of unobserved individual and time specific factors on dependent variable can be accommodated by using one of the panel data techniques.   According to (Gujarati, 2003) panel data is a special form of pooled data in which the same cross-sectional unit is surveyed over time. It helps researchers to substantially minimize the problems that arise when there is an omitted variables problems such as time and individual-specific variables and to provide robust parameter estimates than time series and (or) cross sectional data. All the empirical models that have been tested by using pooled data analysis and tested again on the basis of panel data analysis techniques (Fixed Effects and Random Effects).   3.3.2 The fixed effects model (FEM) Fixed effects technique allows control for unobserved heterogeneity which describes individual specific effects not captured by observed variables. According to Gujarati (2003) the fixed effect model takes into account the specific effect of each firm â€Å"the individuality† by allowing the intercept vary across individuals (firms), but each individual’s intercept does not vary over time. However, it still assumes that the slope coefficients are constant across individuals or over time. Two methods used to control for the unobserved fixed effects within the fixed effects model; the first differences and Least Square Dummy variables (LSDV) methods.  For the purposes of the current study, (LSDV) was used where; two sets of dummy variables (industry, and year dummy variables). The additional dummy variables control for variables that are constant across firms but change over time. Therefore, the combine time and individual (firm) fixed effects model eliminates the omitted variables bias arising both from unobserved factors that are constant over time and unobserved factors that are constant across firms. However, fixed effects model consumes the degrees of freedom, if estimated by the Least Square Dummy Variable (LSDV) method and, too many dummy variables are introduced (Gujarati, 2003). Furthermore, with too many variables used as regressors in the models, there is the possibility of multicollinearity. It is worth noting that OLS technique used in estimating fixed effects model. 3.3.3 The Random Effects Model (REM) By contrast, fixed effects model, the unobserved effects in random effects model is captured by the error term (ÃŽ µit) consisting of an individual specific one (ui) and an overall component (vit) which is the combined time series and cross-section error. Moreover, it treats the intercept coefficient as a random variable with a mean value (ÃŽ ±0) of all cross-sectional (firms) intercepts and the error component represents the random deviation of individual intercept from this mean value (Gujarati, 2003). Consequently, the individual differences in the intercept values of each firm are reflected in the error term (ui). On the other hand, the Generalized Least Square (GLS) used in estimating random affects model.  This is because the GLS technique takes into account the different correlation structure of the error term in the Random Effect Model (REM) (Gujarati, 2003). 3.3.4 Statistical specification tests The study uses three specification tests to identify which empirical method is the best. These tests are used for testing the fixed effect model versus the pooled model (F-statistics), the random effect model versus pooled model (Lagrange Multiplier test) (LM), and the fixed effect model versus the random effect model (Hausman test). The following sub-sections offer brief disc

Inhaling Knowledge :: Personal Narratives Drugs Illegal Narcotics Essay

Inhaling Knowledge When I was a young girl, my dad and I would drive to Chinatown every third Saturday of the month to get his monthly dose of rice. Through the west side of Chicago we went. My dad always complained about the litter, the lack of cleanliness and how easy it would be to keep the city clean if everyone just took care of their own trash. Looking out the window, I remember seeing trash piled high on every corner, as if garbage had taken the place of grass. Graffiti covered every building we passed, broken windows everywhere. It always made me sad that people had to live in such an environment, but I can so vividly remember laughing at the sight of gym shoes tied together, hanging high above me from the telephone lines in this part of town. Every few blocks I'd see another pair, and another, and another! What a funny joke, I thought to myself. How did some one even get them up there? Little did I know that these shoes hung high in the sky, once bringing a smile to my face, would one day fil l my heart with sorrow and pain, threaten the binds that held my family so close together or almost take the life of my beloved sister. Never in my worst nightmare could I imagine something so right could go so wrong. I grew up in a family of three children, an older brother and a sister eighteen months younger, with two loving parents who would walk to the moon and back to keep us happy and healthy. I was one of the luckiest kids in the world, I used to tell myself, because when nothing else in my life was right, I always had my family to cheer me up and make my troubles disappear. I thought that is how each and every one of us felt, but I guess I was wrong. Some people have a talent of hiding how they are feeling; they keep her pain bottled up until one day when their bottle gets too full, it explodes. This is what happened to my sister, Susan. She was never one to be very open with her feelings or what she was thinking. I can still remember our weekly arguments about her not telling me what was going on in her life—school, friends, karate, boyfriends, work.

Advantages and Disadvantages of A Single Sex Education

Why would anyone want to go to an all girls' school? This is a question I have often pondered. Can you imagine school without the obnoxious comments from boys, football games, and gossiping about boys? This doesn't sound like a lot of fun, does it? You girls may think about this and decide there are no advantages to an all girls' school, but in reality, all girls' schools have many. Believe it or not, having boys around is not the most important factor in our education. In fact, boys in the classroom are actually a setback. All girls' schools are more advantageous than coeducational schools because there are fewer distractions, you will have a higher self esteem socially and academically, and you will be more successful academically. Let's face it, we are obsessed with boys. We act and dress with only a boy's opinion in mind. Boys not only preoccupy our minds in a social setting, but in the classroom as well. We know that we know the answers to the questions in school, but we often avoid raising our hand in class. Why? We are afraid that the answer might be wrong, and the boys will laugh at us. Even worse, we might be right, and then they will think we are nerds! We also must confess that we tend to space out during lessons and daydream about the star quarterback two seats over. These distractions could be eliminated if boys are removed from the setting. Without them, we could focus on education rather than what they think of us. Self-esteem is another issue that will improve with the absence of the male species in the classroom. In high school, there is an extreme amount of pressure to fit in. Some may not fit in, and some prey on others in order to fit in and increase their own self esteem. Usually it is the boys who will tease us, whether it's because they like us or they want to get a laugh out of their friends. This teasing can crush our confidence and cause us to become very self-conscious. Without boys, we can confidently walk down the hallway without dodging annoying boys who relentlessly torture us. Some may say, â€Å"What about other girls? † Girls can definitely be cruel and catty, but usually this bitterness towards another girl sprouts from a boy, whether she stole your boyfriend or he likes her better. How many times have you found yourself gossiping with your friends about how you are much prettier than the girl your crush likes? Girls would get along better if there were no boys around to fight about. Boys will not get in the way of friendships, which are far more important than relationships, making the high school experience much better for a girl. A single sex atmosphere will also increase our self-esteem academically. Studies prove that women do better in single sex schools and have higher self-esteems (Cooner, Knight, and Wiseman 90). In coed classrooms, boys receive more attention, whether it is criticism or praise, than we do (Cooner, Knight, and Wiseman 91). How often does a teacher stop a class to yell at a typically obnoxious boy? We therefore feel ignored by our teachers. This has a dramatic effect on our confidence in the classroom. In an all girls' school we can receive our teacher's attention more frequently and ask questions without feeling embarrassed. More attention means more praise, which we clearly deserve. The increase in attention from our teachers will help to increase our academic self-esteem. The most important advantage of an all girls' school, however, is academic success. Did you know that coed schools are structured around the development of male students? Writing, reading, and math concepts, such as long division, are introduced to us when a boy's mind is ready to process and understand the information (Cooner, Knight, and Wiseman, 90). The fact that we were developmentally ready to understand this information a few years ago is ignored. I find that completely unfair and I'm sure that you can agree. Girls develop math and verbal skills faster than boys do, so we rarely experience any challenges in the classroom. No wonder we are so bored! Our boredom can negatively affect our achievement. I reiterate the fact that the teachers often ignore female students, even high achieving females. This discourages us from exerting ourselves in their schoolwork. Why bother pulling an all-nighter preparing for a presentation when a boy is going to receive more attention for his presentation anyway? An all girls' school is structured around our development, which poses an academic challenge to us. We will then strive to succeed and in turn receive praise from our teachers. Our increased interest in our schoolwork improves our attitudes as well as our grades, which will help us in the future. Better grades will increase our opportunities to attend good colleges and get good jobs. Our increase in confidence will prepare us for these jobs that we will be able to get with a good education. You still may not be convinced that an all girls' school is better than a coeducational school because you are wondering how it's possible to meet boys if they are not in school. Don't worry girls! There are tons of places to meet boys. There are boys everywhere (except in all girls' schools of course) including the mall and your neighborhood. Let's consider another fact. If an all girls' school exists in your town or nearby, chances are an all boys' school is not far off. If not, where would all of the boys go? Trust me, the boys are looking for us girls as much as we are looking for them. Clearly, this issue is not an obstacle in your social life. Life without boys? It sounds worse than it really is. You can now see that having boys in the classroom is a setback for us girls. Without them around, we can focus on our valuable education. We will have all attention focused on our work and our needs, which is very beneficial to receiving an effective education. We can also focus on forming friendships with other girls in the school without worrying about them stealing our boyfriends. Catty gossip can be eliminated from everyday school life, allowing us to fully concentrate on our education. Our education should be our first priority in life, and an all girls school in turn makes us their first priority, improving the quality of our education.

Book Review on The Autobiography of Malcolm X

Book Review on The Autobiography of Malcolm X Free Online Research Papers America has a very terrible history starting with the slave trade in the 1600’s. From then until the ratification of the thirteenth amendment in 1865 slaves were legal, and even after that until the 1960’s racial discrimination was prevalent in the United States. Malcolm X was an African American and dealt with the trials or racism. After enduring through difficult parts in his life, he found the Nation of Islam and became a devout follower and preacher of the Nation. The Autobiogrophy of Malcolm X was told by Malcolm X to Alex Haley. Haley was an African American born in Ithaca New York, and worked for the United States Coast Guard for twenty years. There, he taught himself to write stories. After his time at the Coast Guard he eventually became senior editor for Reader’s Digest. He also conducted interviews for Playboy and co wrote The Autobiography of Malcolm X. He also wrote Roots: The Saga of an American Family, which was published in 1975. k The Autobiogrophy of Malcolm X is a chronological autobiography telling the story of Malcolm X’s life. It starts with his childhood in Lansing Michigan, where his family was persecuted by the Ku Klux Klan because his father, Reverand Earl Little, was a preaching black power. Eventually, Reverend Little was murdered by the Klan; he was beaten and run over by a train. The life insurance company wouldn’t pay Louise Little, his wife and Malcolm’s mother, because she couldn’t prove that Mr. Little’s death wasn’t suicide. Left impoverished and with five children to feed, Louise slowly lost her sanity as she worked herself to the bone to provide for her family. Growing up in this troubled household, Malcolm was an ill-behaved child and was taken away from his family by the state Welfare. While at school, Malcolm told his teacher, Mr. Ostrowski, that he wanted to be a lawyer. Mr. Ostrowski’s response was this: â€Å"A lawyer- tha’s no realistic goal for a nigger. You need to think about something you can be. You’re good with your hands- making things. Everybody admires your carpentry shop work. Why don’t you plan on carpentry? People like you as a person- you’d get all kinds of work†(38). This was the first time that Malcolm was directly discouraged for doing what he wanted to do because he was black. This led him to notice more and more that people treated him differently because of his skin color, and this angered him. During this time he was writing to his step sister, Ellen, in Boston, and she invited him to live with her. While in Boston, Malcolm became drawn to â€Å"The sharp-dressed young ‘cats’ who hung on the corners and in the poolrooms, bars and restaurants, and who obviously didn’t work anywhere†(45). He later became one of these â€Å"cats† himself, getting his hair â€Å"conked† and becoming a very successful hustler. He moved to Harlem in New York City and became an even bigger hustler. He also became addicted to drugs, alcohol, and hustling. He moved back to Boston and started robbing houses and apartments. Eventually, he was caught by the police and sent to jail. Malcolm X was in jail for eight years. When first go there he was nicknamed â€Å"Satan† because of his anger and hate toward himself, God, and the Bible. The first person in prison that made a positive impact on Malcolm was another inmate named Bimbi. Whenever Bimbi talked everyone would listen, even the white guards; this was what fascinated Malcolm about Bimbi. Malcolm said, â€Å"Out of the blue one day, Bimbi told me flatly, as was his way, that I had some brains, if I’d use them. He told me I should take advantage of the prison correspondence courses and the library† (157). When Malcolm started reading, he learned about topics like history, philosophy, and religion that he never thought about when he was a hustler. Around this time his brother, Reginald went to visit Malcolm in prison. Reginald taught Malcolm about the Nation of Islam. When Malcolm began thinking about what Reginald was telling him, he realized that the teachings of the Nation were right a nd that the â€Å"white devil† caused all the strife in his life. Malcolm then began writing to Mr. Elijah Mohammed, the prophet that started the Nation of Islam. Mr. Mohammed wrote back and they exchanged letters often. Malcolm began his conversion to Islam and when he left jail he became a devout follower of Mr. Mohammed and the Nation of Islam. He worked hard for the Nation for twelve years, until he was suspended and finally exiled. Before he was officially exiled, Malcolm, since conversion Malcolm X, went on his hajj to Mecca. There for the first time he was treated as an equal by other Muslims and came to befriend â€Å"white devils†. When he got back to the United States, he started preaching his new-found knowledge, but people didn’t trust him because of his falling out with the Nation of Islam and his sudden, hypocritical-seeming conversion of faith. This book is important because it describes the views of one of the most important figures during the civil rights movement and in the history of America. It tells Malcolm X’s life story in a very factual and forthright manner; he doesn’t try to justify his time as a hustler, and he expresses his views to the point. This book isn’t an argument to join the Nation of Islam, it is telling how the Islam helped Malcolm and how strongly Malcolm believes in it. Malcolm X does show extreme prejudice against the white man. Despite this, I don’t think it marrs the value of the book, in fact I think it adds to the value of the book. Malcolm X describes to us the things he went through because of white people’s racism, and why he believes so devoutly in the Nation of Islam. He has evidence and facts to support his ideas and beliefs, which is why, as a reader, I didn’t dismiss him as an angry black man; instead I paid attention to what he was saying, even though I might not believe them myself. For example, when Mr. Mohammed is spreading the beliefs of the Nation of Islam, he says: â€Å"The ignorance we of the black race here in America have, and the self-hatred we have, they are fine examples of what the white slavemaster has seen fit to teach to us. Do we show the plain common sense, like every other people on this planet Earth, to unite among ourselves? No! We are humbling ourselves, sitting-in, and begging-in, trying to unite with the slavemaster! I don’t seem to be able to imagine any more ridiculous sight. A thousand ways every day, the white man is telling you ‘you can’t live here, you can’t enter here, you can’t eat here, drink here, walk here, work here, you can’t ride, here you can’t play here, you can’t study here.’ Haven’t we yet seen enough to see that he has no plan to unite with you? â€Å"You have tilled his fields! Cooked his food! Washed his clothes! In many cases, you have been far and away better Christians than this slavemaster who taught you Christianity! â€Å"†¦this Christian American white man has not got it in him to ding the human decency, and enough sense of justice, to recognize us, and accept us, the black people who have done so much for him as fellow human beings!† I think this is a very powerful part of what the Nation of Islam taught. When you think about the history of America and racism from their point of view, they make total sense and are in the right. I think Alex Haley did a very good job putting this book together; I felt like it was really Malcolm X who wrote this book. I think Haley’s story telling abilities really played an important role in writing this book; before I started reading I expected it to be boring, but this book read like a novel instead of an autobiography. This book is valuable to everyone interested in influential people, the history of America, and even religion. I have learned so much about all of these topics by reading The Autobiography of Malcolm X. I have learned that some of the greatest leaders come from the lowliest backgrounds, that the history of this great and free nation has four hundred years of bondage in its history, that Islam isn’t the religion the media is brainwashing America to be afraid of; in fact it is a very loving and brotherly religion that accepts anyone and everyone. This book has current and permanent interest because it tells the story of a very important man in the history of America no more than fifty years ago, and it tells history of America that people will be educated about in generations to come. Bibliography Alex Haley. 19 Jan. 2008. Wikipedia, the free encyclopedia. 7 Feb. 2008 . Haley, Alex. Autobiography of Malcolm X. New York: Broadway Books, 1998. Research Papers on Book Review on The Autobiography of Malcolm X19 Century Society: A Deeply Divided EraHip-Hop is ArtWhere Wild and West MeetThe Effects of Illegal ImmigrationTrailblazing by Eric AndersonThe Masque of the Red Death Room meaningsCapital PunishmentEffects of Television Violence on ChildrenComparison: Letter from Birmingham and CritoPersonal Experience with Teen Pregnancy

Odyssey and Victoria Secret Model Essay

Odyssey and Victoria Secret Model Essay Odyssey and Victoria Secret Model Essay Obstacle 1: Opinions Opinions can ruin anybody’s confidence. Once, I dressed up in my new shirt, but a girl came up to me and said, â€Å"Your shirt is so ugly!’’ After that I grabbed my jacket and zipped it up tight. I really thought the shirt looked nice, but one person’s opinion destroyed the confidence I had that day. In the Odyssey, Circe told Odysseus that all his men will perish. If Odysseus told his men about Circe’s opinion about Odysseus’s men then they could have tried to live longer, learn from their mistakes and be a little more careful. Obstacle 2: Bullies Bullying is now seen worldwide and has stripped away every ounce of confidence one person might have possessed. I’ve experienced many years of being bullied and my self-esteem has evaporated. Many people can’t handle the effects of bullying so they call on a greater force to help stop it such as a god, a teacher or parents. The Odyssey has a great example of bullies like when Odysseus taunted the Cyclops while escaping. The Cyclops felt weak because he was defeated by a puny mortal. The Cyclops had to call upon his father, Poseidon, for help to destroy Odysseus and his men. Obstacle 3: Society (Media) The social media has conducted itself to make everyone believe that beauty is created with adding pounds of makeup and prancing around like a Victoria Secret Model. Cover Girl has changed its slogan to ‘’Easy, Breezy, Better’’ instead of the classic ‘’Easy, Breezy, Beautiful.’’ This is a simple example of how society is changing the way ‘beauty’ is seen and breaking down every girl and boys’ confidence including mine. In comparison to The Odyssey, Odysseus believes he has to be tough like when he saw his dead mother in the underworld. He didn’t cry because he wanted to stay strong and continue to find Tiresias. Obstacle 4: Influences (Peer pressure) Influences can only lead to bad decisions. Many of my friends have influenced me to try new things such as a different style. But, it didn’t suit me so I chose my own thing. Odysseus’s men have a habit of drinking and while under the influence they’d make bad choices. Eurylochus, one of Odysseus’s men, told everybody that dying of hunger is

Affect of Immagration on Society Essay Example | Topics and Well Written Essays - 750 words

Affect of Immagration on Society - Essay Example Other countries like British and France had to compel employers to listen and work with employees to avoid strikes, conflicts and unrests (Howard, 35). The split between two original labour unions (knight of labour and National labour union) in 1888 led to emergence of American Federation of Labour. The coming up of the third labour union was detrimental in addressing labour reforms, because no sooner was it started than the labour reform stopped. This splits it led to a situation where trade union lacked superiority, power, and labour reforms lost its meaning. In 1902 due to racial segregation that had occurred, black and other migrants formed unions to safeguard them from exploitation. This is because they were the majority who were working. Knight of labour then began to decline due to certain factors like lack of skilled workers, and continued rise of power from national governments (Joseph, 680). There were labour gains during the years 1933 to 1945 after certain pieces of legislations were crafted. Some of legislations include the liberal bill on wages and hours to pay and work respectively. Workers, for example, were expected to work for 30 hours a week, and significant rise of salary, but one drawback was lack of minimum wage provision. After suspension of anti-trust laws, the National recovery administration act came into place as a response to ‘black 30 hour bill’ bringing together business owners, and providing them with the opportunity to set maximum, minimum wages, working hours and amount of output to be produced. The aim of the stated union was to create an avenue for fair competition, increased economy and help in employment of workers (Lichtman, 230). Although the National recovery administration act was in place, there were no effort to prevent workers unrest and no work was organized well. The limitation of the act

Corporate and global strategy Essay Example | Topics and Well Written Essays - 3000 words

Corporate and global strategy - Essay Example Finally the study tried to some useful recommendation in terms of research & development and value chain cost for the company. Table of Contents Table of Contents 3 1.0 Procter & Gamble 5 2.0 Corporate Strategy 6 2.1 Core Competency of P&G 7 2.2 Overall Scope 8 3.0 Business Level Strategy 8 4.0 Internal Analysis 10 4.1 Porter’s Value Chain 10 4.2 Barney’s VRIN model 13 5.0 External Analysis 16 5.1 PESTLE 16 5.1.1 Political Environment 16 5.1.2 Economic 16 5.1.3 Social Environment 16 5.1.4 Technological 16 5.1.5 Environment 17 5.1.6 Laws and Regulations 17 5.2 Porter’s Five Forces 17 5.2.1 Threat of New Entrants 17 5.2.2 Buyer Power 18 5.2.3 Supplier Power 18 5.2.4 Competition 18 5.2.5 Threat of Substitutes 18 6.0 Evaluation of Strategy 19 7.0 Conclusion 20 7.1 Internationalization of P&G 20 7.2 History of Global Expansion of P&G 21 References 22 1.0 Procter & Gamble Proctor & Gamble is a famous American consumer product company. The organization is headquartered at Cincinnati, Ohio, USA. The company was founded by William Procter and James Gamble in the year 1837. The company operates over ninety five countries internationally. Sales volume of the company has crossed a record mark of $82, 00 billion in the year 2011. The organization has established product leadership in various categories such as Skin Care, House Care and Oral care. More than 125,000 employees work in the Procter & Gamble. The consumer product company sells more than two hundred and sixty brands across the globe. The organization enjoys leadership in more than twenty four brands globally and able to obtain billion of dollars per annum from each of the product category. The consumer product organization has established more than twenty eight technical centres internationally (PG-Global, 2012). Proctor & Gamble emphasizes on adopting modern technology integrated with state of art research and development facility in order to achieve competitive advantage over competitors. Th ey have incorporated market research intelligence process in order to take strategic decision to expand business in foreign market (Kotler, 2009, p. 253). The company has expanded their business extensively in last twenty years and achieved phenomenal sales growth from their international business operation hence analyzing their business and corporate level strategy will help management practitioners to understand key ingredients required to develop a sustainable strategic model. Strategic analysis of Procter & Gamble will not only help management practitioners to gain insight about strategic choices but to gain knowledge about global business practices. These study will do strategic analysis of Procter & Gamble in the below mentioned manner. Step 1- Analyzing corporate strategy of P&G, Step 2- Analyzing business strategy of P&G and Step 3- Internal and External environment analysis. 2.0 Corporate Strategy The Cincinnati based company has realized the significance of globalization t o survive in the hyper competitive market and adopted themselves (read Clay Street Think Tank) according to the prerequisite of situation (Weiner, 2006, p. 22). The organization has shifted focus from delivering products to American consumers and established SBU or strategic business units internationally. Procter & Gamble has increased level of plant capacity with the intention of achieving economies of scale and deliver product mix in cost effective manner (Lofgren, 2005, pp. 102-115).