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Strong and Affordable Location Privacy in VANETS Identity Diffusion Using Time-Slots and Swapping

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Strong and Affordable Location Privacy in VANETS: Identity Diffusion Using Time-Slots and Swapping

Vehicular Ad Hoc Networks (VANETs) need a way to help authorize messages, remove malevolent vehicles, and find valid vehicles. A public Key Infrastructure (PKI) can offer this operation using fixed public keys and certificates. However, the used of fixed keys allow an adversary to associate a key with a place and a vehicle, thus compromising the privacy of a driver. The use of Temporary Anonymous Certified Keys (TACKS) is a scheme management by VANET to improve diver’s privacy. The approach of this scheme efficiently hinders eavesdropping from associating different keys and gives timely revocation of participants misbehaving while sustaining less or the same overhead for car-to-car communication like the current IEEE 1609.2 standard used in VANET security.

The major concern for deploying VANET in the public is the achievement of effective and simple security mechanisms. Insecurity in VANET translates a broad system open to a number of security attacks such as suppression of real warning messages as well as propagation of false messages of warning, thereby leading to many accidents. The vulnerability of vehicles to security attacks in VANET makes security a major concern when coming up with such systems (Eckhoff).

Privacy is introduced into a VANET network system by using pseudonyms in the form of more block of private of public keys which are provided to the user. The keys are used for a short period and then become changed frequently. The keys are made in a way that they do not bear identity associated information but have the capability of being traced back to the user in the liability linked cases. The follow-up is usually done by Central Authorities (CA). Pseudonyms get used because they make sure that the vehicle a vehicle does not get attacked by an adversary or any other attacker and a message cannot be associated to its sender by other cars.

Instead of equipping vehicle nodes with a lot of pseudonyms, each node bears a time-clotted pool of pseudonyms with slot length t, so that p/t time-slots span the length period p. every single time-slot is assigned exactly one pseudonym, leading to p/t pseudonyms for each vehicle, and a single valid pseudonym for each arbitrary point in time. When a particular slot of time passes, a change of pseudonym gets initiated. This mechanism is usually achieved by use of clocks, which are synchronized with the Global Positioning System (GPS) signal.

The use of non-overlapping pseudonyms, similar to time-slots, implies that nodes in this scenario have the advantage of reusing pseudonyms. When the last time-slot—p/t the time-slot—has passed, time-slot 1 will get activated again, meaning that periodic time will then reload from the beginning.

A good choice of the values of p and t is very important to make sure security is realized. For instance, if t= 20 minutes and p is one week, then the pseudonym generated becomes valid, such as, Monday 7:00 a.m. till 7:20 a.m. it is vital for one to notice that the above pseudonym is then, in fact admissible on every Monday for the said 20 minutes. It is clear from the above scenario that place privacy that comes with time-slotted pool alone depends not only on the time slot-length (t) that determines the frequency of change for a node pseudonym, but also on the reliability of the periodic behavior of the node, such as, beginning the work-commute every Monday 7:00 a.m.

The exchange of pseudonyms can improve the privacy of drivers in VANET by complicating tracking for an attacker. When nodes have the ability to exchange pseudonyms in secrecy by use of encryption and keep third parties at bay from tracking nodes, which have exchanged pseudonyms, then a possible way of mapping authority also becomes admissible. The time-slotted mechanism allows only valid pseudonyms for a particular time-period to be exchanged; otherwise there is usually no guarantee that each car has exactly one pseudonym per time-slot (Chaurisia and Verma).

A node usually scan its surrounding ( such as speed, heading of its neighbors, and vehicle number) and then comes up with a decision on whether change of pseudonym if important or not, so that attackers cannot infer node pseudonyms simply after the swapping by elongating their expected place according to their last known speed and heading.

By a careful choice of limits of similarity, people can increase the possibility of both swap vehicles being unknown in terms of place. An adversary can then never know whether a pseudonym swap took place or not. The efficacy of this approach, of course, is greatly dependent on the positional and frequency accuracy of the beacons emitted by each car. The driver privacy achieved by use of this mechanism can be augmented by using silent time-slots, meaning two vehicles will not send beacons for a while after a possible swap of pseudonyms (Sun et al.).

An advantage that comes with time-slotted mechanism over pseudonym pool is its characteristic of making sure that, ideally, a car always has a pseudonym to take part in the ITS as provided it has received its p/t pseudonyms during the setup period. Whether a CA is not reachable or the vehicle was not used for longer period the car will not exhaust the pseudonyms because it has the chance of reusing old pseudonyms.

The mechanism also comes up with upper bounds of disk space and, importantly, the volume of traffic. This simplifies the make-up of the on-board units and cuts the costs of communication, bring affordability to the deployment of an ITS. The size of the pool of pseudonyms is cut to a value of p/t * s bytes and, importantly, workload of the CA no longer depends on the number vehicular nodes taking part in the network but on the ones entering it.

The use of GPS synchronized clocks and time-slots, by every node will make sure that nodes swap pseudonyms at the same time. Density of traffic and rate of penetration dependency increases traffic driver’s privacy. Further use of pseudonym exchange much improves the security of drivers (chaurasia and verma).

A common problem associated with the time-slot mechanism is that when cars swap currently valid pseudonyms—their current identifier—each vehicle will begin using the same pseudonym every p/t slots, due to the fact that a new slot n + 1 has begun, the pseudonym previously used in the slot will then be reactivated. This way, an adversary, or authority, is able to associate two positions to a single node. The current one (such as, Monday 7:00:00 a.m.) and the one from the earlier time the slot was active (such as, 7:19:59 a.m.). Moreover, each time a new vehicle gets into a time-slot for the first time, which will occur p/t times after being attached with the ITS device, the operator can associate the first place in this time-slot to a vehicle.

A diagram to illustrate the swapping of pseudonyms by two vehicles

References:

Eckhoff, Dacid et al. Strong And Affordable Location Privacy In VANETS: Identity Diffusion Using Time-Slots And Swapping. Gaimersheim: University of Erlangen.

Chaurasia and verma. Optimizing Pseudonym Updation for Anonymity in Vanets. Allahabad, Indian Inst. Technol., 2008.

Sun, Jinyuan et al. An Identity-Based Security System for User Privacy in Vehicular Ad Hoc Networks. Knoxville: Univ. of Tennessee, September, 2010.

Chaurisia and Verma. Maximizing Anonymity of A Vehicle. Allahabad: Indian Inst. Technol., 2008.

Stealing, Theft and Robbery

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Stealing, Theft and Robbery

People in any society experience some form of crime, hence the need for law and order. Some of the most common crimes in the world are stealing, theft and robbery. Although many people use the terms interchangeably, there are some differences between the three. Stealing refers to the act or process of taking something that belongs to someone else. Theft and robbery are the legal terms used to define the crime of stealing, though there is one main difference. Robbery involves violence or coercion in the process of taking something, while theft does not involve force. In fact, one may not realize till much later that they have been the victim of theft, and a perfect example of this is identity theft. Due to the violence involved, robbery is taken as a more serious crime than theft under the law. Stealing, theft and robbery are common occurrences in society. In examining this topic, some relevant areas include statistics, punishment under the law, effects of the crimes and preventive measures.

Statistics from The Pew Research Organization sheds some light on violent crimes such as robbery in the United States. Data shows that violent crimes have been on the decline since the 1990s, with a 51% decrease between 1993 and 2018, according to numbers from the FBI (Gramlich 1). The report also indicates that non-violent crimes such as motor vehicle theft, burglary and theft are far more common than violent crimes. Despite the steady decline in violent crimes, many Americans’ opinions do not reflect this. For example, a 2016 Pew Research poll found that 57% of registered voters at the time believed than rates of crime were higher than the year before, despite the FBI reports showing a double-digit decline. Stealing, theft and robbery fall under the category of property crimes, which have similarly been on the decline. For example, in the year 2017, robbery rates stood at roughly 99 robberies per 100,000 people, and this fell to 87 per 100,000 people in 2018 (Gramlich 2). This is according to data from the Federal Bureau of Investigations.

Despite the promising outlook on cases of theft and robbery, identity theft remains a primary area of focus as instances of identity theft have become more common. Identity theft is a crime where a person obtains another’s personal information such as their social security number, then uses this information to impersonate the person for various reasons such as to obtain a loan, or pay for goods. The number of identity fraud cases is on the rise, mainly due to the digitization of all areas of life. With people working from home, shopping and placing orders online, and filling out various forms over the internet, their information becomes an easy target for hackers and identity fraudsters. Children have especially become an easy target for identity theft. In 2018, the Bureau of Justice Statistics reported 14.4 million cases of identity fraud (BJS). Javelin Strategy & Research focused on cybercrimes and compiled a comprehensive report on identity fraud in the year 2019. Although numbers dropped from 16.7 million in 2017 to 14.4 million in 2019, consumers bore a heavier financial burden. For example, the out of pocket costs on the victims as a result of the crime doubled to $1.7 billion from 2016 to 2019 (Ahmed 21). Additionally, 3.3 million of the consumers who fell victim to identity fraud were found to be liable or partly liable for the crimes against them.

Americans remain the most likely victims of identity theft than people from any other country, with more than 791 million identities stolen in the year 2016 alone. Statistics from a Javelin poll give more insight into why this is the case. 60% of consumers report feeling that their information is safe when using public Wi-Fi networks, which makes them more vulnerable to attack. 43% of adults admitted to shopping online over public networks, and 33% of American adults also reported sharing passwords and account names with others (Zhang 55). A majority of small business, 52%, have no cyber protection investments as they do not believe they could be victims of attacks. One of the verified ways of increasing protection online is the use of a VPN, but 75% of customers still do not use it. Account takeovers are the most prominent form of identity fraud, where fraudsters access a person’s account and change their security information such as passwords. EMV-chip-based credit cards are mostly responsible for the decline in fraud as skimmers cannot copy them.

There are many reasons why people would engage in stealing, theft and robbery, the most prominent of which is material gain. Most thefts and robberies are motivated by financial gain. An excellent example of this is the case of identity theft, where account losses resulted in the loss of $5.1 billion in 2017 alone. Theft is an easy way to make money, especially in cases where the victims do not realize the crime immediately. Identity fraudsters can sell the information they steal in the deep web to criminals who want to use it for different things (Zou et al. 8). Material gain is also the primary motivation for violent robberies. This includes robberies on stores, banks and other commercial businesses. Robbers target cash and other valuable items from these premises. Criminals also engage in theft and robbery just because they can. Some hackers and identity thieves gain access to other people’s information to prove their skill and ability to get away with it.

To avoid falling victim to theft and robberies, there are different things that people can do. The law also protects people by punishing offenders, but the first step to protecting oneself is to be vigilant and proactive. The most critical step in dealing with the issue of theft and robbery is the awareness that anyone can be a victim. With this in mind, people should take care to protect themselves as much as they can. For example, homes and business premises should have alarms installed that one can access in case of any violent attacks. People should learn basic tactics on how to deal with robbers, such as compliance to avoid further injury or harm. On the issue of identity theft, people should improve their safety online by using VPNs to protect their information (Zhang 42). They should also avoid using public networks when sharing sensitive information, such as social security numbers or credit card information. Companies and business should also invest in protecting consumers’ information. The Equifax hack in 2016 led to the stealing of information of millions of Americans, which is a potential avenue for identity theft (Zou et al. 11). Companies should thus take adequate and proactive measures to protect their customers’ data as much as they can.

Under the law, robbery and theft are serious charges depending on the seriousness of the crime. Most states have divided robberies into categories such as simple, aggravated, first-degree or second degree. These categories dictate the punishment that an offender receives. In most cases, robberies are felonies that attract at least a one-year jail term. Punishment depends on the violence of the crime, the value of property stolen, the offender’s criminal record, among other factors. Identity theft carries charges similar to those of robbery, depending on whether the crime is classified as a misdemeanour or felony. Different states have different statutes for identity theft. For instance, Arizona classifies the trafficking in a stolen identity as a Class B felony. Having a record of such crimes of ‘moral turpitude’ can have a significant impact on an offender’s life. For example, a person with such a criminal record will usually have a hard time getting employed as these records show up in a standard background check. Theft and robbery also adversely affect victims of the crimes. They lose their valuable items, some of which may never be recovered. Victims of identity theft experience some financial losses as well as access to their personal information which opens them up to other problems. Being a victim of theft or robbery also comes with psychological effects such as paranoia, fear, and trauma (Golladay & Holtfreter 751).

In conclusion, stealing, theft and robbery are serious crimes ranging from petty offences to more serious ones. Some of the most common kinds of theft and robbery include identity theft, home invasions and motor vehicle theft. Statistics from the FBI and Bureau of Justice Statistics show the trend of crimes over the years, with a general downward trend in violent crimes. Identity theft is one of the biggest concerns for consumers as people shift to online activity such as shopping and banking for convenience. Anyone can be a victim of these crimes, and people should learn some necessary forms of defences. All kinds of crime are punishable by law, but individuals must take proactive measures to keep themselves and their property safe.

Works Cited

Ahmed, Syed R. Preventing Identity Crime: Identity Theft and Identity Fraud: An Identity Crime Model and Legislative Analysis with Recommendations for Preventing Identity Crime. BRILL, 2020.

Golladay, Katelyn, and Kristy Holtfreter. “The consequences of identity theft victimization: An examination of emotional and physical health outcomes.” Victims & Offenders 12.5 (2017): 741-760.

Gramlich, John. “5 Facts About Crime in the US.” Pew Research Organization. 17 October 2019. https://www.pewresearch.org/fact-tank/2019/10/17/facts-about-crime-in-the-u-s/STATISTICS, BUREAU OF JUSTICE. “IDENTITY THEFT.” (2018).

Zhang, Joe. “Holster with protection mechanism facilitating Holstering and unholstering and protecting against theft and robbery.” U.S. Patent No. 10,041,762. 7 Aug. 2018.

Zou, Yixin, et al. “” I’ve Got Nothing to Lose”: Consumers’ Risk Perceptions and Protective Actions after the Equifax Data Breach.” Fourteenth Symposium on Usable Privacy and Security ({SOUPS} 2018). 2018.

Spanish Inquisition

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Spanish Inquisition

Between the thirteenth and seventeenth centuries, non-Catholics in the kingdom of Spain faced a lot of prosecution, and they were forced to accept Catholicism or leave Spain. The actions were taken by the rulers of Spain at the time, Isabella I of Castile and Ferdinand II of Aragon, in collaboration with the Pope came to be referred to as the Spanish Inquisition. The Inquisition officially began in 1478. The Spanish Inquisition was a form of religious discrimination meant to safeguard the Catholic religion in the Spanish Empire. The Inquisition was formally abolished in the year 1834 by Isabella II (Rawlings 15). Throughout the period, more than 150000 were tried, and roughly 3% of the total number was executed.

The main religion of the Spanish empire was Catholicism, although the empire also had significant populations of Jews and Muslims. The Spanish had also conquered other lands as it expanded its territory into the Americas as well as Naples, Canary Islands and the Netherlands. Before the Inquisition, non-Christians all over Europe had suffered from prosecution for their religious beliefs. The Spanish Inquisition was created to root out heresy especially among newly converted Catholics. An example of this is the French bishop Pope Lucius III who organized the persecution of Catharists as alleged heretics were referred to (Kamen 21).

The Inquisitions were led by inquisitors appointed by the monarchs. The inquisitors visited different cities in the kingdom, with the offer that self-confessed heretics would receive a lighter punishment such as whipping or pilgrimage. They were forced to testify to their alleged crimes, and most of the time, there was no evidence presented against them. Some of the reasons why people would accuse others of heresy included revenge, jealousy, economic reasons, among others. The ruling class used the Inquisition to abuse their power; for example, Count Alphonese of Toulouse would confiscate the land and property of the accused, while his predecessor Count Raymond VII burned the accused even after they confessed (Rawlings 41).

The fifteenth century was the most intense for the Inquisition when the newly converted Catholics, named Conversos, were suspected of bringing corruption into the Church. For many years, Jews had to suffer from anti-Semitism and to avoid this they converted into Catholicism and gained the title Conversos. However, Ferdinand and Isabella still did not trust these converses and continued to prosecute them. They were accused of secretly practising their former religion while outwardly pretending to be Catholic. The Christian community also mistrusted the conversos and wanted the ruling class to take a harsh stand against them. In the year 1481, conversos were forced to live in camps apart from the Christians, and hundreds of them were burned at the stake despite their confession.

As the Spanish expanded their kingdom into the Americas, the Inquisition followed. In the year 1556, Phillip II took the throne, and this increased the rate of prosecution of the Conversos. In 1574, the Inquisition in Mexico led to the burning of Lutherans at the stake, and similar incidents happened against the Protestants in Peru. Between 1609 and 1615, a new king, Phillip III, forced Muslims to leave Spain including those who had earlier converted into Catholicism (Rawlings 58). The Spanish Inquisition came to an end after Napoleon conquered the country in 1808 and abolished the practice, which formally ended in 1834 under Isabella II.

The Spanish Inquisition can be compared to the Holocaust in Germany in which millions of Jews were killed for their religious beliefs. The systematic persecution of the Jews began in 1933 when Adolf Hitler became the German Vice-Chancellor. Adolf belonged to the Nazi party, which believed that Germans were superior to other races. The Jews were considered to be inferior and a threat to the Germans and the Nazis decided to completely obliterate the Jews as a solution to the Jewish Question. Before the Holocaust, Europe had a significant population Jewish population of over nine million, but afterwards, less than a third of these remained.

Along with the Jews, other groups of people deemed inferior such as the disabled, homosexuals, and soviet war prisoners were executed. The Jewish prosecution began with a boycott of Jewish businesses in 1933, ending in the destruction and ransacking five years later in the Kristallnacht (Crowe 31). As World War II began, the Germans took the opportunity to declare Jews a threat to Germany and send them to concentration camps in Germany and Poland including Chelmno, Auschwitz, Sobibor and Belzec . The main methods that the Germans used in the executions were gas chambers, mass shootings, gas vans and starvation. Overall, the German Nazis killed more than eleven million people between 1933 and 1945 (Crowe 53).

In conclusion, history has seen the systematic persecution of several groups of people on different grounds, including religion and politics. The Spanish Inquisition was sanctioned by the ruling political and religious class in Spain, with the main aim of ensuring the purity of the Catholic religion in the empire. Muslims and Jews were forced to convert to Catholicism or leave the empire. Even after this, they were still accused of heresy and contaminating the Church, and many of them were tried and executed. The Holocaust follows a similar trend, beginning with segregation of the Jews and other groups of people labelled as inferior by the Nazis. The Nazis then destroyed property owned by the Jews and sent them into concentration camps across Germany and Poland. By the end of 1945, the Nazis killed more than 11 million people.

Works Cited

Crowe, David M. The Holocaust: Roots, History, and Aftermath. Routledge, 2018.

Kamen, Henry. The Spanish Inquisition: a historical revision. Yale University Press, 2014.

Rawlings, Helen. The Spanish Inquisition. John Wiley & Sons, 2008.

Should We Tax the Rich More

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Should We Tax the Rich More?

The debate on taxing the rich more is a long-standing one with different points in support of the argument and others against it. Taxation is an essential part of the economy as it provides revenue for the government, which is then used to fund important projects in infrastructure, education, and healthcare, among others. Tax regimes are progressive, meaning the more a person earns, the more they are taxed. Taxes vary across states and localities. One main area of concern when it comes to taxation is the fact that the super-rich pay much lower taxes in proportion to their income and assets as compared to the middle and lower-income earners in the country. The current tax regimes have been a point of contention, with many arguing that the rich should be taxed more. 

Warren Buffet is one of the wealthiest men in the world, and his admission that he was subject to a much lower tax rate as compared to that of his secretary sparked a fierce debate. The fact of the matter is that the wealthiest individuals in the population really do pay less tax than the average citizen. The New York Times article titled ‘The Rich Really Do Pay Lower Tax Rates than You’ explores this claim in depth. The article uses data from a 2018 study across different income groups that shows that the 400 of the most affluent Americans paid significantly lower tax rates compared to other income groups in the country. Such information is shocking, given the vast difference in income among the groups. The current tax rates are a world away from those of the 1960s when the very richest people were subject to a higher tax rate than the rest of the population (Leonhardt 1). The main reason for this is the plummet in taxes, such as corporate and estate taxes. In contrast, the poor and mid-income earners have had to pay higher taxes in payroll taxes, while they do not benefit much from a reduction in estate and corporate taxes. 

Forbes author Howard Gleckman tackles this topic in the article titled ‘How Should We Tax the Rich?’ The article shares similar opinions with those of the New York Times article. Gleckman explains that tax regimes have become less progressive over the past few years, and says that the country should restructure its tax systems. He gives different areas where tax for the rich should be reconsidered. The rich have come up with ways to avoid taxes, and this is the reason why they pay lower taxes. One of the ways they do this is categorizing income as capital gains, which are subject to lower tax rates. He offers the main areas of consideration in taxing the rich, including reforms to the estate tax, introducing a wealth tax, taxing unrealized gains, and raising taxes on ordinary income and capital gains (Gleckman 1). 

The efforts to tax the rich more have often been met with stumbling blocks. An excellent example of this is the 2014 tax cuts by President Trump, which favored the very wealthy. Such a step is a step back from efforts to ensure proportionate tax rates for various income groups. Although President Trump touted the tax cuts as beneficial for job creation and for the middle-class, it has since become clear that the cuts disproportionately lower rates for the very rich. A Bloomberg publication titled ‘A Year after the Middle Class Tax Cut, the Rich Are Winning’ explores the intricate 2017 tax cuts. The consensus is that the benefits of the tax cuts on the economy will fade over time, leaving the very rich as the only beneficiaries (Steverman et al. 1).

In conclusion, there have been numerous studies and findings that show the disproportionate tax rates among the various income groups in the country. Tax regimes are supposed to be progressive, with the wealthiest paying the highest tax rates. However, in the case of the United States, the very rich pay lower tax rates, begging the question, “Should We Tax the Rich More?” 

Works Cited

Gleckman, Howard. “How Should We Tax the Rich?” Forbes. 11 September 2019. https://www.forbes.com/sites/howardgleckman/2019/09/11/how-should-we-tax-the-rich/#7caba3ac38bdLeonhardt, David. “The Rich Really Do Pay Lower Taxes Than You.” The New York Times. 6 October 2019. https://www.nytimes.com/interactive/2019/10/06/opinion/income-tax-rate-wealthy.htmlSteverman, Ben. et al. “A Year After the Middle Class Tax Cut, the Rich Are Winning.” Bloomberg. 18 December 2018. https://www.bloomberg.com/graphics/2018-tax-plan-consequences/

Short Essay Question Two

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Short Essay: Question Two

President Truman’s decisions to drop atomic bombs on the Japanese cities of Hiroshima and Nagasaki during the Second World War faced some questions and criticism, although the president defended his decision. The reason why the president decided to drop the bombs is that the Japanese refused to surrender unconditionally, as demanded by the United States. The war had been raging for years, and the Japanese showed no signs of surrender to put an end to the war. Japan declared war on the United States and attacked US fleets at Pearl Harbor (Donohue 12). They were also interested in American-owned assets in the Pacific region, and this is why they angered the US.

The United States was keen to maintain its position as a World Super Power, and thus it could not take such threats and aggravations lying down. During the last days of the war, the Japanese showed signs of relenting, yet the United States still decided to drop atomic bombs. One reason for this was to punish Japan for its grandstanding and refusal to surrender and end the war. Another reason for the bombings was that the United States wanted to show the world that any attacks would be met with a fierce retaliation, such as the atomic bombs.

President Truman had several options, one of them being accepting the conditional surrender of Japan. Another option was to wait for the weakened Japanese troops to surrender with time, and also demonstrating the atomic bombs to Japanese leaders before the actual bombings (Walker 24). All these would have been a sign of weakness, according to the US. It is difficult to judge if President Truman was right in his decision. The main issue was that the bombs were too severe of retaliation, and it affected hundreds of thousands of civilians. The effects of the bombs are still felt today in Japan.

Works Cited

Donohue, Nathan. “Understanding the decision to drop the bomb on Hiroshima and Nagasaki.” Center for Strategic & International Studies (2012).

Walker, J. Samuel. Prompt and utter destruction: Truman and the use of atomic bombs against Japan. UNC Press Books, 2016.

Schindler’s List (2)

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Schindler’s List

The Holocaust is one of the most horrific events in human history, between 1939 and 1945, Nazis systematically murdered more than six million Jews in Germany and neighboring countries, wiping out nearly two-thirds of Europe’s Jewish population. Film is a powerful storytelling tool, and Steven Spielberg recreates the terrors of the Holocaust is the critically acclaimed film, ‘Schindler’s List.’ It is difficult to recreate the scale of suffering and death that happened during the actual event, but the film represents a stellar performance by all those involved to provide audiences with a most realistic view of what happened. Spielberg uses color and different camera angles to highlight specific themes and ideas in the film.

Oskar Schindler is the main protagonist in the film. He is a German businessman interested in setting up a factory in Krakow. He bribes the Nazi soldiers to allow him to set up an enamelware factory, and keep his workers in their jobs even when most Jews were being shipped off to concentration camps. Schindler employs the services of an accountant named Itzhak Stern, who helps him get investors for his business. Schindler and Stern run a successful operation, with Jews working in the factory due to their lower labor costs. Schindler bribes the German armed forces by telling them that his factory supports the German war effort, and his workers remain working. However, as the war continues, the Germans lose their ground, and Second Lieutenant Amon Goth is instructed to transfer all the Jews to the Auschwitz concentration camp. Wanting to save as many lives as possible, Schindler offers Goth a huge bribe to keep his workers and relocate his factory to Brunnlitz (Tabraiz 12). Schindler witnesses the brutal clearing of the Jews from the ghetto, which leaves many of them dead. This violence and death affect him profoundly, and he tries to save as many Jews as he can. Schindler spends all his wealth on bribes to German officials and runs out of money by 1945. This coincided with Germany’s surrender having lost the war, and Schindler is to be captured as a war profiteer and Nazi. Before feeling, he bribes the German officials not to kill his workers, and the grateful Jews give him a signed letter attesting to the fact that he saved many Jewish lives.

One of the most remarkable features of Schindler’s List is its lack of color. Only very few scenes in the movie were shot in color, and this was intentional on the part of the film director. The Holocaust ended in the year 1945, and recreating events form that time would prove to be very challenging. Spielberg decided to use black and white to make the film more realistic and achieved his goal perfectly. Most of the scenes were shot on location in Poland, where the actual events happened. Although the Holocaust happened more than seventy years ago, viewers watching Schindler’s List feel like they are transported back in time to the time of the real events in the movie. This feeling allows audiences to immerse themselves in the events of the Holocaust and sympathize with all the people who suffered and died (Tabraiz 15). The lack of color also shows the draining of life during the film. Millions of people died during the Holocaust. Color is a sign of life and happiness, both of which were destroyed during the Holocaust. The black and white nature of the film captures the bleak mood of the film.

Another notable feature of the film is its use of color in specific scenes. One of the scenes with color in ‘Schindler’s List’ is the opening scene. Here, audiences see a Jewish family in prayer. The lit candles symbolize light, faith, and hope as the family engages in the religious ritual. At this time, the Jews are still free to practice their religion. However, as the scene progresses, the candles burn out, and the color disappears with the flame. The draining of color from the scene is a sign of hopelessness and death that is to come as a train transporting Jews to concentration camps appears. The girl in a red coat is one of the highlights of the film that emphasizes the use of color (Ott & Burgchardt 25). One day while riding a horse, Schindler witnesses the inhumane eviction of Jews from their homes. One person stands out from the crowd, a little girl in a red coat roaming the streets. Schindler follows her movements as she goes into a house and hides under the bed. Schindler later sees the same girl in a pile of dead bodies. The red coat is a symbol of bloodshed and the death of innocent Jews. Another prominent technique is that the film is the use of camera angles to convey certain ideas. In the opening scene, the camera pans to the fading candle of the flame in a close-up shot. The smoke from the candle then turns into smoke billowing from a train (Goodman 276). This symbolizes the transition from peace to war and death.

In conclusion, Spielberg does a stellar job of telling the story of the Holocaust to audiences in later times. The film reminds people of the truly ghastly acts that human beings can be capable of, and how the actions of one man saved many. Schindler sacrificed all his wealth to save his workers, and this leaves people to wonder how many more lives would have been saved if others like Schindler, stood up to be counted. Schindler’s List is a powerful and unforgettable reminder of human cruelty, but also human kindness. Works Cited

Goodman, Nancy R. “Opening the Mind to Trauma Through Oscillations of Focus: Learning From the Film Schindler’s List: Nancy R. Goodman.” The Power of Witnessing. Routledge, 2012. 273-279.

Ott, Brian L., and Carl R. Burgchardt. “On critical-rhetorical pedagogy: Dialoging with Schindler’s List.” Western Journal of Communication 77.1 (2013): 14-33.

Tabraiz, Anas. “The holocaust as film and literature in Schindler’s List.” Creative Forum. Vol. 21. No. 1-2. Bahri Publications, 2008.

Sacrifice and Love in ‘Casablanca’

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Sacrifice and Love in ‘Casablanca’

The 1942 film ‘Casablanca’ directed by Michael Curtiz is a romantic drama revolving around World War II. Rick is the main character in the movie, played by Humphrey Bogart. At the time, Casablanca was a bustling city with immigrants from all parts of the world on transit, mostly to the United States. Rick is an American expatriate who runs a popular café in Casablanca frequented by many patrons. Rick is a politically neutral man who keeps to himself, never interacting with the patrons in his café. However, as the film progresses, the story of Rick’s past emerges with the arrival of Ilsa Lund in Casablanca. The film is a story about war, love, and the struggle to find happiness and freedom. While ‘Casablanca’ is essentially a film about love and freedom, it also shows that the pursuit of these goals comes at a great sacrifice.

At the beginning of the film, Rick is shown to be an eccentric man whose sole focus is on running his bar. Amid the war, he never takes any political stand telling people that politics is not his business. However, in the past, Rick had been a gunrunner and fought for the Loyalist side during the Spanish War. A crook named Ugarte lays his hands on some valuable letters of transit that would allow the bearers to travel to any destination. He plans to sell them and asks Rick to keep them safe before the sale. However, Ugarte is arrested and dies before he can sell them, and Rick keeps them in his possession (Plath 12). Ilsa Lund, Rick’s former lover, and her husband Victor Laszlo arrive in Casablanca soon afterward. On seeing Ilsa, Rick is angry because she left him without explanation in Paris. Victor wants to purchase the letters, but Rick refuses due to his history with Ilsa. Ilsa sneaks into Rick’s café and explains to him the circumstances of their separation, and also confesses her love for him. Rick finally agrees to help Victor, giving Ilsa the impression that she would remain in Casablanca with Rick. He dupes Captain Renault, and Laszlo and Ilsa escape to America.

Ilsa made a sacrifice in leaving Rick in Paris. Before meeting Rick, Ilsa had been married to Victor but thought that he was dead. She kept this information secret from Rick the whole time they were together. In the film, Ilsa and Rick had planned to leave Paris together. In the scene showing their separation, Rick stands on the train platform on a rainy day. He keeps looking around, waiting for Ilsa to arrive, but she never does. When the train master announces that its three minutes before the train departs, Rick looks anxiously at his watch. Sam arrives with a note from Ilsa, telling Rick that she would not be coming, but that she cared deeply for him (Movie Predictor 46:03). Rick looks crestfallen, knowing that Ilsa would not show up, and he is forced to leave Ilsa alone. This particular scene shows the sacrifice that Ilsa made in leaving Rick, although she loved him. Just before the planned departure, she found out that her husband was still alive and made up her mind to stay and nurse him back to health.

The final scene of ‘Casablanca’ shows the sacrifice that Rick made in letting Ilsa leave with her husband Victor ( Movie Predictor 1:36:01) Rick made an agreement with Captain Renault that would have the captain arrest Victor for possession of the letters, while Ilsa and Rick remained in Casablanca. However, on reaching the airport, Rick tells Ilsa that she would be leaving with her husband. Despite the fact that Rick loved Ilsa, he knew that it was the best thing for her to go with her husband. At first, Ilsa is confused to find her name among the list of those flying because she thought she was staying in Casablanca. She grabs Rick by the lapels of his coat, protesting his decision. This scene in the film shows that Rick sacrificed his love and a life with Ilsa just so she could be safe with her husband. Although Rick loved Ilsa, he knew that she agreed to stay with him so that her husband could be safe (Robertson & v 15). Rick could have kept her, but he chose to allow her to leave. Additionally, Ilsa was ready to sacrifice her life with Victor just so he could get the letters of transit and leave Casablanca. Ilsa knew that her husband’s life was in danger, and she would do anything to keep him safe, including faking love for Rick and letting Victor leave without her.

In conclusion, the film ‘Casablanca’ is mostly about love and the sacrifices that people are willing to make for those they love. Rick and Ilsa were lovers from years before, but they were separated by circumstances. Ilsa had been married but assumed her husband was dead. Upon learning that he was still alive, she sacrificed the new happiness and love she had found with Rick to nurse her husband. The romance between Rick and Ilsa endured for many years, shown in how affected Rick is by Ilsa’s appearance in Casablanca. Ilsa and her husband Victor are trying to escape, and Rick sacrifices his love for Ilsa so that she can be happy with her husband. Love is very rarely a simple thing, and people must be willing to make difficult choices and sacrifices for the wellbeing of their loved ones, as Rick and Ilsa do in ‘Casablanca.’

Works Cited

Movie Predictor “Casablanca| 1942” YouTube. 19 February 2019. Retrieved from www.youtube.com/watch?v=gUKVorB3Ll8Plath, James. Critical Insights: Film-Casablanca. Salam Press, 2016.

Robertson, James C., and James Robertson. The Casablanca man: the cinema of Michael Curtiz. Routledge, 2013.

Run the World (Girls)

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Run the World (Girls)

Music is a powerful tool that people use to pass across any message that they want. Music is an important part of a people’s culture, and this is especially true for the African-American culture. The black community has many prominent names in all genres of music, such as hip-hop, rap, RnB, jazz, among others. Beyonce is arguably one of the biggest musical names of our times. Since she began her singing career as part of the musical trio Destiny’s Child and later branched out on her own, she has made a name and fortune on her own right. She has several albums and songs to her name that have been released over the years. Her album ‘Homecoming’ released in April 2019 showcases Beyonce’s powerful vocals, enchanting performance, and a strong message, especially for the black community. One of my favorite songs from the Homecoming album is ‘Run the World (Girls)’ which brings a message of empowerment to women.

The video for the song is enchanting, to say the very least. At the start of the video, Beyonce and a group of women come out to face a group of men. The women then start to sing that they run the world. Their moves are perfectly choreographed. The girls are all dressed like they are prepared for a fight, and there is even a lion in one scene. There are also scenes showing a barren landscape and debris strewn all over, showing that there was a fight. Beyonce sings while a car blows up behind her. She also has on some fierce make-up that makes her look dominating.

The song is about women and their strength that gives them the power to run the world. The opening lyrics of the song are, “Girls, we run this mother, yeah!” (Beyonce) This shows that the women are asserting themselves, especially to the men standing in front of them. The women all look quite feminine with their dressing, make-up and hair, but they show up ready for a fight. This is something that women have to do every day; they have to fight for their positions at work, at home, in business, and in all other areas of their lives. The powerful lyrics show that they know the power they have, and they can run the world.

Beyonce emphasizes the power that women have. Although they may no use their physical power, they have other traits that help them rule the world. The lyrics, “”My persuasion can build a nation. Endless power Our love we can devour. You’ll do anything for me” (Beyonce) is a perfect example of this. Women are quite persuasive, and they use their feminine qualities as well as their love to put across their message. All the people in the world will do anything for women, especially the men. In society, women take on the traditional role of motherhood, being a wife, and bearing children. No matter how far we have come, many still hold on to these beliefs, and women are forced to struggle to get equal treatment in other areas (Utley 23). However, Beyonce sings that women are more than capable of handling all their responsibilities, both at home and in school (Chatman 931). According to her, women are “strong enough to bear the children then get back to business.”

Beyonce lauds women for their struggle and achievements in education and their hustles. She sings, “”I’m reping for the girls that’s Taking over the world Help me raise a glass for the college grads.” (Beyonce) This lyric encourages women never to lose hope and get the education they need so that they can take charge of their own lives as well as the world. In addition to this, Beyonce appreciates the women who work hard to maintain their own lives and make their money. She uses the phrase “That’s in the club rocking the latest/ Who will buy it for themselves and get more money later” (Beyonce) to show that women should not be afraid to spend their money and make even more. Women are also careful to look their best because it makes them feel good. Beyonce also recognizes the hard work that women put into their work, saying, “I work my nine to five, better cut my check! This goes out to all the women getting it in you on your grind”(Beyonce) they are willing to put in all the hours and work to achieve what they need, and they expect to get paid for it.

The song ‘Run the World (Girls)’ from Beyonce’s ‘Homecoming’ album passes across a powerful message for women and especially African-American women. Beyonce is an icon in the black community, and she often sings about issues affecting her people. ‘Run the World’ appreciates the many struggles that women have to go through in their lives. The phrase ‘Run the World’ encourages women to harness their strength and courage and take charge of the world around them. The music video carries this theme perfectly with the women in the video dressed for a fight, and vigorous choreography. The beats of the song have a high tempo showing the upbeat message and the high energy in the song. Beyonce talks about women and the different roles they play in the family, business, and their places of work. Women are strong enough to have children and still go back to work. They always work hard and strive to look their best. The song is a tribute to the power of women and the social position they hold in the world.

Works Cited

Beyonce “Run the World (Girls)” 18 May 2011. Retrieved from www.youtube.com/watch?v=VBmMU_iwe6UChatman, Dayna. “Pregnancy, Then It’s “Back To Business” Beyoncé, black femininity, and the politics of a post-feminist gender regime.” Feminist Media Studies 15.6 (2015): 926-941.

Utley, Ebony A. “What does Beyoncé mean to young girls?.” Journal of Popular Music Studies 29.2 (2017): e12212.

Corporate Governance Practices In The Uk The Case Of Greene King Plc

Corporate Governance Practices In The UK: The Case Of Greene King Plc

Contents

TOC o “1-3” h z u HYPERLINK l “_Toc376172867” Overview of the Case Study Organisation PAGEREF _Toc376172867 h 1

HYPERLINK l “_Toc376172868” Greene King’s Compliance and Disclosure Issues PAGEREF _Toc376172868 h 1

HYPERLINK l “_Toc376172869” Shareholder Relations PAGEREF _Toc376172869 h 5

Overview of the Case Study Organisation

Greene King is a leading UK brewery located in Bury St Edmunds, Suffolk. The brewery is made up of three core businesses – retail, pub partners as well as brewing & brands. Retailing involves company operated pubs, hotels and restaurants, pub partners involves agent operated pubs while brewing & brands involves two breweries, one in Bury St Edmunds and another in Dunbar (Greene King, 2012). Currently, the brewery occupies about 2 percent of the UK beer market and is a constituent of the FTSE 250 share index and the London Stock Exchange (Euromonitor, 2010). By local standards, a 2 percent market share can be considered modest given the humble beginnings of the company – it started as a small family brewery back in 1799. Greene King’s current market share can be attributed to a series of acquisitions. Some of the most notable acquisitions include Ridley’s in 2005, Morland in 1999, Hardays and Hansons 2006 and Belhaven in 2005 (Greene King, 2012). Moreover, this modest market share can be attributed to the strong “Greene King” brand attached to a host of popular beers such as Abbot Ale, IPA Export, St Edmunds and IPA (Euromonitor, 2010).

However, the company has been involved in a number of controversies in the recent years due to its shrewd acquisition strategy. The company has been accused by consumer groups for trying to create a near monopoly by acquiring competing breweries and suspending the sale of locally brewed beers. For instance, the company was involved in a controversy with revellers of Lewes Arms pub located in Lewes, East Sussex for withdrawing the sale of a locally brewed beer (Davies, 2006). In view of this controversially successful business strategy there is need to examine how the company undertakes its core corporate governance obligations. This concern forms the major aim of this report. Specifically, the report examines the company’s disclosure and a compliance practices as well as its treatment of stakeholders. For purposes of referencing and comparability, this examination will be based on the provisions of the UK Corporate Governance Code.

Greene King’s Compliance and Disclosure IssuesThe UK has one of the most responsive corporate governance laws in the world. Governance of listed companies in the UK is regulated by the UK Corporate Governance Act firstly enacted in 1992 and as amended severally. The code is based on the principle of “comply or explain” – listed companies are expected to disclose any incidences of non-compliance stating reasons for non-compliance (Solomon, 2011). Specifically, the law stipulates best practices guiding key corporate undertakings such as composition of the executive board, shareholder relations, director remuneration, accountability, and effectiveness of the board (Mallin, 2007). Companies that fail to comply with the set governance standards are expected to give out the reasons for non-compliance and how they plan to address similar governance concerns in the future. Those who fail to do so face heavy fines as stipulated in the Listing Rules (Solomon, 2001).

Greene King commits itself in maintaining high corporate governance standards. This is because the brewery understands that high corporate governance standards are critical to the achievement of organisational goals, creation of strong shareholder value, safeguarding stakeholder interests, and delivery of business and corporate level strategies (Clarke, 2004; Solomon, 2011). Greene King believes that it complies with the UK Corporate Governance Code and the Financial Services Authority (FSA) regulations insofar as addressing of shareholder interests is concerned. Specifically, it believes that its strategies to invest in its people through popular value adding brands and long term growth through acquisitions qualify as best corporate governance practices (Greene King, 2012).

At a glance, Greene King’s compliance with the UK Corporate Governance Code can be summarised into the following key indicators: it has in place competent board made up of competitively elected persons with balanced skills and knowledge of the company activities, it employs a performance-based executive remuneration procedure, it adheres to accountability procedures such as risk management, auditing and regular financial reporting, and it has a good rapport with its shareholders (Greene King, 2012). Analytically, these corporate undertakings exemplify good principles of governance and go a long way in helping the company to achieve its long term strategy of delivering value, quality and service to its stakeholders.

Moreover, the company discloses a number of non-compliance incidences. In respect to the UK Corporate Governance Code and the Financial Services Authority (FSA), Greene King discloses the following non-compliance incidences during the 2012 financial year as related to B.7.1 and C.3.1 requirements of the Code (Greene King, 2012). B.7.1 of the Code requires companies forming the FTSE index to subject their directors to annual election by shareholders while on the other hand, regulation C.3.1 of the Code requires listed companies to include at least three directors and all non-executive directors (Mallin, 2007).

In regards to the first non-compliance, the company discloses that it did not subject its directors to the required annual shareholder re-election exercise because there was a clear indicator that a majority of institutional shareholders were not in favour of this requirement. Moreover, it discloses that the decision not to subject its directors to the annual shareholder re-election was as a result of specific circumstances. These specific circumstances included the fact at the time there were only five serving directors, three of whom were re-elected in 2010 and the other two were re-elected in 2011 AGM as well as two new ones who joined the company in 2011 (Greene King, 2012).

On the other hand, the company discloses that it did not meet the minimum requirement regarding the composition of the audit committee membership between 2 May and 26 July 2011. This is because during this time, the audit committee comprised of only two members. However, the company rectified this glitch by appointing Mike Coupe to the committee in the capacity of an independent non-executive director (Greene King, 2012).

These two disclosures underscore the company’s commitment to enhancing corporate integrity. According to Bowen (2008), governance integrity from an Anglo-American model of corporate governance entails fulfilling of shareholders’ interests. Specifically, E.1 and E.2, B.7, C.1 and C.3 regulations of the Code regarding shareholder relations, re-election of board members and transparency require listed companies to hold dialogue with shareholders and to fulfil their interests at all times. This should be enhanced through shareholder participation during AGM and election of board members (Cadbury, 1992). A company that believes in corporate integrity should allow monitoring by large institutional shareholders, should peg director remuneration to their performance, should spread powers among board members – the president should not be the treasurer, should encourage monitoring from the board members and should institute sound internal auditing procedures (Mallin, 2007). In respect to these controls and in view of the foregoing non-compliance disclosures, it is arguable that Greene King’s leadership practices meet the minimum governance integrity threshold. Specifically, the disclosure underscores the integrity of the company’s governance particularly in regards to the composition and effectiveness of its board – though it did not subject its directors to the annual shareholder re-election the current directors are equally qualified to execute their mandate in a professional and unbiased manner.

Nevertheless, the extent to which Green King governance meets the minimum integrity requirements is questionable. One major incidence that puts the integrity of Greene King’s corporate governance practices to question is the Lewes Arms pub stalemate where the company’s decision to withdrawal a popular local beer (Harvey’s Sussex Best Bitter ale), from sale in the pub caused year-long crisis with the pub’s regulars (Davies, 2006). The company was forced to change its policy and to relieve one of its Directors, Mark Angela of his duties following what reports termed as a major corporate climb-down (Minogue, 2007). Based on the overarching notion that one of the core aims of corporate governance is to mitigate stakeholder conflicts and to enhance cohesion among stakeholders (OECD, 2004), it is arguable that Greene King decision to pull down Harvey’s from Lewes Arms shelves was done in complete disregard to stakeholders needs. Specifically, the Code requires the company to develop and implement policies that take into considerations the needs of the internal and external stakeholders. The foregoing disclosures notwithstanding, the Lewes Arms controversy as well as a host of other questionable acquisitions undermines Greene King’s corporate integrity threshold.

These controversies lower the company’s integrity threshold. According to the Anglo-American corporate governance model espoused in the Code, listed companies should roll out business strategies that take into consideration the local communities interests – though the business of any for-profit entity is to make profit, companies should not implement strategies that disrupt the lives of the locals but rather should aim at adding value to the lives of the local communities (Madura, 2009). Specifically, as part of its social corporate responsibilities, Greene King is expected to align its businesses to the local cultural values including availing for sale beer brands such as Harvey’s that have deep meaning to the lives of the communities (Haidar, 2009). Yet the pub has earned a name among revellers in the UK as an aloof brewery interested in enhancing its corporate position in the local beer market, that has lost focus of the local beer tastes and that will not hesitate to close a pub if it feels Overall, any attempt to deprive the local communities of their closely held cultural values is as good as to bad governance.

Insofar as the agency problem is concerned, Greene King’s B.7 and C.3 disclosures amount to good principles of governance. According to Solomon (2011), the agency problem posits that while the manager (agent) is tasked with the core responsibility of safeguarding the shareholders (principals) interests, most of the times managers act out of self interest to maximise their overall returns at the expense of their principals. Some of the most evident ways that managers act in conflict with the shareholder interest is approving unrealistic remuneration packages for directors while declaring low dividends for the shareholders (Madura, 2009). While acknowledging the reality that it is very hard for a company to completely eliminate the agency problem, it is arguable that Greene King fares relatively well insofar as reducing the agency problem is concerns. It achieves this by pursuing a performance-based compensation approach for its directors that allows a direct shareholder influence through AGM and voting. The two disclosures show that the company is committed to giving shareholders the opportunity to determine the composition and hence the effectiveness of the board of directors (Haidar, 2009). Moreover, they show that the company is committed to accountability in reporting to the shareholders the annual performance as well as the projected growth (Solomon, 2001).

From a different front, the two foregoing disclosures underscore Greene King’s commitment to identifying and managing organisational risks brought about by moral hazards and adverse selection. According to Arcot, Bruno and Faure-Grimaud (2005), OECD (2004) and Solomon (2011), company’s can mitigate potential risks by streamlining their boards – only selecting highly experienced, knowledgeable, and committed directors with a clear understanding of the company’s activities. To this effect, Greene King selects directs based on merit – only qualified candidates are shortlisted for approval by the shareholders.

Through the audit committee whose composition forms part of the C.3 non-compliance disclosure discussed above, the company’s competent board manages potential risks by scrutinising the viability of its long term strategies, their impact on shareholders’ interests. Since a competitively elected board is not only capable of achieving its objectives, working as a team, and optimising the utility of key organisational resources such as time, finance, and human capital (Haidar, 2009), it is arguable that Greene King governance practices are capable of mitigating risks such as agency problem. This is true since the board is responsible for the approval of long term strategies and their implementation, approving budgets and financial statements, approving acquisitions and disposals, and overseeing the overall operations of the company as per the set strategic paths (Greene King, 2012).

Moreover, Greene King reduces risks through

Shareholder RelationsAs a leading brewery in the UK, Greene King’s has many stakeholders. These include shareholders, suppliers, customers, government, competitors, trade partners, communities, creditors, debt holders, board members, executives, and normal employees. However, some of these stakeholders are not significant enough to warrant major concern from the day-to-day execution of company strategies (Aglietta & Rebérioux, 2005). For instance, the company is not under any obligations to fulfil the needs of its competitors and business partners. However, other stakeholders such as the government and shareholders warrant much attention. While drawing on the Anglo-American corporate governance model as described by Mallin (2007) and Solomon (2011), these stakeholders can be broadly grouped into two broad categories depending on their position in the company’s corporate governance chart. The two broad categories are external and internal stakeholders. Board members, executive managers, and normal employees fall in the internal category while the other stakeholders fall in the external category.

From an Anglo-American corporate governance model standpoint, it is arguable that the company should be more concerned with the external stakeholders than internal ones. This argument draws from contemporary business practices in the EU and the United States where bulk of shareholders are made of large institutional investors with ownership and controlling powers (Madura, 2009). As a matter of fact, the composition of boards of large multinational companies operating in the EU is purely based on shareholders’ interests – companies create boards that have a clear understanding of their activities, their market, their industry, and their long term customer dynamics (Clarke, 2004; Clarke & Chanlat, 2009). Greene King’s non-compliance disclosure of the B.7 and C.3 underscores this argument – it listened to its institutional investors in its decision not to subject its board of directors from the annual shareholder re-election.

Nevertheless, not all external stakeholders are significant to Greene King’s operations within the UK. According to Clarke and Dela-Rama (2008), the business of for-profit organisations is to maximise returns by leveraging its core competencies and resources. This argument suggests that for-profit organisations are only obligated to serving their customers, abiding by the set regulatory frameworks, and giving back to the local communities through sponsorships and environment-friendly practices. To this effect, Green King should put its emphasis on shareholders, government agencies, and local communities. The nature of the beer UK industry demands breweries to closely monitor customers’ tastes and dutifully respond to any changes thereof. As a matter of fact, Davies (2006) and Minogue (2007) point out that beer drinking is not only a matter of getting tipsy but rather catching up on local issues such as sports, politics, healthcare, and business matters. It is assumed serving its shareholders amounts to serving the local communities (customers) – Greene King’s customers are its shareholders too. This arguments draws from the evidence that customers will tend to buy from company they have invested in (Aglietta & Rebérioux, 2005). Moreover, the company cannot however serve its customers well without honouring its corporate governance obligations as stipulated in the Code and as required by the FSA. Overall, serving shareholders, government agencies and local communities (customers) should be perceived as a single obligation. Of course the company should ensure that it has an effective board of directors so as to better serve its shareholders, government agencies, and the local communities. Since the Code requires the company to put in place an effective board of directors (Clarke & Chanlat, 2009), it is only fair to assert that such board is meant to safeguard the interests of the shareholders, government agencies, and local communities.

Currently, Greene King has very little respect for the local communities. The Lewes Arms pub stalemate highlighted above show that the company gives little emphasis to its regular consumers’ beer tastes and other social values. As a matter of fact, Minogue (2007) point out that Greene King as well as other big beer companies are on the verge of possessing all major beer outlets and converting them into other businesses such as such as restaurants or even residential flats to maximise on profits at the expense of the role such pubs plays in the local communities. It should be noted that the beer industry in the UK is much more of a social industry than a commercial one insofar as customer loyalty and the taste for new products is concerned (Davies, 2006; Minogue, 2007). The Lewes Arms pub, for example, hosts many local activities including sports which are coordinated by the revellers and not by the management. Moreover, some of the pub’s customers are renowned persons while others have been regulars since 1970s (Minogue, 2007). It is therefore ironical for Greene King to withdraw a popular beer with a huge socio-economic connotation without seeking the approval of the regulars.

Overall, the Lewes Arms stalemate taints Greene King’s corporate standing. Greene King has been accused of monopolising the beer market through controversial acquisitions some of which are not approved by its shareholders or even by the local communities (Minogue, 2007). Interestingly, the company does not disclose this major governance weakness as part of the C.2 requirement regarding risk management and internal control. Actually, it reports in its website that it fulfils the risk management and internal control requirement when undertaking its acquisition and expansion strategies (Greene King, 2012). To some extent, this is not true especially when the Lewes Arms stalemate and other acquisitions-related controversies are taken into consideration. Analytically, these actions underscore the argument that the company is yet to accept the contemporary corporate governance practices within the Anglo-American region that put shareholders at the prime position among all other company stakeholders.

Conclusion

Corporate governance from an Anglo-American perspective is all about giving emphasis to shareholder interests. Large corporations such as Greene King are expected by the Code to put in place competitively elected boards, employ performance-based remuneration system for its directors, conform to conventional accountability practices, cultivate sustainable shareholder relations, and subscribe to ethical business practices such as giving back to the community and partnering with community-based groups in addressing climate change concerns. In the event a company does not achieve any of the above feats, it must make a disclosure to that effect and how it is planning to address the non-compliance. Green King fares relatively well insofar as abiding by fulfilling its corporate governance obligations are concerned. It even discloses where it feels it has not fulfilled the regulations. However, the company needs to work closely with the local communities (customers) to reduce incidences of stakeholder conflicts such as the Lewes Arms stalemate. Given the social nature of the UK beer industry, Greene King should work closely with the regulars as part of its long term strategy to create value, quality, and service.

References

Aglietta, M. & Rebérioux, A. (2005). Corporate Governance Adrift: A Critique of Shareholder Value. Northampton, MA: Edward Elgar.

Arcot, S., Bruno, V. & Faure-Grimaud, A. (December 2005). ‘Corporate Governance in the U.K.: is the comply-or-explain working?’ FMG CG Working paper 001.

Bowen, W. G, (2008). The Board Book: An Insider’s Guide for Directors and Trustees. New York, NY: W.W. Norton & Company.

Cadbury, A. (1992). Report of the Committee on the Financial Aspects of Corporate Governance. Gee, London, December, 1992, Sections 3.4.

Clarke, T. & Chanlat, J. (eds.) (2009). European Corporate Governance. New York, NY: Routledge.

Clarke, T. & Dela-Rama, M. (eds.) (2008). Fundamentals of Corporate Governance (4 Volume Series). London and Thousand Oaks, CA: Sage.

Clarke, T. (ed.) (2004) “Theories of Corporate Governance: The Philosophical Foundations of Corporate Governance,” London and New York: Routledge.

Davies, N. (November 4, 2006). Bonfire night protest turns heat on brewery. The Guardian. [Online]. Available at: HYPERLINK “http://www.guardian.co.uk/uk/2006/nov/04/nickdavies.uknews2/” http://www.guardian.co.uk/uk/2006/nov/04/nickdavies.uknews2/ (accessed August 19, 2012).

Euromonitor (2010). Company shares of beer by national brand owner 2006-2010. Europmonitor. [Online]. Available at: HYPERLINK “http://www.euromonitor.com/beer-in-the-united-kingdom/report/” www.euromonitor.com/beer-in-the-united-kingdom/report/ (accessed August 19, 2012).

Greene King (2012). Time well spent: Annual report 2012. Greene King Plc. [Online]. Available at: HYPERLINK “http://www.greenekingreports.com/financial_statements/group_accounts/independent_auditors_report_group/” http://www.greenekingreports.com/financial_statements/group_accounts/independent_auditors_report_group/ (accessed August 19, 2012).

Haidar, J.I. (2009). ‘Investor protections and economic growth’, Economics Letters, Elsevier, Vol. 103(1), pp. 1-4.

Madura, J. (2010). International financial management. Australia, South-Western Cengage Learning.

Mallin, C. (2007). Corporate governance, 7th Ed. New York, NY: Oxford University Press.

Minogue, T. (March 23, 2007). ‘Last orders’. [Online]. Available at: HYPERLINK “http://www.guardian.co.uk/uk/2007/mar/23/britishidentity.travel /” http://www.guardian.co.uk/uk/2007/mar/23/britishidentity.travel / (accessed August 19, 2012).

OECD (2004). ‘OECD Principals of Corporate Governance, 2004, Articles I and V’. OECD. [Online]. Available at: HYPERLINK “http://www.oecd.org/dataoecd/32/18/31557724.pdf/” http://www.oecd.org/dataoecd/32/18/31557724.pdf/ (accessed August 19, 2012).

Solomon, J. (2011). Corporate Governance and Accountability, 2nd ed. West Sussex: John Wiley & Sons.

Corporate governance in Saudi Arabia focusing on the responsibility of board of directors

Corporate governance in Saudi Arabia focusing on the responsibility of board of directors

1.0 Chapter

1.1 IntroductionThe present study seeks to examine corporate governance in Saudi Arabia focusing on the responsibility of board of directors. Effective corporate governance is key in ensuring that firms utilize their limited resources in an efficient manner, protects the interests of all shareholders, makes prudent decisions and strengthens relationship with employees, suppliers, creditors, communities and all stakeholders. As noted by Rashidah,& Yaseen, (2006) good corporate governance practices is needed for attracting the more capital required for continued long-term growth of any firm.

The proposed study shall therefore attempt ton examine the role of board of directors play in corporate governance in Saudi Arabia. By studying and examining the main duties of the board of directors, the responsibilities of the board, its formation, meetings and committees, and through careful examination of the corporate governance regulations in Saudi Arabia, the study shall explore how the board of directors function and work towards implementation of corporate governance with firms operating in Saudi Arabia.

Of late, there has been increased awareness and interest of importance of corporate governance in Saudi Arabia. In the aftermath of market correction that occurred in 2006, when the Saudi Stock Market (SSM) faced a big market crash, resulting in the Capital Market Authority (CMA) to cancel the trading of these two companies Al Sanie and Saad Group. Accordingly, these events raised serious questions regarding the role of different motoring bodies such as the board of directors in protecting the interests of investors. This forced the Saudi government and market regulators to respond by directing companies to improve their corporate governance as well as undertake legal and institutional reforms. This for example, resulted in Corporate Governance Regulation (CGR) (2006), framework on corporate governance best practices to be followed by banks, and strengthening of supervisory roles within the financial sector (The World Bank, 2009). Though these measures point to the right direction, the board of directors is needed to ensure that companies are implementing these measures as demanded by the authorities and the regulatory bodies.

This study will contribute to the knowledge of corporate governance in Saudi Arabia and help companies to develop regulators in developing suitable roles for board of directors in regard to corporate governance. Therefore, the Capital Market Authority may need to improve skills and responsibilities of boards

1.2 The importance of the topic

Presently, the importance of good corporate governance is being underline by governments and regulatory bodies to avoid corporate scandals that have witnessed in several countries. Certainly, the, corporate governance is an important tool in developing and controlling business. This is underpinned by the fact that corporate governance advocates for principles like fairness to shareholders, helping immediate communities, fighting unethical conduct and encourages companies to disclose their information. Several factors also indicate that corporate governance performance is affected by internal and external systems, one of them being the board of directors. It has been observed that there is a positive relationship between the board of directors and the firm’s performance.

Saudi Arabia like many other economies is going through increase market activities that are putting a lot of pressure for companies operating within the country to enhance their corporate governance practices. Owing to this, board of directors has a duty to ensure that corporate implement effective corporate governance practices. It is against this understood that it has become important to study the responsibility of the board of directors in corporate governance in Saudi Arabia.

1.3 Problem of study

This research study aims at analyzing the responsibility of board of directors in corporate governance in Saudi Arabia. As stated in the introduction part, Saudi Arabia in the recent past faced extraordinary stock market crash in 2006 that brought to the core the important role played by corporate governance (Al-Matari, 2012). However, there has been little research on the responsibility of the board of directors in corporate governance in Saudi Arabia. The effectiveness and efficiency of board or directors in performing the oversight role in corporate governance is expressed in different terms like composition and size. However, studies have varied on the which factors create an effective board of directors that can be used to ensure that an organization adopts corporate governance practices that will result in positive performance of the organization. This creates the need to analyze the responsibility of board of directors in corporate governance in Saudi Arabia.

1.4 Study Questions

The study questions for this research have been selected with the objective of understanding the role of the board of directors in corporate governance. This implies that each research question will be further expanded in subsequent chapters of the study. This further examination of the study questions will help in answering the present research question concerning the responsibility of Board of directors in corporate governance in Saudi Arabia. To achieve this aim the following research questions have formulated.

What are corporate governance practices in Saudi Arabia?

What are the responsibilities of board of directors in corporate governance in Saudi Arabia?

What is the improvement required on corporate governance provisions in regard to the responsibilities of the board of directors?

To answer the questions above, the main broad objective of the research study is to investigate corporate governance in Saudi Arabia and its relationship with board of directors. Alongside this broad objective the following specific objectives are also significant to the study:

to investigate the relationship between board size and firm performance in Saudi Arabia

To investigate the relationship between the independence of the audit committee and firm performance

To investigate how frequency of meetings affects firm performance

1.5 The reasons for choosing the topic

The current topic has been selected because Saudi Arabia as an emerging economy is facing increased interest to improve its corporate governance. This is because good and effective corporate governance will reduce the vulnerability of the Saudi stock market; enhance the property rights and lower transactions costs. In addition, strong corporate governance increases the investor confidence within the markets. However, the board of directors has a big responsibility in success of corporate governance. This research is interested in understanding the responsibilities of board of directors in relation to corporate governance. Understanding these responsibilities will assist in formulating strategies to improve oversight work of the board of directors regarding corporate governance.

1.6 The Structure of the Study

The dissertation is arranged in 5 chapters as underlined below

Chapter 1: Introduction: this chapter opens the with research paper by providing the background information of the dissertation, outlining the importance of the topic, pproblem of study, study questions and T reasons for choosing the topic.

Chapter 2: the literature review: this reviews the past literature on corporate governance and role of the board of directors in Saudi Arabia.

Chapter 3: methodology: this chapter describes the research methodology, instruments and techniques adopted by this dissertation to gather and analyze the data.

Chapter 4: data analysis: Describes both qualitative and quantitative techniques to be used in presenting and interpretation of the data in graphical forms and explains the findings.

Chapter 5: Conclusions, Recommendations: This is the final chapter, it summarizes the findings in each of the chapters as a conclusion, and offers recommendation based on the findings of the present research.

Literature review

Background of Corporate governance in Saudi Arabia

Corporate governance in Saudi Arabia was entrenched in 1985, when the ministry of commerce and industry enacted the disclosure and transparency standard. Al-Mulhem (1997) explains that corporate governance was strengthened in Saudi Arabia through this standard, owing to the fact that disclosure and transparency is viewed as one of core factor of corporate governance best practice. Al-Mulhem (1997) restates that the enactment f this standard in Saudi Arabia was an important decision that enhanced accounting and reporting in the country. Before, 1985, disclosure requirements in Saudi Arabia were awfully low. Advancement in corporate governance was made in 2006, when developed code of corporate governance. This code was developed to harmonize the standards of Saudi Arabia with international standards of corporate governance for example, the OECD code. The Saudi Arabia code of corporate governance comprises of three sections, Al-Janadi, et al (2013, 26) names them as “the rights of shareholders, the general assembly, disclosure and transparency and board of directors”.

Board independence

Past empirical studies have found a positive relationship between board independence and corporate voluntary disclosure. One such study was carried out by Forker (1992), which found a positive relationship between the number of external directors on the boards and comprehensiveness of the financial disclosure given. Similar findings have been reported by Laksamana (2008); Boesso and Kumar (2007) and Arcay & Vazquez (2005). Some studies have attempted to explain this positive relationship. For instance, Klein (2002); Beasley (1996) both established that the possibility of corporate managers to manage earning and engage in fraud is reduced when the number of non-executive directors on board is high. More so, Gul and Leng (2004) assert that a larger number of independent directors enhance the role board monitoring and increases the degree of corporate transparency.

On the contra, some empirical studies have found a negative relationship between external directors on boards and the degree of voluntary disclosure. For example,

Eng and Mak (2003) and Hoitash, et al (2009) found this negative relationship. similarly some studies such as Ho and Wong, (2001); Haniffa and Cooke, (2002)have found insignificant difference between independence of boards and voluntary disclosure.

According to Rashidah, and Yaseen, (2006) the board independence indicates the level of the independence of the board from the management of the company. The independence depends on the number of external board directors. Al-Matari et al (2012) note that including independent external directors is a critical tool to help the board of directors in overseeing the activities of the management of the company. Abbott et al (2004) explain that the OECD code of corporate governance (2004) outlines that independent board members have the ability to contribute considerably to the decisions taken by the board. Independent board directors are thought to be more objective in examining the performance of the management. More so, these independent directors play a crucial function in areas where the varying interests of the management, the shareholders and the company may differ, for example on succession, corporate control, audit function and executive remuneration.

Understanding that significance of having a high number of independent directors on the board of directors is important for a company. Indeed, as stated before, a numbers of researchers have found a positive link between board independence and shareholder interest. In addition, the proportion of independent or external directors on the board is usually used to assess the board independence. According to Al-Matari et al (2012) past findings have consistently reported that the number of independent directly has a positive relationship with the monitoring and financial reports. Instance, Beekes et al., (2004) in their study found that companies with a comparatively high percentage of external directors on the board, increased the conservativeness of these boards. Similar findings have been reported by Kiel and Nicholson (2003) who investigated the link between board demographics and corporate performance in selected Australian big public traded companies. Their study also revealed that there exists a positive link between the number of external directors and the performance of the company.

The size of the Board of Directors

The board of directors is responsible for overseeing the operations of the organization on behalf of the shareholders. The size of the board of directors therefore its effectiveness has drawn a lot of argument among various scholars. When talking of the board of directors of a given company, reference is made to the total number of directors who constitute the board. In this perspective and basing on the number of directors who sit in the board, there could be a small or large board of a company. A lot of contrast has existed among various researches who have studied the effectiveness of both small and large boards of directors in minimizing the agency costs of their companies as well as the suitability of their management practices.

Board size

Researchers on one side have argued that larger boards are effective when it comes to safeguarding the interests of the shareholders because the large boards varied expertise in addition to a wide range of experience which constitutes the some of the greatest assets in the synergistic governance by the board. Additionally, a large board is powerful and this is vital when it comes to advising and counseling on strategic options of the firm. Some writers such as Abdul Rahman and Ali (2006) as well as Zahra and Pearce (1989) have argued that having a large board is crucial because it helps create corporate identity as well as strengthening the link between the environment and the firm. To further support this stand, Forbes and Milliken (1999) have argued that the size of the board has a bearing on its effectiveness. For instance, they say that for a large board a wide range of skills and knowledge is at their disposal. Additionally, cognitive conflict is enhanced by the huge perspective assembled by a large board. According to Pfeffer (1972) the resource dependency theory points to the fact that the variety of knowledge present in large boards is crucial for resource management.

On the contrary some scholars have strongly advocated for a smaller board of directors citing various reasons. First of all, such researchers have criticized the credibility of large boards by saying that a larger number of directors frustrate decision making, coordination and communication as these processes become increasingly complex in the large boards. Again, in large boards it is argued that coordination of the various contributions of group members is very difficult. Proponents of this idea point to the fact that when the board is large, effective utilization of skills and knowledge is also difficult. Large boards are criticized on the basis that building trust, having strong cohesion, maintaining norms, building and maintaining trust and personal relationships is a daunting task. According to Lipton and Lorsch (1992) a large board is dysfunctional because it is easier for top managers to control the large board that does not realistically criticize the management decisions.

After analyzing various views on the size of the board, Abdellatif (2009) came to a conclusion that the performance of a corporation was negatively related to the size of the board but the size of the board was positively related to the value of the firm. The scholar also said that large boards did not necessarily add value or influence the value of accounting information. Supporters of a small board say that contradiction in objectives of the firm does not exist. Various reports and committees best practices in corporate governance supports small sizes of the boards of directors. For instance the Hampel Report (1998), Saudi Code of Corporate Governance (2006) and the Malaysian Code on Corporate Governance (2000, Revised 2007) support a smaller size of the board. Studies by Byard, Lin and Weintrop (2006), Yermack (1996) and Vafeas (2000) have found an association between disclosure and board size. The small size of the board therefore aids in quality management and better disclosure.

Board Member Perspective

There may be a difficulty in pinning a responsibility or accountability to the board of governors without understanding the role this board plays in terms of each board member or based on the role generally assigned to each board member. While members of the board may be appointed based on the individual’s expertise, the members have to understand that the authority they have is not exercisable collectively (Al-Matari et al 2012). According to the Saudi Arabia regulations on corporate governance (2011), there are rules and standards that control the management of joint stock companies that are listed on the Saudi Stock Exchange to guarantee that there is compliance with the best practices in governance to ensure that the rights of stakeholders are protected. According to the regulations, the board of directors is responsible for approving the corporate body’s strategic plans and key objectives. Besides this, the board of directors is also responsible for supervision of their implementation. As is evident, this mandate implies that the board of directors is answerable if and when the company’s strategic plans and objectives are not steering the company in the right direction. By and large, the board is thus culpable when a corporate body fails because it has an approval and a supervisory role in the formulation and implementation of the strategic plans as well as the objectives. Among the roles and functions of the board mandated by the Saudi Arabia corporate governance regulations, the board must lay down a comprehensive plan for the corporate body or company, detailing the main work plan and the strategy regarding management of any risk, review and revision of such policy. Determination of capital structure is also part of what the board is mandated to take care of and this includes establishing the accompanying financial objectives and then approval of annual budgets. This aspect of the role of board of governors shows that even financial failure of the corporate body shall ultimately cast culpability on the board. Coupled with the fact that another regulation (Corporate Governance Regulation 1(2) 2011) mandates the board of governors to supervise the main capital expenses and the acquisition or disposal of assets implies that almost everything that happens in the corporate body is in the limelight of the board and it is culpable when almost anything goes bad.

Audit Committee Variables

Independence of Audit Committee and Firm Performance

There are a number of factors that are related to the audit committee and which have a direct impact on the firm performance. Past studies have delved into investigating the impact of various audit committee variables on firm performance. For instance, the study by Chan and Li (2008) brought out the empirical result of the relationship that exists between audit committee independence and firm performance though the results generally showed that it is ambiguous. In the same study, Chan and Li (2008) established that autonomy of the audit committee such that there are at least 50% of expert-independent directors perform on audit committee has a positive impact on the performance of the firm based on the measurement of Tobin’s Q. in a similar light, the study by Ilona, (2008) established that there is a positive correlation between audit committee independence and performance of the firm performance when analyzed from the Return on Assets (ROA) basis.

Additionally, Erickson et al (2005) contended that independent directors can lessen agency problems. Founded on the contention provided by Erickson et al (2005) that the independence of a firm’s directors can help in reducing the agency problem, it can equally be argued that independence of audit committee can also help in reducing the agency problems. What this means is that a positive relationship between the independence of audit committee and firm performance is not only expected but also justified. Following from the above contention with reference to the agency theory, it is possible to empirically test the hypothesis that there is a positive correlation between the autonomy of the audit committee members and firm performance.

Audit committee meeting and Firm Performance

The frequency which members of the audit committee hold meetings should be considered to be an imperative attribute for the monitoring effectiveness of the audit committee (Lin et al 2006). In another study, Anderson et al (2004) argued that audit committee supervises the internal control and supplies steadfast information to the shareholders. For that reason, according to Hsu (2007) audit committee reinforces the internal auditing function and watches over management’s evaluation of business risk.

Xie et al (2003) add that the frequency of audit committee meetings is deemed as a surrogate for audit committee function.

The point by Xie et al (2003) as noted above therefore implies that the audit committee that meets more regularly with the internal auditors has better information about issues that relate to auditing and accounting. When a significant auditing or accounting concern comes up, the audit committee can direct the appropriate level of internal audit function to deal with the problem without delay. As a consequence, an audit committee that conducts meetings frequently can mitigate the likelihood of financial fraud in the firm (Abbott et al 2004). Audit committees that essentially inactive and which conduct with smaller number of meetings are not likely to effectively take charge of management. In a study conducted by Beasley et al (2000), the authors found that fraudulent companies with corrupted earnings and financial reports have smaller number of audit committee conventions than firms that do not experience such fraudulent cases such as misstatement of earnings. An audit committee that regularly conducts meetings has sufficient time to supervise the financial reporting practice, detect and ascertain management risk and monitor internal controls. Accordingly, firm performance strengthens with audit committee activity. More outstandingly, there have not been many studies that have focused on examining the impact of audit committee meeting on performance of the firm performance. As a point of illustration, Hsu (2007) established that audit committee meeting has appositive relationship with firm performance. This implies that on the basis of investig7ation into the subject of audit committee meetings, it is justifiable to empirically test the hypothesis that the frequency of audit committee meeting has a positive correlation with firm performance.

Audit Committee Size and Firm Performance

Another variable that relates to audit committee is its size and this is a relevant characteristic regarded as being relevant to the successful discharge of its duties (Al-Matari et al 2012). According to assessment done by Al-Matari et al (2012) it is generally proposed that an audit committee should have a minimum of three audit committee directors; and among the corporate governance reports that recommend this include the Capital Markets Authority and the New York Stocks Exchange. These recommendations not only provide evidence of the significant role the size of the audit committee plays but also points to the significance of the main argument behind audit committee size, which holds that a bigger committee size has superior organizational standing and authority (Al-Matari et al 2012) and an extensive knowledge base (Karamanou & Vafeas, 2005). Nevertheless, an audit committee can experience process losses and dilution or dispersal of responsibility if it becomes extremely. Similarly, just as the previous hypotheses that have been fronted for investigation and testing, the aspect of audit committee size can also be empirically investigated by testing the hypothesis that the size of the audit committee has a positive correlation with firm performance.

Research Method and the Study Models

This research undertaking only focuses on the listed companies in Saudi Arabia, without including financial companies at the end of the year 2010. The total number of companies in Saudi Stock Market (TADWAUL) is 176 companies at the end of the year 2010.

Quantitative Research Design

This study applies quantitative research approach. This is what can also be referred to as the research design in the study. Creswell (2003) offers an explanation of research design by observing that research design is a framework that guides the researcher in carrying out the study. They go on to state that research design links the research questions to the data collected. There are several research designs that a study can employ, these designs are grouped based on their logic, results, process and objective of the study. It is also possible to describe a single project using different ways.

One of the research designs is quantitative research which is used to measure individuals, cases or units and evaluate limited aspects using numbers. On the other hand, qualitative research normally entails qualitative data and assesses a lot of aspects of a small population of cases over a short or long time and explains those aspects. Similarly, a researcher can use a mixed approach where he combines both quantitative and qualitative research methods.

Accordingly, this can be observed in the present research in that element of qualitative; however small or minute, mixed with the quantitative aspects boil up to applied a mixed research design. In addition, Creswell (2009) provides support for this notion by noting that that approach helps the researcher to get better results since the each design complement another. As observed Creswell and Plano-Clark (2011), the mixed approach provides better insights in the aspect being researched. However, while the research basically focuses on quantitative approach as the most preferred strategy, it would not go without realizing the advantages of the approach by comparing it with the aspects of the sister approach: the qualitative approach. Creswell (2009) provides a good starting point on the basis of giving the merit of the qualitative study by opining that qualitative method provides verbal data instead of numerical values which means that qualitative method does not use statistical analysis, but rather uses content analysis to describe and understand the research findings. Following this reasoning and understanding, it implies that to use the qualitative method, a research employs inductive reasoning and not deductive. Creswell (2009) turns to the quantitative methodology and explains that the key aspect projected through quantitative methods is the validity of the measurement and its reliability. Using these two aspects, the researcher can generalize the findings and have a clear predication of the cause and effect. This explanation shows how generalization is an important strength that is keenly put into account in the case where quantitative approach is used.

Philosophical Basis for Research DesignRationale for choice of quantitative bias in approach mixed method design as the best research design for the study was arrived at based on several aspects of the research study that call for a mixed methodology approach in order to be effective. First off, the study encompasses multilevel perspectives that that are intended to solve research questions that require real-life contextual understandings. For this to be achieved effectively, Creswell (2003) admonitions that a quantitative method approach is essential to ensure that the advantages of employing quantitative research are of benefit to the study. The first advantage comes from the fact that quantitative rese4arch approach employs prescribed procedures that make it more standard and can be replicated easily under similar circumstances. When analyzed on the perspective, this point basically implies that quantitative research commands better grounds on the basis of generalizability. The quantitative approach allows for a broader study approach to be carried thereby enhancing the generalization of results and it also brings the researcher to the platform of using and building upon good data collection methods such as standardized methods such as in-depth interviews and survey questionnaires. Creswell (2003) further points out that taking the quantitative method approach enables the research study to draw from the strengths of the quantitative that relate to avoiding bias in the study. Using quantitative approach helps in avoiding personal bias that can jeopardize reliability (Creswell 2009). Quantitative research also allows for greater objectivity and accuracy of results and these are important when considering the validity and reliability.

In addition to the philosophical bases provided above for choice of research design, there is yet another basis for the choice of quantitative methodology approach as identified by Greene (2007). Greene points out that generally researchers and investigators collect diverse types of data and these will ultimately need to be quantitatively analyzed in order to make sense in terms of decision making (Greene 2007).

Quantitative Data Analysis

According to Creswell and Plano Clark (2011) there are about four issues in quantitative research method and they mainly concern the quantitative data analysis. The first is the aspect dealing with hypotheses, and then there is causality, generalizability and reliability. The authors point out that since quantitative research is often concerned with establishing evidence to either concur with or contradict a formulated hypothesis or a held idea; hypothesis testing is a very essential part of the entire quantitative research. Formulating hypotheses for testing starts with formulation of two hypotheses where the null hypothesis forms the backbone of what is being tested since it is the one that indicates no change and it is the one to be rejected or accepted (Gupta 2011). Hewitt and Cramer (2007) add that the formulation of null hypothesis provides good basis for selecting a sample from which evidence is sought to support the null hypothesis or if it does not support the null hypothesis then it supports the alternative hypothesis. The alternative hypothesis is basically the experimental hypothesis that allows the researcher to have an alternative option for decision making when the null hypothesis is rejected. The other issue that quantitative research has to take care of is the causality and this is essentially concerned with cause and effect hence it ensures that the researcher clearly identifies the independent and dependent variables correctly. Gupta (2011) explains that independent factor in research study is the variable that is deliberately manipulated to determine what effect it has on another variable while the dependent variable is the one that the researcher measures to find out the effect of the independent factor. In this study, the dependent variable is “firm performance” and it shall be evaluated on the basis the company’s To