Ceceros on moral duty Essay

Man is endowed with reason where unlike animals, he is able to understand how things come about, and be able to interpret how causes relate to the effects. From there, the man will be able to draw conclusion and relate the current and the future appropriately. In most cases man will try to look for a truth and the necessary changes in life to adapt with the situation. It is no doubt that man has a feeling for order, politeness and moderation in life. It is because of this that moral goodness is worth all respect and by all means, we appropriately maintain it. The moral right emanate from the four sources. These sources include; Its concern with the full development of the true intelligent, its concern about the conservation of the organized society, its greatness ant power of a dignified and unbeatable spirit, or its concern with the orderliness and the moderation of all that is said and done. Clearly, one is able to observe the real truth in any given sources, and when he can detect and explain the reasons behind it then he will be able to wisely understand it The other virtues, is set to provide and maintain such things where the practical business of life relied on such that there will be conservation of the relation between man to man in the society. In that case the dignity of man will be improved to help them increase their superiority to these things. However, the orderly behavior and the self control have their sphere in the section of things where a certain amount of physical effort is required. For example, if we develop a certain amount of propriety and order to the daily activities the moral rectitude and the moral dignity will be conserved. The interest of the society should be best conserved, and kindness be shown to every person in relation to the proximity of his relationship. However, it is important to trace back into their eventual sources that nature has established among men. The first principle is found in the connection between members of the human race, and the bond of connection is reason and speech which through the process educating reasoning associate men and unite them together.

Law and Cases

Page 1 All ER Reprints/[1914-15] All ER Rep /Hickman v Kent or Romney Marsh Sheep Breeders' Association and another – [1914-15] All ER Rep 900 Hickman v Kent or Romney Marsh Sheep Breeders' Association and another [1914-15] All ER Rep 900 Also reported [1915] 1 Ch 881; 84 LJ Ch 688; 113 LT 159; 59 Sol Jo 478 CHANCERY DIVISION ASTBURY J 4, 25 MARCH 1915 31 MARCH 1915 Arbitration – Submission – Article of company – Application for membership of company and acceptance Rule for all disputes between company and members to be referred.Company – Articles – Effect – Contract between members and company and between members inter se. In 1905 the plaintiff was elected a member of the defendant association, and he then agreed to conform to its rules and regulations. By art 49 of the articles of association differences between the association and any of its members relating to any of the affairs of the association must be referred to the decision o f an arbitrator.In 1914 the plaintiff issued a writ against the association and its secretary claiming injunctions and declarations in respect of matters which related to the affairs of the association and for certain other relief, which in substance was to enforce his rights under the articles. On an application by the defendants for a stay of the action pursuant to s 4 of the Arbitration Act, 1889, and to refer the matters in dispute to arbitration in accordance with the terms of art 49,Held: (i) art 49 must be treated as a statutory agreement between the members and the association as well as between themselves inter se, and it constituted a submission to arbitration within the Arbitration Act, 1889; (ii) the application for membership by the plaintiff and its acceptance by the association constituted a contract between the plaintiff and the association by which the plaintiff agreed in writing to conform to the regulations of the association, one of which regulations was that all ifferences between the association and a member should be submitted to arbitration, and that contract also constituted a submission to arbitration; therefore, on both those grounds a stay of the action would be granted. Notes Applied: Anglo-Newfoundland Development Co v R, [1920] 2 KB 214. Considered: Agricultural Wholesale Society v Biddulph and District Agricultural Society, [1925] Ch 769; Beattie v Beattie, Ltd, [1938] 3 All ER 214. Applied: Kanssen v Rialto (West End) Ltd, [1944] Ch 154. Considered: Rayfield v Hands, [1958] 2 All ER 194.Referred to: London Sack and Bag Co v Dixon and Lugton, Ltd, [1943] 2 All ER 763. As to the effect of memoranda and articles of association, see 6 HALSBURY'S LAWS (3rd Edn) 127-130, and for cases see 9 DIGEST (Repl) 85-88. As to submissions to arbitration and stay of proceedings, see 2 Page 2 HALSBURY'S LAWS (3rd Edn) 3 et seq, and for cases see 2 DIGEST (Repl) 421 et sec. For Companies Act, 1948 see 3 HALSBURY'S STATUTES (2nd Edn) 452, and for Arbitration Act, 1950, see ibid, vol 29, p 89. Cases referred to: 1) Willesford v Watson (1873) 8 Ch App 473; 42 LJ Ch 447; 28 LT 428; 37 JP 548; 21 WR 350, LC & LJJ; 2 Digest (Repl) 452, 190a. (2) Re Tavarone Mining Co, Pritchard's Case (1873) 8 Ch App 956; 42 LJ Ch 768; 29 LT 368; 21 WR 829, LJJ; 9 Digest (Repl) 85, 362. (3) Melhado v Porto Alegre Rail Co (1874) LR 9 CP 503; 43 LJCP 253; 31 LT 57; 23 WR 57; 9 Digest (Repl) 53, 152. (4) Eley v Positive Government Security Life Assurance Co (1875) 1 ExD 20; 45 LJQB 50; 33 LT 743; 24 WR 252; affirmed (1876) 1 ExD 88; 45 LJQB 451; 34 LT 190; 24 WR 338, CA; 9 Digest (Repl) 87, 372. 1914-15] All ER Rep 900 at 901 (5) Browne v La Trinidad (1887) 37 Ch D 1; 57 LJ Ch 292; 58 LT 137; 36 WR 289; 4 TLR 14, CA; 9 Digest (Repl) 87, 374. (6) Kelner v Baxter (1866) LR 2 CP 174; 36 LJCP 94; 15 LT 213; 15 WR 278; sub nom Kelmer v, Baxter, 12 Jur NS 1016; 9 Digest (Repl) 682, 4498. (7) Re Famatina Development Coops, Ltd, [1914] 2 Ch 271; 84 LJ Ch 48 ; 30 TLR 696, CA; 10 Digest (Repl) 978, 6731. (8) MacDougall v Gardiner (1875) 1 Ch D 13; 45 LJ Ch 27; 33 LT 521; 24 WR 118, CA; 9 Digest (Repl) 619, 4130. (9) Pender v Lushington (1877) 6 Ch D 70; 46 LJ Ch 317; 9 Digest (Repl) 609, 4039. 10) Imperial Hydropathic Hotel Co, Blackpool v Hampson (1882) 23 Ch D 1; 49 LT 150; 31 WR 330, CA; 9 Digest (Repl) 553, 3655. (11) Johnson v Byttle's Iron Agency (1877) 5 Ch D 687; 46 LJ Ch 786; 36 LT 528; 25 WR 548, CA; 9 Digest (Repl) 350, 2243. (12) Bradford Banking Co, Ltd v Briggs & Co, Ltd (1886) 12 App Cas 29; 56 LJ Ch 364; 56 LT 62; 35 WR 521; 3 TLR, 170, HL; 9 Digest (Repl) 85, 363. (13) Word v Odessa Waterworks Co (1889) 42 Ch D 636; 58 LJ Ch 628; 37 WR 733; 5 TLR 596; 1 Meg 265; 9 Digest (Repl) 86, 364. (14) Salmon v Quin and Axtens, Ltd, [1909] 1 Ch 311; 78 LJ Ch 367; 100 LT 161; 25 TLR 164; 53 Sol JoPage 3 150, CA; affirmed sub nom Quin and Axtens, Ltd v Salmon, [1909] AC 442; 78 LJ Ch 506; 100 LT 820; 25 TLR 590; 53 Sol Jo 575; 16 Man s 230, HL; 9 Digest (Repl) 498, 3283. (15) Welton v Saffery, [1897] AC 299; 66 LJ Ch 362; 76 LT 505; 45 WR 508; 13 TLR 340; 41 Sol Jo 437; 4 Mans 269, HL; 9 Digest (Repl) 203, 1293. (16) Bisgood v Henderson's Transvaal Estates, Ltd, [1908] 1 Ch 743; 77 LJ Ch 486; 98 LT 809; 24 TLR 510; 52 Sol Jo 412; 15 Mans 163, CA; 9 Digest (Repl) 201, 1288. (17) Re Lewis, Ex parte Munro (1876) 1 QBD 724; 45 LJQB 816; 35 LT 857; sub nom R v Munro, Re Lewis, 24 WR 1017, DC; 42 Digest 126, 1211. 18) Caerleon Tinplate Co v Hughes (1891) 60 LJQB 640; 66 LT 118; 7 TLR 619; 2 Digest (Repl) 423, 27. (19) Baker v Yorkshire Fire and Life Assurance Co, [1892] 1 QB 144; 61 LJQB 838; 66 LT 161; 2 Digest (Repl) 423, 28. Also referred to in argument: Morgan v W Harrison, Ltd, [1907] 2 Ch 137; 76 LJ Ch 548; 97 LT 445, CA; 2 Digest (Repl) 445, 170. Borland's Trustee v Steel Bros & Co, Ltd, [1901] 1 Ch 279; 70 LJ Ch 51; 47 WR 120; 17 TLR 45; 9 Digest (Repl) 99, 446. Re Wheat Buller Consols (1888) 38 Ch D 42; sub n om Re Wheal Buller Consols Ltd, Ex parte Jobling, 57 LJ Ch 333; 58 LT 823; 36 WR 723; 4 TLR 282, CA; 9 Digest (Repl) 469, 3071.Adjourned Summons by which the defendants applied for a stay of the action under s 1 of the Arbitration Act, 1889 [see now s 4 of the Arbitration Act, 1950]. The defendants, the Kent or Romney Marsh Sheep Breeders' Association and their secretary, W W Chapman, applied for an order staying all proceedings in the action pursuant to s 4 of the Arbitration Act, 1889, and referring the matters in dispute in the action to arbitration under art 49 of the articles of association of the association.The Kent or Romney Marsh Sheep Breeders' Association was incorporated under the Companies Acts in the year 1895 as an association not for profit, the defendant [1914-15] All ER Rep 900 at 902 W W Chapman having been the secretary since the incorporation of the association. On 8 November 1905, the plaintiff, Alfred John Hickman, wrote to Chapman as such secretary stating he wished to become a member of the association, and in reply on 10 November 1905, Chapman wrote to the plaintiff inclosing a form of application for membership.This form, completed and signed by the plaintiff, was received by Chapman on or about 12 November 1905, and was as follows: Page 4 â€Å"Kent or Romney Marsh Sheep Breeders' Association (Incorporated). – Application form for membership. – I, Alfred J Hickman, of Court Lodge, Egerton, in the county of Kent, am desirous of becoming a member of the Kent or Romney Marsh Sheep Breeders' Association (Incorporated) as a flock owner, and I engage when elected to pay the entrance fees, annual subscriptions, nd such fees for entry of ewe flocks and individual sheep as may then be in force or subsequently adopted, together with all such costs for inspection and tattooing as may be sanctioned by the council for the time being, and to conform to the rules and regulations of the association until I by notice in writing to the secretary cease to be a member of the association. – Signature, ALFRED J HICKMAN. – Dated Nov 11, 1905. † The plaintiff was elected a member of the association on 12 December 1905, and he was informed of such election by letter on 14 December 1905.By art 49 of the articles of association of the defendant company: â€Å"Whenever any difference arises between the association and any of the members touching the true intent or construction or the incidents or consequences of these presents or of the statutes, or touching anything then or thereafter done, executed, omitted, or suffered in pursuance of these present, or of the statutes, or touching any breach or alleged breach of these presents, or any claim on account of any such breach or alleged breach, or otherwise relating to the premises or to these presents, or to any statute affecting the association, or to any of the affairs of the association, every such difference shall be referred to the decision of an ar bitrator to be appointed by the parties in difference or if they cannot agree upon a single arbitrator, to the decision of two arbitrators, of whom one shall be appointed by each of the parties in difference, or an umpire to be appointed by the two arbitrators. â€Å"On 18 December 1914, the plaintiff issued the writ in the present action claiming, inter alia, an injunction to restrain the defendants from taking any steps to expel him from the association or doing any act or acts in derogation of his rights as a member of the association, and damages for refusing to register his sheep, and a declaration that he was entitled to have his sheep registered. A summons for directions was issued, but before it was heard or any further step taken is the action, the defendant association and Chapman issued this summons far the hearing of an application by them that all further proceedings be stayed, pursuant to s 4 of the Arbitration Act, 1889, and that the matters in question in the action should be referred to arbitration in accordance with art 49 of the articles of the association.By s 4 of the Arbitration Act, 1889 [see now Arbitration Act, 1950, s 4]: â€Å"If any party to a submission, or any person claiming through or under him, commences any legal proceedings in any court against any other party to the submission, or any person claiming through or under him, in respect of any matter agreed to be referred, any party to such legal proceedings may at any time after appearance, and before delivering any pleadings or taking any other steps in the proceedings, apply to that court to stay the proceedings, and that court, or a judge thereof, if satisfied that there is no sufficient reason why the matter should not be referred is accordance with the submission, and that the applicant was, at the time when the proceedings were commenced, [1914-15] All ER Rep 900 at 903 and still remains, ready and willing to do all things necessary to the proper conduct of the arbitrat ion, may make an order staying the proceedings. † By s 27 [see s 32 of Act of 1950]: â€Å"‘Submission' means a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not. â€Å"By s 14(1) of the Companies (Consolidation) Act, 1908 [see now s 20 of Companies Act, 1948]: â€Å"The memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed and sealed by each member, and contained covenants on the part of each member, his heirs, executors, and administrators, to observe all the provisions of the memorandum and of the articles, subject to the provisions of this Act. † Page 5 Micklem, KC, and F Hinde for the defendants. Frank Russell, KC, and HS Simmons for the plaintiff in the action. Cur adv vult, 31 Mar 1915 ASTBURY J: (read the following judgment) This is a summons by the defendants to stay proceedings in the action under s 4 of the Arbitration Act, 1889 [see now s 4 of Arbitration Act, 1950].The plaintiff, by his writ in the action, which is brought against the defendant association and their secretary, claims injunctions, a declaration, and certain other relief in respect of matters which arise out of and relate solely to the affairs of the association, which relief is, in substance, to enforce the plaintiff's rights under the articles of association of the defendant company. It is admitted by the plaintiff that the action is against, the association and the second defendant as its officer, and no point is made by the plaintiff of there being two defendants. The association is a limited company registered under the Companies' Acts, and by its memorandum of association it is provided (inter alia) that the objects of the association are â€Å"the encouragement of the breeding of Kent or Romney Marsh sheep at home and abroad and the maintenance of the purity of the breed† Further: The es tablishment and publication of a flock book of recognised and pure-bred sires which have been used, or ewes which have been bred from, and of such other flock books (if any) which the council may think fit and the annual registration of the pedigrees of such sheep as are proved to the satisfaction of the council to be eligible for entry. †¦ The undertaking of the arbitration upon and settlement of disputes and questions relating to or connected with Kent or Romney Marsh sheep and the breeding thereof, and for other subsidiary purposes. † By art 49 disputes between the association and any of its members are to be referred to arbitration.This is a common form of article in private companies, and, the objects of the association being what they are, it and its members might he seriously prejudiced by a public trial of their disputes. If this summons fails, as the plaintiff contends that it should, these arbitration clauses in articles are of very little, if any, value. The pl aintiff became a member of the association in 1905. It is clear on the authorities that if there is a submission to arbitration within the meaning of the Arbitration Act there is a prima facie duty cast upon the court to act upon such an agreement: per LORD SELBORNE in Willesford v Watson (1) 8 Ch App at p 480.In the present case the defendants contend, first, that art 49, dealing as it does with the members of the company in their capacity of members only, constitutes a submission within the meaning of the Arbitration Act, or, alternatively, that the contract contained in the plaintiff's application for membership and the company's [1914-15] All ER Rep 900 at 904 acceptance of it amounts to such a submission. The plaintiff contests both these propositions. Independently Page 6 of the particular dispute in this case, the arguments, especially upon the first of these contentions, have raised questions of far-reaching importance and of great difficulty. I will deal with the question a s to the effect of art 49 first. Section 14(1) of the Companies (Consolidation) Act, 1908 [see new s 20(1) of Companies Act, 1948], says: The memorandum and articles shall, when registered, bind the company and members thereof to the same extent as if they respectively had been signed and sealed by each member, and contained covenants on the part of each member, his heirs, executors, and administrators, to observe, all the provisions of the memorandum and of the articles, subject to the provisions of this Act† It is laid down in text-books of the highest authority that the articles are not a contract between the members and the company, but a contract with the other members. The articles are a contract only as between the members inter se in respect of their rights as shareholders.The exact nature of this covenant – that is, the covenant referred to in s 14 – has given rise to considerable discussion and is even now very difficult to define; but it is now settled that it is not equivalent to a contract between the company, on the one part, and the members, on the other, on which either a member can sue the company or the company can sue a member. The principal authorities in support of these propositions are Re Tavarone Mining Co, Pritchard's Case (2); Melhado v Porto Alegre Rail Co (3); Eley v Positive Government Security Life Assurance Co (4); and Browne v La Trinidad (5) In Pritchard's Case (2) by the articles of association of a mining company it was provided that the company should immediately after incorporation enter into an agreement with the vendor of the mine for the purchase of the mine, and the price was fixed.The articles were signed by the vendor and six other persons, and the directors allotted shares to the vendor, but no further agreement was made with him. It was held, affirming the decision of WICKENS, V-C, that the articles of association did not constitute a contract in writing between the vendor and the company within s 27 of the Companion Act, 1867, and that certain shares should not, therefore, be considered as fully paid up. MELLISH, LJ, in giving judgment, said (8 Ch App, at p 960): â€Å"But I am of opinion that the articles of association cannot be considered as a contract in writing between De Thierry and the company for the sale of the mine to them.It may no doubt be the case if no other contract was entered into, and if De Thierry signed these articles and they were acted upon, that a court of equity would hold that as between him and the company – from their acting upon it – there was a binding contract; but in themselves the articles of association are simply a contract as between the shareholders inter as in respect of their rights as shareholders. They are the deed of partnership by which the shareholders agree inter se. † In Melhado v Porto Alegre Rail Co (3) the articles of association of a joint stock company provided that the company should defray such expens es incurred in its establishment as the directors should consider might be deemed and treated as preliminary expenses to an amount not exceeding a sum named. The plaintiffs, who were promoters of the company, had incurred preliminary expenses in its establishment, and it was held that no action would lie at the suit of the plaintiffs against the company under the articles. LORD COLERIDGE, CJ, said (LR 9 CP at p 505): The action is brought on a clause in the articles of association, by which the directors are authorised to pay certain expenses if they should consider them [1914-15] All ER Rep 900 at 905 to be properly deemed preliminary expenses. The declaration avers that all conditions were. performed, necessary to entitle the plaintiffs to be paid, their expenses; and therefore I think we must take it that, they, were expenses which, if the directors had thought proper to pay then the articles would have justified them in paying. The question therefore is whether an action will li e for the payment of these expenses, in pursuance of the articles of association, to which the plaintiffs were not parties.I have come to the conclusion that no such action will lie – I must say somewhat reluctantly, because though I wish to â€Å"press no opinion on the merits of this particular case, having no materials for forming such Page 7 an opinion, it does seem just, in general, if a company takes the benefit of the work and expenditure by which its existence has been rendered possible, and voluntarily comes into existence on the terms that it shall be liable to pay for such work and expenditure, that a cause of action should be given. I can find, however, no legal principle upon which such an potion can be maintained. It appears to me that there is no contract between the plaintiffs and the defendants.The doctrine of ratification is inapplicable, for the reasons given in the judgments in Kelner v Baxter (6). † MELLOR, J, said (ibid at p 506): â€Å"The plain tiffs were not in any way parties to the articles of association, and there was not, therefore, any express contract to pay them. † BRETT, J, said (ibid at p 507): â€Å"There is no contract, in my judgment, of any sort upon which they can sue, and unless there be a contract of some sort between them and the company I do not see that they can have any cause of action. No contract made with them before the existence of the company can be ratified by the company for the reasons pointed out in the case of Kelner v Baxter (6) with which I fully agree. â€Å"In Eley v Positive Government Security Life Assurance Co (4) the articles of association contained a clause in which it was stated that the plaintiff, a solicitor, should be the solicitor to the company and transact its legal business. The article were registered and the company incorporated. The plaintiff was not appointed solicitor by any resolution of the directors, nor by any instrument bearing the seal of the company, th at he acted as such for a time. Subsequently the company ceased to employ him, and he brought an action for breach of contract against the company for not employing him as its solicitor. The first count of the declaration stated that it was agreed by and between the plaintiff and the defendants that the plaintiff should be employed by the defendants as, and appointed by them to the office of, solicitor of the company.During the argument it was contended that the contract declared for was not the contract purported to be contained in the articles. AMPHLETT, B, in his judgment, said (1 ExD at pp 26, 28): â€Å"The articles, taken by themselves, are simply a contract between the shareholders inter se, and cannot, in my opinion, give a right of action to a person like the plaintiff, not a pasty to the articles, although named therein. If authority were wanted for this proposition, the cases cited in the argument, Pritchard's Case (2) and Melhado v Porto Alegre Rail Co (3) are, in my op inion, quite conclusive on the subject. †¦ For these reasons, I think that there was no contract at all between the plaintiff and the company to the effect stated in the declaration. â€Å"CLEASBY, B, confined his judgment to the last points raised in the case and said (ibid at p 30): â€Å"I am of opinion that cl 118 of the articles cannot by itself be taken to operate as a contract between the solicitor and the company. † [1914-15] All ER Rep 900 at 906 KELLY, CB, said (ibid at pp 31, 32): â€Å"I forbear to pronounce any opinion as to whether these articles, with the fact of the subsequent employment, constitute a contract on the terms contained in them, because, were I to so hold, there would be a difficult question behind, whether it was not ultra vires for the directors to attempt to bind the company to employ a solicitor to transact, for all his life, all the legal business of the company.Passing by this, I come to consider the objection raised under s 4 of the Statute of Frauds. I do not see how anyone can doubt that this agreement was not to be performed within a year. It was for the life of the plaintiff, subject to a defeasance on the possibility of his being guilty of some misconduct. But, assuming, as I think we must, that this was not to be performed in a year, the question arises whether there is any memorandum or note in writing of it signed by the defendants. The signatures affixed to the articles were she intuitu and it can hardly be suggested that the directors had any idea that in signing the articles they were signing a note of this contract. † Page 8This case went to the Court of Appeal, and LORD CAIRNS, LC, said (1 ExD at pp 89, 90): â€Å"I wish to say, in the first place, that in my opinion a contract of the kind suggested to exist in this case ought not to receive any particular favour from the court. The statement is that Baylis was endeavouring to form a joint stock insurance company upon a new principle, and ap plied to the plaintiff to make advances to meet the expenses of getting up the company, and it was arranged between them that in the event of the company being formed the plaintiff should be appointed permanent solicitor to the company. That is to say, a bargain is made between a professional man and Baylis, which, so far as the case is concerned, does ot appear to have been communicated to those who were invited to join the company, that if the former will advance money for the formation of the company he shall be appointed permanent solicitor, and the company shall be obliged to employ him as their professional adviser. When the articles are prepared, they are so by the plaintiff, and in them he inserts a clause which no doubt informs those who signed the articles of the arrangement, but does not appear to have been brought to the notice of those who joined from receiving circulars. This, I repeat; is not a proceeding which the court would encourage in any way. I also wish to rese rve my judgment as to whether a clause of this kind is obnoxious to the principles by which the courts are governed in deciding on questions of public policy. †¦ This case was first rested on the 118th article.Articles of association, as is well known, follow the memorandum, which states the object of the company, while the articles state the arrangement between the members. They are an agreement inter socios, and in that view, if the introductory words are applied to art 118, it becomes a covenant between the parties to it that they will employ the plaintiff. Now, so far as that is concerned, it is res inter alios acts, the plaintiff is no party to it. No doubt he thought that by inserting it he was making his employment safe as against the company, but his relying on that view of the law does not alter the legal effect of the articles. This article is either a stipulation which would bind the members or else a mandate to the directors.In either case it is a matter between the directors and shareholders, and not between them and the plaintiff. † In Browne v La Trinidad (5) before the formation of the company an agreement was entered into between B. and a person as trustee for the intended company by which it was stipulated (inter alia) that B should be a director and should not be removable till after 1888. The sixth clause of the articles provided that the directors should adopt and carry into effect the agreement with or without modification, and that subject to such modification (if any) the provisions of the agreement [1914-15] All ER Rep 900 at 907 should be construed as part of the articles.The agreement was acted upon, but no contract adopting it was entered into between the plaintiff and the company. Held, that treating the agreement as embodied in the articles, still there was no contract between B and the company that he should not be removed from being a director, the articles being only a contract between the members inter as, and not b etween the company and B COTTON, LJ, towards the end of his judgment, said (37 Ch D at pp 13, 14): â€Å"Assuming that an unlimited power is given to the meeting by art 91, ought we, having regard to the contract entered into by the memorandum of Nov 24, 1884, and art 6, to interfere by injunction to restrain the company in general meeting from acting under that power?I do not give any opinion upon the question how far the court would have interfered by injunction in order specifically to enforce an agreement between the company and the plaintiff that he should be an irremovable director. That point raises questions upon which I should not like to give any opinion without having them fully discussed. In my opinion we ought not to interfere in the present case, because there is no such contract between the plaintiff and the company. The memorandum of agreement of Nov 24, 1884, is in no way a contract between the plaintiff and the company. It is said that it was adopted and incorpora ted into the articles, but I cannot accede to that. The company by its directors acted upon the agreement, but that does not make it binding on the company.Then is it incorporated into the articles in such a way as to entitle the plaintiff to say, ‘I have such a contract between me and the company as can be enforced by a court of law, and as I might enforce in equity by way of specific performance'? That point is clearly settled, I think, by Eley v Positive Government Security Life Assurance Co (4). There two of the members of the court of first instance held, and the other member did not express dissent, that the articles are merely a contract between the shareholders inter se, and that though a person in whose favour a stipulation is made in the articles may afterwards have shares allotted to him, he does not by that means become in the same position as if he had entered into a contract with the company. † LINDLEY, LJ, said: â€Å"Having regard to the construction put upon s 16 of the Companies Act of 1862 in the case of Eley v.Positive Government Security Life Assurance Co (4) and subsequent cases, it must be taken as settled that the contract upon which he relies is not a contract upon which he can maintain any action, either on the common law side or the equity side. There might have been some difficulty in arriving at that conclusion if it had not been for the authorities, because it happens that this gentleman has had shares allotted to him, and is therefore a member of the company. Having regard to the terms of s 16, there would be some force, or, at all events, some plausibility, in the argument that, being a Page 9 member, the contract which is referred to in the articles has become binding between the company and him.Of course, that argument is open to this difficulty, that there could be no contract between him and the company until the shares were allotted to him, and it would be remarkable that upon the shares being allotted to him a contract between him and the company, as to a matter not connected with the holding of shares, should arise. † In these four cases the article relied upon purported to give specific contractual rights to persons in some capacity other than that of shareholder, and in none of them were members seeking to enforce or protect rights given to them as members in common with the other corporators. The actual decisions amount to this, that an outsider to whom rights purport to be given by the articles in his capacity as such outsider, whether he subsequently becomes a member or not, [1914-15] All ER Rep 900 at 908 cannot sue on such articles treating them as contracts between himself and the company to enforce such rights.Such rights are not part of the general regulations of the company applicable alike to all shareholders and can only exist by virtue of some contract between such non-member and the company, and the subsequent allotment of shares to an outsider in whose favour such an article is inserted does not enable him to sue the company on such an article to enforce rights which are res inter alios acta and not part of the general rights of the corporators as such. The language of some of the judgments appears, however, to go further, as recognised, for instance, by SARGANT, J, in Re Famatina Development Corpn (7) ([1914] 2 Ch at p 279). The wording of s 14(1) of the Companies (Consolidation) Act, 1908, which is in the same terms as s 16 of the Act of 1862 [see now s 20(1) of Companies Act, 1948], is difficult to construe or understand. The company cannot in the ordinary course be bound otherwise than by statute or contract, and it is in this section that its obligation must be found, so far as the members are concerned.The section does not say with whom they are to be deemed to have covenanted, but the section cannot mean that the company is not to be bound when it says it is to be bound, as if, , nor can the section mean that the members are to be unde r no obligation to the company under the articles in which their rights and duties as corporators are to be found. Much of the difficulty is removed if the company be regarded, as the framers of the section may very well have so regarded it, as being treated in law as a party to its own articles. It seems clear from other authorities that a company is entitled as against its members to enforce and restrain breaches of its regulations: see, for example, MacDougall v Gardiner (8) Pender v Lushington (9) and Imperial Hydropathic Hotel Co, Blackpool v Hampson (10). In the last case BOWEN, LJ, said (23 Ch D at p 13): â€Å"The articles by s 16 are to bind the company and all the shareholders as much as if they had all put their seals to them. â€Å"It is also clear from many authorities that shareholders as against their company can enforce and restrain breaches of its regulations, and in many of these cases judicial expressions of opinion appear which, in my judgment, it is impossible to disregard. In Johnson v Lyttle's Iron Agency (11) in an action by a shareholder against the company, JAMES, LJ, said (5 Ch D at p 693): â€Å"The notice did not comply strictly with the provisions of the contract between the company and the shareholders which is contained in the regulation of Table A† In Bradford Banking Co, Ltd v Briggs & Co, Ltd (12) the articles gave the company a lien on its members' shares, and, in an action by the company to enforce such lien, LORD BLACKBURN said (12 App Cas at p 33): Page 10 The only one of the articles of association which I think it material to notice is the 103rd article, which is as follows: ‘The company shall have a first and permanent lien and charge, available at law and in equity, upon every share of every person who is the holder or one of several joint owners thereof for all debts due from him, either alone or jointly with any other person, whether a shareholder or not in the company. ‘ John Faint Easby, a coa l merchant, became a proprietor of a number of shares in the respondent company, and obtained certificates for them. This property in the shares was, by virtue of s 16 of the Companies Act, 1862, already quoted, I think, bound to the company as much as if he had (at the time he became holder of these shares) executed a covenant to the company in the same terms as art 103, but I do not think it was bound any further. † [1914-15] All ER Rep 900 at 909In Wood v Odessa Waterworks Co (13) which was an action by the plaintiff on behalf of himself and all other shareholders against the company, STIRLING, J, said (42 Ch D at p 642): â€Å"The articles of association constitute a contract not merely between the shareholders and the company, but between each individual shareholder and every other. † In Salmon v Quin and Axtens, Ltd (14) FARWELL, LJ, referring to this last statement, said ([1909] 1 Ch at p 318): â€Å"I think that that is accurate subject to this observation, tha t it may well be that the court would not enforce the covenant as between individual shareholders in most cases. † In Welton v Saffery (15) LORD HERSCHELL, who dissented on the main question from the rest of the House, made the following general observation ([1897] AC at p 315): â€Å"Section 16 of the Act of 1862 provides that the articles of association, when registered, shall bind the company and the members hereof to the same extent as if each member had signed his name and affixed his seal thereto, and there were in such articles contained a covenant on the part of himself, his heirs, executors, and administrators, to conform to all the regulations contained in such articles, subject to the provisions of this Act. The articles thus become in effect a contract under seal by each member of the company, and regulate his rights. They cannot, of course, diminish or affect any liability created by the express terms of the statute; but, as I have said, the statute does not purp ort to settle the rights of the members inter se; it leaves these to be determined by the articles (or the articles and memorandum together) which are the social contract regulating those rights. I think it was intended to permit perfect freedom in this respect.It is quite true that the articles constitute a contract between each member and the company, and that there is no contract in turns between the individual members of the company; but the articles do not any the less, in my opinion, regulate their rights inter se. Such rights can only be enforced by or against a member through the company, or through the liquidator representing the company; but I think that no member has, as between himself and another member, any right beyond that which the contract with the company gives. † In all these last-mentioned cases the respective articles sought to be enforced related to the rights and obligations of the members generally as such, and not to rights of the character dealt with in the four authorities first above referred to.It is difficult to reconcile these two classes of decisions and the judicial opinions therein expressed, but I think this much is clear – first, that no article can constitute a contract between the company and a third person; secondly, that no right merely purported to be given by an article to a person, whether a member or not, in a capacity other than that of a member, as, for instance, as solicitor, promoter, or director, can be enforced against the company; and, thirdly, articles regulating the rights and obligations of the members generally as such do create rights and obligations between them and the company respectively. Page 11 In Bisgood v Henderson's Transvaal Estates, Ltd (16) BUCKLEY, LJ, said ([1908] 1 Ch at p 759): â€Å"The purpose of the memorandum and articles is to define the position of the shareholder as shareholder, not to bind him in his capacity as individual. † By s 27 of the Arbitration Act, 188 9 [see now s 32 of Arbitration Act, 1950]: â€Å"‘Submission' means a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not. † [1914-15] All ER Rep 900 at 910The defendant's first contention is that art 49 is, on the authorities, a written agreement within the meaning of this section. In Re Lewis, Ex parte Munro (17) which was an action on the Attorneys and Solicitors Act, 1870, it was held that: â€Å"A document containing the terms of an agreement as to the amount of costs payable by a client to his solicitor, assented to by the client, but signed by the solicitor only, is not ‘an agreement in writing' within the Attorneys and Solicitors Act, 1870. † LORD COLERIDGE, CJ, said: â€Å"It is quite clear that there was no agreement in writing within s 4 of the Act. †¦ An ‘agreement in writing' within s 4 must be an agreement by both parties, and both parties must sign their names upo n the agreement. â€Å"In Caerleon Tinplate Co v Hughes (18) in an action for the price of goods sold, the bought note signed by the defendants contained a provision for arbitration in case of dispute, while the sold note signed by the plaintiff contained no such provision. It was held that there was no submission within the meaning of the Act, for an agreement to submit to arbitration must be in writing and signed by both parties. Re Lewis (17) was referred to, and DENMAN, J, referring to s 27 of the Arbitration Act, 1889, said (60 LJQB at p 641): â€Å"In my judgment, there can be no written agreement unless in writing signed by the parties as their agreement, and that ‘written agreement' means one in which the terms on both sides are reduced into writing.It is useless to discuss the doctrines here, for the bought and sold notes differ in the essential particular that the former contains a provision which is wholly absent in the latter. † WILLS, J, said (ibid): †Å"Supposing there were a contract and the parties were ad idem [which in fact they were not in this case] yet there was no submission under the Act unless there was an agreement in writing by both parties. Re Lewis, Ex parte Munro (17) is conclusive on this point. In the present case the agreement is to be in writing under s 27, and we must hold that both parties must sign their names to it; otherwise there might be a conflict of evidence, and a discussion as to what was understood by either party. â€Å"In Baker v Yorkshire Fire and Life Assurance Co (19) an action was brought on a fire policy which was executed in the usual way by the company, but not by the assured, and it was held that the policy, though not signed by the plaintiff, amounted to a submission to arbitration within the meaning of the Act LORD COLERIDGE, CJ, who had been a party to Re Lewis (17) said ([1892] 1 QB at pp 145, 146): Page 12 â€Å"The plaintiff sues on the policy, and by so suing affirms it to be his contract; he cannot disaffirm a part of the very contract on which he is suing. He contends that in order to bring into operation the arbitration clause contained in the policy, the policy must be signed by both parties; but the Act of Parliament says nothing of the kind, and the only apparent justification for the contention is to be found in Caerleon Tinplate Co v Hughes (18). That decision must be interpreted, however, with regard to the particular facts of that case.There was there no complete contract; the two documents constituting the contract differed materially in their terms, and the court said it was plain that the parties were never ad idem. † A L SMITH, LJ, said (ibid at pp 146, 147): â€Å"It is said, however, that by the interpretation clause a submission must be a written agreement to refer disputes to arbitration. This, however, is not a [1914-15] All ER Rep 900 at 911 higher interpretation than was necessarily put on the language of the old Act, under which it was the universal practice to refer these cases, and does not mean that in all cases the written agreement to refer must be signed by both parties. It is quite unnecessary to say more as to the decision in Caerleon Tinplate Co v Hughes (18) than that it turned entirely upon the peculiar facts of the case. â€Å"The result of these decisions is, I think, that if the submission is in writing and is binding on both parties as their agreement, or as the equivalent in law to an agreement between them, the statute is satisfied. In the present case the plaintiff's action is, in substance, to enforce rights as a member under the articles against the company. The 49th article is a general article applying to all the members as such, and, apart from technicalities, it would seem reasonable that the plaintiff ought not to be allowed, in the absence of any evidence filed by him, to proceed with an action to enforce his rights under the articles which in itself is a breach of his obligation contained therein to submit his disputes with the company to arbitration, and, if the case falls within the Act, I see no reason for exercising my discretion under s 4 in his favour.In my judgment, art 49, for the reasons above referred to, creates rights and obligations enforceable as between the plaintiff and the company respectively, and such rights and obligations are contained in a written document, but whether such document is a contract or agreement between the plaintiff and the defendants within s 27 of the Arbitration Act, 1889, depends upon whether the decision in Eley v Positive Government Security Life Assurance Co (4) and the other cases of a similar character above referred to ought to be regarded as only dealing with and applying to articles purporting, first, to contain an agreement with the company and a third person, or, secondly, to define the rights of a shareholder in some capacity other than that of a member of the company.To reconcile the decisions and express ions of judicial opinion above mentioned, some such view should, I think, be adopted, and general articles dealing with the rights of members â€Å"as such† treated as a statutory agreement between them and the company as well as between themselves inter se, and in my judgment, art 49 in the present case does constitute a submission to arbitration within the true meaning and intent of the Arbitration Act. Having regard, however, to the conclusion to which I have come on the second contention raised by the defendants, it is not necessary for me to base my decision upon this ground alone and upon the opinion I have so expressed.The defendants' second contention is that the contract contained in the plaintiff's application for membership, and the defendants' acceptance of it, amounts to a submission within the Act. On 8 November 1905, the plaintiff wrote to the company, through its secretary: â€Å"I wish to become a member of the Kent Sheep Breeders' Association. Will you kind ly take the necessary steps? † That was answered by a letter from the secretary, in which he said: â€Å"If you will fill in the inclosed form †¦ I shall have great pleasure in submitting it to the next council meeting. † Page 13 The form inclosed was signed by the plaintiff. It stated that the plaintiff wished to become a member of the association and agreed to pay an entrance fee, subscriptions, and fees for entry of sheep, and to conform to the rules and regulations of the association.At a meeting of the council of the association held on December 12 the plaintiff's offer was accepted and he was elected a member of the defendant company. Notice of such acceptance was given to the plaintiff in a letter of December 14 by the secretary, which informed him he was elected a member of the association at the council meeting held on the 12th. In consideration of being elected a member and of his offer to join the association being accepted, the plaintiff contracted in w riting with the association to conform to its rules and regulations. One of such regulations was a general submission to arbitration of all differences between the [1914-15] All ER Rep 900 at 912 ssociation and any of its members as such, amply wide enough to cover the matters in dispute in this action. The association at the date of the contract was already bound to each and all its corporators to act in conformity with such regulations, and was at the date of the writ in this action, and has been since, ready, and willing to so act It is submitted on behalf of the plaintiff that at the date of this contract he may have known nothing about art 49, and that as the council of the association have power under its articles to make further by-laws and regulations as to certain matters therein referred to, the plaintiff's offer may have referred to these.The plaintiff has, however, filed no evidence in support of this, and the articles not only constitute the rules and regulations of the company, but refer to the rules and regulations of the association as, contained in them, and I am unable to accept this contention. In my judgment, the contract so made between the plaintiff and the association is also a submission in writing within the true meaning and intent of the Arbitration Act, and I make an order to stay under s 4 and direct that the matters in dispute in this action be referred to arbitration accordingly. Solicitors: Walters & Co; Ernest Simmons & Co. Reported by GP LANGWORTHY, ESQ, Barrister-at-Law.

Nice Guys Always Finish Last

Nice guys is a term in the popular culture and general public discourse describing a male, young or adult, with friendly yet unassertive personality traits in the context of a relationship with a woman. Nice guy is said to be who puts their interest aside and out others first, avoids confrontation, does favors, gives emotional support, tried to stay out of trouble and generally be nice towards women. Although many people would agree with the generalization of â€Å"nice guys always finish last† I would disagree and side with nice guys because bad guys may get the girls and sleep around but in the end of the day they end up with the nice guy. There is a discrepancy between preference and the actual action of women in choices in men. They say that they want â€Å"nice guys† but in reality, they go for â€Å"bad boys† or â€Å"jerks† in the end. Stephan Desrochers claims, in a 1995 article in the journal Sex Roles, that many â€Å"sensitive† men, based on personal experience, do not believe women actually want â€Å"nice guys†. Desrochers, 1995). And Urbaniak & Kilmann write that, â€Å"Although women often portray themselves as wanting to date kind, sensitive, and emotionally expressive men, the nice guy stereotype contends that, when actually presented with a choice between such a ‘nice guy' and an unkind, insensitive, emotionally-c losed, ‘macho man' or ‘jerk,' they invariably reject the nice guy in favor of his ‘so-called' macho competitor. † (Urbaniak & Kilmann, 2003). They all both say that what they want and what they actually do is totally different. Women say they want â€Å"nice guys† but they want nice guys to be attractive, well built but those guys are either taken or jerks. Then they go for the jerks, who are attractive and challenge themselves to make them to become nice guys but that rarely happens. Nice guys do not always finish last. The difference is how one defines or take word â€Å"last† as. Bad boys or jerks do always get the girls because they know the game and most of them are attractive in different ways but when one looks at long-term, many can see that women tend to choose nice guys. Herold and Milhausen claim that â€Å"while ‘nice guys' may not be competitive in terms of numbers of sexual partners, they tend to be more successful with respect to longer-term, committed relationships. † (Herold & Milhausen, 1999). No women wants to be treated badly or be used and that what bad boys or jerks do. Thats is why they prefer nice guys and be will to go out on second date or go in a relationship with them. McDaniel constructed vignettes of dates with a stereotypical â€Å"nice guy† vs. a stereotypical â€Å"fun/sexy guy,† and attempted to make them both sound positive. Participants reported a greater likelihood of wanting a second date with the â€Å"nice guy† rather than with the â€Å"fun/sexy guy. † (McDaniel, 2005). People may think that nice guys finish last but for to them the â€Å"last† is the goal for the women. The women may take a detour but most of them reach the goal to the nice guy. It is like the story of the rabbit and the tortoise, the rabbit is the jerk and tortoise the nice guy. My best friend is a bad boy who gets all the girls he wants and I was always the nice guy. He always told me to be like him but I could not and never be someone who I am not and comfortable with. I always thought that generalization was true until recently but not anymore. It took me three years but I am finally in a relationship and I am happy. From past to present, the women's preference has not changed and that means something. Women do and always will desire nice guys because they care and think about them. Thats is what women is looking for at the end of the day. Nice guys does not finish, they finish first.

Importance of employee performance management Essay

Importance of employee performance management - Essay Example 72). â€Å"Given the current challenges of the economic climate and high rates of unemployment, performance management and employee evaluation is likely to remain a hot topic† (Gliddon, 2004 cited in Newman, 2008, p. 172). In simple words, performance management of employees is a process of getting the most out of employees. In order to achieve this, organizations need to work on a range of factors that include but are not limited to employees’ motivation, continued learning, skill improvement, allocation of right jobs to the right people, fostering teamwork, and providing the employees with an environment where they can thrive with their capabilities. Performance management has probably never been as important in the organizational context as it is today since the workplace is more dynamic than ever before with new kinds of technology surfacing and being integrated into the work setup so frequently. Managers in the contemporary age not only face the challenge of keepin g updated with the latest advancements of technology and integrating them into the workplace, but they also have to take the required measures to enable the employees to make effective use of those technologies. This makes it a continuous process with great margin of trial and error, requiring great knowledge and experience to handle the intricate issues with respect to performance management. â€Å"If you are a manager, the progress principle holds clear implications for where to focus your efforts. It suggests that you have more influence than you may realize over employees’ well-being, motivation, and creative output. Knowing what serves to catalyze and nourish progress—and what does the opposite—turns out to be the key to effectively managing people and their work† (Amabile and Kramer, 2011). Discussion Why is performance management important? Performance management of employees in an organization derives its importance from the fact that it is a way to reinforce the decisions related to organizational personnel like those related to transfer, promotion, compensation and reward, training and skill development, planning of human resources, and development of the organization as a whole (Bhattacharyya, 2011, p. 58). The level to which each of these factors is considered important may vary from one organization to another but all of these factors govern the performance of employees in any organization. Besides the primary importance of the different factors in different organizations, performance management strengthens the relationship between the management and the subordinates, and improves motivation and flow of communication in the organization, thus improving its overall performance. From the perspective of human capital, performance management plays a very important role in the development of the human capital of an organization (Smither and London, 2009). The importance of performance management of employees in the organizat ions is elaborated with the help of some case studies below: Case Study 1 One of the prime motivations behind conducting performance reviews is eradication of bad performers from the organization. This is a case in which performance management helped in the identification and weeding out of a bad leader. Usually organizations tell their managers to establish a paper trial to justify the termination of an employee that is deemed a poor performer. In such cases,

Aztec empire art Essay Example | Topics and Well Written Essays - 500 words

Aztec empire art - Essay Example Although there is no explicit evidence of bloodletting in the archeological records, there are strong beliefs that they practiced it. This is being proven by numerous ceramic spikes, thorns and artifacts which have been cited as blood letters. In Elmanati site, disarticulated skulls and femurs were found. In addition, the skeletons of newborn children were discovered. This leads to speculations that infant sacrifices were being conducted in these places. Nevertheless, it is yet unknown how these infants met their deaths. Innovation of writing by Olmec played a significant role in art and beliefs of later Mesoamerican cultures. In 2002, there was discovery of bird, speech scrolls and glyphs. These artifacts were crucial in enabling the Mesoamerican to organize their seasonal rituals. In addition, they were able to plan their activities that were significant in improving their religious beliefs. Hieroglyphs such as Epi-Olmec were also crucial in developing the Mesoamerican art. Chichen Itza and Tula have many similarities in art and architectural designs. Both cities had similar temples, an aspect that indicated that there was a close relationship between the two sites. People in these areas have similar religious structures that they used to appease their gods. In addition, the Sacred Cenote, which was a large cylindrical and natural sinkhole, had a religious importance to the local people. Tula copied some of the architectural designs from such structures. This is an indication that Itza was established before Tula. Major beliefs in Tula had some similarities with those of Itza. The artifacts indicate that the carvings and the writings had major similarities. For instance, both cities portrayed a close relationship with Plumed Serpent. The art and architecture includes different depiction of him. In addition, the carvings of big-nosed god had some relationship between

Proportionality and discrimination are key concepts for jus in bello Essay

Proportionality and discrimination are key concepts for jus in bello. Examine the practical consequences of these concepts in th - Essay Example It differs from jus ad bellum in the sense that while the former refers to regulations and decrees issued during a war, the latter deals with legal justification and legitimate reasons for commencing a war (Orend, n.d. p. 105). This paper examines the principles of proportionality and discrimination and their present practices with respect to principles of jus in bello. Jus in bello According to war theorists, ‘jus in bello’ refers to the rights and regulations that are followed after commencement of a war. It is a Latin term, which for a large part also evaluates and justifies a nation’s reasons for entering into warfare. At the same time, it also justifies whether the war is conducted on a just manner or not. Under any circumstance, nations are not allowed to adopt perverse means to meet their objectives. Due to this reason, jus in bello is often referred to be an ethical parameter. Thus, principles of jus in bello function with the sole objective of maintaining a coherence between the means and outcome of an armed conflict. Added to these, jus in bello performs another important function. Its principle task is to limit warfare. This is a measure to control the ever- escalating destruction and cost of war (Henderson, 2009, pp. 3-4). Principle of proportionality: jus in bello The term ‘proportionality’ refers to adoption of methods which will not only be proportional to the ends of the war, but will also help in achieving just goals. From a narrower perspective, war theorists define ‘proportionality’ as the method that is adopted by combatants for fulfilling their respective goals, without inducing mass- massacre of enemy troops. Proportionality has often become a controversial issue for it often justifies violence to a certain degree. Though the principles of proportionality are pitted against general sense of humanity, it ensures that basic respect is paid for lives and privacy. Thus, the principle of proportiona lity demands the war commanders not to chase unattainable objectives or which were relatively unimportant by paying with lives of their own military troops. This brings the principles of proportionality in line with the codes of jus in bello (Shapcott, 2013 ). Though not itself the key consideration, the principles of proportionality hugely influences one of the key concepts- humanness, and is directed towards ensuring basic human rights. Proportionality imposes severe limitations on activities of States, especially when it adopts extreme means to save few soldiers by claiming more lives. It aims at saving more lives compared to those risked at war. This makes it a ‘consequentialist concern’. Three chief principles of proportionality are- firstly, when any aspect or objective has provisions for both good and bad, the ‘good’ must be chosen. Secondly, the effectiveness of good must be taken into consideration. Lastly, in case they are unequal, effectiveness b ecomes the decisive factor (May, 2008, pp. 117- 120). Principle of discrimination Civilian immunity is central to principles of discrimination which insist that when at war, discrimination must be practiced between the combatants and the ones who are not. Irrespective of war objectives, under no circumstances the military is supposed to make the civilian population a permissible target. The principles also incorporate certain chivalric codes of conduct and customary practices, in respect to the material characteristics of armed combat. The immunity

Ethical dilemmas are everywhere in finance Research Paper

Ethical dilemmas are everywhere in finance - Research Paper Example An interesting aspect of this dilemma is to understand what is considered ethical and what is not. Finance by its very nature propagates the theory of maximization of profits. Why would anyone culminate a financial transaction if there was nothing to gain out of it? Now to decide how much to earn and by what means to earn is the most interesting facet of this dilemma. In theory, an organization is considered to be an entity that works for the benefit of its shareholders. The employees of the firm are thus assumed to be the representatives of this entity. They work on the various financial models to look for avenues which have minimum risk and maximum return. The financial theory also states that people are averse to taking risk. Hence, an investment in a risky proposition would mean that the investor is expecting an above average return. Riskier the proposition, higher the return expected. But the amount of risk to be taken is something that the investor needs to understand. Another concept in financial management is that of the Net Present Value (NPV). A firm should invest only in those assets or projects which have a positive NPV. All these concepts are interlinked with the fact that ethical dilemmas will continue to haunt the stakeholders at all points of decision making while running an organization. The various theories of finance can tell what the best options to maximize returns are, but ethics relate to the means that are used to achieve those ends. This is the most important aspect of this topic. The figures used in finance require an ethical basis to produce positive and sustainable results. Let us see how this dilemma exists in the present market. Discussion of Financial irregularities that lead to the recent global crisis (Kolb 2010) One of the stark examples of financial irregularity and unethical activities can be seen in the recent financial crisis of 2008 which is considered to be the biggest financial depression since the depression of 1930â₠¬â„¢s. This has been attributed to the emergence of complicated financial instruments called CDOs which are traded through investment banks. Investment banks, unlike the normal banks which give out loans and have adequate deposits to cover them, do not need to keep any deposits. They collect all the mortgage backed securities (MBS) and sell them to investors after securitization. Kolb (2010) explains the process of lending that takes place in the mortgage market in the figure below. The figure shows the origin to distribute model (OTD) which was being applied in the industry before the financial crisis occurred. As per this model, the originators of the loans were not there holders unlike in the normal banking loans scenario. Ethical dilemmas at borrower level (Kolb 2010 and Stich n.d) Kolb (2010) observed that most of the borrowers never had any intentions of paying their principal amounts. Ethical issues cropped at all the links in the model. The first level of unethical financial dealing started at the borrowers level itself. In a normal banking scenario a borrower has access to only those loans and interest rates which are commensurate with the risk he has been associated with by the lender ( the banker in this case). However, in the OTD model, the originator of the loan gives the borrower options of varied interest rates and EMI payments by overlooking their actual credit worthiness because the originator is

Digital forensic investigation Essay Example | Topics and Well Written Essays - 5000 words

Digital forensic investigation - Essay Example icated and the information blocked or writer blocked so as to prevent the information on the hard drive from being altered or modified (Kaliski, 2006). Analysis: In this process the information which was found in the hard drive is looked at carefully. The investigators try to piece things together at this stage so that they may come up with the necessary evidence which can be presented in the court (Pereira, 2009). This evidence can be retrieved by using various techniques such as key word searches, whereby things such as the list of the names or account numbers and such like things are searched. This report main task was to look at the involvement of Clyde Barrow in fraud. The investigation also looked at the fact of Clyde Barrow and Bonnie Parker had been communicating. In the investigation we were able to establish that Clyde Barrow was involved in the fraud and that the two suspects had been communicating with each other. It was also established that Clyde Barrow was involved in terrorism activities as well. The evidential facts are as follows: Clyde Barrow was dealing in counterfeit money. This can be proven by the fact that there were images of the counterfeit money in his hard drive. The images upon investigation, were found to be illegal, i.e. they were not legal tender. Clyde Barrow and Bonnie Parker not only knew about each other, they had been communicating via e-mail. In our investigations we were able to establish that the two had in fact sent each other an e-mail. If for instance we had found an e-mail from Bonnie Parker to Clyde Barrow and then Clyde Barrow had not replied it, Clyde Barrow could have stated that he did not know Bonnie Parker. In such a case we would not have had proof of the two individuals having prior knowledge about the others existence. Fortunately for us these two had sent each other e-mails about a certain deal meaning they were business partners in the fraud. This is as shown in the appendices we have put forth. How can we

A new 300 m2 house that must be completed for Mr and Mrs Jones by Assignment

A new 300 m2 house that must be completed for Mr and Mrs Jones by December 25th 2012 - Assignment Example The owners of the house will be contacted on regular basis to confirm the adjustments and modifications done. The Supplementary Planning Document has been developed in accordance with local, regional and national planning policy, and the adoption of this guidance means that sustainable design and construction are material considerations to be given weight in considering development of this project, and can be the subject of planning conditions and/or obligations in respect of appropriate development. Applicants for planning permission will be expected to have considered this planning guidance and in so doing to have focused on the five sustainable design and construction aims defined here to: Mr. and Mrs. Jones have relocated from New York to Alabama following their retirement. They decided to build their new dream house in a lot of land that they had purchased earlier. This brought about to them selecting a team oversee the construction works. I was contracted to write a project plan for the new housing project that will act as a guideline to the whole project since in this project plan I have indicated all the procedures to be undertaken to ensure that the project is successful and it is delivered according to the stipulated time. The house to be constructed is of 300m2 which will be used as their new home, the project plans is to be started as soon as possible so as to meet the 25th December, 2012 deadline and which is the time the project is expected to come to a completion. The construction and the implementation of this project should be done in accordance to the ideas, specification and requirements of the owners which in this case is Mr. and Mrs. Jones. They are to approve every step and phase undertaken in the construction process and by using this project plan as the guideline to ensure strict budgetary arrangements and proper construction procedure is followed. The construction

Housing Markets in the Financial Crisis of 2008 Essay

Housing Markets in the Financial Crisis of 2008 - Essay Example The origin of the housing market boom The boom in the housing market started growing as the stock bubble grew up in the last decade of the 20th century. In simple terms, the logic governing the growth of the housing bubble was one such that the wealthy were spending the money they had accumulated from the favorable stock markets (Baker, 2008, 73). The stock prices had run up in a manner extraordinary and many people had not anticipated. The wealthy therefore started spending at a rate similar to the rate of wealth accumulation. The increased wealth resulted in an increase in the average consumption and it was noted that the savings rate sourced out of every individual’s disposable income experienced a fall from 5% in 1995 to about 2% in the year 2000. The wealth gained from the favorable stock markets led to massive investments in the housing industry as people strived to buy bigger houses and to make better homes. The supply of housing is, of course, fixed so this therefore m eant that the sudden increase in demand was likely to cause the housing bubble effect (Baker, 2008, 73). This caused a chain of events starting by an increase in demand which automatically resulted in the house prices to rise. As the prices started rising in some of the areas affected there was a unique phenomenon such that the prices started being incorporated into expectations and these made the buyers of houses and homes to start paying more than they would otherwise have done. This had a tendency of making the expectations self fulfilling and more convincing. Research together with the data from the government’s documents pointed to a very slight change in the house prices for over 100 years before the beginning of the house bubble. Even as the price of the houses rose, the rent did not increase in a similar manner but it in fact remained trailing behind in a modest manner a clear indication that the price of the houses was as a result of the housing bubble (Baker, 2008, 74). The instantaneous increase in the price of the houses both for buyers and those renting them started creating a substantial effect on the supply side as a result of the rise in price from around 1995 towards 2000. The house prices rose up to about 25% in the year 2002. This was above the average rate of the three years from 1993 to 1995. This then resulted in to an effect that appeared as an oversupply in the number of rental housing sector for it caused the vacancy rate to rise to about 9% in the year 2002 which was 1.5% increase to that of around 1990 that stood at about 7.5%.

Why does Britain want Turkey in the EU Essay Example | Topics and Well Written Essays - 4500 words

Why does Britain want Turkey in the EU - Essay Example The acceptance of Turkey as a member state of EU is a difficult decision mostly because the risk involved is high. More specifically, the country has proved the last years that significant efforts are made towards the improvement of the social and political condition both in the internal and the external environment; however, the standards set by the EU have not been met still. In order to develop its economy in accordance with the Western standards, Turkey introduced a privatisation programme which ‘has included the sale of a number of key state assets. As for UK, the possibly entrance of Turkey in EU could have significant benefits especially in the commercial sector. Possibly gains in political and military sectors could be also exist but only if the intervention of military in the country’s politics is limited. The final decision belongs to European leaders who will formulate their decision in accordance with the completion of the terms set to Turkey regarding its entrance in the EU. In case that Turkey will not follow the guidelines of EU (as presented also through the paper of the Commission of the European Communities published in 2006, section 2 above) then its entrance in EU is very likely to be postponed again in the next enlargement. For reason Turkish investment in the UK is also growing,the support of UK towards the success of bid of Turkey for the membership should be expected to continue for quite a long.

Salem Witch Trials Essay Example for Free

Salem Witch Trials Essay The Crucible- Web Quest 1. Crucible- a severe, searching test or trial. 2. Spectral evidence- is a form of evidence based upon dreams and visions. 3. Witch Hunt- An Investigation carried out ostensibly to uncover subversive actlvltles but actually used to harass and undermine those with differing views. a. Recently uncovered files reveal the case of Raymond Ginger, a Harvard professor who was asked to resign in 1954 because he refused to respond to questions over whether he and his wife were Communists. . Yes, It qualifies as an Investigation to uncover ubversive activities. 4. a. The two events that had a profound influence on Millers work were the depression and the war that immediately followed it. b. The Crucible was his masterpiece. c. Arthur was married to famous actress Marilyn Monroe 5. Mather treated some of the afflicted, wrote Journals and advised the Judges. Evidently Mather was quite arrogant and liked prestige. 6. a. Nothing about this trial was inevitable. Only an unfortunate combination of an ongoing frontier war, economic conditions, congregational strife, teenage boredom, and personal ealousies can account for the spiraling accusations, trials, and executions that occurred in the spring and summer of 1692. b. It could have been from stress, asthma, guilt, boredom, child abuse, epilepsy, and delusional psychosis. c. Increase Mather was the man who pleaded for the dismissal of spectral evidence, it was ironic because he was the father of Cotton who had wrote the Journals. d. It suggests that the trials were somewhat of congregational feuds which played a major role In determining who lived and died. 7. a. Their friendship came to an abrupt end in 1 952, at the height of the so-called Communist witch hunt conducted by the House un-American Activities Committee. b. He wrote It because It drew parallels between the 17th century Salem Which Trials and the Red Scare of the 1950s. c. The film was called On the Waterfront it testified a friendly witness. 8. a. McCarthyism was an intense effort to root out Communists from any part of America even if it went against American values. The Second Red Scare was the time in which McCarthyism came bout. b. The primary targets of such suspicions were government employees, those in the entertainment industry, educators and union activists. c. He was a Republican U. S. Senator who created the idea that there were lots of communists or spies in the U. S. He was the man who McCarthyism came from. d. The government eventually censored McCarthy, and later In life he died from Alcoholism, e. McCarthyism was carried out in many ways. It started out with only the talk of McCarthy because people believed him. Then laws, (which were unconstitutional and wrong), were passed, making people go along with McCarthyism even more because it was now everywhere. Along with that, many cases went to trial during that time. f. To be blacklisted by the HUAC meant to be shunned,fired from your work, and unable to get a Job basically anywhere. Many careers and reputations were ruined, and clearing 1 OF2 given two options. They could speak in defense of themselves or let the Committee come to a verdict without a hearing. h. Execution or being sent to prison.

Marks and Spencer Business and Financial Performance Analysis

Marks and Spencer Business and Financial Performance Analysis Marks and Spencer is a British retail giant specialised in apparel and food industry. The company had been in its business for more than hundred years and has the biggest market capitalisation in the retail industry. This research is conducted to measure and analyse the business and financial performance of the company. Business performance is measured in this study considering the opportunities and constraints in company macroeconomic and industry circumstances. Financial performance had been measured using ratios on profitability, liquidity, efficiency and leverage. There performance of MS is then compared with the financial performance of Next Group, the next biggest player in British retail industry. The study found that, although MS has many business successes over the years, it had been performing financially poorer than Next Group and needs emergency improvement in its liquidity. The study recommends Marks and Spencer to rethink its leverage strategy and exploit the benefit of debt as like Next Group. Chapter 1 Introduction 1.1 Study Background Marks and Spencer is one of the largest retailers in UK specialised in clothes and foods with a market capitalization of more than  £6400 million1. We have over 700 stores located throughout the UK and Republic of Ireland; this includes our largest store at Marble Arch, London. In addition, the company has over 300 stores worldwide, operating in more than 40 territories2. In 2010 the companys sales revenue from general merchandise was  £4.1 billion and  £4.3 billion from foods. Its nearest competitor Next, which has a market capitalisation of around  £4100 million1, had a turnover of  £3.41 million in 2010 with a market share of 8.3% in comparison to 11% by Marks and Spencer in general merchandise segment. This study is particularly concerned with the business and financial performances of Marks and Spencer which are compared with the performances of Next. 1.2 Study Objectives The prime objective of this research is to analyse and evaluate the key business and financial performances of British retail giant Marks Spencer from year 2007 to 2010. While achieving this objective the research will try to meet the following secondary objectives 1.2.1 Analyse the major business performances of the company over last three years: The study will examine the companys performances in major business areas including its growth, market share, competitive position in the whole macro environment and major strengths over its competitors. 1.2.2 Identify and analyse the measures key financial performances: The second objective of the study is to identify the measures of companys financial performances especially in profitability, liquidity, investment and leverage performances. Besides this operational performances in other areas would be identified and anlaysed under this objective. 1.2.3 Compare the performances against Next: The third objective of the study is to compare the financial performances of M S with the performances of Next, the nearest competitor in general retail section. 1.2.4 Identify the major problems of Marks Spencer in business and financial performances and provide recommendations: Finally the study will try to identify the major weaknesses of Marks Spencers based on the measures of business and financial performances. The research will also formulate 1.3 Study Scopes and Usefulness of the Study Scope of this research work is three years (2007-2010) business and financial performances of Marks and Spencer. The scope also includes financial performance of Next for the same period. The findings of the study can be useful information for investors. The method used by the study can be a guide for the business and financial analysts. 1.4 Research Structure The research paper is structured in line with the sequence of objectives. The first chapter includes the rationale and objectives of the study. Then relevant literatures and theoretical issues are discussed in chapter two. The third chapter will present the methods of conducting this research work. Companys business performances and financial performances would be presented consecutively in chapter four and five. In chapter six Marks and Spencers performance will be compared with Nexts performance and areas of improvement for M S would be identified. Finally in chapter six recommendations would be provided with final remarks. Chapter 2 Literature Review 2.1 Introduction As discussed earlier, this research work is concerned with the business and financial performance of Marks and Spencer. This chapter will narrate an overview of the business operation of the company. This chapter will also review the techniques of measuring business and financial performance especially using qualitative and quantitative techniques along with brief interpretation of the performance measures. 2.2 Marks and Spencer: An Overview Marks and Spencer is a FTSE 100 company with the largest revenue base of more than  £8 billion as a retailer. It is headquartered in City of Westminster, London having operation in more than 40 countries. The following section provides a brief discussion on companys history, main line of business, geographical spread, summary of financial performances, its corporate social responsibility and the management. 2.2.1 Corporate History Marks and Spencer was established in 1884 by Michael Marks and Thomas Spencer3. The company had a policy of selling only British-made goods which made it popular in early 20th century. It started its apparel brand St Michael in 1928 and in 1950 St Margaret label was introduced for woman clothing. The company started its international expansion in 1970s by putting its step in central Europe and Ireland. During its hundred years of lifetime the company became the pioneer in quality management, customer relationships, health and safety and energy efficiency. The companys performance briefly slumped during the first decade of new millennium. However, the company is back to profit and growth in 2010 under the strong leadership of Marc Bolland who joined the company as CEO in May 2010. 2.2.2 Core UK Businesses M Ss core UK businesses include general merchandise and foods. It is largest clothing retailer including womenswear, lingerie and menswear and kidswear. Last year the companys turnover in general merchandise was  £4.1 billion which constituted an stunning 11% of the overall market share. Marks and Spencer is also the leading provider of high quality food, selling everything from fresh produce and groceries, to partly-prepared meals and ready meals and an award winning range of wines. Turnover from foods was  £4.3 billion in 2010 with a modest market share of 3%. 2.2.3 Sales Channel Customers shop with MS in many ways in stores, online or over the phone (MS Annual Report, 2010). The company has 690 stores across the UK. Its shops are located in convenient locations from high streets to retail parks, train stations to airports. Over the past four years the company has transformed these stores into bright and contemporary destinations with a range of hospitality options. The company also sells online which it calls MS Direct. MS Direct is a platform for improving customer convenience and service including via its website and newly launched Shop Your Way facility. The company aims to achieve £500m in sales through MS Direct by 2010/11. 2.2.4 International Business MS has 320 owned and franchised stores in 41 countries. The companys mix of ownership models and countries enabled it to perform well over the past year even when individual markets were weak. In 2010 its international turnover was  £949 million which is more than 15% of its overall revenue. 2.2.5 Recent Business and Financial Performances In 2010 the companys sales were up by 3.2% despite recessionary pressure. The overall gross margin was 41.2% with sales revenue  £9.3 billion. The company significantly improved its cost by saving  £145 million. The company reduced its capital expenditure cash outflow and generated a cash inflow of  £412m after tax and dividend. However, the companys market share was slightly down from 4.3% to 3.9%. Average visit to MS shops had been estimated around 21 million and average mystery shopper score was found to be stunning 89% in 2010. 2.2.6 About Next: The Nearest Competitor NEXT is the second largest UK based retailer offering clothing, footwear, accessories and home products. It distributes through three main channels: NEXT Retail, a chain of more than 500 stores in the UK and Eire, NEXT Directory, a home shopping catalogue and website with nearly 3 million active customers, and NEXT International, with more than 180 stores around the world. In 2010 the company had overall revenue of  £3.4 with a profit after tax of  £400 million. 2.3 Techniques of Measuring Business Performances A companys business can be analysed using various tools like PESTLE, SWOT analysis and Porters five force models. Measures of business performance might be companys expansion rate, revenue growth, development of strength, management of weaknesses and exploitation of opportunities etc. These measures can be achieved by subjective analysis and using business analysis tools. A brief discussion on these tools is presented as below. 2.3.1 PESTLE Analysis PESTLE, which is a popular macro-environmental analysis tool, stands for Political, Economic, Social, Technical, Legal, and Environmental analysis. Political factors include governments tax policy, employment and environmental law, trades and tariffs regulation, and political stability. Common Economic factors are GDP growth, nominal interest rates, exchange and the inflation rate. Key social factors are population growth, age distribution, health consciousness, religious views and career attitudes etc. Technological factors are spread and dependence on technology, innovation, research, and technological change etc. Legal factors are laws on discrimination, consumer, heath and safety law etc. Finally environmental factors include weather, climate, climate change etc. 2.3.2 Porters Five Force Model The five forces model is an industry analysis tool and provides a good idea of how a business should perform inside an industry. The model analyses five industry variables. These variables are ease of getting entry into industry, availability and potentiality of substitute products, suppliers and customers bargaining power and degree of competition in the industry. These factors determine how attractive and profitable an industry might be. 2.3.3 SWOT Analysis PESTLE and Porters models are used to analyse a companys macro and industry environment. SWOT Analysis is used for measuring a companys internal strengths and weaknesses. It also helps to identify specific opportunities and threats to company from the macro environment. 2.4 Techniques of Measuring Financial Performances Generally, financial performances are measured using the financial information of a company. Practically, ratio analyses are conducted on financial statement figures. Financial statements include companys income statement, balance sheet, statement of cash flow and statement of equity. There are several types of ratios profitability, liquidity, efficiency, gearing, and investor ratios. In following sections these groups of ratios are briefly discussed 2.4.1 Profitability Ratios These ratios are also called performance ratios where profit at different levels are compared with other figures and expressed in percentage. These ratios are (a) Gross Profit Margin: Gross profit margin is found by dividing gross profit by sales turnover and the formula looks like following The ratio can be a good indicator of companys direct cost or cost of sales. Profitability of a company in its core operation can be determined using this ratio. The higher the ratio the better it is. (b) Operating Profit Margin: Operating profit margin is found by dividing net profit by sales turnover and the formula looks like following As operating profit is found by deducting indirect expenses from gross profit, the ratio shows how much a company spends on non-direct activities. Too much cost on indirect cost might result in lower or negative operating profit margin. (c) Return on Capital: Shareholders and debt investors generally count profit on their investments. Return on capital can be calculated using the following formulas This ratio (ROCE) provides percentage return on the overall funds invested in the business. There is another ratio that provides return on stockholders equity which is called Return on Equity (ROE). The formula is as following ROE measures the profitability of the fund provided by the companys owners or shareholders. Profit margins and return on capital ratios together gives a good idea of overall profitability of the firm. A company having very good profit margin may have a poor ROCE or ROE ratio. Such cases happen when companies large investment operates in small scale or during the initial years. 2.4.2 Liquidity Ratios These are also known as solvency ratios, as they refer to the ability of the business to pay its payables in the short term. There are two main liquidity ratios. (a) Current Ratio: This is also known as the working capital ratio, as it is based on working capital or net current assets. It is calculated as: Current ratio is a measure of the liquidity of a business that compares its current assets with those payables due to be paid within 1 year of the statement of financial position date (otherwise known as current liabilities). (b) Quick Ratio: This is also known as the acid test ratio and is calculated as following This is similar to the current ratio, but takes the more prudent view that inventories may take some time to convert into cash, and therefore the true liquidity position is measured by the relationship of receivables and cash only to current liabilities. 2.4.3 Efficiency Ratios These ratios are also referred to as use of assets ratios. They measure the efficiency of the management of assets, both non-current and current. (a) Asset Turnover Ratio: These ratios compare the assets with the sales revenue (turnover) that they have earned. The end result is often expressed in money value to represent the value of sales revenue for each $1 invested in those assets. The formula is: (b) Inventory Days: Inventories may be analysed by calculating the ratio of inventories to cost of sales, and then multiplying by the number of days in a year to give inventories days. The formula is as following This figure gives the number of days that on average an item is in inventories before it is sold; this may alternatively be expressed as the number of days a firm could continue trading if the supply of goods ceased. (c) Receivable Days: This is a measure of the average time taken by customers to settle their debts. It is calculated by: As with inventories days, a slowing down in the speed of collecting debts will have a detrimental effect on cash flow. On the other hand, it may be that the business has deliberately offered extended credit in order to increase demand. (d) Payable Days: This is a measure of the average time taken to pay suppliers. Although it is not strictly a measure of asset efficiency on its own, it is part of the overall management of net current assets. It is calculated by: The result of this ratio can also be compared with the receivables days. A firm does not normally want to offer its customers more time to pay than it gets from its own suppliers, otherwise this could affect cash flow. Generally, the longer the payables payment period, the better, as the firm holds on to its cash for longer, but care must be taken not to upset suppliers by delaying payment, which could result in the loss of discounts and reliability. It is important to recognise when using these ratios that it is the trend of ratios that is important, not the individual values. Payment periods are longer in some types of organisation than in others. 2.4.4 Capital Structure Ratios Different firms have different methods of financing their activities. Some rely mainly on the issue of share capital and the retention of profits; others rely heavily on loan finance; most have a combination of the two. (a) The Gearing Ratio/Leverage Ratio: Gearing is a measure of the relationship between the amounts of finance provided by external parties (e.g. debentures) to the total capital employed. It is calculated by: The more highly geared a business, the more profits that have to be earned to pay the interest cost of the borrowing. Consequently, the higher the gearing, the more risky is the owners investment. On the other hand, a highly geared company might be more attractive to shareholders when profits are rising, because there are fewer of them to share out those profits. (b) Interest Cover: Connected to the gearing ratio is a measure of the number of times that the profit is able to cover the fixed interest due on long-term loans. It provides lenders with an idea of the level of security for the payment. The formula is: 2.5 Using Ratio Analysis Calculating the ratios is only one step in the analysis process. Once that is done, the results must be compared with other results. Comparison is commonly made between: Previous accounting periods; Other companies (perhaps in the same type of business); Budgets and expectations; Government statistics; Other ratios. 2.6 Conclusion This chapter gave brief overview of Marks and Spencer and also the tools and ratios that will be used to analyse the business and financial performances the company. The same ratios will be used to compare the performance of MS with Next. The next chapter will provide a brief overview on the research methodology and data that will be used for the research. Chapter 3 Research Methodology 3.1 Introduction Methodology may be defined as procedures that are used to conduct a function or activity. This chapter will briefly discuss on the methodology that will be used to analyse the business and financial performance of Marks and Spencer and comparing its performance with that of Next Inc. This section will also provide an overview of the data used in this study and their sources. 3.3 Required Data, Sources and Collection Methods Data required for completion of this research work are of secondary nature. Mark Spencers business related information were collected from companys website and annual reports of three years 2007, 2008 and 2009. Annual reports were collected from company website. The data required for macro-environmental analysis were collected from various articles, national statistical websites and newspapers. Financial information required for analysing financial performances are extracted from the annual reports of the company. Financial information of Next was collected in the same way. Findings of financial performance analysis are then used to identify the areas of improvement for MS. 3.4 Research Methodology Various quantitative and qualitative methods had been used to achieve the objectives these research. The nature of the methodologies are briefly discussed as following 3.4.1 Method for Analysing Business Performances: Method used for this purpose is qualitative. PESTLE analysis had been used for analysing the business performance in macro-environment. Porters model were used for analysing industry performance and position of MS. Finally, SWOT analysis was used to find out company specific opportunities and threats and companys key strengths and weaknesses. (See Chapter One to have idea of these tools). 3.4.2 Methods Used for Analysing and Comparing Financial Performances: Financial ratio analysis (discussed in chapter 1) is used to analyse the companys performance in profitability, liquidity, efficiency and leverage. The values of these ratios are compared against the ratios of Next to compare the performances of two companies. For presentation of findings different types of charts were used. 3.4.3 Methods of Identifying Improvement Areas: Areas of improvement would be identified using the findings of financial performance analysis using ratios. The areas where Next is performing better than MS would be identified as areas of improvements. After identifying areas of improvement strategy would be formulated to eliminate problem areas in companys financial performances. 3.4.4 Research and Data Analysis Tools Microsoft Excel 2007, which is a popular spreadsheet application, is used for conducting the ratio analysis and presenting findings of analysis graphically. 3.5 Conclusion This chapter provided a brief overview of the research data, methods and tools used in this research. In next, chapter the findings of the research would be presented followed analysis of findings. Chapter 4 Analysis and Findings 3.1 Introduction This research is conducted based on the information available on the Annual Reports of Marks and Spencer and Next Group as well as on the findings of professional business analysts found on reliable internet sources. In this chapter, the most important section of this study, key findings of companys business performance in light of PESTLE, Five-Forces and SWOT analysis and also the financial performance over last three would be presented. A comparison of performance with Next Group would also appear in this section. 3.2 An Analysis of MSs Business and Performance Summary Business performance of Marks and Spencer can be measured in reference to the factors available in macro-economic environment, factors in apparel and food industry and in terms of companys strengths and weaknesses. The findings of business analysis are presented as following. 3.2.1 Findings from PESTLE Analysis MSs Performance Key factors relevant to Marks and Spencers business found from PESTEL analysis can be summarised as following (table 3.1) Recent political development in United Kingdom is posing threat to many businesses in form of rise in tax rate, cut of social benefit and cap in immigration. There is also setback of recession that had injured the British economy significantly. Despite these negative elements in political and economic environment Marks Spencers revenue has grown at a steady rate over last three years (See Chart 4.1) showing no sign of recessionary impact on its business. Social environment however demonstrate goods signs for clothe and food retailers. Marks and Spencer had introduced various successful brands that meet the changing social pattern and consumer demand. The company is also successful in adopting technologies. Its ecommerce sales have increased at a sizable chunk in last few years. MS has also successfully used consumer research technologies for identifying market demands and customer needs. The retailer has proved it as one of the most energy conscious and environmentally friendly comp any in British history. Marks and Spencer is a century old company and had well adopted itself in the macroeconomic context of United Kingdom. British retail industry is run by a few very big players. In apparel retailing the popular names are Marks and Spencer, Next and Debenham. However, food retailers like Tesco and Asda are trying to get into apparel market with lower prices. However, for completely new businesses it would be very tough to challenge companies like Marks and Spencer which have grown its market share by 4% from 7% to 11% in cloth and general merchandise. The companys market share has also improved by 2% in 2010. However, MS could not maintain its image regarding its relationships with suppliers. Many international pressure groups had criticised its bargaining power on its suppliers. 3.2.2 SWOT Analysis and MSs Performance Marks and Spencer is well capitalising on its strength by adding more clothing brands and stepping foot in international markets. Last year companys international revenue was more than  £900 million with a growth of 5%. The company also have capitalised on ecommerce technology; in 2010 MS Directs revenue grew by 27%. Financial Performance Analysis In this study, Marks and Spencers financial performance have been analysed on four performance areas. These areas were profitability, liquidity, efficiency and leverage. For measuring performance in these areas eleven different ratios had been used. The findings of ratio analysis are presented as following. 3.3.1 Profitability: MS vs. Next Average operating profit of MS and Next is respectively 11% and 15%. Though revenue of both the companies grew over the period, operating profit was steady. However, according to findings Next Group is more profitable than Marks and Spencer. Nexts Return on Capital Employed and Return on Equity are also significantly higher than MS (See Figure 4.3 and 4.4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Based on the above analysis, the research concludes that Next Group is a highly profitable business by providing extra ordinary return to its equity holders. Liquidity Performances Both the companies liquidity is poor scoring far below standard value of 2:1. Marks and Spencers liquidity is at an alarming level of around 50% capability of paying off its current liabilities. Also, over the year none of the retailers could improve liquidity performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.4 Efficiency Although in profitability and liquidity M S is lagging behind Next, in case of efficiency in receivables, payables and inventory management MS had been showing excellent dexterity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The ratios (Figure 4.6) indicate that, inventories are sold in 23 days by MS and in 40 days by Next after purchase. On the other hand, MS is capable of collecting its receivable assets within eleven days of sales which Next can do in 67 days. Payable days are matched with receivable days. However, though MSs collection from customers is faster, its payment frequency to suppliers is a little slow. This might a sign of efficiency in working capital management. The reason behind MSs extra ordinary efficiency is because of its long experience in British industry. Average Asset Turnover Ratio of MS over the last fours years is below 1.5 which is above 2.0 for Next. The ratio indicates that MS can generate sales of around  £1.34 against  £1 of its assets which, though is not poor, in comparison to Next is pretty ordinary. 3.3.5 Leverage Performances Leverage indicates the use of debt in boosting of equity return. Both Marks and Spencer and Next Group use debt which is reflected in their gearing ratios (See Table 4.7). .From Figure 4.8 it can be easily understood that Next Group a highly geared company in comparison to Marks and Spencer. MSs policy seems to be keeping long-term debt less than 50% in its balance sheet. The leverage ratio better explains why Nexts Return on Equity is very high. Now question is are the companys comfortable with these levels of leverage? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In managing its leverage MS is again performing poorer than Next. While Nexts average interest cover ratio is 13.45 times, MSs one is only around 6 times. The figures indicate that, MS generate only around  £6 of operating profit for paying  £1 of debt cost. Therefore the leverage ratios indicate that MSs competitor is better managing its leverage with higher interest coverage ratio against higher leverage rate. 3.4 MS Summary of Business and Financial Performance Business Performance Summary Financial Performance Summary Marks Spencers revenue has grown at a steady rate over last three years Introduced various successful brands that meet the changing social pattern and consumer demand. Ecommerce sales have increased at a sizable chunk in last few years. Successfully used consumer research technologies for identifying market demands and customer needs. Most energy conscious and environmentally friendly company in British history. Grew its market share by 4% from 7% to 11% in cloth and general merchandise. Market share has also improved by 2% in 2010 in foods. MS could not maintain its image regarding its relationships with suppliers. International revenue was more than  £900 million with a growth of 5%. The company also have capitalised on ecommerce technology; in 2010 MS Directs revenue grew by 27%. Average operating profit margin is 11% in comparison to 15% of Next; Liquidity performance is very poor; Both current and quick ratios are less than 0.5; Average asset turnover rate is more than 1 in comparison to 1.5 of Next; Inventory, receivables and payables management is highly efficient and better than Next; Moderately levered company while Next is a highly levered one; Interest coverage ratio is healthy; but Next is doing better which shows the rationale behind using more debt by Next Overall financial performance of MS is not satisfactory against its competitor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table 4.9: Performance Summary Chapter 5 Conclusion Recommendations 5.1 Introduction In previous section, it has been observed that Marks and Spencers financial performance is not satisfactory in comparison to Next Group. Except the efficiency areas, MS needs to improve itself in profitability, liquidity and leverage. 5.2 Improving Profitability MSs average operating profit margin was only around 11%. It is found that though companys revenue has grown in last three years its profit margin shrank because of increase costs. Marks and Spencer needs to cut its operating costs to match its profitability with the industry. 5.3 Improving Liquidity The companys liquidity is below the alert level which had been persistent over last four years. Although for very large and established companys it is not a big concern. However, in times