Ethics Essay

1. Frame the ethical issue Should Giles and Regas have a serious relationship while working on a same case or within the same accounting firm? 2. Gather all the facts: The couple spends personal time together during the workday Regas is having a three hours long lunch break Regas is being distracted from work Team members are aware of the relationship between two Regas and Giles have tried to be discreet about their relationship 3. Identify the Stakeholders and their obligations Mark Sax, the controller of CAA Industries, has the right to know the hours that were billed was applied correctly and the work was done efficiently. Giles should be responsible for billing the hours and work process since he is the supervising partner on the engagement. Team members on the engagement have the right to expect the co-workers do their part of the work and have a fair treatment. Regas should consider the consequences of her actions on others. Saduga & Mihca (the firm) has the right to expect their employees to perfom their work on a professional level. The client (CAA Industries) has the right to expect the work being done correctly. Herb Morris, the managing partner of Saduga& Mihca, has a right to be told about the relationship between Giles and Regas. 4. Identify the relevant accounting ethics standards Honesty – Fully disclosing about the relationship between the employees and hours being billed to the client. Integrity – Billing the client the correct hours and acting in accordance with principled behavior. Due care in the performance of professional responsibilities Fairness – Each team members on the engagement should be treat equally and openly. 5. Identify the operational issues Is that an Human Resources policy existed which prohibited dating between two members of the Firm who were of different rank, and that policy appears impotent Should Giles act as the supervising partner on the engagement point out the unprofessioness performance by Regas? Should the team members on the engagement communicate about the problems with the supervisor? 6. Identify the accounting, auditing and/or taxation issues Since the case does not deal with financial reporting per se, these issues are limited. The hours that billed to the client. 7. What are the alternatives? Do nothing. Wait to see what happens and then decided what to do next Talk to both Regas and Giles about the problems and concerns from the client. 8. Compare and weigh the alternatives Do nothing – it is legal to do so, however it does not consistent with professional standards because there is an actual policy pointed that employees in different ranks should not be dating with each other within the firm. Wait to see what happens and then decided what to do next – Since Giles and Regas have come to an conclusion to set the personal matter aside until this particular engagement ends, it probably could wait until the project is over. However, dating is still not allowed when the employees are from different ranks. Talk to both parties – It is the company’s responsibility to ensure that the client’s work is done properly and in a timely manner. Whether or not Regas and Giles have billed extra hours to the clients because of their relationships, the company should be responsible for their employees’ behavior and let the employees aware of the policy and execute it. Also, because the fact that the team members are aware of the r elationship and they deserve to be treat fairly according to the justice theory. Egoism – Defines right or acceptable behavior in terms of its consequences for the individual Utilitarianism – follow a relatively straightforward method for deciding the morally correct course of action for any particular situation. Justice Theory – respects your rights and treats you fairly and gives each person what she or he deserves. Virtue Theory – apply both to the decision maker and to the act under consideration by that party. 9. Decide on a course of action Talk to both Regas and Giles about the problems and concerns from the client. Both of the employees should know that the company expects them to perform on a professional level during work and follow the human resources policy. 10. Reflect on your decision Be professional and perform as a professional. Since Giles are aware that Regas is having a hard time putting herself back to work because of the relationship, they should put their personal pleasure after the work. If the relationship is getting serious, one of the parties should be resign from the firm. Questions: 1. I think both parties have the responsibility to perform the work. However, Ed Giles is the supervising partner on the engagement team, he should be more aware of being professional and perform client’s work to the standard. 2. If Giles were a person of integrity, he would tell Herb Morris he would set aside his relationship with Regas until the engagement is over. Furthermore, they should not be in a same audit team anymore since they both have personal feelings for each other. If Giles thinks that their relationship is getting serious, one of them will be resign. 3. Everyone would have one or two weak moment in a relationship. However still, a professional accountant should not bring their personal pleasure into work or even prolong the process of the client’s work. Herb Morris should still meet with Giles and talk about the client’s (CAA Industries) concerns and make it clear with the client and the relationship would not affect anything on the engagement. Since both Giles and Regas have been working on the CAA industries audit team for a while, it is not wise to replace both of them at this moment. Herb Morris, as the managing partner of the firm, has the right to inform Regas and Giles their responsibilities and expects them to perform the work within the expectation. If Regas and Giles decide to process their relationship further, then they should follow the Human Resources policy and one of them should be resign from the accounting  firm in the future in order to avoid conflicts of interests.

Jane Loevinger and Her Theory of Ego Development Essay

Human development is a fascinating subject. Psychologists have long studied the recurrent patterns of how humans develop physically, emotionally, and psychologically. If psychologists can find patters, then they can begin to predict behavior and understand how and why people behave the way they do. Many theories have been put forth to try to explain some of the consistencies people go through as they develop. Jane Loevinger is one of those developmental theorists. Her theory of ego development has been a significant contribution to the psychological world. Loevinger was born in 1918. She grew up in Minnesota as the daughter of a lawyer and homemaker. Her home was comfortable, but not full of a lot of love. After finishing her undergraduate and master’s degree at the University of Minnesota, she ended up at the University of California. There she was a research assistant for Erik Erikson. She learned a great deal during this time about her own thoughts and beliefs about psychology (www. webster. edu). In 1943 she finished her PhD dissertation on the construction and evaluation of tests of ability. Her critique of test reliability made her no friends in the psychometric world, and publications refused to publish her work. She ended up paying for the publication herself. After finishing her dissertation, Loevinger quit working full time to have her two children. During this time she felt the guilt and pressure all moms feel. Working moms feel guilty for all the time they spend away from their children, and stay-at-home moms feel guilty for not doing anything professionally. She also felt discriminated against because of her gender. After working in unfulfilling part-time jobs, Loevinger finally decided to get back to research. She was one of the first psychologists to focus her testing on the demographic of women. She began working with a small group of women, and eventually designed the Sentence Completion Test (SCT) which consists of thirty-four open-ended questions that measures ego development. This test led her to develop her theory of ego development, which states that a person’s ego development follows nine typical phases (psychology-health. today. com). Loevinger’s theory of personality asserts that as people grow, they begin to internalize social rules, become less impulsive, and mature in their decision-making processes. The first stage of development is the infancy stage. This is the very beginning of development and ego. The infant does not know how to do anything but cry when it needs something. No thoughts are about anything other than the self. The impulsive stage is similar; when a young child wants something, they want it now. They are starting to understand consequences at this stage, so there is some awareness of others. The self-protected stage is when children first exhibits self control. They understand rewards and consequences, and are very motivated by them. The next stage, the conformist stage, is when conforming to the group of peers in paramount. There is no identity outside the group, and the disapproval of others is a major problem. Behaviors are judged by what happened, not by the intentions behind them. Finally, in the self-aware stage, there begins to be a bit of maturity. This is when people begin to become individuals. There is more to life than the group, and an inner sense of self is emerging. The conscientious stage takes those ideas even further. Here the person has goals and ideals, a sense of responsibility, and feels guilt not only about breaking a rule, but because of the thought of hurting others. Motives are taken into account as well as actions. During the individualistic stage, there develops a greater tolerance of other people, as well as an awareness of inner conflict. During this stage, the person will pull away from the group toward a more individual identity. People in the autonomous stage show a great deal of maturity. They worry about their needs verses the duties of their lives, they want self-fulfillment, and they can understand more than one point of view. Finally, the integrated stage is reached when a person fully understands their own identity. She is self-actualizing, and can understand behavior motives and intentions of others as well as herself. While not all people will be able to reach this last stage of integration, Loevinger shows a road map of how to get there. I feel her developmental theory is meaningful today, because people still have inner struggles throughout the course of their lives. When I think about all of my friends and family, I can see which stage they are each in. Loevinger contributed a theory that definitely stands the test of time and is relevant to people today. I can also look back over my life and see that some decisions I made were direct results of the stage I was in at the time. I feel like I am always trying to improve myself on the inside, and be a good person on the outside, so I feel I am in the conscientious stage. I know some of my friends who are still in the conformist stage, and this is probably a source for much of our conflict. I cannot understand why they are so concerned with what others think about them, but it might be simply because they have no matured past that stage yet. I think most young adults fall somewhere between the conformist and self-aware stages. That is why so many young adults get into trouble; they follow the group and try drugs or things they would not ordinarily try on their own. The group mentality can be very problematic, and the power it has over young adults is scary. Loevinger contributed a theory of ego development that has made a significant impact on how we understand why we act the way we do. Her stages of development represent specific time frames of life and the decisions that many people make during those times. Her theory is relevant today and still has valid implications for anyone studying human development. References Women’s intellectual contributions to the study of mind and society. Retrieved May 17, 2009, from http://www. webster. edu/~woolflm/loevinger. html Writer 44. Jane Loevinger’s theory of ego development. Retrieved May 17, 2009 from http://psychology-health. today. com/2009/03/01/jane-loevingers-theory-of-ego-development/

Stability of Beta over Market Phases

International Research Journal of Finance and Economics ISSN 1450-2887 Issue 50 (2010)  © EuroJournals Publishing, Inc. 2010 http://www. eurojournals. com/finance. htm Stability of Beta over Market Phases: An Empirical Study on Indian Stock Market Koustubh Kanti Ray Assistant Professor, Financial Management at Indian Institute of Forest Management (IIFM), Bhopal, India. E-mail: [email  protected] ac. in Abstract The significant role played by beta in diverse aspects of financial decision making has forced people from small investors to investment bankers to rethink on beta in the era of globalization.In the present changing market condition, it is imperative to understand the stability of beta which augments an efficient investment decisions with additional information on beta. This study examined the stability of beta for India market for a ten year period from 1999 to 2009. The monthly return data of 30 selected stocks are considered for examining the stability of beta in diffe rent market phases. This stability of beta is tested using three econometric models i. e. using time as a variable, using dummy variables and the Chow test. The results obtained from the three models are mixed and inconclusive.However there are 9 stocks where all the three models reported similar signal of beta instability over the market phases. Keywords: Stability of Beta, Phase wise beta, Indian Market Beta, Dummy Variable, Chow Test 1. Introduction The Capital Asset Pricing Model (CAPM) developed by Sharpe (1964), Lintner (1965) and Mossin (1966) has been the dominating capital market equilibrium model since its initiation. It continues to be extensively used in practical portfolio management and in academic research. Its essential implication is that the contribution of an asset to the variance of the market portfolio – he asset’s systematic risk, or beta risk – is the proper measure of the asset’s risk and the only systematic determinant of the asse t’s return. Risk is the assessable uncertainty (Knight, 1921) in predicting the future events that are affected by external and internal factors. Sharpe (1963) had classified risks as systematic risk and unsystematic risk. The elements of systematic risk are external to the firm. The external factors are changes in economic environment, interest rate changes, inflation, etc. On the other hand, internal factors are the sources of unsystematic risk.Unsystematic risks are categorized as business risk or financial risk specific to the firm. The systematic risk related with the general market movement cannot be totally eradicated through diversification. The unsystematic risk, which is confine to a firm, can be eliminated or reduced to a considerable extent by choosing an appropriate portfolio of securities. Some of the sources of unsystematic risk are consumer preferences, worker strikes and management competitiveness. These factors are independent of the factors effecting stock market.Hence, systematic risk will influence all the securities in the market, whereas unsystematic risk is security specific. International Research Journal of Finance and Economics – Issue 50 (2010) 175 Theoretically defined, beta is the systematic relationship between the return on the portfolio and the return on the market (Rosenberg and Marathe, 1979). It refers to the slope in a linear relationship fitted to data on the rate of return on an investment and the rate of return of the market (or market index). Beta is a technique of telling how volatile a stock is compared with the rest of the market.When the return on the portfolio is more than the return on the market, beta is greater than one and those portfolios are referred to as aggressive portfolios. That means, in a booming market condition, aggressive portfolio will achieve much better than the market performance. While in a bearish market environment the fall of aggressive portfolios will also be much prominent. O n the other hand, when the return on portfolio is less than the market return, beta measure is less than one and those portfolios are treated as defensive.In case of defensive portfolios, when the market is rising, the performances associated with it will be less than the market portfolio. However, when the market moves down, the fall in the defensive portfolios would also be less than the market portfolio. In those situations where, the return of the portfolio accurately matches the return of the market, beta is equal to one that rarely happens in real life situations. Beta estimation is central to many financial decisions such as those relating to stock selection, capital budgeting, and performance evaluation. It is significant for both practitioners and academics.Practitioners use beta in financial decision making to estimate cost of capital. Beta is also a key variable in the academic research; for example it is used for testing asset pricing models and market efficiency. Given the importance of this variable a pertinent question for both practitioners and academics is how to obtain an efficient estimation. This study is aimed at testing the beta stability for India. Further the stability of beta is of great concern as it is a vital tool for almost all investment decisions and plays a significant role in the modern portfolio theory.The estimation of beta for individual securities using a simple market model has been widely evaluated as well as criticized in the finance literature. One important aspect of this simple market model is the assumption of symmetry that propounds the estimated beta is valid for all the market conditions. Many studies questioned this assumption and examined the relationship between beta and market return in different market conditions, but the results are mixed and inconclusive. In this paper, an attempt is made to investigate the stability of beta in the Indian stock market during the last 10 years i. . from August 1999 to August , 2009. With this objective, the paper is divided into five sections including the present section. Section 2 reviews the existing literature and discusses the findings of major empirical researches conducted in India and other countries. Section 3 describes the data sources and methodology. Section 4 outlines the results of tests for investigating the stability of beta and its findings. Section 5 is dedicated to summary, conclusion and scope for further research in the area. 2. Literature reviewSeveral studies are carried out to study the nature and the behavior of beta. Baesel (1974) studied the impact of the length of the estimation interval on beta stability. Using monthly data, betas were estimated using estimation intervals of one year, two years, four years, six years and nine years. He concluded that the stability of beta increases significantly as the length of the estimation interval increases. Levy (1971) and Levitz (1974) have shown that portfolio betas are very stable w hereas individual security betas are highly unstable.Likewise Blume (1971) used monthly prices data and successive seven-year periods and shown that the portfolio betas are very stable where as individual security betas are highly unstable in nature. He shows that, the stability of individual beta increases with increase in the time of estimation period. Similar results were also obtained by Altman et al (1974). In both the cases, initial and succeeding estimation periods are of the same length. Allen et al. (1994) have considered the subject of comparative stability of beta coefficients for individual securities and portfolios.The usual perception is that the portfolio betas are more stable than those for individual securities. They argue that if the portfolio betas are more stable than those for individual securities, the 176 International Research Journal of Finance and Economics – Issue 50 (2010) larger confidence can be placed in portfolio beta estimates over longer peri ods of time. But, their study concludes that larger confidence in portfolio betas is not justified. Alexander and Chervany (1980) show empirically that extreme betas are less stable compared to interior beta.They proved it by using mean absolute deviation as a measure of stability. According to them, best estimation interval is generally four to six years. They also showed that irrespective of the manner portfolios are formed, magnitudes of inter-temporal changes in beta decreases as the number of securities in the portfolios rise contradicting the work of Porter and Ezzell (1975). Chawla (2001) investigated the stability of beta using monthly data on returns for the period April 1996 to March 2000. The tability of beta was tested using two alternative econometric methods, including time variable in the regression and dummy variables for the slope coefficient. Both the methods reject the stability of beta in majority of cases. Many studies focused on the time varying beta using cond itional CAPM (Jagannathan and Wang (1996) Lewellen and Nagel (2003)). These studies concluded that the fluctuations and events that influence the market might change the leverage of the firm and the variance of the stock return which ultimately will change the beta.Haddad (2007) examine the degree of return volatility persistence and time-varying nature of systematic risk of two Egyptian stock portfolios. He used the Schwert and Sequin (1990) market model to study the relationship between market capitalization and time varying beta for a sample of investable Egyptian portfolios during the period January, 2001 to June, 2004. According to Haddad, the small stocks portfolio exhibits difference in volatility persistence and time variability. The study also suggests that the volatility persistence of each portfolio and its systematic risk are significantly positively related.Because of that, the systematic risks of different portfolios tend to move in a different direction during the per iods of increasing market volatility. The stability of beta is also examined with reference to security market conditions. For example, Fabozzi and Francis (1977) in their seminal paper considered the differential effect of bull and bear market conditions for 700 individual securities listed in NYSE. Using a Dual Beta Market Model (DBM), they established that estimated betas of most of the securities are stable in both the market conditions.They experienced it with three different set of bull and bear market definitions and concluded with the same results for all these definitions. Fama and French (1992, 1996), Jegadeesh (1992) and others revealed that betas are not statistically related to returns. McNulty et al (2002) highlight the problems with historical beta when computing the cost of capital, and suggest as an alternative- the forward-looking market-derived capital pricing model (MCPM), which uses option data to evaluate equity risk. In the similar line, French et al. (1983) m erge forward-looking volatility with istorical correlation to improve the measurement of betas. Siegel (1995) notes the improvement of a beta based on forward-looking option data, and proceeds to propose the creation of a new derivative, called an exchange option, which would allow for the calculation of what he refers to as â€Å"implicit† betas. Unfortunately the exchange options discussed by Siegel (1995) are not yet traded, and therefore his method cannot be applied in practice to compute forward-looking betas. A few studies are carried out to explore the reason for instability of beta.For example, Scott & Brown (1980) show that when returns of the market are subjected to measurement errors, the concurrent autocorrelated residuals and inter-temporal correlation between market returns and residual results in biased and unstable estimates of betas. This is so even when true values of betas are stable over time. They also derived an expression for the instability in the esti mated beta between two periods. Chen (1981) investigates the connection between variability of beta coefficient and portfolio residual risk. If beta coefficient changes over time, OLS method is not suitable to estimate portfolio residual risk.It will lead to inaccurate conclusion that larger portfolio residual risk is associated with higher variability in beta. A Bayesian approach is proposed to estimate the time varying beta so as to provide a precise estimate of portfolio residual risk. Bildersee and Roberts (1981) show that during the periods interest rates fluctuate, betas would fluctuate systematically. The change would be in tune with their value relative to the market and the pattern of changes in interest rate. International Research Journal of Finance and Economics – Issue 50 (2010) 177Few research studies are available in the Indian context to examine the factors influencing systematic risk. For example, Vipul (1999) examines the effect of company size, industry gro up and liquidity of the scrip on beta. He considered equity shares of 114 companies listed at Bombay Stock Exchange from July 1986 to June 1993 for his study. He found that size of the company affects the value of betas and the beta of medium sized companies is the lowest which increases with increase or decrease in the size of the company. The study also concluded that industry group and liquidity of the scrip do not affect beta.In another study, Gupta & Sehgal (1999) examine the relationship between systematic risk and accounting variables for the period April 1984 to March 1993. There is a confirmation of relationship in the expected direction between systematic risk and variables such as debt-equity ratio, current ratio and net sales. The association between systematic risk and variables like profitability, payout ratio, earning growth and earnings volatility measures is not in accordance with expected sign. The relationship was investigated using correlation analysis in the stu dy. 3. Data Type and Research MethodologyThe data related to the study is taken for 30 stocks from BSE-100 index. The top 30 stocks are chosen on the basis of their market capitalization in BSE-100 index. These 30 stocks are selected from BSE100 stocks in such a way that the continuous price data is available for the study period. The adjusted closing prices of these 30 stocks were collected for the last 10 years period i. e. from August 1999 to August 2009. The stock and market (BSE-100) data has been collected from prowess (CMIE) for the above period. BSE-100 index is a broad-based index and follows globally accepted free-float methodology.Scrip selection in the index is generally taken into account a balanced sectoral representation of the listed companies in the universe of Bombay Stock Exchange (BSE). As per the stock market guideline, the stocks inducted in the index are on the basis of their final ranking. Where the final rank is arrived at by assigning 75 percent weightage t o the rank on the basis of three-month average full market capitalization and 25 percent weightage to the liquidity rank based on three-month average daily turnover & three-month average impact cost.The average closing price for each month of 30 socks is computed for the period August 1999 to August 2009. Therefore we have 120 average monthly prices for each of the 30 stocks included in the research. The following method has been used to compute the monthly return on each of the stock. P i,t – P i,t-1 ri,t = –––––––––– P i, t-1 Where: P i,t = Average price of stock â€Å"i† in the month t Pi,t-1 = Average price of stock â€Å"i† in the month t-1 r i,t= Return of ith stock in the month t. The monthly market return is computed in the following way: Bt – Bt-1 mt = –––––––––– B t-1Where: Bt = BSE-100 Index at time period t Bt-1 = BSE-100 Index at time period t-1 mt = Market return at time period t. After the monthly stock and market returns are calculated as per the above formula, we identified the different market phases to compute beta separately. The market phases are identified, by creating a cumulative wealth index from the market returns. The cumulative wealth index data is presented in annexure-1. As per the cumulative wealth index, we identified five different market 178 International Research Journal of Finance and Economics – Issue 50 (2010) hases in BSE-100 index. We recognized that there are three bullish phases (Jan-1999 to Feb-2000, Oct-2001 to Dec-2007 and Dec-2008 to August 2009) and two bearish phases (Mar-2000 to Sept2001, Jan-2008 to Nov-2008). The summary of different market phases is depicted in Table -1& figure-1 below. Table-1: Different Market Phases Market Phases Phase I Phase II Phase III Phase IV Phase V Market Phase Timing Start End Jan-1999 Feb-2000 Mar-2000 Sep-2 001 Oct-2001 Dec-07 Jan-2008 Nov-08 Dec-2008 Aug-09 Market Type Bullish Bearish Bullish Bearish Bullish Figure-1: Different Market PhasesAfter these five market phases are identified, the beta value has been computed for each stock for each market phases following the below mentioned regression equation. ri,t = ? + ? mt + e (1) ri,t = Return on scrip i at time period t mt = Market rate of return at time period t e = Random error ? & = Parameters to be estimated The above regression equation is applied to calculate beta coefficient of each stocks for each market phases separately and taking the entire ten years period. As the objective of the paper is to test the stability of beta in different market phases, the hypothesis has been set accordingly.The null hypothesis (H0) being the beta is stable over the market phases, whereas the alternative hypothesis (H1) is that the beta values are not stable and varies according to phases in the market. The hypothesis has been tested with the help of three econometric models- using time as a variable, using dummy variables to measure the change of slope over the period and through Chow test. International Research Journal of Finance and Economics – Issue 50 (2010) 179 3. 1. Testing the Stability of Beta using time as a variableIn case of measuring stability of beta using time as a variable, in the above regression model (1) another variable i. e. † t mt† is used as a separate explanatory variable. Where the time variable t takes a value of t=1 for the first market phase, t=2 for the second market phase and so on for all other market phases identified. In this method the objective is to see whether the beta values are stable over time or not. After including the tmt variable, the above regression model (1) can be written as: ri,t = ? + ? 1mt + ? 2( t*mt) + e (2) The above regression equation can be re-framed as below: ri,t = ? + (? + ? 2*t )*mt + e (2) To test the stability of beta, we basically have to see whether the expression ? 2 is significant or not. If it is significant, we need to reject the null hypothesis and accept alternative hypothesis. It is implied that the sensitivity of stock return to market return i. e. (? 1 + ? 2*t)* mt changes with time, and hence, beta is not stable. If ? 2 is not significant, (? 1 + ? 2*t)* mt will get reduced to ? 1*mt , implying that ? 1, or the beta of stock, does not vary with time and is thus stable over time. The statistical significance of ? 2 is tested using the respective p-values. . 2. Testing the Stability of Beta using dummy variable In case of the second method of testing the beta stability, dummy variables are used in above mentioned regression equation (1) for the slope coefficients. As five market phases discovered, there are 4 dummy variables used in the new equation (Levine et al. 2006). The new regression equation is reframed as follows: ri,t = ? 0 + ? 1* mt + ? 2*D1* mt + ? 3*D2* mt + ? 4*D3* mt + ? 5*D4*mt + e (3) Where: D1 = 1 for phase 1 (Jan 1999 to Feb 2000) data = 0 otherwise. D2 = 1 for phase II (May 2000 to Sept 2001) data = 0 otherwise D3 1 for phase III (Oct 2001 to Dec 2007) data = 0 otherwise D4 = 1 for phase IV (Jan 2008 to Nov 2008) data = 0 otherwise = return on stock I in period t. r i,t mt = return on market in period t. e = error term and ? 0, ? 1, ? 2, ? 3, ? 4 & ? 5 = coefficients to be estimated. As there are 5 market phases, we use 4 dummy variables in the above equation (3). The use of 5 dummy variable would lead to a dummy variable trap. We treat the 5th phase viz. Dec-08 to Aug-09 as the base period. The significance of ? 2, ? 3, ? 4 and ? 5 will tell us whether the beta is stable over the time periods or not.For the beta to be truly stable over the entire period, all coefficients like, ? 2, ? 3, ? 4 and ? 5 should be statistically insignificant and where we need to accept the null hypothesis. The logic is that if ? 2, ? 3, ? 4 and ? 5 are insignificant, the equation reduces to the following, thus implying that beta is stable over time. ri,t = ? 0 + ? 1*mt + e (4) th 3. 3. Testing for Structural or Parameter Stability of Regression Model: The Chow Test In the third method, for structural or parameter stability of regression models, the Chow test has been conducted (Gujarati, 2004).When we use a regression model involving time series data, it may happen 180 International Research Journal of Finance and Economics – Issue 50 (2010) that there is a structural change in the relationship between the regress and the regressors. By structural change, we mean that the values of the parameters of the model do not remain the same through the entire time period. We divide our sample data into five time periods according to the different market phases identified earlier.We have six possible regressions for each stock (five regressions for each market phases and one for the whole ten year period). The regression equations are mentioned below. ri,t = ? 1 + ? 2 mt + ut (5) (6) r i, t = ? 1 + ? 2mt + ut Equation (5) is for each market phases and equation (6) is for the whole period. There are 128 observations (n=128) for the whole period and n1=14, n2=19, n3=75, n4=11 and n5=9 are the number of observations for phase-I to phase-V respectively. The u’s in the above regression equations represent the error terms.Regression (6) assumes that there is no difference over the five time periods and therefore estimates the relationship between stock prices and market for the entire time period consisting of 128 observations. In other words, this regression assumes that the intercept as well as the slope coefficient remains the same over the entire period; that is, there is no structural change. Now the possible differences, that is, structural changes, may be caused by differences in the intercept or the slope coefficient or both. This is examined with a formal test called Chow test (Chow, 1960). The mechanics of the Chow test are as follows: First the regression (6) is estimated, which is appropriate if there is no parameter instability, and obtained the restricted residual sum of squares (RSSR) with df = [(n1+n2+n3+n4+n5) ? k], where k is the number of parameters estimated, 2 in the present case. This is called restricted residual sum of squares because it is obtained by imposing the restrictions that the sub-period regressions are not different. Secondly estimated the phase wise other regression equations and obtain its residual sum of squares, RSS1 to RSS8 with degrees of freedom, df = (no of observations in each phase ? ). Since the five sets of samples are deemed independent, in the third step we can add RSS1 to RSS8 to obtain what may be called the unrestricted residual sum of squares (RSSUR) with df = [(n1+n2+n3+n4+n5)? 2k]. Now the idea behind the Chow test is that if in fact there is no structural change (i. e. , all phases regressions are essentially the same), then the RSSR and RSSUR should not be statistical ly different. Therefore in the fourth step the following ratio is formed to get the F-value. F = [(RSSR ? RSSUR)/k] / [(RSSUR)/ ((n1 + n2+n3+n4+n5) ? 2k)] ~ F [k, ((n1+n2+n3+n4+n5) ? 2k)] (7)We cannot reject the null hypothesis of parameter stability (i. e. , no structural change) if the computed F value is not statistically significant (F value does not exceed the critical F value obtained from the F table at the chosen level of significance or the p value). Contrarily, if the computed F value is statistically significant (F value exceeds the critical F value), we reject the null hypothesis of parameter stability and conclude that the phase wise regressions are different. 4. Test Results and Findings Initially the beta coefficient is calculated using the Ordinary Least Square (OLS) technique as defined in equation (1).The estimation was carried out by using monthly return data for the 5 market phases for each of the 30 stocks. To compare the phase wise beta estimation with the enti re 10 year period, the same estimation also carried out taking the whole 10 years for each stock separately. Stock wise beta values over 5 market phases and the entire period is reported in appendix-2. From annexure-2, it is revealed that there are 14 stocks beta value is greater than 1 in phase I. This figure (beta value greater than 1) has reduced to 6, 11, 12 and 10 for phase-2 to phase-5 respectively.It is also illustrated that, there are 8 stocks whose beta value is greater than 1 in respect to overall between Jan-99 to Aug-09 and highest being for Wipro of 1. 47. The stocks having beta value International Research Journal of Finance and Economics – Issue 50 (2010) 181 more than 1 are considered to be volatile securities. It is noticed that, as we increase the period of estimation to full ten years period, there are less number of stocks proved to be more volatile. Out of the total 30 stocks considered in the study, only one company i. e.L&T has beta more than 1 in all p hases including the overall period. But none of the company’s overall beta value is more than the phase wise betas. There are seven companies (RIL, NALCO, ITC, GAIL, Hindustan Lever, Hero Honda and Cipla) whose beta values are less than 1 all through the phases including overall period. These stocks are considered to be less volatile than the market. There are 3 companies (Cipla, ITC and Hindustan Lever) recent beta value (Dec 2008 to August 2009) is negative, where Cipla’s phase I beta value is also negative along with other two stocks like SAIL and NALCO.It is observed from annexure-2 that there are only two companies’ from the software sector (Infosys and Wipro) whose beta values are consistently declining over time. However there are 7 stocks viz. Cipla, Sunpharma, Wipro, Grasim, Hindustan Lever, Infosys and ITC whose beta values are showing a decreasing trend from phase 3 onwards, while Tata steel is the only stock whose beta values are showing an increasin g trend during the same period. It is observed from the annexure-2 that, on an overall basis 29 out of 30 stocks have their beta values statistically significant at 5% level.This number has varied from 8 to 30 over the various phases, indicating that the beta values of the stocks have fluctuated significantly. This implies that the volatility of the stocks depend on the market phases i. e. bearish or bullish. Thus the result rejects the null hypothesis that the beta is stable over various market phases. The null hypothesis is rejected in 29 out of 30 cases in case of overall period, while 30 out of 30 cases in respect to phase-3. Since the period of estimation of beta is more in case of overall period and in phase-3, the obtained results are similar in both the cases.But the remaining phase wise results do not follow any pattern. In respect of period of estimating the value of beat the results are comparable to the finding of Baesel (1974) and Altman et al (1974). It is mentioned ea rlier that to examine the stability of beta over different market phases, three separate models have been used in paper. The results obtained from these models are interpreted in the following paragraphs. The estimated results for regression model-2 that includes t*mt as a separate variable are depicted in annexure-3.It is observed that the value of R2, a measure of goodness of fit varies from 0. 11 to 0. 61. It is only in 5 out of 30 regression results, the value is greater than 0. 50. The coefficient of mt (? 1) is found to be highly statistically significant at 5% level in 19 out of 30 cases. It is in 11 regressions, the coefficient is statistically insignificant. As discussed earlier, the significance of the coefficient of variable t*mt implies the rejection of the null hypothesis of stable beta over time. It is observed that the coefficient (? ) is significant in 14 cases out of 30. The regression results indicate that in 50% cases the null hypothesis of stability of beta over the market phases is rejected. This means 50% stocks reported stability of beta over different phases. So model (2) cannot infer that beta is not stable over market phases. The estimated results for coefficients for regression model-3 that incorporates dummy variables are depicted in annexure-4. It is noticed from the results that the R2 value fluctuates from 0. 15 to 0. 62 and in case of 8 stocks this value is greater than 0. 0. It is mentioned earlier that the null hypothesis of stability of beta will be rejected if any of the coefficients (? 2, ? 3, ? 4 & ? 5) corresponding to D1*mt, D2*mt, D3*mt or D4*mt were found to be statistically significant. It is observed from the results presented in appendix-4, that there are 17 out of 30 stocks represented statistically significant at 5% level at least one of the coefficient. There are only 2 cases where 3 coefficients are significant and none of the stocks reported significant for all the 4 coefficients.Further in 6 cases where 2 out of 4 coefficients are reported significant, where as in 9 cases depicted significant only for one coefficient. The outcome of this model in brief can be stated that, in case of 17 stocks out of 30 stocks, the stability of beta hypothesis is rejected meaning, in rest 13 cases there is a stability of beta over the market phases. 182 International Research Journal of Finance and Economics – Issue 50 (2010) The estimated results of Chow test are depicted in annexure-5. The results show that, 12 out of 30 cases the F-value is statistically significant and rest 18 stocks are reported insignificant at 5% level.Based on the F- statistics and its corresponding p-values, the null hypothesis of beta stability over the market phases is rejected in 12 cases and accepted in 18 cases. The F-values are also supported by log likelihood ratio and it p-values, which also reported statistical significance in 12 cases. The outcome of Chow test confirms that the beta values are not stable or there is a structural change in 12 out of 30 stocks in different market phases. But the rest 18 stocks reported stability or no structural change in beta values over the market phases.From the above deliberations, it is observed that all the three models described above exhibit a mixed and inconclusive result. There are 14, 17 and 12 stocks are statistically significant as per model2, model-3 and model-7 respectively. This means as per model-2 the beta values of 14 stocks out of 30 stocks are instable over the period. But this number is 17 and 12 in case of model3 and 7 respectively. However, on the basis of results obtained from different models, it is not possible to conclude that the beta values of the stocks are stable or instable over the market phases.But if we closely glance at the results obtained from three models, it is very apparent that in case of 9 stocks where all the three models represented similar results and rejected the null hypothesis. These stocks include Sun pharmac eutical, Wipro, Tata motors, Tata Steel, Hindalco, Hindustan Unilever, HDFC, Infosys and Zee Entertainment. This indicates that beta values are not stable over the market phases in these 9 stocks. Similarly there are 6 stocks where two models recommended instability of beta and 4 stocks where only one model reported a change in beta values over the period.There are 11 cases where none of the models rejected the null hypothesis, which proved that the beta values are stable over the time in these stocks. 5. Conclusion The objective of the present study is to examine the stability of beta in different Indian market phases. For the purpose of the study monthly return data of 30 stocks for the period from 1999 to 2009 is considered. Considering the bullish and bearish condition in the Indian market, we divided the whole 10 years into 5 different market phases. Initially the beta has been estimated for different market phases and also taking the whole 10 years period.The results show that the beta values are not showing any particular pattern but in the overall phase almost all the stocks are statistically significant. Further the beta stability is examined using three different models. In the first method the beta coefficient is calculated considering the market phases as time variable. The results show that in 50% of cases the null hypothesis is rejected as the beta is stable over different market phases. In the similar line the results obtained in respect to model two states that in 17 out of 30 cases the null hypothesis is rejected.This confirms that in 17 cases the stability of beta is not there over the market phases but in rest 13 cases it stable over the market phases. In the third method of investigating beta stability, the Chow test has been conducted. The F-statistics under Chow test reveals that, beta is instable in 12 out of 30 stocks considered in the study in different market phases. We can thus finally conclude that the results obtained from differen t models are mixed and inconclusive in nature, where it is less ground to conclude that the beta values are stable or instable over the market phases.But there are 9 stocks which gives a strong indication that their beta values are not stable over the market phases. In these 9 cases, all the three models reported similar signal of beta instability over the market phases. The instability of beta has its implications in taking sound corporate financial decisions. Financial decisions should not be based on the overall beta of the company. Rather, the company’s periodical beta should be relied upon for taking certain managerial decisions.Considering the inconclusive results obtained from present study, it is suggested that the future research on beta in Indian market may be investigated from (a) industry wise stability of beta in different market phases (b) stability of beta from portfolio point of view (c) optimal time limit for stability of beta (d) forward looking beta and its stability (e) impact of market and company specific factors and stability of beta and (f) market efficiency study using phase wise beta under the event study methodology. 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[26] [27] [28] [29] 30] [31] [32] [33] [34] 185 International Research Journal of Finance and Economics – Issue 50 (2010) Annexure-1: Month December 1998 January 1999 February 1999 March 1999 April 1999 May 1999 June 1999 July 1999 August 1999 September 1999 October 1999 November 1999 December 1999 January 2000 February 2000 March 2000 April 2000 May 2000 June 2000 July 2000 August 2000 September 2000 October 2000 November 2000 December 2000 January 2001 February 2001 March 2001 April 2001 May 2001 June 2001 July 2001 August 2001 September 2001 October 2001 November 2001 Dece mber 2001 January 2002 February 2002 March 2002 April 2002May 2002 June 2002 July 2002 August 2002 September 2002 October 2002 November 2002 December 2002 January 2003 February 2003 March 2003 April 2003 May 2003 June 2003 July 2003 August 2003 September 2003 October 2003 November 2003 December 2003 January 2004 February 2004 Identification of Market Phases Closing Price Return (R) 1+R Cumulative Wealth Index Market Phases 1359. 03 1461. 52 1506. 95 1651. 37 1449. 64 1714. 02 1790. 51 1988. 06 2192. 94 2213. 33 2071. 50 2253. 29 2624. 49 2875. 37 3293. 29 2902. 20 2396. 22 2156. 99 2397. 06 2153. 26 2306. 07 2075. 67 1916. 99 2061. 18 2032. 20 2209. 31 2139. 72 1691. 71 1682. 1 1763. 35 1630. 02 1564. 46 1534. 73 1312. 50 1389. 17 1557. 01 1557. 22 1592. 27 1707. 72 1716. 28 1671. 63 1596. 71 1650. 34 1506. 23 1580. 55 1473. 88 1458. 78 1594. 03 1664. 67 1600. 87 1628. 72 1500. 72 1470. 31 1641. 44 1819. 36 1893. 45 2229. 25 2314. 62 2485. 43 2594. 34 3074. 87 2946. 14 2923. 99 0. 0 8 0. 03 0. 10 -0. 12 0. 18 0. 04 0. 11 0. 10 0. 01 -0. 06 0. 09 0. 16 0. 10 0. 15 -0. 12 -0. 17 -0. 10 0. 11 -0. 10 0. 07 -0. 10 -0. 08 0. 08 -0. 01 0. 09 -0. 03 -0. 21 -0. 01 0. 05 -0. 08 -0. 04 -0. 02 -0. 14 0. 06 0. 12 0. 00 0. 02 0. 07 0. 01 -0. 03 -0. 04 0. 03 -0. 09 0. 05 -0. 07 -0. 01 0. 09 0. 04 -0. 04 0. 2 -0. 08 -0. 02 0. 12 0. 11 0. 04 0. 18 0. 04 0. 07 0. 04 0. 19 -0. 04 -0. 01 1. 08 1. 03 1. 10 0. 88 1. 18 1. 04 1. 11 1. 10 1. 01 0. 94 1. 09 1. 16 1. 10 1. 15 0. 88 0. 83 0. 90 1. 11 0. 90 1. 07 0. 90 0. 92 1. 08 0. 99 1. 09 0. 97 0. 79 0. 99 1. 05 0. 92 0. 96 0. 98 0. 86 1. 06 1. 12 1. 00 1. 02 1. 07 1. 01 0. 97 0. 96 1. 03 0. 91 1. 05 0. 93 0. 99 1. 09 1. 04 0. 96 1. 02 0. 92 0. 98 1. 12 1. 11 1. 04 1. 18 1. 04 1. 07 1. 04 1. 19 0. 96 0. 99 1. 08 1. 11 1. 22 1. 07 1. 26 1. 32 1. 46 1. 61 1. 63 1. 52 1. 66 1. 93 2. 12 2. 42 0. 88 0. 73 0. 65 0. 73 0. 65 0. 70 0. 63 0. 58 0. 63 0. 62 0. 67 0. 65 0. 51 0. 51 0. 54 0. 9 0. 48 0. 47 0. 40 1. 06 1. 19 1. 19 1. 21 1. 30 1. 31 1. 27 1. 22 1. 26 1. 15 1. 20 1. 12 1. 11 1. 21 1. 27 1. 22 1. 24 1. 14 1. 12 1. 25 1. 39 1. 44 1. 70 1. 76 1. 89 1. 98 2. 34 2. 24 2. 23 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 186 March 2004 April 2004 May 2004 June 2004 July 2004 August 2004 September 2004 October 2004 November 2004 December 2004 January 2005 February 2005 March 2005 April 2005 May 2005 June 2005 July 2005 August 2005 September 2005 October 2005 November 2005 ecember 2005 January 2006 February 2006 March 2006April 2006 May 2006 June 2006 July 2006 August 2006 September 2006 October 2006 November 2006 ecember 2006 January 2007 February 2007 March 2007 April 2007 May 2007 June 2007 July 2007 August 2007 September 2007 October 2007 November 2007 December 2007 January 2008 February 2008 March 2008 April 2008 May 2008 June 2008 July 2008 August 2008 September 2008 October 2008 November 2008 December 2008 January 2009 February 2009 Mar ch 2009 April 2009 May 2009 June 2009 July 2009 August 2009 International Research Journal of Finance and Economics – Issue 50 (2010) 2966. 31 3025. 14 2525. 35 2561. 16 2755. 22 2789. 07 2997. 97 027. 96 3339. 75 3580. 34 3521. 71 3611. 90 3481. 86 3313. 45 3601. 73 3800. 24 4072. 15 4184. 83 4566. 63 4159. 59 4649. 87 4953. 28 5224. 97 5422. 67 5904. 17 6251. 39 5385. 21 5382. 11 5422. 39 5933. 77 6328. 33 6603. 60 6931. 05 6982. 56 7145. 91 6527. 12 6587. 21 7032. 93 7468. 70 7605. 37 8004. 05 7857. 61 8967. 41 10391. 19 10384. 40 11154. 28 9440. 94 9404. 98 8232. 82 9199. 46 8683. 27 7029. 74 7488. 48 7621. 40 6691. 57 4953. 98 4600. 45 4988. 04 4790. 32 4516. 38 4942. 51 5803. 97 7620. 13 7571. 49 8176. 54 8225. 50 0. 01 0. 02 -0. 17 0. 01 0. 08 0. 01 0. 07 0. 01 0. 10 0. 07 -0. 02 0. 03 -0. 04 -0. 05 0. 9 0. 06 0. 07 0. 03 0. 09 -0. 09 0. 12 0. 07 0. 05 0. 04 0. 09 0. 06 -0. 14 0. 00 0. 01 0. 09 0. 07 0. 04 0. 05 0. 01 0. 02 -0. 09 0. 01 0. 07 0. 06 0. 02 0. 05 -0. 02 0 . 14 0. 16 0. 00 0. 07 -0. 15 0. 00 -0. 12 0. 12 -0. 06 -0. 19 0. 07 0. 02 -0. 12 -0. 26 -0. 07 0. 08 -0. 04 -0. 06 0. 09 0. 17 0. 31 -0. 01 0. 08 0. 01 1. 01 1. 02 0. 83 1. 01 1. 08 1. 01 1. 07 1. 01 1. 10 1. 07 0. 98 1. 03 0. 96 0. 95 1. 09 1. 06 1. 07 1. 03 1. 09 0. 91 1. 12 1. 07 1. 05 1. 04 1. 09 1. 06 0. 86 1. 00 1. 01 1. 09 1. 07 1. 04 1. 05 1. 01 1. 02 0. 91 1. 01 1. 07 1. 06 1. 02 1. 05 0. 98 1. 14 1. 16 1. 00 1. 07 0. 85 1. 00 0. 88 1. 12 . 94 0. 81 1. 07 1. 02 0. 88 0. 74 0. 93 1. 08 0. 96 0. 94 1. 09 1. 17 1. 31 0. 99 1. 08 1. 01 2. 26 2. 30 1. 92 1. 95 2. 10 2. 13 2. 28 2. 31 2. 54 2. 73 2. 68 2. 75 2. 65 2. 52 2. 74 2. 90 3. 10 3. 19 3. 48 3. 17 3. 54 3. 77 3. 98 4. 13 4. 50 4. 76 4. 10 4. 10 4. 13 4. 52 4. 82 5. 03 5. 28 5. 32 5. 44 4. 97 5. 02 5. 36 5. 69 5. 79 6. 10 5. 99 6. 83 7. 92 7. 91 8. 50 0. 85 0. 84 0. 74 0. 82 0. 78 0. 63 0. 67 0. 68 0. 60 0. 44 0. 41 1. 08 1. 04 0. 98 1. 07 1. 26 1. 66 1. 65 1. 78 1. 79 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5International Research Journal of Finance and Economics – Issue 50 (2010) Annexure-2: Beta values of individual securities over all the five phases Overall Phase I Phase II Phase III Phase IV ? p-val ? p-val ? p-val ? p-val ? p-val Bharat Heavy Electricals Ltd. 0. 86 0. 00* 0. 67 0. 21 1. 18 0. 00* 1. 10 0. 00* 0. 80 0. 02* Bharat Petroleum Corpn. Ltd. 0. 80 0. 00* 1. 02 0. 15 0. 66 0. 06 1. 13 0. 00* 1. 30 0. 06 Cipla Ltd. 0. 51 0. 00* -0. 04 0. 95 0. 75 0. 02* 0. 80 0. 00* 0. 51 0. 07 Sun Pharmaceutical Inds. Ltd. 0. 69 0. 00* 1. 13 0. 15 0. 80 0. 08 0. 57 0. 00* 0. 74 0. 00* Ranbaxy Laboratories Ltd. 0. 94 0. 00* 1. 19 0. 3 0. 63 0. 03* 0. 78 0. 00* 1. 07 0. 10 Wipro Ltd. 1. 47 0. 00* 2. 79 0. 02* 2. 63 0. 00* 0. 88 0. 00* 0. 87 0. 00* Reliance Infrastructure Ltd. 1. 24 0. 00* 1. 38 0. 02* 0. 26 0. 39 1. 20 0. 00* 1. 50 0. 00* Larsen & Toubro Ltd. 1. 30 0. 00* 1. 12 0. 08 1. 70 0. 00* 1. 21 0. 00 * 1. 07 0. 00* State Bank Of India 1. 01 0. 00* 1. 22 0. 08 0. 86 0. 00* 1. 03 0. 00* 1. 08 0. 01* Tata Motors Ltd. 1. 20 0. 00* 1. 07 0. 08 -0. 13 0. 65 1. 11 0. 00* 1. 20 0. 00* Oil & Natural Gas Corpn. Ltd. 0. 79 0. 00* 0. 43 0. 47 0. 59 0. 03* 1. 06 0. 00* 1. 03 0. 01* Steel Authority Of India Ltd. 1. 23 0. 00* -0. 31 0. 68 0. 99 0. 00* 1. 54 0. 0* 1. 12 0. 01* Tata Steel Ltd. 1. 22 0. 00* 0. 79 0. 17 0. 64 0. 05* 1. 25 0. 00* 1. 39 0. 00* Grasim Industries Ltd. 0. 94 0. 00* 1. 24 0. 13 0. 91 0. 01* 0. 95 0. 00* 0. 86 0. 00* H D F C Bank Ltd. 0. 79 0. 00* 1. 38 0. 03* 0. 36 0. 10 0. 68 0. 00* 0. 98 0. 00* Hero Honda Motors Ltd. 0. 47 0. 00* 0. 24 0. 64 0. 04 0. 85 0. 79 0. 00* 0. 93 0. 00* Hindalco Industries Ltd. 1. 00 0. 00* 0. 03 0. 95 0. 39 0. 06 1. 22 0. 00* 1. 44 0. 00* Hindustan Unilever Ltd. 0. 49 0. 00* 0. 78 0. 01* 0. 42 0. 06 0. 77 0. 00* 0. 67 0. 00* HDFC Ltd. 0. 74 0. 00* 0. 77 0. 01* 0. 50 0. 06 0. 85 0. 00* 1. 01 0. 00* Infosys Technologies Ltd. . 91 0. 00* 1. 33 0. 05* 1. 30 0. 00* 0. 73 0. 00* 0. 67 0. 06 G A I L (India) Ltd. 0. 49 0. 00* 0. 00 1. 00 0. 46 0. 11 0. 79 0. 00* 0. 34 0. 18 I C I C I Bank Ltd. 0. 84 0. 00* 1. 85 0. 05* 0. 06 0. 88 0. 50 0. 00* 0. 57 0. 14 I T C Ltd. 0. 37 0. 00* 0. 54 0. 13 0. 57 0. 01* 0. 42 0. 00* 0. 27 0. 24 National Aluminium Co. Ltd. 0. 49 0. 00* -0. 31 0. 75 0. 24 0. 37 0. 73 0. 00* 0. 21 0. 69 Indian Oil Corpn. Ltd. 0. 87 0. 10 0. 32 0. 56 0. 65 0. 00* 1. 24 0. 00* 0. 75 0. 01* Reliance Industries Ltd. 0. 51 0. 00* 0. 34 0. 47 0. 08 0. 81 0. 41 0. 00* 0. 74 0. 06 Sterlite Industries (India) Ltd. 1. 11 0. 00* 0. 99 0. 14 1. 3 0. 09 0. 87 0. 00* 0. 01 0. 96 Tata Communications Ltd. 0. 78 0. 00* 1. 10 0. 05* 1. 18 0. 00* 0. 87 0. 00* 0. 85 0. 09 Unitech Ltd. 0. 79 0. 00* 0. 47 0. 14 0. 48 0. 02* 0. 87 0. 00* 0. 21 0. 47 Zee Entertainment Ent. Ltd. 1. 00 0. 00* 1. 39 0. 08 0. 72 0. 07 0. 78 0. 00* 1. 13 0. 03* * indicates significance of coefficient at 5% level of significant Name of the Company Annexure-3: 187 Phase V ? p-val 0. 74 0. 00* 0. 48 0. 03* -0. 13 0. 65 0. 16 0. 55 1. 96 0. 01* 0. 78 0. 10 2. 46 0. 00* 1. 77 0. 00* 1. 55 0. 00* 1. 33 0. 02* 0. 94 0. 01* 1. 66 0. 00* 2. 07 0. 00* 0. 41 0. 29 0. 96 0. 00* 0. 29 0. 21 1. 63 0. 01* -0. 1 0. 68 0. 95 0. 00* 0. 07 0. 83 0. 38 0. 03* 1. 35 0. 02* -0. 01 0. 95 0. 50 0. 19 0. 98 0. 02* 0. 57 0. 10 0. 85 0. 03* 0. 43 0. 15 1. 27 0. 11 0. 74 0. 07 Estimates of regression equation using Time as a Variable Name of the Company Bharat Heavy Electricals Ltd. Bharat Petroleum Corpn. Ltd. Cipla Ltd. Sun Pharmaceutical Inds. Ltd. Ranbaxy Laboratories Ltd. Wipro Ltd. Reliance Infrastructure Ltd. Larsen & Toubro Ltd. State Bank Of India Tata Motors Ltd. Oil & Natural Gas Corpn. Ltd. Steel Authority Of India Ltd. Tata Steel Ltd. Grasim Industries Ltd. H D F C Bank Ltd. Hero Honda Motors Ltd. Hindalco Industries Ltd.Hindustan Unilever Ltd. HDFC Ltd. Constant 0. 02 0. 01 0. 02 0. 03 0. 01 0. 01 0. 01 0. 01 0. 01 0. 00 0. 01 0. 02 0. 01 0. 01 0. 0 2 0. 02 0. 00 0. 00 0. 02 mt (? 1) 0. 56 (0. 03) 0. 79 (0. 02) 0. 94 (0. 00) 1. 69 (0. 00) 0. 63 (0. 05) 3. 35 (0. 00) 0. 25 (0. 44) 1. 10 (0. 00) 0. 71 (0. 00) 0. 61 (0. 02) 0. 25 (0. 38) 0. 26 (0. 51) 0. 01 (0. 99) 0. 97 (0. 00) 0. 92 (0. 00) 0. 19 (0. 42) -0. 12 (0. 60) 0. 91 (0. 00) 0. 37 (0. 04) t*mt (? 2) 0. 10 (0. 22) 0. 00 (0. 96) -0. 14 (0. 10) -0. 33 (0. 00)* 0. 10 (0. 29) -0. 62 (0. 00)* 0. 33 (0. 00)* 0. 07 (0. 37) 0. 10 (0. 17) 0. 20 (0. 02)* 0. 18 (0. 03)* 0. 32 (0. 01)*

Management report about the organisation. Case of Pentangelli Essay

Management report about the organisation. Case of Pentangelli - Essay Example In this report, an analyses of the case of Pentangelli, a restaurant, has been presented. The report presents and criticise the reward strategies followed by the management of restaurant to manage the overall performance of the employees. At the same time, the reports also presents different recommendations for formulating effective and efficient reward and development strategy, which can be used by the management of Pentangelli. In this last, the report presents different challenges which have to be faced by the management of Pentangelli while formulating new reward and development strategy. TABLE OF CONTENTS EXECUTIVE SUMMARY 1 TABLE OF CONTENTS 2 INTRODUCTION 3 PRACTICES OF REWARD AND DEVELOPMENT AND ITS IMPORTANCE 3 REWARD AND DEVELOPMENT PRTACTICES FOLLOWED BY PENTANGELLI 4 APPRECIATION AND RECOGNITION 4 REPUTATION MANAGEMENT 5 PROMOTIONS 5 CHALLENGING WORK 5 OPPORTUNITIES FOR GROWTH AND DEVELOPMENT 6 PRACTICES OF REWARDS AND DEVELOPMENT WHICH CAN BE ADOPTED BY PENTANGELLI 6 SHARING OF PROFIT 6 EMPOWERING THE EMPLOYEES AND DECENTRALIZED DECISION MAKING 7 PAID LEAVES 7 MEDICAL BENEFITS AND INCENTIVES 8 CHALLENGES FACED BY THE PENTANGELLI WHILE DEVISING A STRATEY FOR REWARD AND DEVELOPMENT 8 CHALLENGES IN PROFIT SHARING 8 CHALLENGES FACED IN PROVIDING PAID LEAVES 9 CHALLENGES RELATED TO CENTRALIZED DECISOIN MAKING 9 ... This report aims to analyze the organizational structure of Pentangelli and the rewards system that can boost up the performance of its employees. Pentangelli is a chain of restaurants. The analysis of the structure will find out that how the organizational structure of this restaurant has impacted on the performance of its managers. The role of rewards and benefits is also analyzed to see their impact on the employees’ motivation and job satisfaction. The analysis of organizational structure will help to make appropriate changes in the structure to get the desirable outcomes. The reward system will be designed after analyzing that what benefits and compensations will attract the most to the employees of the restaurants. The rewards will be designed in such a way that will boost up the performance of employees in the organization. The impact of performance management techniques will also be analyzed for making the recommendations for proper performance management system in a c omplete chain. PRACTICES OF REWARD AND DEVELOPMENT AND ITS IMPORTANCE It has been identified in several researches that reward and compensation system has a highly considerable impact on the performance of employees (CIPD, n.d.). The rewarding system leads to the motivation of employees and employee motivation is the basic driver of job satisfaction (Hutchinson, July 2013). A good reward system is also used to improve the relationship of employer and employees in the organization. There are two types of reward system that are financial and non financial. It has been determined in several researches that Non financial rewards comparatively have two or three times greater impact on the employees’ motivation, Maritz (2007). REWARD AND DEVELOPMENT PRTACTICES

Sociology 101- Essay Example | Topics and Well Written Essays - 2000 words

Sociology 101- - Essay Example Durkheim is one of the principal architects of sociology along with other prominent names in the subject, Karl Marx and Max Weber. He is also regarded as a father of sociology for institutionalizing and the first professor of social science in France. Durkheim had significant contributions with the establishment of sociology particularly the combination of empirical research with sociological theory. He had also addressed topics such as study of suicide, sociological theory of religion, and refining positivism. Early Age. Durkheim was from a family of French Jews and grew up in Epinal, Lorraine. He was born on April 15, 1858. His great grandfather, grandfather, and his father were all rabbis (Calhoun, 2002). His father, Moise, was also Chief Rabbi of the Vosges and Haute-Marne. Although destined for rabbinate, he was the one who broke the rabbinical chain in their family by living in secular life particularly when he arrived in Paris. At an early age he switched school, from rabbinic al school to academic ones. Although he had close relationship with his family, relation, Jewish community especially the Alsace-Lorraine community, he did not follow Jewish traditions. (Poggi, 2000) Durkheim had successfully entered in Ecole Normale Superieure, one of the most prestigious mainstream public universities in France, in his third attempt. Their batch at Ecole was regarded as one of the most brilliant batches in the nineteenth century. He was in batch with the known socialist Jean Jaures, who became his long-time friend, along with philosophers Henri Bergson, Bustave Belot, Edmond Goblot, Felix Rauh, and Maurice BlondelHenri Bergson, Bustave Belot, Edmond Goblot, Felix Rauh, and Maurice Blondel, also with Pierre Janet, a psychologist, historians Henri Berr and Camille Jullian, geographer Lucien Gallois, and Ferdinand Brunot, a linguist. Details of his historical account described Durkheim to be pessimistic yet he was always part of the intellectual philosophical debates and political discussions. Eventually he became a strong advocate of the republican cause (Calhoun, 2002). At Ecole, Durkheim had studied under the supervision of Numa Denis Fustel de Coulanges, who was notable for his social scientific perspective and a purist. Aside from the influence of Coulanges to Durkehiem, his readings of Auguste Comte and Herbert Spencer’s works were credited that influenced him to be exposed with social science at an early age. He then became very interested with the scientific approach to society. This influence also reflected from his academic performance. It was cited that Durkheim was initially interested in humanistic studies, psychology, and philosophy but eventually had shifted his interest in ethics and early scope of sociology. With his aggregation in Philosophy, he had graduated in 1882. Academic Performance. Durkheim is regarded as an advance student during his studies at Ecole. He was included as one of the brightest in his batch. During his studies, he was less of political and more of academics by orientation. Later on, he developed inclination in scientific studies than academics, leading him to criticize the scholastic structure of Ecole. In 1885, he went to Germany to pursue his focus study in sociology at Marburg, Berlin and Leipzig. (Calhoun, 2002) Journey to Sociology. One of the contributions of Durkheim to sociology is the empirical method in sociological research. In his personal essays, he revealed that he had appreciated the value of the empiricism during

History Essay Example | Topics and Well Written Essays - 500 words - 45

History - Essay Example Karl Marx and Friedrich Engels produced the Manifesto to announce their policy document; â€Å"society as a whole is more and more splitting up into two great hostile camps . . .† and committed to the aim of â€Å"the overthrow of the bourgeoisie, the rule of the proletariat, the ending of the old society . . .† (Marx and Engels 34). The concepts of capital, labor and excess profits were all remarkably new at that time and Marx thought the modern bourgeoisie had established new conditions of oppression. His theory therefore advocated for the workers to own the means of production so that they will reap and benefit from the profits it produced. It is not very surprising that he had anticipated a future that is post-capitalist in which the workers live in Utopian society; where everybody is equal without artificial divisions in the way rich and poor people lead their lives. â€Å"The feudal relations of property . . . had been replaced by free competition† of the industrial society such that there is an absurdity – an epidemic of over-production.† He further stated all history is the history of class struggles (between the Bourgeoisie and the Proletariat) but he predicted that in the end, the proletarians (modern working class) will win, it is â€Å"as equally inevitable.† (ibid.). The Eisenhower administration covered two presidential terms (1953-1961) and was a period marked by relative global peace (except the Korean War) and also by a continuous expansion of the United States economy. In other words, it was a period of prosperity in that most Americans had secure high-paying jobs and were able to attain the â€Å"American Dream† of reaching the middle class in terms of owning their homes and having cars in the garages. This period has also seen the rise of the so-called military-industrial complex in which Big Business and the military establishment had joined forces to ask for big-budget ticket items in arsenals. President Eisenhower

Second midterm Essay Example | Topics and Well Written Essays - 750 words

Second midterm - Essay Example ar II, which also gets described as the short American century, represented a period of continuous prosperity for the American government and its economy. The shift in the international economic order has led to the US citizens’ increasing sense of disempowerment. The changes witnessed in the classical world economy have decreased the US government’s effectiveness in managing its economy. The change from the Bretton woods based international economic system to a greater international economic integration based system has seen the US lose grip on it domestic economy. The Bretton wood’s system had contributed to the US leading the international economic order between the 1940s and 1970s. The Bretton wood’s system had allowed America to focus on the politics of its national security through the international economic integration it promoted. Through the Bretton wood’s system, the US spent less of its money in rebuilding the economies of Western Europe and Japan. The collapse of the Bretton Wood’s system meant that the US had to put preference in international markets over its domestic considerations of national security. The new contemporary international economic world order has seen countries such as China and Singapore also emerge as serious global economic powerhouses. With the new found international economic system, the relevance of the dollar has dwindled as each and every country strives to use their currency as a means of trade. The US massive foreign debt has inflicted heavily on the predominance held before by its dollar as an international currency. The contemporary international economy that took over the American led Bretton Wood’s system has also allowed for almost every country in the globe to engage in international trade, finance, and investment (Frieden 153). Under the previous classical economic order, only the US and its closest allies had control in setting up terms for international trade. The changing global environment created

Women throughout American History Essay Example | Topics and Well Written Essays - 1500 words

Women throughout American History - Essay Example Perhaps the most essential, women fought for and to a large extent realized a reassessment of conventional notions of their duties in society. In addition, women in America were perceived to be second class citizens and in a number of occasions to be used and owned by members of the male population. Even though these views still persist in several regions in the world, women have accomplished tremendous progress with regard to equal rights. These civil rights were most notably established in the 19th and 20th centuries with noteworthy laws, for example, the Married Women’s Property Laws enacted during the 19th century and the 19th Amendment. The most significant accomplishment was realized in the 1920 elections when a large number of American women were allowed to exercise their rights to vote for the initial time. It took tremendous efforts of activists and reformers and approximately a century to win this right. Even though the consequences were astounding, the campaign was extremely demanding. Nevertheless, in the final part of 1920, the 19th Amendment of the constitution was formally approved, incorporating American women and for the first time asserting that like men, women, ought to have all rights and responsibilities that is associated with being an American citizen (Hemming and Savage 48). This paper will look at how women have suffered for numerous years, but the efforts they have put in have shown throughout history. From the early periods women have been specifically perceived as an innovative source of human existence. However, historically, women in America have been regarded both as a major source of evil and temptation, and mentally mediocre to their male counterparts. In contrast, the attitude towards members of the female population in the Eastern part of the world was initially extra approving. For instance, in ancient India, women were not denied of individual freedoms or property rights by marriage. Nevertheless, in America, children of the male gender were considered to be of significance than female children. On the other hand, when women were allowed intellectual and individual freedom, they made tremendous realizations. In the middle periods nuns played a significant part in Europe’s religious life. In America, women made significant contributions towards the fight for education for American women (Rosenbloom 37). Emma Willard established the Troy Female Seminary in 1821. This was the foremost American educational institution to give females a college education identical to that offered to men. Also, in 1841, Oberlin College was the institution that gave the bachelor’s degree to the first three women, Mary Caroline Rudd, Elizabeth Smith Prall, Mary Hosford, in America, and in 1862 it gave a degree to Mary Jane Patterson, an African America woman. Women in America were for a long time perceived as biologically inferior to men, delicate, and not able to engage in activities needing intellectual or muscular development. In preindustrial America, domestic activities were left for women and females, leaving what were considered as significant activities, for example, plowing and hunting to men. This did not take notice of activities, for example, taking care of children, washing clothes, and milking cows which needed sustained, burdensome labor. Also, the American community regarded the natural biological responsibility of women as their foremost social responsibility as well. This made middle-class children to learn from their mother’s example that caring for children, cleaning, and cooking was the responsibilities required of her when she became an adult

East Asia Studies Essay Example | Topics and Well Written Essays - 1000 words

East Asia Studies - Essay Example Although much of the regional transformation in the recent years has been so positive, principally in the economic sphere, various challenges abound, this challenges pose the risk to stability in this region. It is rather hard to count on which of the two; economic and security, could trigger stability in the region. The discourse of security and economic situations has been hugely dominated by the rise of China’s economy which has a huge role of the foreign affairs and has also transformed the geographic landscape of the region, which has sent the policy makers in the region searching for effective ways to cooperate, while still evading uncertainty concerning its future course. Another trend that is being overlooked in the region is Japan’s own steady transformation. The growth of China in the region accompanied by global political influence and rapidly growing defense expenditures has stirred up the public sentiment of Japan towards China. Additionally, situations at the Korean peninsula have been in recent years has become increasingly destabilizing security and the geographical flashpoint. Most importantly the continued growth of China’s economy and its current modernization has the great security concern in the region (Beeson 187). Another reason for tension in the region and its neighbors is the use of water due to the increased population pressure; the whole per capita water accessibility has declined by between forty and sixty per cent. This creates a security concern in the scramble for resource now that there is a great rise of China population and the great industrialization in Japan the great weather that is experienced in the region does not come to of help to the highly populated region. The currency crisis has also been a major concern of the East Asian region. This issue has been of concern for quite a long time spreading from Thailand and becoming more regional. This issue has brought about retrospect in the imbalances of t he structure of the economy of Thailand which exposes it to short term debt; this has in turn affected the currency values of the countries that have had the same experience such as Koreas, Malaysia, Singapore, and the Philippines (Beeson 206-210). Amongst these countries, some of them such as Indonesia did experience great currency movements; with their currency facing up to 80% loss of its value. It is significant to note that this financial crisis had an influence on the regional institutional development, and it affected the reputation and standing of the major powers in various ways with Japan suffering the greatest damage of its regional leadership ambitions (Beeson 203-206). With much concern to the environment, the capacity of China has faced some greater challenges which are associated with the continued processes of economic developments, which have also been extended beyond the borders. There is some indication of the impact of the population of China on the East Asian co untries with the growing prices of commodities and resources such as Oil. The consumption of such commodities in China continues to rise which brings about the continued thinking of the significant development and significant future of the East Asian. Some sources argue that unless the externalities that are associated wi

EMERGENCY MEDICAL TREATMENT AND LABOR ACT Assignment

EMERGENCY MEDICAL TREATMENT AND LABOR ACT - Assignment Example The Medical Screening examination should be readily available when requested or needed for examination or treatment in case of an emergency condition. The section, 1867, also required that the Medicare-participating hospitals to also offer active labour efficiently and not considering the payment capabilities of the patients. The Section also requested that a hospital should provide appropriate and correct emergency medical treatment and stabilize the condition to a patient if found to have an emergency condition. In a situation where the hospitals physician finds out that the patients condition is quite unstable, it recommend for a transfer if and only if there is a guarantee that the transfer helps stabilize the state. Hospitals can accept requests for transfer of patient if they have specialized facilities to cater for the unstable conditions. Some of the specialized services that and hospital should have so as to accept the requests include; burn units. In hospitals, EMTALA functions and responsibilities are usually incorporated in the Medicare provider agreement. According to the Health Care Financing Administration (HCFA), all hospitals should meet all the provisions EMTALA.In addition: offer screening examination, give appropriate and accept transfers and necessary stabilizing facilities, keep the ir patients informed and updated on their rights to testing and treatment. Moreover, EMATLA also requires hospitals to keep proper records of patients’ transfers, and report any transfers that it considers as appropriate. If a hospital does not meet all the requirements of EMATALA, it is immediately terminated on the basis that it has violated and breached the agreement. The responsibilities of EMATALA involve all the Medicare specialists and the hospitals’ emergency department staff. Hospitals are expected to keep a record of all the on-call physicians who can complete the medical screening exams. The Medicare agreement also requires that hospitals

Elite Running Inc Case Study Example | Topics and Well Written Essays - 1000 words

Elite Running Inc - Case Study Example The inventory of Elite rose by 39% in 2003 as compared to 2002. The rise in the level of inventory was preplanned by the management in order to be prepared to grab the offers from the suppliers when they offer favorable prices for the company. The changes also indicate that while the sales have declined for the company by 24%, the gross profits have declined by 53.8%. This fall in gross profits was mainly due to the changes in the product prices due to the change in competitive market scenario with the appearance of a new entrant named, Stampy. The other significant changes include fall of retained earnings of the company by 11.2% and the fall of equity by 8.4%. Explanation for tick-marks b, e & k The explanation for the tick-marks has been explained as follows. Tick-mark b The fall in the accounts receivable of Elite Running Inc. in 2003 as compared to the value of 2003 could be explained by the fall of sales figures of the company. Due to the fall in the level of sales volume of th e company, the credit offered for sales also reduced. Thus the accounts receivable also declined in 2003 as compared to 2002. Tick-mark e The inventory of the company increased by 17 million dollars which is a rise of 39% in inventory level of 2003 as compared to that of 2002. ... Tick-mark k Elite running Inc. has faced unprecedented competition in 2003. The management forecasted a 10% rises in the sales as compared to 2002. However, due to entry of a new competitor and offers of a similar footwear and apparel product by the competitor eroded their market share as the customers inclined towards the products offered by Stampy. This led to the fall of revenue earnings of the company. In order to respond to the changed external environment, the company reduced its product prices. Although, it allowed the company to retain a large number of customers, the gross profit of the company declined. Discussion: auditing and accounting issues for identified changes The accounting and auditing issues identified in the valuation accounts receivable suggest that the valuation of accounts receivables should have been $51m instead of $60m that has been recorded in the books of accounts. The issue behind this gap is that the management has influenced the accountant and the aud itor in disclosing consistent value of aging account (AICPA 18). The accounts receivable figure for a period of less than 30 days has also been suggested to be maintained at 85%. In order to do this, the accounts receivable from the three sales transactions of the new sales and marketing tool of the company, named Andy Dufresne has not been recorded under the assurance of the management. This is an auditing issue as it shows clear deviation from standards of accounting (U.S. Securities and Exchange Commission 1). The accounting and auditing issue involved in the rise of inventory level of Elite Running Inc. questions the gap between the available information on the receipt of supplier materials as the reason for rise in inventory and the

Moral panics Essay Example for Free

Moral panics Essay The term moral panic suggests a dramatic and rapid overreaction to forms of deviance or wrongdoing believed to be a direct threat to society. The most common definition of a moral panic is the opening paragraph of Folk Devils and Moral Panics by Stanley Cohen: Societies appear to be subject, every now and then, to periods of moral panic. (1) A condition, episode, person or group of persons emerges to become defined as a threat to societal values and interests; (2) its nature is presented in a stylized and stereotypical fashion by the mass media; (3) the moral barricades are manned by editors, bishops, politicians and other right-thinking people; (4) socially accredited experts pronounce their diagnoses and solutions; (5) ways of coping are evolved or (more often) resorted to; (6) the condition then disappears, submerges or deteriorates and becomes more visible. Sometimes the object of panic is quite novel and at other times it is something which has been in existence long enough, but suddenly appears in the limelight. Sometimes the panic passes over and is forgotten, except in folk lore and collective memory; at other times it has more serious and long-lasting repercussions and might produce such changes as those in legal and social policy or even in the way the society conceives itself. Although in Cohens original work the numbers did not appear, but they can be said to represent the six stages in the development of a moral panic. One such moral panic was the video nasties case after the James Bulger murder in 1993. Robert Thompson and Jon Venebles, who were both ten years old at the time, abducted James from the Strand shopping centre in Bootle, Liverpool. They walked him two miles to a railway line where they inflicted massive injuries on him, which resulted in his death. This deviant act dominated the newspaper headlines and created a panic. This murder was portrayed as a horrific act in the press and symbolized the degeneration of modern British society. The Bulger case was used, by the media, to symbolise all what was wrong with Britain. They focused on the difference between innocence and evil and why we as a society let this happen, it suggested the increase of public indifference, lowering family values and increasing isolation, generating massive public guilt and predicting a breakdown in society itself. Fuelled by the press reports, reasons were sought why the murder of James Bulger may have happened. This prompted demands for tighter controls, curfews for young people and stricter laws. One of these laws was for stricter controls on violent films, or video nasties, as the press called them. This was because the trial judge, who sentenced Venebles and Thompson to be detained at Her Majestys Pleasure, unusually made a statement in open court claiming that he believed violent videos may in part be an explanation to why the boys committed murder. He in particular singled out the film Childs Play 3, which he stated had some striking similarities to the manner of the attack on James Bulger. The police officer in charge of the case told The Guardian newspaper that he had no evidence to suggest that the boys had access to any videos worse than might be found in many households. This comment didnt matter, the scapegoat had been found and this was the starting point for the second moral panic about video nasties. The first such panic occurred between 1982-1984 during the influx of video cassette recorders (VCR), one-third of households owned or rented a VCR. Coincidentally, Hollywood produced a crop of gruesome horror films which prompted many complaints, due to the extreme violence of such films, including sadism, mutilation and cannibalism. Laws were set up to prevent children from renting or buying 18 certificate films, and The Daily Mails Ban The Sadist Videos campaign was set up. During the course of this first video nasty moral panic, the term video nasty was unmistakably synonymous simply with horror films and by 1984 the Video Recordings Act had been set up and became law. During the Bulger trial the press used emotive language to create a moral panic about the influences of video nasties. The press wanted to blame the moral decline on liberal permissiveness, the collapse of family life and the failings of schools, but the real culprit in the Bulger case was the arguments about the effects of the media. Every newspaper focused in detail on the alleged influence of video nasties. The Sun declared that An x-rated video may have sown the seeds of murder in the mind of one of James Bulgers killers and the Daily Mirror ran the headline Judge Blames Violent Videos. Childs Play 3, a film about a doll which comes to life and commits a series of murders, had been rented by one of the parents of one of the boys shortly before the murder. However, the police did not introduce the film as evidence in court as there was no evidence that either Venebles or Thompson had actually watched it. Whether or not the film had played a part in inciting the boys to commit murder, the video became the scapegoat. The press simplified the moral issues by concentrating on the video to the exclusion of virtually all other possible influences on the killers. The day after the judges summing up the Daily Mirror printed sensational coverage of the evil and sick video in the first few pages of the paper. Later Mirror coverage included an interview with the films director, David Kirschner, quoting him as saying that Childs Play 3 was never intended for kids and that he wouldnt let his own children watch it. The Suns coverage was more graphic than that of the Mirror. The front page of an issue led with the headline For the sake of ALL our kids BURN YOUR VIDEO NASTY, launching a campaign to destroy all copies of Childs Play3 by asking readers and video shop outlets to burn them. In the same issue a graph was also printed showing the heart rate of a Sun journalist who watched Childs Play 3 whilst wired to a heart monitor, her heart rate increased during the most violent parts of the film. The Sun used this experiment to prove that the video was indeed an incitement to murder, trying to prove that the furore over the so-called video nasties was a valid one. The case of the Bulger murder was seen to encompass every negative aspect of society which is evident in todays world. The Times described this as a reminder of humanitys most ancient and bestial instincts. Comments like this gave the press the opportunity to preach to society about modern social values and the need to return to a vigilant network of neighbours looking out for one another. The Times also used the word alarm to sensationalise the more accurate term concern, this use of language brings a new urgency to the debate about the video nasty moral panic. The press, using sensational media scaremongering, as they do to sell more papers, focused entirely on how violent films and in particular Childs Play 3 incited the two boys to commit murder. Describing the film using words such as sick and evil, and even drawing parallels between the killings in the film and how James Bulger was murdered, of which none were proved in court. Moral panics tap into the publics fears for their safety and the safety of their society around them. In many instances the press coverage of such events doesnt help in alleviating the publics fears, more often than not the press heighten these fears. They do this through sensationalism reporting. As tragic as it was that a young toddler was killed it allowed the people who hold power in this country to enforce their ideas and rules more CCTV cameras were installed in the country because of how essential they were in identifying James murderers. Many panics result in official change and have long-lasting repercussions, as was the case of the video nasties moral panic. The Video Recording Act 1984 was set up introducing the regulations of videos through the British Board of Film Classification. The debates upon the lack of parental control in monitoring childrens viewing and the dangers of young children watching films intended for a mature audience led to further regulations in 1994. Bibliography Bell A, Joyce M, Rivers D, Advanced Level Media. Hodder Stoughton, UK, 1999 Bowker, Julian, Looking at Media Studies, Hodder and Stoughton, UK, 2003 Cohen, Stanley, Folk Devils and Moral Panics, Macgibbon and Kee, London, 1972 Critcher, Chas, Moral Panics and the Media, Open University Press, UK, 2003 Price, Stuart, Media Studies (2nd Edition), Longman, UK, 1999

Ethylene glycol

Ethylene glycol Summary Ethylene Glycol is a much sought after organic compound belonging to the diols family. It is colourless, odourless and is miscible in water and most organic compounds. It was first synthesized by a French chemist, Charles Wurtz, in 1859. Even though it did not gain commercial importance at the time, during World War I, the Germans used ethylene glycol as a substitute for glycerol in explosives (ethy). During and following World War II, ethylene glycol was extensively used as an anti-freeze for engines and machinery in general. This led to an increase in production of ethylene glycol. By the early 1970s, demand for ethylene glycol rose dramatically as it used in the manufacture of polyester fibre, with a further rise in levels of consumption spurred on due to phasing out of glass bottles in favour of PET bottles. In the year 2007, there were 99 ethylene glycol plants globally and the total amount of ethylene glycol produced that year was estimated to be roughly 17.8 million tons (icis ). The demand for ethylene glycol, MEG in particular is expected to rise due higher demand from industries in China. In comparison to existing ethylene glycol plants, the plant design that is discussed in this report would be attractive to a producer of ethylene glycol on a small to medium scale, catering to a local market. The plant discussed in this report aims to produce 10,500 tonnes of MEG and 4,500 tonnes of DEG, and commercially viable amounts of TEG and TetEG every year. This plant will be in operation for 8000 hours per year. For this production target to be realised it is necessary to have a ethylene oxide flow rate of 1493.56 kg/h to be fed into the reactor. A crude ethylene glycol mixture is produced by the hydrolysis of ethylene oxide with excess water in a tubular type reactor operating at 1950C and a pressure of 21.44 bar. In the reactor all the ethylene oxide is converted into the four types of ethylene glycols, with the formation of MEG being the most favored. For every 1 mole of ethylene oxide in the feed stream there are 6 moles of water and 0.269 moles of recycled MEG. This ratio is strictly maintained so as to optimize ethylene glycol conversion to MEG, the most favored product and DEG, the second most favored product. The resulting mixture of water and glycols is then fed to a flash drum operating at atmospheric pressure, where almost one third of the water in the product stream is removed along with some MEG. The removed water and MEG is recycled and sent back to a holding vessel. After the flash drum the water-glycol mixture undergoes a series of distillation cycles so as to separate out the components of the ethylene glycol s and rid them of water. The first distillation column, T-01 operates 2000C and 1 atm. During this distillation process nearly 99% of all remaining water is removed and recycled. The highly concentrated ethylene glycol mixture is them pumped to a second distillation column, T-02 operating at 2350C and 0.8 atm, (vacuum). Here 99% of all MEG entering the column is removed and a significant amount of MEG is recycled. However most of the MEG is sent to storage at a rate of 1312.86 kg/h. The remaining mixture of glycols enter distillation column, T-03, where all DEG is removed and sent to storage at a rate of 562.50 kg/h. The fourth and final distillation column operating at 2600C and 0.8 bar removes nearly 99% of available TetEG. The remaining glycol mixture contains TetEG, is extracted using a tar sill. This process produces 2.58 kg/h of waste largely made up of TetEG. Since the reactions within the reactor produce a lot of heat, water is pumped into the reactor at a rate of 965.5373 k g/h, resulting in the formation of steam at a pressure of 6 bar. Due to the hydrolysis of ethylene oxide in water, some water is lost in the reaction and as well as in storage of the ethylene glycol products. To keep this process running at its optimum, a fresh water feed of 489.50 kg/h is added to the process. Literature Survey Even though Charles Wurtz had derived ethylene glycol by the hydrolysis of ethylene glycol diacetate in the year 1859, its commercial importance wasnt realized until during World War 1, during which the Germans had started an industrial process to produce ethylene glycol to substitute for glycerol in explosives. And only in 1930 did the production of ethylene glycol via industrial chemistry really take off, since it was used as anti-freeze for machinery. The demand for anti-freeze shot up markedly during and after World War 2. As more motor vehicles and machinery were built and sold during the years following World War 2, demand for ethylene glycol grew along with production. Between the late 1960s and earl 1970s there was a renewed and greater demand for ethylene glycol, due to the manufacture of polyesters fibers. From then onwards to the early 1990s production of ethylene glycol fluctuated. The demand for ethylene glycol would go on to increase throughout the 1990s and 2000s due t o the increase in the amount of plastic, especially PET bottles being manufactured. The increase in demand was further boosted by the rapid growth of Asian economies, namely India and China. China accounts for nearly a third of the global MEG demand. Global production of ethylene glycol in 2007 was estimated at 17.8m tones (PCI). According to the Merchant Research Consulting Ltd. rising demand from polyester fiber and PET resin markets means that one to two world-scale EG plants are needed every year. The cost of ethylene oxide feedstock is also expected to increase due to demand in the ethylene glycol sector as well as demand for other ethylene oxide derivatives. New plants are being built in the Middle East to produce low-cost feedstocks, which are expected to cater to the American and Asian markets. Presently, the commercial applications of ethylene glycol are numerous and range from the traditional use as an anti-freeze to more hi-tech uses such as the manufacture of capacitors. Some of the applications are polyester resins for fiber, PET containers, and film applications; all-weather automotive antifreeze and coolants, defrosting and deicing aircraft; heat-transfer solutions for coolants for gas compressors, heating, ventilating, and air-conditioning systems; water-based formulations such as adhesives, latex paints, and asphalt emulsions; manufacture of capacitors; and unsaturated polyester resins (ethy). MEG is the most widely sought after of the commercially available ethylene glycols, and in the year 2007 it accounted for 90% of all ethylene glycol produced (icis). In the year 2007, nearly 82% of all MEG produced was bought by companies in the polyester manufacturing business. The demand for polyester stems from the Asian region, China in particular, where it is used in the textile industry, and this has led to a 5-6% increase in production of MEG per year. Demand for polyethylene terephthalate (PET) bottle resin has been growing strongly globally since the beverage business phasing out the use of glass bottles and replacing with the more durable PET bottles. Demand for MEG for the manufacture of anti-freeze was at 12%, and demand is expected to decrease slightly over the years largely due recycling and substitution by propylene glycol-based antifreeze. Apart from its use in the manufacture of polyurethanes, DEG is also used in the treatment of corks, glue, paper and cellophane. DEG along with TEG is used in the dehydration of natural gas, an area where demand for DEG and TEG is set to rise over the years. DEG and TEG have excellent hygroscopic properties and along with their low volatility are best suited for applications such as dehydration of natural gas and as a dehumidifier in air conditioning systems. According to research and industry analysts, PCI, there were 72 MEG producing companies in 2007 operating 99 plants spread across 31 countries. Of these, the top 10 producers account for close to 50% of global ethylene glycol capacity. The top producers were Dow and Nan Ya Plastics Corp with 1.75 million tons each while Jubail United Petrochemical Co was the third largest with 1.5 million tons. Other major producers include Shell, a South Korean company Honam, Equate, Reliance (India), Sabic (Saudi Arabia), ExxonMobil, Equistar, Old World Industries. Late last year prices of MEG were trading at $860-875/ton CFR, cost and freight included in Asian trade. By the beginning of the year with news that plants in Saudi Arabia will be shutting down for maintenance and increasing stockpiles in Chinese ports, led to a bullish rally during trade, sending the price of MEG to $970-980/ton. Towards the end of February, with the beginning of the Chinese New Year holidays, a period of relaxed trade, and with the Saudi Arabian plants coming back online, the price of MEG showed signs of returning to pre January levels (icis). However in the short to medium term prices of MEG are expected drop due to new more efficient plants being built which would result in slightly more MEG being produced that demand. Therefore this possibility of over abundant supply may drive MEG prices slightly lower than $860-875/ton (PCI). Ethylene glycol used to be manufactured by the hydrolysis of ethylene oxide (EO) which was produced via ethylene chlorohydrin but this method has been superseded by a direct oxidation route. The EO is first produced by the oxidation of ethylene in the presence of oxygen or air and a silver oxide catalyst. A crude ethylene glycol mixture is then produced by the hydrolysis of EO with water under pressure. The water-glycol mixture is fed to evaporators where the water is recovered and recycled. Fractional distillation under vacuum is used to separate the monoethylene glycol from the diethylene and triethylene glycols. Mitsubishi Chemical has developed a catalytic process that employs a phosphorous-based catalyst for converting ethylene oxide to monoethylene glycol (MEG) with little by-product formation. Shell has subsequently acquired exclusive rights to the Mitsubishi Chemical process and licenses a combined EO/MEG technology as an integrated Omega (only mono-ethylene glycol advanced) process package. The Omega process is claimed to have a MEG selectivity of over 99%, compared to 90% for conventional, non-catalytic processes. It is claimed to have lower capital costs due to the elimination of purification and handling equipment for by-products. Operating costs are also reduced as it uses much less water lowering utility and water treatment costs. The first plant to use the Omega process is Lotte Daesans 400,000 tonne/year unit at Daesan, Korea, started up in May 2008. Shell plans to use the process in a 750,000 tonne/year plant in Singapore, due for start-up in 2010. Researchers have looked at other EG processes such as the reaction of ethylene and carbon dioxide to give ethylene carbonate followed by hydrolysis, and the direct oxidation of ethylene to glycol acetate anhydride which can be hydrolysed to ethylene glycol and acetic acid.