Organization Design And Technology Of Sony Corporation Essay

Due to the fast-paced growth of Sony Corporation in the international market, it gave way for the misalignment of its market and internal expansion leading to the deterioration of its rate of technological development or the quality of its product lines, and the decline of the efficiency of its workforce as the number of responsibilities and tasks suddenly increased triggered by the market expansion of the said company. With the aid of ICT Supplier Self-Assessment Questionnaire and balance scorecard, Sony Corporation has been able to improve the quality of its product and workforce efficiency. By expanding the workforce of Sony, it can solve the deterioration of its rate of technological advancement and inefficiency on workforce on a long term basis. Between adding new position to the organization structure of Sony and hiring more workers to expand the workforce of the said company, adding new position to Sony Corporation is the one that fits to solve the above mentioned problems of Sony considering the cost of its implementation and effectiveness. Introduction With the growing competition in the international market, it is a must for Sony Corporation to secure competitive advantage in terms of internal stability and technological development. Most consumers nowadays provides more premium on the most advanced products in the market, and this is the primary reason why Sony Corporation allot significant amount of resources to research and development to maintain the pace of their technological development. Furthermore, Sony has designed its organization structure in such a way that it could easily respond to various new market challenges. But the forces of market competition and globalization blocks the technological advantages of Sony as well as destabilized the internal stability through attacking their organization design as various departments and key person of the said company shoulders broader responsibilities as the company continues to expand in the international market. Sony’s competitors, Panasonic, Toshiba, Apple, Microsoft, and Dell are just few of the many electronics companies also operating in the international market with fast-paced technological development (Isuppli. om 2006: 1). Due to this scenario, Sony’s products appears to be less technologically advanced compared to its competitors leading to a sudden down turn on their sales and profit internationally as their customers shift to their competitors (Eetimes. com 2008: 1). Furthermore, during the peak of Sony’s international operation, various departments and top level managers was bombarded with more tasks and responsibilities in order to support their market expansion which presently lead to the deterioration of their performances. Distribution of task and responsibilities is weak and most of the organization design of Sony is already obsolete considering the present condition of competition and globalization in the international market. In this regard, this paper aims to discuss how the forces of competition and globalization weaken the organization design and technological advantage of Sony as well as the potential alternatives that Sony must undertake in order to solve the said weaknesses. At the end of this paper, expect for a recommendation that would best solve the problems of Sony concerning its organization design and technology. Classification of Organization Structure Sony Corporation has been using divisional type of organizational design as illustrated by their organizational chart, see appendix (. During the early years of Sony’s operation in the market, the divisional type of organization design enables them to easily implement strategies and decisions to problems that need immediate solution. Since Sony was only on its development stage, they were able to fully utilize the optimal gains that can be derived from using divisional organization structure. The fast relay of information, decision making and implementation of strategies through the use of divisional organization design provided Sony with tremendous amount of gains in the international market as they start successfully penetrating their target market and out-performed their competitors in the market, making them one of the successful multinational companies around the globe (Goliath. ecnext. com 2007: 1). Furthermore, the divisional organization design enables Sony to specialize its â€Å"groups† since thereby improving the quality of their products in the market (Market Wire 2005: 1). Like for instance, the Sony Ericson Mobile Communications Group concentrate only to develop and produce mobile communication products in the market. The head of Ericson Mobile Communications Group is directly below the CEO of Sony, and so with their other groups (Sony. net 2008: 1). The direct relationship between the head of Sony’s groups and its CEO provides ease on decision making and distribution of information as well as strategies on brand development. But this organizational structure starts to provide instabilities to Sony Corporation as it continues to grow as electronics industry superpower in the international market. As the company grew in the international market, responsibilities of each head of various groups also increased up to the point wherein they start performing inefficiently as their time being spent on every vital aspect of their operation become lesser and lesser. In this regard, the present status of divisional organization design to Sony becomes ineffective and only provides instabilities as the executives of the company starts to perform inefficiently on their respective fields. But divisional organization design fits Sony than any other organization structure available in the business management realm. Since Sony have a diversity of products in the market, and each group specializes into the production of their own product lines, then, divisional structure already fits Sony. The only problem lies on the fact that every executive of Sony starts gaining more responsibilities in his/her assigned group. In other words, the international expansion of Sony in the recent years was not accompanied by expansion of internal responsibilities of various executives of the said company, thereby leading to a down turn on their overall performance. In order for Sony to restore the stability of its internal affairs, it does not have to change its organization design; rather, Sony management can make improvements on their divisional structure by adding new positions or by appointing executive assistants to key positions on various groups of the said company. This strategy will provide enough room for the key personnel of Sony to manage their responsibilities well and delegate those less priority tasks to their assistance or new positions in the group. In other words, this strategy will give way for the internal expansion of Sony while maintaining their original organization design that was already proven to be effective and fit to the business structure of Sony Corporation. Choosing organization structure other than divisional design would provide great risk since Sony operates on various groups with different product lines to produce into the market. Furthermore, each group has less influence on one another and almost operates independently from other group while their headquarters and CEO serves as the link between them. In this regard, it is vital for Sony Corporation to implement the said internal expansion of their groups in order for them to re-establish their competitive advantage in the international market in terms of internal stability and workforce efficiency especially during these times wherein the forces of tight market competition and globalization calls for the acquisition of more potential sources of competitive advantages to keep the pace of Sony’s growth internationally. Key Determinant and Influences on Organizational Structure One of the main strategies of Sony in expanding its share on the international market would be the diversification of its product line from electronics to B2B business solutions, which later on enables the company to tap various resources. Since each product line of Sony needs different production processes compared to others, Sony decided to use divisional organizational structure in order to easily manage the entire company without compromising the quality of their product lines. For instance, Sony Financial Holdings Group provides business solution services to the market and needs different operational processes compared to Sony Entertainment Business Group that provides television, digital cameras, and video cameras in the market. Each of these groups requires different set of operational style, set of skills and equipments, and set of strategies, thereby providing enough room to these groups to operate independently from one another would enhance their productivity and efficiency as they specialize into their production process. This is the main reason why Sony chose to use divisional organization design in order to provide enough room for each product line to be developed separately by workers specialized on producing it from other product line. In this regard, the strategy of Sony to diversify its product line gave way for the use of divisional organization structure. Furthermore, another factor that serves to be the key determinant of Sony Corporation’s organization structure would be its growth rate. Sony Corporation has roughly 4 percent sales growth rate internationally as of this month which is relatively higher compared to its rival companies like Panasonic with -2. 78 percent sales growth rate (Reuters. com 2008: 1). During the initial stage of Sony’s growth in the international market, as their product become more diverse leading to a fast-paced growth, Sony chose to use divisional organization structure to allow the company to cope up with the said growth rate since divisional organization structure provides enough room for Sony to further develop their diverse product line through specialization. At present, the root of organization stability of Sony roots on the fact that they were not able to accompanied their market growth and expansion with internal expansion causing for the divisional organization structure to work inefficiently. Once the internal growth rate of Sony already aligned itself to its market growth, then, that is the only time wherein Sony can fully utilize the potential gains of using divisional organization structure. In this regard, it is therefore vital for Sony to keep track its market growth and internal growth if whether these two still align each other since these affects the performance of their organization structure. The strategy and growth of Sony is interrelated to one another and this is the main reason why these two factors greatly affect its organization structure. The strategy of Sony to diversify its product line provided them with enough opportunity to increase their market share in the international market. The said product line expansion and increase of market share enable Sony to easily penetrate its target market and outperformed its competitors. Furthermore, as Sony continues to successfully penetrate its target market and outperformed its competitors, it starts to gain impressive growth in the market due to higher sales and profit. But the said market growth of Sony was not accompanied by internal expansion which presently leads to tremendous losses as key personnel of its groups starts performing inefficiently and ineffectiveness of their organization structure. Furthermore, as these key personnel of Sony perform inefficiently, the research and development of their products starts to drop, giving enough room for its competitors to step up in the electronics and business solutions industry and provide financial losses to the company (Forbes. com 2008: 1). Therefore, at this point in time, it is vital for Sony to address these instabilities on its workforce in order to restore their competitiveness in the international market with respect to their market strategies and technological advancement. Organizational Effectiveness One way in which Sony Corporation evaluates performance would be through the use of Information and Communications Technology Supplier Self-Assessment Questionnaire which aims to determine if whether their suppliers uphold the Electronic Industry Code of Conduct. Since suppliers have a direct impact on the overall performance of Sony in terms of product quality, along with other electronics companies around the globe such as HP, IBM, and Microsoft, Sony Corporation created the Electronic Industry Code of Conduct which encompasses the ICT Supplier Self-Assessment Questionnaire. Through the ICT Supplier Self-Assessment Questionnaire, Sony can monitor the product quality of their suppliers. By securing the performance of their suppliers, Sony Corporation has been able to maintain its integrity of producing high quality products in the market. There were cases wherein Sony Corporation was sued for releasing substandard products in the market. Like what happened recently when a couple sued Sony when the battery of a Sony laptop exploded causing injuries to the complainants. Due to this, Sony had to pull out all of the batteries that were being suspected as substandard and replaced with a new one in order to prevent having more accidents. In this regard, through the ICT Supplier Self Assessment Questionnaire, Sony Corporation can stop the above mentioned accident caused to substandard products that they release in the market which mostly came from their suppliers. Dell, the maker of the said substandard battery of Sony laptop, is now making collaboration with Sony in pulling out those substandard laptop batteries in the market. Another way by which Sony evaluates their performance is through the use of balance scorecard. Balance score card help every organization in the market to determine if whether their smaller scale operational activities are still aligned with their larger scale activities. As for the case of Sony Corporation, it uses balance scorecard in determining the alignment operational processes of its groups, e. g. Sony Ericson Mobile Communications, Game Business Group, Entertainment Business Group, and Sony Financial Holdings Group, to the vision and strategy of the entire organization. For instance, the balance scorecard is being used by Sony Corporation in determining if whether the processes used in producing Sony Ericsson in the market are still aligned with the Corporate Social Responsibility of the entire company. Through this, Sony Corporation can keep their various groups intact to the vision and strategies of their â€Å"parent† company – Sony Corporation. Just recently, Sony Ericsson phone was awarded as the most â€Å"Eco-Friendly† phone in the market and the said award is being attributed to the continues success of Sony Corporation to uphold its Corporate Social Responsibility on minimizing the wastes being emitted in producing the said product (Sayer 2008: 1). Considering the said success of Sony Ericsson phone in the market, there is a great possibility that it can earn positive balance scorecard by upholding the CSR of Sony Corporation, which can eventually serve as the basis for further development of Sony Ericsson phone in the market (Ericsson. co. jp 2005: 9). Therefore, balance scorecard provides enough room for Sony Corporation to determine the alignment of their product lines to their vision and strategy especially when it concerns the integrity of their brand name. At this point, the performance evaluation tools of Sony Corporation, ICT Supplier Self Assessment Questionnaire and Balance Scorecard, has been able to solve its problem regarding maintaining the quality of their products in the market by securing the compliance of their suppliers and aligning the production processes of their product lines into their Corporate Social Responsibilities. Therefore, ICT Supplier Self Assessment Questionnaire and Balance Scorecard fit to the vision and strategies of Sony Corporation based from their successful solution regarding the low quality level of Sony’s products in the market. This issue on quality level and on how the above identified evaluation tools of Sony Corporation solved it will be thoroughly discussed in the next part of the paper. Critical Analysis of Current Problems Actually, the main problem of Sony Corporation would be the misalignment of its market and internal expansion that eventually lead to various â€Å"branch-problems† like low performance rate from the workforce of the company as well as the deterioration of the quality level of their product lines in the market. The fast-paced growth of Sony in the past years, while leaving their internal condition to remain untouched, provided inefficiencies on the part of their workforce as the responsibility of one another can no longer be performed as efficient as before, and low product quality as the said inefficiencies on their workforce started to reflect on the quality level of their product lines. This is the main reason why Sony Corporation suffers from return on investment and profit on its operation as their customers shift to the side of their competitors since the latter already have relatively technologically advanced product lines in the market compared to Sony Corporation. In order to provide a long term solution to this problem of Sony Corporation, it is a must for the management of the said company to expand their workforce either by adding new positions to reinforce the key positions in the company or hire more workers to delegate the tasks optimally among their workforce. But at present, Sony Corporation is applying short term solutions to these problems through the use of evaluation tools as discussed on the previous part of this paper. First, the ICT Supplier Self Assessment Questionnaire provided solution on securing the quality of their supplier’s products which later on be used on the production process of Sony. With the ICT Supplier Self Assessment Questionnaire, Sony can monitor if whether the supplies of their suppliers are substandard or complies with the Electronic Industry Code of Conduct which sets up the standards for electronic products in the market (Greenwald 2005: 2). Sony Corporation can now minimize the incidence of product malfunction or substandard components of their product lines just like what happened to the batteries of Sony’s laptop that exploded due to overheating. ICT Supplier Self Assessment Questionnaire will improve the quality of Sony’s product line even up to a small degree since it only solves their problem on the side of their supplier and not the root of the problem which still lies on the internal stability of their workforce. With the rise of ICT Supplier Self Assessment Questionnaire and Electronic Industry Code of Conduct, cases of substandard electronic products in the market will be minimized leading for Sony to improve the quality level of its products (United Nations Environment Program 2005: 1). In this regard, through the use of ICT Supplier Self Assessment Questionnaire, Sony Corporation manages to improve the quality of their product lines even up to a small degree. On the other hand, the balance scorecard of Sony Corporation provides enough room for the said company to improve the quality of their workforce’s performance since the company can determine if whether a group or department already performs outside the boundaries of their vision and corporate strategies. There are times wherein the misalignment of Sony Corporation’s products to their vision and corporate strategies roots on the inefficient performance of workforce of a given department or group, and balance scorecard can determine if whether a given group of Sony Corporation performs inefficiently based from the evaluation of the products being produced by that given group. Through this, Sony Corporation can easily determine which group among its companies needs to undergo workforce expansion to solve the said inefficiency of their workers. In this regard, the balance scorecard provides two services to Sony Corporation, evaluation of their product’s performance in the market and its alignment to the vision and corporate strategies of the company, and on which group of the company needs workforce expansion in order to improve the quality of their product lines just like what happened to Sony Ericsson phone in the market (Esato. com 2007: 1). Solutions In order for Sony Corporation to have long term solution to their problem regarding the misalignment of their market and internal expansion as the consequence of their fast-paced growth, it is advisable for them to expand their workforce either by adding new positions into their organization structure to optimally delegate the tasks among the workers of the company; or, the management could hire more workers that will handle the additional responsibilities provided by the market expansion of the company. Furthermore, through adding new position to the organization structure to various business groups of Sony Corporation, e. g. executive assistants will give their key executives to delegate some of the less important tasks and responsibilities to their assistants so they can concentrate to more responsibilities. The divisional organization structure of Sony Corporation will still be used in the organization design of Sony under the said strategy considering that it is the only organization design that fits to the business nature of Sony Corporation as discussed on the previous part of this paper. On the other hand, with regards to hiring more workers that will be responsible on shouldering the additional tasks provided by the market expansion of Sony Corporation, this will provide Sony with enough room to improve the efficiency of their workforce as every person on their workforce can now perform their responsibilities to their optimal level since tasks are now well distributed on their workforce. At the end of the day, these strategies will improve the quality of Sony’s workforce and so with the quality of their products. The only problem with hiring of additional workers would be the fact that it is costly to hire more workers for the company considering that Sony is presently suffering from low profitability in the market compared to adding new position to the organization structure of Sony Corporation. Recommendation Both of the above mentioned strategies provides same improvement on lifting the efficiency of Sony Corporation’s workforce and boosting its product quality level, but in terms of costs on the part of the company, adding new positions to the organization structure of Sony is relatively cheaper than hiring more workers. In this regard, alongside with the performance evaluation tools of Sony Corporation, it is a must for their management to add new positions into the divisional organization structure of the company to provide long term solution on their low quality product in terms of technology and improving the efficiency of their workforce considering the extent of their market expansion in the global market. Conclusion With the misalignment of market and internal expansion of Sony Corporation due to its fast-paced growth in the international market, it provided various problems into the said company. Technological advancement of Sony’s products drops while the efficiency of its workforce decline due to the significant increase on tasks and responsibilities on the workplace caused by the fast-paced growth of Sony in the recent years. Through adding new positions on the organization structure of Sony, it can already improve the efficiency of its workforce and so with the rate of its product line’s technological advancement in the market.

National Territory of the Philippines Essay

The Constitution of the Philippines ( Filipino: Saligang Batas ng Pilipinas ) is the supreme jurisprudence of the Philippines. The Constitution presently in consequence was enacted in 1987. during the disposal of President Corazon Aquino. and is popularly known as the â€Å"1987 Constitution† . [ 1 ] Philippine constitutional jurisprudence experts recognize three other old fundamental laws as holding efficaciously governed the state — the 1935 Commonwealth Constitution. the 1973 Constitution. and the 1986 Freedom Constitution. [ 2 ] [ 3 ] Fundamental laws for the Philippines were besides drafted and adopted during the ephemeral authoritiess of Presidents Emilio Aguinaldo ( 1898 ) and Jose P. Laurel ( 1943 ) . †¢ Background of the 1987 ConstitutionIn 1986. following the People Power Revolution which ousted Ferdinand Marcos as president. and following on her ain startup. Corazon Aquino issued Proclamation No. 3. declaring a national policy to implement the reforms mandated by the people. protecting their basic rights. following a probationary fundamental law. and supplying for an orderly interlingual rendition to a authorities under a new fundamental law. [ 4 ] President Aquino subsequently issued Proclamation No. 9. making a Constitutional Commission ( popularly abbreviated â€Å"Con Com† in the Philippines ) to border a new fundamental law to replace the 1973 Constitution which took consequence during the Marcos soldierly jurisprudence government. Aquino appointed 50 members to the Commission. The members of the Commission were drawn from varied backgrounds. including several former congresswomans. a former Supreme Court Chief Justice ( Roberto Concepcion ) . a Catholic bishop ( Teodoro Bacani ) and movie manager ( Lino Brocka ) . Aquino besides intentionally appointed 5 members. including former Labor Minister Blas Ople. who had been allied with Marcos until the latter’s ejector. After the Commission had convened. it elected as its president Cecilia Munoz-Palma. who had emerged as a prima figure in the anti-Marcos resistance following her retirement as the first female Associate Justice of the Supreme Court. The Commission finished the bill of exchange charter within four months after it was convened. Several issues were hotly debated during the Sessionss. including on the signifier of authorities to follow. the abolishment of the decease punishment. the continued keeping of the Clark and Subic American military bases. and the integrating of economic policies into the Constitution. Brocka would walk out of the Commission before its completion. and two other delegates would dissent from the concluding bill of exchange. The ConCom completed their undertaking on October 12. 1986 and presented the bill of exchange fundamental law to President Aquino on October 15. 1986. After a period of countrywide information run. a plebiscite for its confirmation was held on February 2. 1987. More than three-fourth of all ballots cast. 76. 37 % ( or 17. 059. 495 electors ) favored confirmation as against 22. 65 % ( or 5. 058. 714 electors ) who voted against confirmation. On February 11. 1987. the new fundamental law was proclaimed sanctioned and took consequence. On that same twenty-four hours. Aquino. the other authorities functionaries. and the Armed Forces of the Philippines pledged commitment to the Constitution. Significant characteristics of the 1987 Fundamental law The Constitution establishes the Philippines as a â€Å"democratic and republican State† . where â€Å"sovereignty resides in the people and all authorities authorization emanates from them† . ( Section 1. Article II ) Consistent with the philosophy of separation of powers. the powers of the national authorities are exercised in chief by three subdivisions — the executive subdivision headed by the President. the legislative subdivision composed of Congress and the judicial subdivision with the Supreme Court busying the highest grade of the bench. The President and the members of Congress are straight elected by the people. while the members of the Supreme Court are appointed by the President from a list formed by the Judicial and Bar Council. As with the American system of authorities. it is Congress which enacts the Torahs. topic to the veto power of the President which may however be overturned by a two-thirds ballot of Congress ( Section 27 ( 1 ) . Article VI ) . The President has the constitutional responsibility to guarantee the faithful executing of the Torahs ( Section 17. Article VII ) . while the tribunals are expressly granted the power of judicial reappraisal ( Section 1. Article VIII ) . including the power to invalidate or construe Torahs. The President is besides recognized as the commander-in-chief of the armed forces ( Section 18. Article VII ) . The Constitution besides establishes limited political liberty to the local authorities units that act as the municipal authoritiess for states. metropoliss. municipalities. and barangays. ( Section 1. Article X ) Local authoritiess are by and large considered as falling under the executive subdivision. yet local statute law requires enactment by duly elected local legislative organic structures. The Constitution ( Section 3. Article X ) mandated that the Congress would ordain a Local Government Code. The Congress punctually enacted Republic Act No. 7160. The Local Government Code of 1991. which became effectual on 1 January 1992. [ 5 ] The Supreme Court has noted that the Bill of Rights â€Å"occupies a place of primacy in the cardinal law† . [ 6 ] The Bill of Rights. contained in Article III. enumerates the specific protections against State power. Many of these wa rrants are similar to those provided in the American fundamental law and other democratic fundamental laws. including the due procedure and equal protection clause. the right against indefensible hunts and ictuss. the right to liberate address and the free exercising of faith. the right against self-incrimination. and the right to habeas principal. The range and restrictions to these rights have mostly been determined by Philippine Supreme Court determinations. Outside of the Bill of Rights. the Constitution besides contains several other commissariats reciting assorted province policies including. i. e. . the avowal of labour â€Å"as a primary societal economic force† ( Section 14. Article II ) ; the equal protection of â€Å"the life of the female parent and the life of the unborn from conception† ( Section 12. Article II ) ; the â€Å"Filipino household as the foundation of the nation† ( Article XV. Section 1 ) ; the acknowledgment of Filipino as â€Å"the national linguistic communication of the Philippines† ( Section 6. Article XVI ) . and even a demand that â€Å"all educational establishments shall set about regular athleticss activities throughout the state in cooperation with athletic nines and other sectors. † ( Section 19. 1. Article XIV ) Whether these commissariats may. by themselves. be the beginning of enforceable rights without attach toing statute law has been the topic of considerable argument in the legal domain and within the Supreme Court. The Court. for illustration. has ruled that a proviso necessitating that the State â€Å"guarantee equal entree to chances to public service† could non be enforced without attach toing statute law. and therefore could non exclude the disallowance of alleged â€Å"nuisance candidates† in presidential elections. [ 7 ] But in another instance. the Court held that a proviso necessitating that the State â€Å"protect and progress the right of the people to a balanced and healthful ecology† did non necessitate implementing statute law to go the beginning of operative rights. [ 8 ] Historical fundamental laws Fundamental law of Biak-na-Bato ( 1897 ) The Katipunan revolution led to the Tejeros Convention where. at San Francisco de Malabon. Cavite. on March 22. 1897. the first presidential and frailty presidential elections in Philippine history were held—although merely the Katipuneros ( members of the Katipunan ) were able to take portion. and non the general public. A ulterior meeting of the radical authorities established at that place. held on November 1. 1897 at Biak-na-Bato in the town of San Miguel de Mayumo in Bulacan. established the Republic of Biak-na-Bato. The democracy had a fundamental law drafted by Isabelo Artacho and Felix Ferrer and based on the first Cuban Constitution. [ 9 ] It is known as the â€Å"Constitucion Provisional de la Republica de Filipinas† . and was originally written in and promulgated in the Spanish and Tagalog linguistic communications. [ 10 ] Malolos Constitution ( 1899 ) The Malolos Constitution was the first republican fundamental law in Asia. [ 11 ] It declared that sovereignty resides entirely in the people. stated basic civil rights. separated the church and province. and called for the creative activity of an Assembly of Representatives to move as the legislative organic structure. It besides called for a Presidential signifier of authorities with the president elected for a term of four old ages by a bulk of the Assembly. [ 12 ] It was titled â€Å"Constitucion politica† . and was written in Spanish following the declaration of independency from Spain. [ 13 ] proclaimed on January 20. 1899. and was enacted and ratified by the Malolos Congress. a Congress held in Malolos. Bulacan. [ 14 ] [ 15 ] Acts of the United States Congress The Philippines was a United States Territory from December 10. 1898 to March 24. 1934. [ 16 ] As such. the Philippines was under the legal power of the federal authorities of the United States during this period. Two Acts of the Apostless of the United States Congress passed during this period can be considered Filipino fundamental laws in that those Acts of the Apostless defined the cardinal political rules. and established the construction. processs. powers and responsibilities. of the Filipino authorities. 1. The Philippine Organic Act of 1902. sometimes known as the â€Å"Philippine Bill of 1902† . was the first organic jurisprudence for the Philippine Islands enacted by the United States Congress. It provided for the creative activity of a popularly elected Philippine Assembly. and specified that legislative power would be vested in a bicameral legislative assembly composed of the Filipino Commission ( upper house ) and the Philippine Assembly ( lower house ) . Its cardi nal commissariats included a measure of rights for the Filipinos and the assignment of two nonvoting Filipino occupant commissioners to stand for the Philippines in the United States Congress. 2. The Philippine Autonomy Act of 1916. sometimes known as â€Å"Jones Law† . modified the construction of the Filipino authorities by taking the Filipino Commission as the legislative upper house. replacing it with a Senate elected by Filipino electors. This act besides explicitly stated that it was and had ever been the intent of the people of the United States to retreat their sovereignty over the Filipino Islands and to acknowledge Filipino independency every bit shortly as a stable authorities can be established in this. Though non a fundamental law itself. the Tydings-McDuffie Act of 1934 provided authorization and defined mechanisms for the constitution of a formal fundamental law via a constitutional convention. Commonwealth and Third Republic ( 1935 ) The 1935 Constitution was written in 1934. sanctioned and adopted by the Commonwealth of the Philippines ( 1935-1946 ) and subsequently used by the Third Republic of the Philippines ( 1946-1972 ) . It was written with an oculus to run intoing the blessing of the United States Government every bit good. so as to guarantee that the U. S. would populate up to its promise to allow the Philippines independency and non hold a premiss to keep onto its â€Å"possession† on the evidences that it was excessively politically immature and therefore unready for full. existent independency. The original 1935 Constitution provided for unicameral National Assembly and the President was elected to a six-year term without re-election. It was amended in 1940 to hold a bicameral Congress composed of a Senate and House of Representatives. every bit good the creative activity of an independent electoral committee. The Constitution now granted the President a four-year term with a upper limit of two back-to-back footings in office. A Constitutional Convention was held in 1971 to rewrite the 1935 Constitution. The convention was stained with apparent graft and corruptness. Possibly the most controversial issue was taking the presidential term bound so that Ferdinand E. Marcos could seek election for a 3rd term. which many felt was the true ground for which the convention was called. In any instance. the 1935 Constitution was suspended in 1972 with Marcos’ announcement of soldierly jurisprudence. the rampant corruptness of the constitutional procedure supplying him with one of his major premises for making so. Second Republic ( 1943 ) The 1943 Constitution was drafted by a commission appointed by the Philippine Executive Commission. the organic structure established by the Japanese to administrate the Philippines in stead of the Commonwealth of the Philippines which had established a government-in-exile. In mid-1942 Nipponese Premier Hideki Tojo had promised the Filipinos â€Å"the award of independence† which meant that the committee would be supplanted by a formal democracy. The Preparatory Committee for Philippine Independence tasked with outlining a new fundamental law was composed in big portion. of members of the prewar National Assembly and of persons with experience as delegates to the convention that had drafted the 1935 Constitution. Their bill of exchange for the democracy to be established under the Nipponese Occupation. nevertheless. would be limited in continuance. supply for indirect. alternatively of direct. legislative elections. and an even stronger executive subdivision. Upon blessing of the bill of exchange by the Committee. the new charter was ratified in 1943 by an assembly of appointed. provincial representatives of the Kalibapi. the organisation established by the Japanese to replace all old political parties. Upon confirmation by the Kalibapi assembly. the Second Republic was officially proclaimed ( 1943-1945 ) . Jose P. Laurel was appointed as President by the National Assembly and inaugurated into office in October 1943. Laurel was extremely regarded by the Japanese for holding openly criticised the US for the manner they ran the Philippines. and because he had a grade from Tokyo International University. The 1943 Constitution remained in force in Japanese-controlled countries of the Philippines. but was ne'er recognized as legitimate or binding by the authoritiess of the United States or of the Commonwealth of the Philippines and guerilla organisations loyal to them. In late 1944. President Laurel declared a province of war existed with the United States and the British Empire and proclaimed soldierly jurisprudence. basically governing by edict. His authorities in bend went into expatriate in December. 1944. first to Taiwan and so Japan. After the proclamation of Japan’s resignation. Laurel officially proclaimed the Second Republic as dissolved. Until the sixtiess. the Second Republic. and its officers. were non viewed as legitimate or as holding any standing. with the exclusion of the Supreme Court whose determinations. limited to reappraisals of condemnable and commercial instances as portion of a policy of discretion by Chief Justice Jose Yulo continued to be portion of the functionary records ( this was made easier by the Commonwealth ne'er representing a Supreme Court. and the formal vacancy in the main justness place for the Commonwealth with the executing of Chief Justice Jose Abad Santos by the Japanese ) . It was merely during the Macapagal disposal that a partial. political rehabilitation of the Japanese-era democracy took topographic point. with the acknowledgment of Laurel as a former president and the add-on of his cabinet and other functionaries to the roll of past authorities functionaries. However. the 1943 charter was non taught in schools and the Torahs of the 1943-44 National Assembly ne'er recognized as valid or relevant. The 1943 Constitution provided strong executive powers. The Legislature consisted of a unicameral National Assembly and merely those considered as anti-US could stand for election. although in pattern most legislators were appointed instead than elected. The New Society and the Fourth Republic ( 1973 ) The 1973 Constitution. promulgated after Marcos’ declaration of soldierly jurisprudence. was supposed to present a parliamentary-style authorities. Legislative power was vested in a National Assembly whose members were elected for six-year footings. The President was ideally supposed to be elected as the symbolic and strictly ceremonial caput of province from the Members of the National Assembly for a six-year term and could be re-elected to an limitless figure of footings. Upon election. the President ceased to be a member of the National Assembly. During his term. the President was non allowed to be a member of a political party or keep any other office. Executive power was meant to be exercised by the Prime Minister who was besides elected from the Members of the National Assembly. The Prime Minister was the caput of authorities and Commander-in-Chief of the armed forces. This fundamental law was later amended four times ( arguably five depending on how one considers Proclamation No. 3 of 1986 ) . On October 16-17 1976. a bulk of barangay electors ( Citizen Assemblies ) approved that soldierly jurisprudence should be continued and ratified the amendments to the Constitution proposed by President Marcos. [ 19 ] The 1976 amendments were: †¢an Interim Batasang Pambansa ( IBP ) replacing for the Interim National Assembly †¢the President would besides go the Prime Minister and he would go on to exert legislative powers until soldierly jurisprudence should hold been lifted. The Sixth Amendment authorized the President to pass: Whenever in the judgement of the President there exists a sedate exigency or a menace or imminency thereof. or whenever the Interim Batasang Pambansa or the regular National Assembly fails or is unable to move adequately on any affair for any ground that in his judgement requires immediate action. he may. in order to run into the exigency. publish the necessary edicts. orders or letters of instructions. which shall organize portion of the jurisprudence of the land. The 1973 Constitution was further amended in 1980 and 1981. In the 1980 amendment. the retirement age of the members of the Judiciary was extended to 70 old ages. In the 1981 amendments. the false parliamentary system was officially modified into a French-style semi-presidential system: †¢executive power was restored to the President ;†¢direct election of the President was restored ;†¢an Executive Committee composed of the Prime Minister and non more than 14 members was created to â€Å"assist the President in the exercising of his powers and maps and in the public presentation of his responsibilities as he may order ; † and the Prime Minister was a mere caput of the Cabinet.†¢Further. the amendments instituted electoral reforms and provided that a natural born citizen of the Philippines who has lost his citizenship may be a transferee of private land for usage by him as his abode. The last amendments in 1984 abolished the Executive Committee and restored the place of Vice-President ( which did non be in the original. unamended 1973 Constitution ) . In existent pattern. while the 1973 Constitution was ideally supposed to put up a true parliamentary system. the late President Marcos had made usage of blind and use in order to maintain executive power for himself. instead than devolving executive powers to the Parliament. as headed by the Prime Minister. The terminal consequence was that the 1973 Constitution – due to all amendments and elusive uses – was simply the abolishment of the Senate and a series of decorative text-changes where the old American-derived nomenclatures such House of Representatives became known as the â€Å"Batasang Pambansa† ( National Assembly ) . Departments became known as â€Å"Ministries† . cabinet secretaries became known as â€Å"cabinet ministers† . and the President’s helper – the Executive Secretary – became known as the â€Å"Prime Minister. † Ultimately. Marcos’ alleged â€Å"Parliamentary System† hence functioned as an authoritarian-run Presidential System due to the series of amendments and other alterations put in topographic point after the 1973 Constitution was ratified. 1986 â€Å"Freedom Constitution† Following the EDSA People Power Revolution that removed President Ferdinand E. Marcos from office. the new President. Corazon C. Aquino issued Proclamation No. 3 as a probationary fundamental law to would fix for the following fundamental law. It adopted certain commissariats from the 1973 fundamental law and granted the President wide powers to reorganize the authorities and take functionaries from office. and mandated that the president would name a committee to outline a new fundamental law. refference/source ; # a B â€Å"The 1987 Fundamental law of the Republic of the Philippines† . 15 October 1986. hypertext transfer protocol: //www. thecorpusjuris. com/laws/constitutions/8-philippineconstitutions/70-1987-constitution. hypertext markup language. Retrieved 2008-04-03. # ^ Isagani Cruz ( 1993 ) . Constitutional Law. Quezon City. Philippines: Cardinal Lawbook Publishing Co. . Inc. . pp. 19. ISBN 971-16-0184-2. # ^ Joaquin Bernas. S. J. ( 1996 ) . The 1987 Constitution of the Republic of the Philippines: A Commentary. Manila. Philippines: Rex Book Store. pp. xxxiv-xxxix. ISBN 971-23-2013-8. # ^ â€Å"1986 Provisional â€Å"Freedom† Constitution of the Republic of the Philippines† . 25 March 1986. hypertext transfer protocol: //www. thecorpusjuris. com/laws/constitutions/8-philippineconstitutions/69-1986-constitution. hypertext markup language. Retrieved 2008-04-03. # ^ â€Å"Local Government Code of 1991† . 1 January 1992. hypertext transfer pr otocol: //www. chanrobles. com/localgov. htm. Retrieved 2007-06-09. # ^ â€Å"People vs. Tatud ( G. R. No. 144037 ) † . Supreme Court of the Philippines. 26 September 2003. hypertext transfer protocol: //www. supremecourt. gov. ph/jurisprudence/2003/sep2003/144037. htm. Retrieved 2007-06-09. # ^ â€Å"Pamatong vs. Comelec ( G. R. No. 161872 ) † . SupremeCourt of the Philippines. 13 April 2004. hypertext transfer protocol: //www. supremecourt. gov. ph/jurisprudence/2004/apr2004/161872. htm. Retrieved 2007-06-09. # ^ â€Å"Oposa et Al. v. Fulgencio ( G. R. No. 101083 ) † . Supreme Court of the Philippines ( requoted by Lawphil. cyberspace ) . 30 July 1993. hypertext transfer protocol: //www. lawphil. net/judjuris/juri1993/jul1993/gr_101083_1993. hypertext markup language. Retrieved 2007-06-09. # ^ Wikisource-logo. svg 1897 Constitution of Biak-na-Bato ( Philippines ) at Wikisource. # ^ â€Å"1897 Biac-na-Bato Constitution† . Corpus Juris. 1 November 1897. h ypertext transfer protocol: //www. thecorpusjuris. com/laws/constitutions/8-philippineconstitutions/300-1897-biac-na-bato-constitution. hypertext markup language? showall=1. Retrieved 2009-01-25. # ^ Tucker. Spencer C. ( 2009 ) . The encyclopaedia of the Spanish-American and Philippine-American wars: a political. societal. and military history. ABC-CLIO. p. 364. ISBN 9781851099511. hypertext transfer protocol: //books. Google. com/ ? id=8V3vZxOmHssC # ^ Guevara. Sulpico. erectile dysfunction ( 2005 ) . The Torahs of the first Philippine Republic ( the Torahs of Malolos ) 1898-1899. . Ann Arbor. Michigan: University of Michigan Library ( published 1972 ) . pp. 104–119. hypertext transfer protocol: //quod. lib. umich. edu/cgi/t/text/text-idx? c=philamer ; iel=1 ; view=toc ; idno=aab1246. 0001. 001. Retrieved 2008-03-26. ( English interlingual rendition by Sulpicio Guevara ) # ^ Guevara 2005. p. 88.

Salem witch trials and the crucible Movie Review

Salem witch trials and the crucible - Movie Review Example At the time when the idea of the â€Å"Crucible† was born in 1652, communism and racism had dominated most nations of the West. Towards the end of the 17th Century, the conception of Satanism and healing in God had masked the minds of most inhabitants of the world. This was also the period of great political change and conflicts among the landlords. Coincidentally, this was the century that ushered in the occurrence of the abnormal psychology, in particular, Hysteria. When Salem Witch Trial was first shot in the year 1692, it followed these trends of the ancient world and reflected the contemporary society in that light. During that time, the belief that witches had the supernatural powers to cause adverse harms to the human beings had been spread across the continent of Europe, New England in particular. Besides, the low class Puritan community was still going through a bitter aftermath of the war between France and British which occurred in the year 1689. Tension and trauma was still lingering in the minds of most residents of the ancient Salem village. The British war was not the only cause of fear in thi s solitary village; there was also an outbreak Smallpox which was not readily curable by that time. The lonely villagers of Salem also lived in a persistent fear of the attack from the neighboring communities. For the Salem inhabitants, this really a dark age from which only the extraordinary intervention of God could safely exit them The two movies, Salem Witch Trial and Crucible, were shot during this very time in history when human permittivity and racism formed the basis of life. These two movies vividly portray how witchcraft was alleged and severely punished by the cruel society. In Salem Witch Trial, young children who suffer from hysteria happened to envision very wild imaginations of witchcraft. Their parents, in reaction to these imaginations, point fingers at the suspects before establishing the

Marketing Essay Example | Topics and Well Written Essays - 500 words - 15

Marketing - Essay Example ographic and behavioral factors specifically computer and internet literacy and the costumers’ need for a more convenient and high quality education. Through the help of technology, the company is able to learn more about the interests and lifestyles of prospective customers. For instance, the company analyzes the online behavior of customers, finds out which affiliates send the most visitors, and tracks response to online promotion. The company also looks at the demographic factors of their previous and current students in order to know more about their prospective customers and employ effective marketing strategies to target them. As with any other business organization, Cyber Health has formulated its own marketing mix using the 4Ps-product, price, promotion, and place. Looking at the company’s marketing strategy, it can be seen that they are utilizing 4Ps which closely complement each other. In the surface, the company’s product is high quality medical education through the use of advanced technology. However, it can also be seen that the company is also selling convenience for students who are also preoccupied with other responsibilities. It should be noted that as opposed to the traditional educational system which handles thirty or more students in a class, Cyber Health gives a more customized product by letting the student study at his or her own pace and by giving exercises to the areas that each student needs most. In terms of pricing strategy, Cyber Health can afford to price more competitively due to the lower operational and administrative cost. As opposed to traditional institutions, promotions in the company are mostly online, from search engines and affiliates. The company also uses its accreditation from medical institutions to enhance its image. Cyber Health operates in the cyberspace and is not limited by geographic boundaries. Thus, the company can afford to serve almost all states in the

Take home final Exam Assignment Example | Topics and Well Written Essays - 1500 words

Take home final Exam - Assignment Example Section 2: Product 13: In the year 2012, FDA made public an examination into 5deaths, along with a heart attack supposedly tied to utilization of an energy drink known as Monster. The analysis was launched subsequent to the passing away of a girl who was 14 years old of a heart attack because of caffeine toxicity following the drinking of two twenty four ounce canisters of the energy drink referred to as Monster, which as one contains four hundred and eighty caffeine milligrams. That is the caffeine comparable to fourteen Coke cans. One thing is certain: it cannot harm to be additionally mindful of the caffeine utilization (Narins 2). While the caffeine tolerance relies on the person’s size and existing consumption practices, the Council of American Medical alliance on Scientific Affairs proposed that an individual ought to be not more than two hundred and fifty milligrams of caffeine, or approximately three 8-oz coffee cups each day. The American public is pushing to get the Monster energy drink restricted for the reason that energy drinks are believed to be dietary complements; their contents are not presently FDA regulated. A lot of the energy drinks together with Monster Energy drink not simply have extremely high caffeine degree, but they additionally mix them with extra herbs that have caffeine, for instance, guarana , as well as yerba mate, that have the capacity to cause noteworthy side effects (Narins 3). Section 3: Pricing 22: A gas model car of MSRP is known to cost 38,375 dollars, and measure it up to the same hybrid model proffered by the similar company at a bottom MSRP of 43,935 dollars. The hybrid representation costs 5560 dollars more. When one buys a hybrid car, one would anticipate to accumulate gasoline, in view of the fact that the car operates to some extent on electricity. Within the above instance, the typical, two-wheel-drive the year 2011 model's merged highway, as well as city probable fuel utilization is 21 miles for every gal lon. The similar replica with a hybrid locomotive has a probable combined 30 miles for every gallon gas mileage. If an individual plans to maintain the hybrid for more than a few years, his gas reserves would possibly recompense for the top sticker price, for the most part with a year's rapid boost in gasoline cost, if the individual would purchase approximately 728 gasoline gallons every year. In difference, for the hybrid, the individual would establish that the yearly gas acquisition would be of approximately 510 gallons. The individual would put aside 218 gas gallons each year when using the hybrid. Multiply the 218 gallons by a conventional 3.50 dollars a gallon of gas for every dollar reserves of 763 dollars. By choosing the hybrid instead of the normal model, a person would spend the $5,560 disparity in sticker cost within seven to around eight years. Therefore, in this instance, an individual would save cash either by disbursing full price, as well as utilizing the hybrid fo r eight years and more, or by utilizing it for three years and more than with a tariff credit. Section 4: Channels of distribution 24: The top five retailers within the globe take account of Wal-Mart, Kroger, Target, Walgreen, as well as Costco. All these retailers are from the United States of America. Walmart has 8,500 storehouses in

Financial Report and Analysis Research Paper Example | Topics and Well Written Essays - 1500 words

Financial Report and Analysis - Research Paper Example In 2012, it was ranked as the 2nd largest firm in terms of number of employees around which are around 435,000 globally, the 4th biggest firm in terms of market capitalization, the 9th most profitable company and the 19th in the list of highest revenue generating business. It has 12 laboratories and the company has on its credit record for creating the most patents for the consecutive 20 years. Overall industry sales are increasing globally since 2013. In the current year 2013-2014 sales are expected to increase by 6.5% and in the next year growth are expected to reach 7.5%. The expected growth rate is higher than the growth rate in the last two years that are 5.5% in 2012 and 0.4% in 2011. The impact of these expectations will definitely have positive impacts on the company in terms of growth in sales revenue and high profits as well as healthy cash flows (Stephen, 2013). There is a continuous decline in the sales revenue since last two years. It has gone down by 2% in 2012 and 4.55% in 2013. This decline is in contrast with the industry expectations mentioned above. The chairman of the company in her report to shareholders mentioned the reason for the decline that there in an adverse movement in the currency exchanges because it is operating in more than 170 countries around the world. Especially, there is a sharp decline of 4.2% in the revenue from Global Technology Services and 1olost 19% decline in revenue from Systems and Technology (IBM, 2013). In total, the net profit has declined by $121 millions in 2013 representing fall of 0.73%, but there is a continuous improvement in the net profit ratio since 2011. It has increased from 12.48% to 15.89% in 2012 and 16.52% in 2013. This year to year improvement is due to the effective controls over administrative expense for instance in total they decreased by $51 millions in 2013 as compared to last year, whereas, cost of sales is reasonably consistent as indicated by consistency in the gross profit

Book exam Essay Example | Topics and Well Written Essays - 500 words

Book exam - Essay Example A union was created and demands were drawn. For instance, since the law stated a fifty-four hour work week, they posed a fifteen percent increase in their wages. With all of these happening, the employers insisted on not granting the demands of the laborers since they are gearing up to cost reduction. I should say that the strike was brought about by a number of reasons. As mentioned earlier, their work states are meager. Then, they don’t receive support from their employers when it comes to their labor rights, in fact; they received deprivation and discrimination from them. Even their own local official responded callously to their demands, sending militia units instead of negotiating in a civil manner to them. They applied force to the workers, even to women and children. The upheaval caught the attention of several states that expressed apparent aversion to the employers’ treatment of the mill workers of Lawrence. Honesty in wealth acquisition is somehow unlikely, especially when they get a hold of it quickly. It is improbable to obtain affluence without hurting people, physically or emotionally and tweaking rules, thus resulting to corruption. Allegedly, this happens to officials sitting in power, since their influence is immense and sad to say, some of them are even rule makers. On Father James O’Reilly’s account on the strike that it is not about the wages instead it is a war against authority, religion and home and themselves, I’d say that the people were not Anti-American in a sense that most of them, to start with, is not born and raised in America. Most of them were immigrants counting on the thought that they will be treated fairly and lawfully. Another point is that they are performing the strike to improve the work conditions of the people, not only the ones working on the factory, but the entire working community. They have expressed their will to eliminate discrimination in the work place. Their participation in the

Organizational Development and Change Essay Example | Topics and Well Written Essays - 2500 words

Organizational Development and Change - Essay Example (Worley and Christopher, 2009:76) This paper analyses why climate change is classified to be a ‘super wicked’ problem, viable options for meaningful change and stakeholder engagement, how can we reach consensus on the global problem and the current state of the global players and their resistance to or acceptance of the problem in relation to organisational change. Global Climate Change as a Super Wicked Problem Climate Change resulting from human activity has been acknowledged as of the main problems affecting the world. It has been observed a remarkable effect on the natural and built environments (Horstmann, 2008). In general, global temperature has increased over the decades and this is mainly cause by human activity emanating from an increase in concentration of Green House Gases (GHG) in the atmosphere (Ainslie, 2001: 37). The present levels of GHG have reached the highest ever since the Industrial Revolution (Barkin, 2006: 59). In a move to evaluate the specific c hallenges facing the climate, we look at the tradition view of ‘wicked problems’. Wicked problems were viewed as lacking straightforward and simple solutions (Australian Public Service Commission, 2007: 23). However, recent studies have shown that climate change has more features than most ‘wicked problems’ thus qualifying it to be ‘a super wicked problem’. The policy characteristics are based on the features of adverse global climate change problems including, uncertainty, complexity and their long – term nature and the need for immediate intervention (Beinecke, 2009: 15). The characteristics of climate change as ‘a super wicked problem’ are explained as follows. First, there is no specific formulation of ‘a super wicked problem’ implying that we must establish the causes of the problems and its solutions in order to get a better understanding of the problem (Finegan, 2010: 123). Second, there is lack of a true solution to ‘a super wicked problem’ expressing that even though destructive human activity was stopped, there would be some level of climate change resulting from other factors. Third, ‘a super wicked problem’ is either good or bad not true or false. This is because for wicked problems, the quest is not to come up with the truth but rather to discover ways of mitigating the impact of climate change. Fourth, there is no sure or ultimate solution to ‘a super wicked problem’ as the proposed remedies may have negative effects that are not stated in advance. Fifth, all solutions to ‘a super wicked problem’ are a one shot activity and there is no chance to learn through trial and error, therefore, every attempt is considered to be important. Sixth, ‘a super wicked problem’ does not have a set of exhaustive solutions (Finegan, 2010: 123). The solutions to climate change are somewhat contested implying that there is no one s pecific solution that will stabilize GHG emission, it can only reduce it. Seventh, every ‘super wicked problem’ is considered to be unique. For instance, climate change varies across nations, communities and ecosystems (Lovejoy, 2005: 15). Eight, every wicked problem is observed to be connected to another (Frame, 2007: 1114). For example, climate change is viewed as a consequence of poor economic growth, failing institutions and population influx. Nine, the existence of ‘

Organization psychology and Behavior Essay Example | Topics and Well Written Essays - 750 words

Organization psychology and Behavior - Essay Example Organizational learning has become highly important in understanding the world of modern business. Due to rapid advancement in technology, new managerial styles, quick transfer of information and dynamically changing environment; it has become highly imperative for the companies to adapt the changes. In such a scenario, only the most flexible companies will be able to sustain themselves till the last. For organizations, it is equally important to learn from their past in order to excel successfully in the future. According to Peter Senge (1990), an organization should be a place where people should be given a chance to excel in order to acquire the desired results, where they should be encouraged to think out-of-the-box, where people should be given an opportunity to learn from their environment and where they should be transformed into role models for others to derive an inspiration. To fulfill his statement; Peter Senge has developed five basic disciplines of a learning organization. These five disciplines enable people to become more productive and more participative in their organization and also, it enables them to understand the reality of their present and shape their future in a more organized manner. It is considered as the conceptual foundation stone of Senge’s approach. This discipline provides a connection between the different parts that constitutes the entire structure of an organization. It enables the managers and the key staff to understand the different components of a system that builds up the entire infrastructure of an organization. Managers should focus on understanding that how these key components interacts with each other in order to attain long term success and goals. They should give importance on how these key components can impact on the system on long term basis. This discipline refers to an individual’s ability to expand and

HR-Faculty of Business Environment and Society Essay

HR-Faculty of Business Environment and Society - Essay Example The multinational corporations operate from their branches and headquarters spread all over the world to expand and enlarge their reach worldwide. And all these initiatives by the business firms have been supported and encouraged by the gifts of modern technology. This global presence of companies is essentially accompanied by the global presence of their human resource or rather the presence of a workforce that comprises people from different parts of the world. The functions of human resource management become more varied and complex when employees are located around the world. Apart from the factors such as technology, economic systems, legal frameworks and industrial relations, the cultural factors also assume great importance in the managing of a global workforce. And the most prominent manifestation of the cultural challenge is the diversity of modern workforce. The US workforce, for instance, has been increasing day by day in terms of its diversity. More and more women are joi ning the workforce. The majority of the existing workforce is gradually nearing old age. The number of immigrants has increased manifold over the past few years. People from different racial and religious background have come to form a part of the ever-increasing workforce of the USA, thus adding to its ethnic diversity. Thus the human resource in all transnational business endeavors has become increasingly diverse in terms of age, gender, ethnicity, culture, political views, physical abilities and psychological orientation. This paper aims to explore the different styles of managing and leading such a diverse workforce in the light of international human resource management. The term diversity used with respect to a workforce simply implies that the working population at the workplace is a heterogeneous mix of people in terms of age, gender, race, religion, culture, education, physical abilities and psychological make-up.

Nokia & Microsoft Alliance Essay Example for Free

Nokia Microsoft Alliance Essay Microsoft would in turn provide support to Nokia in selling its new Windows Phone powered smartphones. Nokia’s Canadian CEO, Stephen Elop, and Steve Ballmer, his Microsoft counterpart, announced that Nokia would make Windows Phone its main phone platform, a move that effectively confirms that Nokia’s own platforms, Symbian and MeeGo, were uncompetitive and they would be tossed onto the technology scrap heap. There were mixed reactions from analysts to the alliance between Nokia and Microsoft. The challenge before the senior management at Nokia and Microsoft was how to make the alliance work. Nokia once dominated the market for standard â€Å"feature phones† and smartphones, the Internetenabled, multi-media devices that are becoming must-have tools for the business and high-end consumer markets. But Nokia’s Symbian OS has not proved popular with consumers, who have been migrating en masse to Android and Apple phones. As a result, Nokia began to face severe competition from companies like Google, Inc. and Apple, Inc. ho entered the market for high-end smartphones after 2007. Analysts said Nokia’s poor focus on software and the lack of the latest OS on its smartphones were the main reasons for its declining market share in the last years. In the autumn of 2010, Nokia faced three choice: the first was to keep developing its own OS, Symbian and MeeGo; the second was to adopt Google’s Android system; and the third was to go with Microsoft. The first option was dropped because of the long lead times that would be required to update Symbian and get M eeGo launched. Android dropped off the list because of the difficulties they were facing in â€Å"differentiating [ourselves] in that ecosystem †¦ [Going with Google] would have felt a bit like giving up†. In the smartphone industry, an ecosystem is the association of hardware developers (in this case Nokia), software developers and the builders of applications, ecommerce, advertising, social applications, multimedia services and the like. The last option – the partnership with Microsoft – was considered the best option. As a result, in September 2010 Nokia’s board appointed a new CEO, Stephen Elop, who was a former executive at Microsoft, to bring more of a focus on software and put the basis of NokiaMicrosoft partnership. Referring to this partnership and the attempt to prevent Google’s Android 1 OS and the Apple’s iPhone from owning the entire smartphone market, Mr. Elop said that â€Å"this is now a three-horse race†. Seated next to Mr. Elop in a London hotel auditorium, Mr. Ballmer said â€Å"this partnership with Nokia will accelerate – dramatically accelerate – our Windows phone ecosystem†. However, the partnership did not impress investors, who drove down Nokia’s shares in Europe at the beginning of February 2011. Analysts said the plunge was in good part due to Nokia’s warning of â€Å"significant uncertainties† over how the changes would affect the Finish company’s performance. Soon after taking over as CEO of Nokia, Elop sent out a memo to the employees emphasizing the need to bring about drastic changes at the company. On the other hand, Mr. Elop said the partnership with Microsoft was only part of Nokia’s strategy to recapture market share and improve profitability in a viciously competitive market, meanwhile extensive firings at both the senior management and factory level were expected in various parts of the world, including Finland. In a Reuters report, Finland’s Economy Minister Mauri Pekkarinen said that Nokia’s restructuring after the partnership with Microsoft â€Å"is the biggest structural reform which has ever impacted new technology in Finland†. As a result of the partnership agreement, Nokia’s hefty research and development budget would also come down. The partnership with Microsoft will see the fledgling Windows Phone 7 platform become the dominant platform on Nokia phones. This means that Nokia will eventually cease shipping phones equipped with its workhorse Symbian system, though the company still expected to sell another 150-million products in 2011. Microsoft Phone 7 was launched in 2010 and the first phones with the OS arrived on the market in October 2010; still, the system’s market share is tiny – no more than 3 per cent.

Comparison of Aldi and Lidl

Comparison of Aldi and Lidl ABSTRACT The price war among supermarkets does really benefit the customers in recession time. But the major discount supermarkets like Aldi and Lidl cannot get the all grip on the retail markets as they had it at early stage. They are not able to maintain the position in the market as cheapest retailers because of tough competition from rivals. This project hopes to discuss some of the trends among major supermarkets like Tesco, Asda Sainsburys in pricing to compete with discount retailers such as Lidl and Aldi. It also focus on the strategies made by the mainstream supermarket chains to overcome the recession effects. Topic In the current economy, will the retail discounters loose out? A case study of Aldi and Lidl. Aim and Objectives Aims-Identify the Strength, weakness, opportunity and Threat of Aldi and Lidl to sustain as discount retailers in the current retail market. Objectives: Find out why people shop at Lidl and Aldi? Their perceptions of the brands, how often they come? How much they spend? To ascertain why Lidl and Aldi customer loyalty has diminished since the competitors changed the strategies. To evaluate the effectiveness of Lidl and Aldis recent repositioning strategies on their brand image Review of Literature: Scientific and technological revolution have shaped an effective and innovative business order .Since the source of information and information procedures have become rapid and convenient ,the business atmosphere has turn out to be more chaoetic.Consumers are showing their buying capacity with an expectation of high quality for reasonable price. As there are liberal policies, new products and services are launching every day in to the market. Information technology plays a crucial role in the business world with up dated information and rapid way of communication 1. Customer Behavior Customers are offered tremendous bundle of choices. Some people restricts their choices, becoming relationship oriented with some organization (Sheth and Parvatiyar, 1995) and have the potential to become long life customers. Customers life cycles are becoming increasingly transitory due to the severe impact of competitors action on existing relationships (Reinartz and Kumar, 2000). Consumer behaviour in retail sector is characterized by impulse purchasing and fickle customers (Newman and Patel, 2004).. This may do to the fact that customers do not experience any switching costs when changing their supplier (Reinartz and Kumar, 2000). Others exhibit switching behaviour in their shopping (Peterson, 1995) and split their purchases among several Table.1: Attributes of store image Most Frequently Cited Attribute Other Attributes 1. Merchandise: * Selection * Quality * Price * Styling 2. Service 3. Clientele 4. Physical facilities 5. Convenience 6. Promotion 7. Store atmosphere 8. Institutional 9. Post-Transaction 2. Brand: When a brand is communicated through advertising, packaging and merchandising, it aims to create confidence and minimise the purchasing risk to the consumer (Palmer, 1996). Such attributes, it is held, are particularly important when buying fashion products (de Chernatony and McDonald, 1992; Doyle, 1991). In brief, brand values provide a promise of sameness and predictability (Keller, 2003). Branding came to be understood as providing a unique mixture of benefits that satisfy rational needs, but also emotional ones, by facilitating and simplifying the consumers choice process through behavioural shortcuts, habit and perception. Successful brand is defined as a name, symbol, design or some combination of these, which identifies the à ¢Ã¢â€š ¬Ã‹Å"à ¢Ã¢â€š ¬Ã‹Å"product of a particular organisation as having a sustainable differential advantage (Schmitt, 1999). 3. Positioning To understand positioning from a customer perspective, it is important to explain what is positioning in marketing literature. Although the craft of positioning is a defining function of modern branding, the idea of positioning dates back to Classical Greece, with Platos assertion that memories evoke related memories, thus colouring interpretation (Warren, 1916). In the seventeenth and eighteenth centuries, the British empiricists elaborated the Aristotelian notion that ideas are stored in memory by association, developing the three à ¢Ã¢â€š ¬Ã…“Laws of Associationà ¢Ã¢â€š ¬Ã‚ ; similarity, contrast and contiguity. Discussion 1. Recession affecting the retailers. Here we will discuss about the recession and its affect on retail markets. As we know that we are running in the bad economic condition. So it gives us unemployment, lack of money, poverty, people go behind the cheap product..etc. in these situation we call it for recession. Recession participate everywhere around the world. In these situations people are scaring to spend their money in to business or market. 2. Current retail UK Market. In the current economic conditions the retail markets are trying to grab their customers giving different offers and products. Using cheap price and quality products are the priority for all retailers to the customers and it is the key factor to increase the business and survive the recession. Neil Saunders, the consulting director at Verdict, said: (telegraph nov 2009) We are now entering the most challenging period many retailers will have ever faced: the UK retail market is both mature and intensively competitive and that, combined with a slowdown in growth, means everyone will need to work much harder just to stand still. Andy bond Asda CEO (the marketing blog aug 2009) à ¢Ã¢â€š ¬Ã…“We be able to already see how changing attitudes are affecting customers shopping habits, Consumers are not prepared to pay a premium when they cannot taste the difference. The era of conspicuous consumption is besides.Saving money by cutting out waste of every part of kinds will be the priority. 3. Major discounters Aldi and Lidl The German chains Aldi and lidl are discount retailer and fight with the big four rivals called Tesco, Asda, sainsburey, and Morrisons. The two discounters have to do a lot of work while competing rivals. Aldi one of the retail company in UK and launched in 1990 and they have more than 300 stores across UK. the company called Aldi sell food, drinks, healthn and beauty product, sanitary items, baby product, and other cheap house hold items and wide variety of fruits and vegetables, including frozen food, fresh meats, fish, desserts, baked goods and alcohol, wines cheeseetc. the important thing that Aldi has concentrated products are own labelled or in other words own brand products and the other brand product or none Aldi products are limited. The store strong in cheapest products and it introduced from GERMANY. So the company typically use two similar brands for all category of the product. So this structure gives Aldi stores to be smaller than general supermarkets which cover the same range of products but with more variety. About the companys offer to the customer giving special offers per week, special buy deal offer a particular range of product like electronics and car accessorie s, cloths and house hold items, garden ,appliancesetc at bargain prices on Sundays and Thursdays (it might be for a week or available for limited products). à ¢Ã¢â€š ¬Ã‹Å" Aldi is able to offer deeply discounted prices on around 1,300 popular food items (a typical grocery store has 30,000) due to its various cost-cutting strategies. These include buying cheap land on the outskirts of towns and cities, building cheap warehouses, employing few staff, keeping store furnishings to a bare minimum and carrying mostly private-label items, which are displayed on pallets rather than shelves. The firm takes a fixed amount of money for carrier bags. Lidl the rivals of Aldi and the major discount supermarket store chain in UK. the store more aware about their customer and so the firm provides 800 different products. As i above mentioned about Aldi , Lidl has wide variety of their own brand products and the companies priority for leading brand for each category. Food, fresh produce, frozen foods, Italian cuisines, wines, home appliances and garden products including tools and planets are available from Lidl. These are the products known as à ¢Ã¢â€š ¬Ã‹Å"Specials and they offer to the customer low cost of frozen foods as well. à ¢Ã¢â€š ¬Ã…“Low-cost operating methods, such as avoiding expensive advertising, high-rent locations and a diverse-range of goods, have enabled it to challenge and even overtake its number one rivals in some European markets such as Franceà ¢Ã¢â€š ¬Ã‚ . Lidl can attract more customers in 2008 in the beginning of recession because most of the consumers especially middle class consumers started their shop ping at discount retailers like Aldi and Lidl. à ¢Ã¢â€š ¬Ã…“According to market research firm TNS, Lidl was the second most successful UK supermarket group over the busy Christmas period in 2008, with group sales far exceeding growth in the overall grocery sectorà ¢Ã¢â€š ¬Ã‚ . G Gavin (2008) describe à ¢Ã¢â€š ¬Ã…“When we visited Lidl stores across Europe, we noticed that new, improved ranges are being introduced across fresh and chilled categories. Ranges are far more tailored to national and even regional markets than in the past. Organics, healthy eating and fairtrade ranges have also been incorporated into the mix. And this strategy, too, is very much determined on a country by country basis, in line with key prevailing consumer trends. Clearly many of these elements are not unique to Lidl among its discounting peer group, but the combination of these is leading to the development of an increasingly compelling proposition, with the branded presence in-store a key differentiator from its largest rival Aldià ¢Ã¢â€š ¬Ã‚ . Now come to the point that the big four super markets battling towards the discounters like Aldi and Lidl.TNS world panel realise that the Aldi and Lidl sales from May to July 8.3 percent, 6.8 percent. But in the case of the big retailers achieved second quarter Morrison 9.5 percentage, Asda 8.1 percentage, waitrose8.2 percentage respectively. Paul (2009), Aldis UK Managing Director, blames à ¢Ã¢â€š ¬Ã…“some of the slowdown in growth on promotional activity from the brands, which has been à ¢Ã¢â€š ¬Ã…“pretty effectiveà ¢Ã¢â€š ¬Ã…“. Aldi does not sell the traditional big brandsà ¢Ã¢â€š ¬Ã‚ . The important things that the big four mainly concentrated in their sales called promotions, discount ranges, and advertising campaigns.etc. The Tescos promotion known as discounters, Asdas round pound, Sainsburys switch and save, Waitrose essential. Chris (2009) of TNS, said: The promotional activity the major multiples have put in place has stolen the wind out of the discounters sails . Waitroses Essentials range now accounts for 15 percent of the grocers salesà ¢Ã¢â€š ¬Ã‚ . Now the current economic down turn the consumer always looking for the promotions and discount sales. So the major discounters will be loose their sales until they started promotional activity from the traditional brands. Research methodology 1. Research Approach To understand the different research approach is in business research. These approaches can be mainly categorized as positivist and critical interpretive, qualitative and quantitative. Positivist and critical interpretive research Positivist paradigm believes in the view that the world is external and objective to the researcher, which is identical to the belief used in natural sciences. Positivist researchers are independent of the research being conducted and focus on description, uncovering facts and explanation .Researchers, then by using models and theories that they have created explains the behaviour on the grounds of the facts and observations The other position, known to us as the critical interpretive paradigm believes in the view that the world is constructed socially and is subjective. They also believe that reality does not exist outside the perceptions of people. Critical researchers are seen as a vital part of the researching process. Critical researchers attempt to discover understandings and discovery of the broad interrelationship in the circumstances they are researching. Qualitative and quantitative research: In qualitative research words are the units of analysis. Qualitative research tends to be associated with description. The data needed for qualitative analysis has to be gathered from interviews and questionnaires. Methods like ethnography will be used for the process of qualitative analysis and ethnographic data storage software will be used to store information. There are many advantages of using such software which will help store the data safely, the data can be coded easily, and retrieval of data will be more reliable. Computerization removes barriers and scales to the scale and complexity of analysis. There are virtually no clerical limits to how much stuff you get now, and few to how complex it is. (Richards and Richards 1993:40) Quantitative research Quantitative research tends to be associated with numbers, as the unit of analysis and it tends to be associated with statistical data. Charts and graphs have to be constructed from the figures and information gathered from the questionnaires and researches. Word processing and spreadsheet packages can be used for this purpose. Information in the form of numbers will be gathered from Different HR Mangers by using different data collection tools like questionnaires, review of previous documents etc. and the data will be used to construct meaningful figures and charts using software. Research Strategies Survey- Since the case study is on the basis of customer behaviour with a clear aim on customers perception of a particular brand, certainly the importance is set on primary data. The secondary data backed the primary data using appropriate hypothetical framework. The primary data will be collected using pre-designed questionnaire. Twelve questions were involved in the close ended questionnaire form with shoppers demographic outlines. Brand and Store loyalty measurement can be done by enquiring Lidl Aldi shoppers to rate definite qualities on predefined scales. Uni-polar scales will be utilized (Ajzen and Fishbein, 1980) starting from one all the way to five, places very low, low, average, high, and superb respectively. Former researchers, like James et a. (1976) have used the similar scaling methods while assessing attributes of a certain brand or store by implying how much a store is able to fulfil consumers expectation. In AldiLidl outlets in London where customers should be asked to rate the attributes with one hundred questionnaires.At least Eighty interviews will be carried out in London AldiLidl outlets. Since only AldiLidl shoppers participated, every questionnaire will be involved in the research. A detailed survey must be conducted. The data analysis could be created by using e SPSS12.O which is the data mining programme. Case study- This research is on the basis of case study since it discovers the individual behaviour of consumers in retail market.Research on the basis of case study is suitable since it covers the contextual situation and a broadly investigation other than a mere theoretical study.More over it is reliable as it provides multiple sources of information. In research, a familiar figure is used to study as it represents the whole concept with itself.Discount supermarket case studies are widely used in most of the UK institutes and research fields as it had a bright past with enormous brand loyalty by customers.,But now the scenario became different and it is facing more challenges to exist in the market. Explanatory study ÃÆ'ËÅ" On the basis of brand position and theory ÃÆ'ËÅ" Explaining fundamental connection of variables (correlation of style and shoppers customers visiting time) ÃÆ'ËÅ" Focusing circumstances for describing the connection among variables. Form of Presentation The dissertation will be presented in a written form supplemented with charts showing current and historical data Conclusion Aldi and Lidl the major discounters in UK, but the above mentioned information give us they are going to lose in current economic conditions. So the message give us the total picture about the current market, economic conditions, and the rivals in the current markets. References Geoffrey Moore, the business cycle research, Jon Gregory Taylor, investment timing and business cycle, john wiley sons publisher in 1997,p23 Gary marks john F. Maudlin, rocking wall street john wiley sons publisher in 2007, p92. Invstopedia forbes digital company(http://www.investopedia.com/terms/r/recession.asp) India dialy news paper(2007) (http://www.indiadaily.com/editorial/17492.asp) Bureau for Economic Research (BER) http://www.fastmoving.co.za/news-archive/retailer-news/retail-sector-faces-threat-of-recession http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/3368164/Tesco-most-likely-retailer-to-survive-recession.html Andy Bond CEO Asda http://www.themarketingblog.co.uk/e_article001292783.cfm Aldi http://www.supermarket.co.uk/aldi.html Lidl http://www.supermarket.co.uk/lidl.html Gavin Rothwell, senior business analyst, IGD, http://www.igd.com/index.asp?id=1fid=1sid=19tid=11cid=85 http://www.guardian.co.uk/business/2009/jul/24/aldi-lidl-sales-growth

Analysis of OECD Principles of Corporate Governance

Analysis of OECD Principles of Corporate Governance Foreword The OECD Principles of Corporate Governance were endorsed by OECD Ministers in 1999 and have since become an international benchmark for policy makers, investors, corporations and other stakeholders worldwide. They have advanced the corporate governance agenda and provided specific guidance for legislative and regulatory initiatives in both OECD and non OECD countries. The Financial Stability Forum has designated the Principles as one of the 12 key standards for sound financial systems. The Principles also provide the basis for an extensive programme of cooperation between OECD and non-OECD countries and underpin the corporate governance component of World Bank/IMF Reports on the Observance of Standards and Codes (ROSC). The Principles have now been thoroughly reviewed to take account of recent developments and experiences in OECD member and non-member countries. Policy makers are now more aware of the contribution good corporate governance makes to financial market stability, invest ment and economic growth. Companies better understand how good corporate governance contributes to their competitiveness. Investors especially collective investment institutions and pension funds acting in a fiduciary capacity realise they have a role to play in ensuring good corporate governance practices, thereby underpinning the value of their investments. In todays economies, interest in corporate governance goes beyond that of shareholders in the performance of individual companies. As companies play a pivotal role in our economies and we rely increasingly on private sector institutions to manage personal savings and secure retirement incomes, good corporate governance is important to broad and growing segments of the population. The review of the Principles was undertaken by the OECD Steering Group on Corporate Governance under a mandate from OECD Ministers in 2002. The review was supported by a comprehensive survey of how member countries addressed the different corporate governance challenges they faced. It also drew on experiences in economies outside the OECD area where the OECD, in co-operation with the World Bank and other sponsors, organises Regional Corporate Governance Roundtables to support regional reform efforts. The review process benefited from contributions from many parties. Key international institutions participated and extensive consultations were held with the private sector, labour, civil society and representatives from non-OECD countries. The process also benefited greatly from the insights of internationally recognised experts who participated in two high level informal gatherings I convened. Finally, many constructive suggestions were received when a draft of the Principles was made available for public comment on the internet. The Principles are a living instrument offering non-binding standards and good practices as well as guidance on implementation, which can be adapted to the specific circumstances of individual countries and regions. The OECD offers a forum for ongoing dialogue and exchange of experiences among member and non-member countries. To stay abreast of constantly changing circumstances, the OECD will closely follow developments in corporate governance, identifying trends and seeking remedies to new challenges. These Revised Principles will further reinforce OECDs contribution and commitment to collective efforts to strengthen the fabric of corporate governance around the world in the years ahead. This work will not eradicate criminal activity, but such activity will be made more difficult as rules and regulations are adopted in accordance with the Principles. Importantly, our efforts will also help develop a culture of values for professional an d ethical behaviour on which well functioning markets depend. Trust and integrity play an essential role in economic life and for the sake of business and future prosperity we have to make sure that they are properly rewarded. OECD Principles of Corporate Governance The OECD Principles of Corporate Governance were originally developed in response to a call by the OECD Council Meeting at Ministerial level on 27-28 April 1998, to develop, in conjunction with national governments, other relevant international organisations and the private sector, a set of corporate governance standards and guidelines. Since the Principles were agreed in 1999, they have formed the basis for corporate governance initiatives in both OECD and non-OECD countries alike. Moreover, they have been adopted as one of the Twelve Key Standards for Sound Financial Systems by the Financial Stability Forum. Accordingly, they form the basis of the corporate governance component of the World Bank/IMF Reports on the Observance of Standards and Codes (ROSC). The OECD Council Meeting at Ministerial Level in 2002 agreed to survey developments in OECD countries and to assess the Principles in light of developments in corporate governance. This task was entrusted to the OECD Steering Group on Corporate Governance, which comprises representatives from OECD countries. In addition, the World Bank, the Bank for International Settlements (BIS) and the International Monetary Fund (IMF) were observers to the Group. For the assessment, the Steering Group also invited the Financial Stability Forum, the Basel Committee, and the International Organization of Securities Commissions (IOSCO) as ad hoc observers. In its review of the Principles, the Steering Group has undertaken comprehensive consultations and has prepared with the assistance of members the Survey of Developments in OECD Countries. The consultations have included experts from a large number of countries which have participated in the Regional Corporate Governance Roundtables that the OECD organises in Russia, Asia, South East Europe, Latin America and Eurasia with the support of the Global Corporate Governance Forum and others, and in co-operation with the World Bank and other non-OECD countries as well. Moreover, the Steering Group has consulted a wide range of interested parties such as the business sector, investors, professional groups at national and international levels, trade unions, civil society organisations and international standard setting bodies. A draft version of the Principles was put on the OECD website for public comment and resulted in a large number of responses. These have been made public on the OECD we b site. On the basis of the discussions in the Steering Group, the Survey and the comments received during the wide ranging consultations, it was concluded that the 1999 Principles should be revised to take into account new developments and concerns. It was agreed that the revision should be pursued with a view to maintaining a non-binding principles-based approach, which recognises the need to adapt implementation to varying legal economic and cultural circumstances. The revised Principles contained in this document thus build upon a wide range of experience not only in the OECD area but also in non-OECD countries. Preamble The Principles are intended to assist OECD and non-OECD governments in their efforts to evaluate and improve the legal, institutional and regulatory framework for corporate governance in their countries, and to provide guidance and suggestions for stock exchanges, investors, corporations, and other parties that have a role in the process of developing good corporate governance. The Principles focus on publicly traded companies, both financial and non-financial. However, to the extent they are deemed applicable, they might also be a useful tool to improve corporate governance in non-traded companies, for example, privately held and stateowned enterprises. The Principles represent a common basis that OECD member countries consider essential for the development of good governance practices. They are intended to be concise, understandable and accessible to the international community. They are not intended to substitute for government, semi-government or private sector initiatives to dev elop more detailed best practice in corporate governance. Increasingly, the OECD and its member governments have recognized the synergy between macroeconomic and structural policies in achieving fundamental policy goals. Corporate governance is one key element in improving economic efficiency and growth as well as enhancing investor confidence. Corporate governance involves a set of relationships between a companys management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders and should facilitate effective monitoring. The presence of an effective corporate governance system, within an individual company and across an economy as a whole, helps to provide a degree of confidence that is necessary for the proper functioning of a market economy. As a result, the cost of capital is lower and firms are encouraged to use resources more efficiently, thereby underpinning growth. Corporate governance is only part of the larger economic context in which firms operate that includes, for example, macroeconomic policies and the degree of competition in product and factor markets. The corporate governance framework also depends on the legal, regulatory, and institutional environment. In addition, factors such as business ethics and corporate awareness of the environmental and societal interests of the communities in which a company operates can also have an impact on its reputation and its long-term success. While a multiplicity of factors affect the governance and decisionmaking processes of firms, and are important to their long-term success, the Principles focus on governance problems that result from the separation of ownership and control. However, this is not simply an issue of the relationship between shareholders and management, although that is indeed the central element. In some jurisdictions, governance issues also arise from the power of certain controlling shareholders over minority shareholders. In other countries, employees have important legal rights irrespective of their ownership rights. The Principles therefore have to be complementary to a broader approach to the operation of checks and balances. Some of the other issues relevant to a companys decision-making processes, such as environmental, anti-corruption or ethical concerns, are taken into account but are treated more explicitly in a number of other OECD instruments (including the Guidelines for Multinational Ente rprises and the Convention on Combating Bribery of Foreign Public Officials in International Transactions) and the instruments of other international organisations. Corporate governance is affected by the relationships among participants in the governance system. Controlling shareholders, which may be individuals, family holdings, bloc alliances, or other corporations acting through a holding company or cross shareholdings, can significantly influence corporate behaviour. As owners of equity, institutional investors are increasingly demanding a voice in corporate governance in some markets. Individual shareholders usually do not seek to exercise governance rights but may be highly concerned about obtaining fair treatment from controlling shareholders and management. Creditors play an important role in a number of governance systems and can serve as external monitors over corporate performance. Employees and other stakeholders play an important role in contributing to the long-term success and performance of the corporation, while governments establish the overall institutional and legal framework for corporate governance. The role of each of the se participants and their interactions vary widely among OECD countries and among non- OECD countries as well. These relationships are subject, in part, to law and regulation and, in part, to voluntary adaptation and, most importantly, to market forces. The degree to which corporations observe basic principles of good corporate governance is an increasingly important factor for investment decisions. Of particular relevance is the relation between corporate governance practices and the increasingly international character of investment. International flows of capital enable companies to access financing from a much larger pool of investors. If countries are to reap the full benefits of the global capital market, and if they are to attract long-term patient capital, corporate governance arrangements must be credible, well understood across borders and adhere to internationally accepted principles. Even if corporations do not rely primarily on foreign sources of capital, adherence to good corporate governance practices will help improve the confidence of domestic investors, reduce the cost of capital, underpin the good functioning of financial markets, and ultimately induce more stable sources of financing. There is no single model of good corporate governance. However, work carried out in both OECD and non-OECD countries and within the Organisation has identified some common elements that underlie good corporate governance. The Principles build on these common elements and are formulated to embrace the different models that exist. For example, they do not advocate any particular board structure and the term board as used in this document is meant to embrace the different national models of board structures found in OECD and non-OECD countries. In the typical two tier system, found in some countries, board as used in the Principles refers to the supervisory board while key executives refers to the management board. In systems where the unitary board is overseen by an internal auditors body, the principles applicable to the board are also, mutatis mutandis, applicable. The terms corporation and company are used interchangeably in the text. The Principles are non-binding and do not aim at detailed prescriptions for national legislation. Rather, they seek to identify objectives and suggest various means for achieving them. Their purpose is to serve as a reference point. They can be used by policy makers as they examine and develop the legal and regulatory frameworks for corporate governance that reflect their own economic, social, legal and cultural circumstances, and by market participants as they develop their own practices. The Principles are evolutionary in nature and should be reviewed in light of significant changes in circumstances. To remain competitive in a changing world, corporations must innovate and adapt their corporate governance practices so that they can meet new demands and grasp new opportunities. Similarly, governments have an important responsibility for shaping an effective regulatory framework that provides for sufficient flexibility to allow markets to function effectively and to respond to expectations of shareholders and other stakeholders. It is up to governments and market participants to decide how to apply these Principles in developing their own frameworks for corporate governance, taking into account the costs and benefits of regulation. The following document is divided into two parts. The Principles presented in the first part of the document cover the following areas: I) Ensuring the basis for an effective corporate governance framework; II) The rights of shareholders and key ownership functions; III) The equitable treatment of shareholders; IV) The role of stakeholders; V) Disclosure and transparency; and VI) The responsibilities of the board. Each of the sections is headed by a single Principle that appears in bold italics and is followed by a number of supporting sub-principles. In the second part of the document, the Principles are supplemented by annotations that contain commentary on the Principles and are intended to help readers understand their rationale. The annotations may also contain descriptions of dominant trends and offer alternative implementation methods and examples that may be useful in making the Principles operational. Shareholders should be furnished with sufficient and timely information concerning the date, location and agenda of general meetings, as well as full and timely information regarding the issues to be decided at the meeting. Shareholders should have the opportunity to ask questions to the board, including questions relating to the annual external audit, to place items on the agenda of general meetings, and to propose resolutions, subject to reasonable limitations. Effective shareholder participation in key corporate governance decisions, such as the nomination and election of board members, should be facilitated. Shareholders should be able to make their views known on the remuneration policy for board members and key executives. The equity component of compensation schemes for board members and employees should be subject to shareholder approval. Ensuring the Basis for an Effective Corporate Governance Framework The corporate governance framework should promote transparent and efficient markets, be consistent with the rule of law and clearly articulate the division of responsibilities among different supervisory, regulatory and enforcement authorities. To ensure an effective corporate governance framework, it is necessary that an appropriate and effective legal, regulatory and institutional foundation is established upon which all market participants can rely in establishing their private contractual relations. This corporate governance framework typically comprises elements of legislation, regulation, selfregulatory arrangements, voluntary commitments and business practices that are the result of a countrys specific circumstances, history and tradition. The desirable mix between legislation, regulation, self-regulation, voluntary standards, etc. in this area will therefore vary from country to country. As new experiences accrue and business circumstances change, the content and structure of this framework might need to be adjusted. Countries seeking to implement the Principles should monitor their corporate governance framework, including regulatory and listing requirements and business practices, with the objective of maintaining and strengthening its contribution to market integrity and economic performance. As part of this, it is important to take into account the interactions and complementarity between different elements of the corporate governance framework and its overall ability to promote ethical, responsible and transparent corporate governance practices. Such analysis should be viewed as an important tool in the process of developing an effective corporate governance framework. To this end, effective and continuous consultation with the public is an essential element that is widely regarded as good practice. Moreover, in developing a corporate governance framework in each jurisdiction, national legislators and regulators should duly consider the need for, and the results from, effective international dialogue and cooperation. If these conditions are met, the governance system is more likely to avoid over-regulation, support the exercise of entrepreneurship and limit the risks of damaging conflicts of interest in both the private sector and in public institutions. The corporate governance framework should be developed with a view to its impact on overall economic performance, market integrity and the incentives it creates for market participants and the promotion of transparent and efficient markets. The corporate form of organisation of economic activity is a powerful force for growth. The regulatory and legal environment within which corporations operate is therefore of key importance to overall economic outcomes. Policy makers have a responsibility to put in place a framework that is flexible enough to meet the needs of corporations operating in widely different circumstances, facilitating their development of new opportunities to create value and to determine the most efficient deployment of resources. To achieve this goal, policy makers should remain focussed on ultimate economic outcomes and when considering policy options, they will need to undertake an analysis of the impact on key variables that affect the functioning of markets, such as incentive structures, the efficiency of self-regulatory systems and dealing with systemic conflicts of interest. Transparent and efficient markets serve to discipline market participants and to promote accountability. The legal and regulatory requirements that affect corporate governance practices in a jurisdiction should be consistent with the rule of law, transparent and enforceable. If new laws and regulations are needed, such as to deal with clear cases of market imperfections, they should be designed in a way that makes them possible to implement and enforce in an efficient and even handed manner covering all parties. Consultation by government and other regulatory authorities with corporations, their representative organisations and other stakeholders, is an effective way of doing this. Mechanisms should also be established for parties to protect their rights. In order to avoid over-regulation, unenforceable laws, and unintended consequences that may impede or distort business dynamics, policy measures should be designed with a view to their overall costs and benefits. Such assessments should take into account the need for effective enforcement, including the ability of authorities to deter dishonest behaviour and to impose effective sanctions for violations. Corporate governance objectives are also formulated in voluntary codes and standards that do not have the status of law or regulation. While such codes play an important role in improving corporate governance arrangements, they might leave shareholders and other stakeholders with uncertainty concerning their status and implementation. When codes and principles are used as a national standard or as an explicit substitute for legal or regulatory provisions, market credibility requires that their status in terms of coverage, implementation, compliance and sanctions is clearly specified. The division of responsibilities among different authorities in a jurisdiction should be clearly articulated and ensure that the public interest is served. Corporate governance requirements and practices are typically influenced by an array of legal domains, such as company law, securities regulation, accounting and auditing standards, insolvency law, contract law, labour law and tax law. Under these circumstances, there is a risk that the variety of legal influences may cause unintentional overlaps and even conflicts, which may frustrate the ability to pursue key corporate governance objectives. It is important that policy-makers are aware of this risk and take measures to limit it. Effective enforcement also requires that the allocation of responsibilities for supervision, implementation and enforcement among different authorities is clearly defined so that the competencies of complementary bodies and agencies are respected and used most effectively. Overlapping and perhaps contradictory regulations between national jurisdictions is also an issue that should be monitored so that no regulatory vacuum is allowed to develop (i.e. issues slipping through in which no authority has explicit responsibility) and to minimise the cost of compliance with multiple systems by corporations. When regulatory responsibilities or oversight are delegated to non-public bodies, it is desirable to explicitly assess why, and under what circumstances, such delegation is desirable. It is also essential that the governance structure of any such delegated institution be transparent and encompass the public interest. Supervisory, regulatory and enforcement authorities should have the authority, integrity and resources to fulfil their duties in a professional and objective manner. Moreover, their rulings should be timely, transparent and fully explained. Regulatory responsibilities should be vested with bodies that can pursue their functions without conflicts of interest and that are subject to judicial review. As the number of public companies, corporate events and the volume of disclosures increase, the resources of supervisory, regulatory and enforcement authorities may come under strain. As a result, in order to follow developments, they will have a significant demand for fully qualified staff to provide effective oversight and investigative capacity which will need to be appropriately funded. The ability to attract staff on competitive terms will enhance the quality and independence of supervision and enforcement. The Rights of Shareholders and Key Ownership Functions The corporate governance framework should protect and facilitate the exercise of shareholders rights. Equity investors have certain property rights. For example, an equity share in a publicly traded company can be bought, sold, or transferred. An equity share also entitles the investor to participate in the profits of the corporation, with liability limited to the amount of the investment. In addition, ownership of an equity share provides a right to information about the corporation and a right to influence the corporation, primarily by participation in general shareholder meetings and by voting. As a practical matter, however, the corporation cannot be managed by shareholder referendum. The shareholding body is made up of individuals and institutions whose interests, goals, investment horizons and capabilities vary. Moreover, the corporations management must be able to take business decisions rapidly. In light of these realities and the complexity of managing the corporations affairs in fast moving and ever changing markets, shareholders are not expected to assume responsibility fo r managing corporate activities. The responsibility for corporate strategy and operations is typically placed in the hands of the board and a management team that is selected, motivated and, when necessary, replaced by the board. Shareholders rights to influence the corporation centre on certain fundamental issues, such as the election of board members, or other means of influencing the composition of the board, amendments to the companys organic documents, approval of extraordinary transactions, and other basic issues as specified in company law and internal company statutes. This Section can be seen as a statement of the most basic rights of shareholders, which are recognised by law in virtually all OECD countries. Additional rights such as the approval or election of auditors, direct nomination of board members, the ability to pledge shares, the approval of distributions of profits, etc., can be found in various jurisdictions. Basic shareholder rights should include the right to: 1) secure methods of ownership registration; 2) convey or transfer shares; 3) obtain relevant and material information on the corporation on a timely and regular basis; 4) participate and vote in general shareholder meetings; 5) elect and remove members of the board; and 6) share in the profits of the corporation. Shareholders should have the right to participate in, and to be sufficiently informed on, decisions concerning fundamental corporate changes such as: 1) amendments to the statutes, or articles of incorporation or similar governing documents of the company; 2) the authorisation of additional shares; and 3) extraordinary transactions, including the transfer of all or substantially all assets, that in effect result in the sale of the company. The ability of companies to form partnerships and related companies and to transfer operational assets, cash flow rights and other rights and obligations to them is important for business flexibility and for delegating accountability in complex organisations. It also allows a company to divest itself of operational assets and to become only a holding company. However, without appropriate checks and balances such possibilities may also be abused. Shareholders should have the opportunity to participate effectively and vote in general shareholder meetings and should be informed of the rules, including voting procedures, that govern general shareholder meetings: Shareholders should be furnished with sufficient and timely information concerning the date, location and agenda of general meetings, as well as full and timely information regarding the issues to be decided at the meeting. Shareholders should have the opportunity to ask questions to the board, including questions relating to the annual external audit, to place items on the agenda of general meetings, and to propose esolutions, subject to reasonable limitations. In order to encourage shareholder participation in general meetings, some companies have improved the ability of shareholders to place items on the agenda by simplifying the process of filing amendments and resolutions.Improvements have also been made in order to make it easier for shareholders to submit questions in advance of the general meeting and to obtain replies from management and board members. Shareholders should also be able to ask questions relating to the external audit report. Companies are justified in assuring that abuses of such opportunities do not occur. It is reasonable, for example, to require that in order for shareholder resolutions to be placed on the agenda, they need to be supported by shareholders holding a specified market value or percentage of shares or voting rights. This threshold should be determined taking into account the degree of ownership concentration, in order to ensure that minority shareholders are not effectively prevented from putting any i tems on the agenda. Shareholder resolutions that are approved and fall within the competence of the shareholders meeting should be addressed by the board. Effective shareholder participation in key corporate governance decisions, such as the nomination and election of board members, should be facilitated. Shareholders should be able to make their views known on the remuneration policy for board members and key executives. The equity component of compensation schemes for board members and employees should be subject to shareholder approval. To elect the members of the board is a basic shareholder right. For the election process to be effective, shareholders should be able to participate in the nomination of board members and vote on individual nominees or on different lists of them. To this end, shareholders have access in a number of countries to the companys proxy materials which are sent to shareholders, although sometimes subject to conditions to prevent abuse. With respect to nomination of candidates, boards in many companies have established nomination committees to ensure proper compliance with established nomination procedures and to facilitate and coordinate the search for a balanced and qualified board. It is increasingly regarded as good practice in many countries for independent board members to have a key role on this committee. To further improve the selection process, the Principles also call for full disclosure of the experience and background of candidates for the board and the nomination process, which will allow an informed assessment of the abilities and suitability of each candidate. The Principles call for the disclosure of remuneration policy by the board. In particular, it is important for shareholders to know the specific link between remuneration and company performance when they assess the capability of the board and the qualities they should seek in nominees for the board. Although board and executive contracts are not an appropriate subject for approval by the general meeting of shareholders, there should be a means by which they can express their views. Several countries have introd Analysis of OECD Principles of Corporate Governance Analysis of OECD Principles of Corporate Governance Foreword The OECD Principles of Corporate Governance were endorsed by OECD Ministers in 1999 and have since become an international benchmark for policy makers, investors, corporations and other stakeholders worldwide. They have advanced the corporate governance agenda and provided specific guidance for legislative and regulatory initiatives in both OECD and non OECD countries. The Financial Stability Forum has designated the Principles as one of the 12 key standards for sound financial systems. The Principles also provide the basis for an extensive programme of cooperation between OECD and non-OECD countries and underpin the corporate governance component of World Bank/IMF Reports on the Observance of Standards and Codes (ROSC). The Principles have now been thoroughly reviewed to take account of recent developments and experiences in OECD member and non-member countries. Policy makers are now more aware of the contribution good corporate governance makes to financial market stability, invest ment and economic growth. Companies better understand how good corporate governance contributes to their competitiveness. Investors especially collective investment institutions and pension funds acting in a fiduciary capacity realise they have a role to play in ensuring good corporate governance practices, thereby underpinning the value of their investments. In todays economies, interest in corporate governance goes beyond that of shareholders in the performance of individual companies. As companies play a pivotal role in our economies and we rely increasingly on private sector institutions to manage personal savings and secure retirement incomes, good corporate governance is important to broad and growing segments of the population. The review of the Principles was undertaken by the OECD Steering Group on Corporate Governance under a mandate from OECD Ministers in 2002. The review was supported by a comprehensive survey of how member countries addressed the different corporate governance challenges they faced. It also drew on experiences in economies outside the OECD area where the OECD, in co-operation with the World Bank and other sponsors, organises Regional Corporate Governance Roundtables to support regional reform efforts. The review process benefited from contributions from many parties. Key international institutions participated and extensive consultations were held with the private sector, labour, civil society and representatives from non-OECD countries. The process also benefited greatly from the insights of internationally recognised experts who participated in two high level informal gatherings I convened. Finally, many constructive suggestions were received when a draft of the Principles was made available for public comment on the internet. The Principles are a living instrument offering non-binding standards and good practices as well as guidance on implementation, which can be adapted to the specific circumstances of individual countries and regions. The OECD offers a forum for ongoing dialogue and exchange of experiences among member and non-member countries. To stay abreast of constantly changing circumstances, the OECD will closely follow developments in corporate governance, identifying trends and seeking remedies to new challenges. These Revised Principles will further reinforce OECDs contribution and commitment to collective efforts to strengthen the fabric of corporate governance around the world in the years ahead. This work will not eradicate criminal activity, but such activity will be made more difficult as rules and regulations are adopted in accordance with the Principles. Importantly, our efforts will also help develop a culture of values for professional an d ethical behaviour on which well functioning markets depend. Trust and integrity play an essential role in economic life and for the sake of business and future prosperity we have to make sure that they are properly rewarded. OECD Principles of Corporate Governance The OECD Principles of Corporate Governance were originally developed in response to a call by the OECD Council Meeting at Ministerial level on 27-28 April 1998, to develop, in conjunction with national governments, other relevant international organisations and the private sector, a set of corporate governance standards and guidelines. Since the Principles were agreed in 1999, they have formed the basis for corporate governance initiatives in both OECD and non-OECD countries alike. Moreover, they have been adopted as one of the Twelve Key Standards for Sound Financial Systems by the Financial Stability Forum. Accordingly, they form the basis of the corporate governance component of the World Bank/IMF Reports on the Observance of Standards and Codes (ROSC). The OECD Council Meeting at Ministerial Level in 2002 agreed to survey developments in OECD countries and to assess the Principles in light of developments in corporate governance. This task was entrusted to the OECD Steering Group on Corporate Governance, which comprises representatives from OECD countries. In addition, the World Bank, the Bank for International Settlements (BIS) and the International Monetary Fund (IMF) were observers to the Group. For the assessment, the Steering Group also invited the Financial Stability Forum, the Basel Committee, and the International Organization of Securities Commissions (IOSCO) as ad hoc observers. In its review of the Principles, the Steering Group has undertaken comprehensive consultations and has prepared with the assistance of members the Survey of Developments in OECD Countries. The consultations have included experts from a large number of countries which have participated in the Regional Corporate Governance Roundtables that the OECD organises in Russia, Asia, South East Europe, Latin America and Eurasia with the support of the Global Corporate Governance Forum and others, and in co-operation with the World Bank and other non-OECD countries as well. Moreover, the Steering Group has consulted a wide range of interested parties such as the business sector, investors, professional groups at national and international levels, trade unions, civil society organisations and international standard setting bodies. A draft version of the Principles was put on the OECD website for public comment and resulted in a large number of responses. These have been made public on the OECD we b site. On the basis of the discussions in the Steering Group, the Survey and the comments received during the wide ranging consultations, it was concluded that the 1999 Principles should be revised to take into account new developments and concerns. It was agreed that the revision should be pursued with a view to maintaining a non-binding principles-based approach, which recognises the need to adapt implementation to varying legal economic and cultural circumstances. The revised Principles contained in this document thus build upon a wide range of experience not only in the OECD area but also in non-OECD countries. Preamble The Principles are intended to assist OECD and non-OECD governments in their efforts to evaluate and improve the legal, institutional and regulatory framework for corporate governance in their countries, and to provide guidance and suggestions for stock exchanges, investors, corporations, and other parties that have a role in the process of developing good corporate governance. The Principles focus on publicly traded companies, both financial and non-financial. However, to the extent they are deemed applicable, they might also be a useful tool to improve corporate governance in non-traded companies, for example, privately held and stateowned enterprises. The Principles represent a common basis that OECD member countries consider essential for the development of good governance practices. They are intended to be concise, understandable and accessible to the international community. They are not intended to substitute for government, semi-government or private sector initiatives to dev elop more detailed best practice in corporate governance. Increasingly, the OECD and its member governments have recognized the synergy between macroeconomic and structural policies in achieving fundamental policy goals. Corporate governance is one key element in improving economic efficiency and growth as well as enhancing investor confidence. Corporate governance involves a set of relationships between a companys management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders and should facilitate effective monitoring. The presence of an effective corporate governance system, within an individual company and across an economy as a whole, helps to provide a degree of confidence that is necessary for the proper functioning of a market economy. As a result, the cost of capital is lower and firms are encouraged to use resources more efficiently, thereby underpinning growth. Corporate governance is only part of the larger economic context in which firms operate that includes, for example, macroeconomic policies and the degree of competition in product and factor markets. The corporate governance framework also depends on the legal, regulatory, and institutional environment. In addition, factors such as business ethics and corporate awareness of the environmental and societal interests of the communities in which a company operates can also have an impact on its reputation and its long-term success. While a multiplicity of factors affect the governance and decisionmaking processes of firms, and are important to their long-term success, the Principles focus on governance problems that result from the separation of ownership and control. However, this is not simply an issue of the relationship between shareholders and management, although that is indeed the central element. In some jurisdictions, governance issues also arise from the power of certain controlling shareholders over minority shareholders. In other countries, employees have important legal rights irrespective of their ownership rights. The Principles therefore have to be complementary to a broader approach to the operation of checks and balances. Some of the other issues relevant to a companys decision-making processes, such as environmental, anti-corruption or ethical concerns, are taken into account but are treated more explicitly in a number of other OECD instruments (including the Guidelines for Multinational Ente rprises and the Convention on Combating Bribery of Foreign Public Officials in International Transactions) and the instruments of other international organisations. Corporate governance is affected by the relationships among participants in the governance system. Controlling shareholders, which may be individuals, family holdings, bloc alliances, or other corporations acting through a holding company or cross shareholdings, can significantly influence corporate behaviour. As owners of equity, institutional investors are increasingly demanding a voice in corporate governance in some markets. Individual shareholders usually do not seek to exercise governance rights but may be highly concerned about obtaining fair treatment from controlling shareholders and management. Creditors play an important role in a number of governance systems and can serve as external monitors over corporate performance. Employees and other stakeholders play an important role in contributing to the long-term success and performance of the corporation, while governments establish the overall institutional and legal framework for corporate governance. The role of each of the se participants and their interactions vary widely among OECD countries and among non- OECD countries as well. These relationships are subject, in part, to law and regulation and, in part, to voluntary adaptation and, most importantly, to market forces. The degree to which corporations observe basic principles of good corporate governance is an increasingly important factor for investment decisions. Of particular relevance is the relation between corporate governance practices and the increasingly international character of investment. International flows of capital enable companies to access financing from a much larger pool of investors. If countries are to reap the full benefits of the global capital market, and if they are to attract long-term patient capital, corporate governance arrangements must be credible, well understood across borders and adhere to internationally accepted principles. Even if corporations do not rely primarily on foreign sources of capital, adherence to good corporate governance practices will help improve the confidence of domestic investors, reduce the cost of capital, underpin the good functioning of financial markets, and ultimately induce more stable sources of financing. There is no single model of good corporate governance. However, work carried out in both OECD and non-OECD countries and within the Organisation has identified some common elements that underlie good corporate governance. The Principles build on these common elements and are formulated to embrace the different models that exist. For example, they do not advocate any particular board structure and the term board as used in this document is meant to embrace the different national models of board structures found in OECD and non-OECD countries. In the typical two tier system, found in some countries, board as used in the Principles refers to the supervisory board while key executives refers to the management board. In systems where the unitary board is overseen by an internal auditors body, the principles applicable to the board are also, mutatis mutandis, applicable. The terms corporation and company are used interchangeably in the text. The Principles are non-binding and do not aim at detailed prescriptions for national legislation. Rather, they seek to identify objectives and suggest various means for achieving them. Their purpose is to serve as a reference point. They can be used by policy makers as they examine and develop the legal and regulatory frameworks for corporate governance that reflect their own economic, social, legal and cultural circumstances, and by market participants as they develop their own practices. The Principles are evolutionary in nature and should be reviewed in light of significant changes in circumstances. To remain competitive in a changing world, corporations must innovate and adapt their corporate governance practices so that they can meet new demands and grasp new opportunities. Similarly, governments have an important responsibility for shaping an effective regulatory framework that provides for sufficient flexibility to allow markets to function effectively and to respond to expectations of shareholders and other stakeholders. It is up to governments and market participants to decide how to apply these Principles in developing their own frameworks for corporate governance, taking into account the costs and benefits of regulation. The following document is divided into two parts. The Principles presented in the first part of the document cover the following areas: I) Ensuring the basis for an effective corporate governance framework; II) The rights of shareholders and key ownership functions; III) The equitable treatment of shareholders; IV) The role of stakeholders; V) Disclosure and transparency; and VI) The responsibilities of the board. Each of the sections is headed by a single Principle that appears in bold italics and is followed by a number of supporting sub-principles. In the second part of the document, the Principles are supplemented by annotations that contain commentary on the Principles and are intended to help readers understand their rationale. The annotations may also contain descriptions of dominant trends and offer alternative implementation methods and examples that may be useful in making the Principles operational. Shareholders should be furnished with sufficient and timely information concerning the date, location and agenda of general meetings, as well as full and timely information regarding the issues to be decided at the meeting. Shareholders should have the opportunity to ask questions to the board, including questions relating to the annual external audit, to place items on the agenda of general meetings, and to propose resolutions, subject to reasonable limitations. Effective shareholder participation in key corporate governance decisions, such as the nomination and election of board members, should be facilitated. Shareholders should be able to make their views known on the remuneration policy for board members and key executives. The equity component of compensation schemes for board members and employees should be subject to shareholder approval. Ensuring the Basis for an Effective Corporate Governance Framework The corporate governance framework should promote transparent and efficient markets, be consistent with the rule of law and clearly articulate the division of responsibilities among different supervisory, regulatory and enforcement authorities. To ensure an effective corporate governance framework, it is necessary that an appropriate and effective legal, regulatory and institutional foundation is established upon which all market participants can rely in establishing their private contractual relations. This corporate governance framework typically comprises elements of legislation, regulation, selfregulatory arrangements, voluntary commitments and business practices that are the result of a countrys specific circumstances, history and tradition. The desirable mix between legislation, regulation, self-regulation, voluntary standards, etc. in this area will therefore vary from country to country. As new experiences accrue and business circumstances change, the content and structure of this framework might need to be adjusted. Countries seeking to implement the Principles should monitor their corporate governance framework, including regulatory and listing requirements and business practices, with the objective of maintaining and strengthening its contribution to market integrity and economic performance. As part of this, it is important to take into account the interactions and complementarity between different elements of the corporate governance framework and its overall ability to promote ethical, responsible and transparent corporate governance practices. Such analysis should be viewed as an important tool in the process of developing an effective corporate governance framework. To this end, effective and continuous consultation with the public is an essential element that is widely regarded as good practice. Moreover, in developing a corporate governance framework in each jurisdiction, national legislators and regulators should duly consider the need for, and the results from, effective international dialogue and cooperation. If these conditions are met, the governance system is more likely to avoid over-regulation, support the exercise of entrepreneurship and limit the risks of damaging conflicts of interest in both the private sector and in public institutions. The corporate governance framework should be developed with a view to its impact on overall economic performance, market integrity and the incentives it creates for market participants and the promotion of transparent and efficient markets. The corporate form of organisation of economic activity is a powerful force for growth. The regulatory and legal environment within which corporations operate is therefore of key importance to overall economic outcomes. Policy makers have a responsibility to put in place a framework that is flexible enough to meet the needs of corporations operating in widely different circumstances, facilitating their development of new opportunities to create value and to determine the most efficient deployment of resources. To achieve this goal, policy makers should remain focussed on ultimate economic outcomes and when considering policy options, they will need to undertake an analysis of the impact on key variables that affect the functioning of markets, such as incentive structures, the efficiency of self-regulatory systems and dealing with systemic conflicts of interest. Transparent and efficient markets serve to discipline market participants and to promote accountability. The legal and regulatory requirements that affect corporate governance practices in a jurisdiction should be consistent with the rule of law, transparent and enforceable. If new laws and regulations are needed, such as to deal with clear cases of market imperfections, they should be designed in a way that makes them possible to implement and enforce in an efficient and even handed manner covering all parties. Consultation by government and other regulatory authorities with corporations, their representative organisations and other stakeholders, is an effective way of doing this. Mechanisms should also be established for parties to protect their rights. In order to avoid over-regulation, unenforceable laws, and unintended consequences that may impede or distort business dynamics, policy measures should be designed with a view to their overall costs and benefits. Such assessments should take into account the need for effective enforcement, including the ability of authorities to deter dishonest behaviour and to impose effective sanctions for violations. Corporate governance objectives are also formulated in voluntary codes and standards that do not have the status of law or regulation. While such codes play an important role in improving corporate governance arrangements, they might leave shareholders and other stakeholders with uncertainty concerning their status and implementation. When codes and principles are used as a national standard or as an explicit substitute for legal or regulatory provisions, market credibility requires that their status in terms of coverage, implementation, compliance and sanctions is clearly specified. The division of responsibilities among different authorities in a jurisdiction should be clearly articulated and ensure that the public interest is served. Corporate governance requirements and practices are typically influenced by an array of legal domains, such as company law, securities regulation, accounting and auditing standards, insolvency law, contract law, labour law and tax law. Under these circumstances, there is a risk that the variety of legal influences may cause unintentional overlaps and even conflicts, which may frustrate the ability to pursue key corporate governance objectives. It is important that policy-makers are aware of this risk and take measures to limit it. Effective enforcement also requires that the allocation of responsibilities for supervision, implementation and enforcement among different authorities is clearly defined so that the competencies of complementary bodies and agencies are respected and used most effectively. Overlapping and perhaps contradictory regulations between national jurisdictions is also an issue that should be monitored so that no regulatory vacuum is allowed to develop (i.e. issues slipping through in which no authority has explicit responsibility) and to minimise the cost of compliance with multiple systems by corporations. When regulatory responsibilities or oversight are delegated to non-public bodies, it is desirable to explicitly assess why, and under what circumstances, such delegation is desirable. It is also essential that the governance structure of any such delegated institution be transparent and encompass the public interest. Supervisory, regulatory and enforcement authorities should have the authority, integrity and resources to fulfil their duties in a professional and objective manner. Moreover, their rulings should be timely, transparent and fully explained. Regulatory responsibilities should be vested with bodies that can pursue their functions without conflicts of interest and that are subject to judicial review. As the number of public companies, corporate events and the volume of disclosures increase, the resources of supervisory, regulatory and enforcement authorities may come under strain. As a result, in order to follow developments, they will have a significant demand for fully qualified staff to provide effective oversight and investigative capacity which will need to be appropriately funded. The ability to attract staff on competitive terms will enhance the quality and independence of supervision and enforcement. The Rights of Shareholders and Key Ownership Functions The corporate governance framework should protect and facilitate the exercise of shareholders rights. Equity investors have certain property rights. For example, an equity share in a publicly traded company can be bought, sold, or transferred. An equity share also entitles the investor to participate in the profits of the corporation, with liability limited to the amount of the investment. In addition, ownership of an equity share provides a right to information about the corporation and a right to influence the corporation, primarily by participation in general shareholder meetings and by voting. As a practical matter, however, the corporation cannot be managed by shareholder referendum. The shareholding body is made up of individuals and institutions whose interests, goals, investment horizons and capabilities vary. Moreover, the corporations management must be able to take business decisions rapidly. In light of these realities and the complexity of managing the corporations affairs in fast moving and ever changing markets, shareholders are not expected to assume responsibility fo r managing corporate activities. The responsibility for corporate strategy and operations is typically placed in the hands of the board and a management team that is selected, motivated and, when necessary, replaced by the board. Shareholders rights to influence the corporation centre on certain fundamental issues, such as the election of board members, or other means of influencing the composition of the board, amendments to the companys organic documents, approval of extraordinary transactions, and other basic issues as specified in company law and internal company statutes. This Section can be seen as a statement of the most basic rights of shareholders, which are recognised by law in virtually all OECD countries. Additional rights such as the approval or election of auditors, direct nomination of board members, the ability to pledge shares, the approval of distributions of profits, etc., can be found in various jurisdictions. Basic shareholder rights should include the right to: 1) secure methods of ownership registration; 2) convey or transfer shares; 3) obtain relevant and material information on the corporation on a timely and regular basis; 4) participate and vote in general shareholder meetings; 5) elect and remove members of the board; and 6) share in the profits of the corporation. Shareholders should have the right to participate in, and to be sufficiently informed on, decisions concerning fundamental corporate changes such as: 1) amendments to the statutes, or articles of incorporation or similar governing documents of the company; 2) the authorisation of additional shares; and 3) extraordinary transactions, including the transfer of all or substantially all assets, that in effect result in the sale of the company. The ability of companies to form partnerships and related companies and to transfer operational assets, cash flow rights and other rights and obligations to them is important for business flexibility and for delegating accountability in complex organisations. It also allows a company to divest itself of operational assets and to become only a holding company. However, without appropriate checks and balances such possibilities may also be abused. Shareholders should have the opportunity to participate effectively and vote in general shareholder meetings and should be informed of the rules, including voting procedures, that govern general shareholder meetings: Shareholders should be furnished with sufficient and timely information concerning the date, location and agenda of general meetings, as well as full and timely information regarding the issues to be decided at the meeting. Shareholders should have the opportunity to ask questions to the board, including questions relating to the annual external audit, to place items on the agenda of general meetings, and to propose esolutions, subject to reasonable limitations. In order to encourage shareholder participation in general meetings, some companies have improved the ability of shareholders to place items on the agenda by simplifying the process of filing amendments and resolutions.Improvements have also been made in order to make it easier for shareholders to submit questions in advance of the general meeting and to obtain replies from management and board members. Shareholders should also be able to ask questions relating to the external audit report. Companies are justified in assuring that abuses of such opportunities do not occur. It is reasonable, for example, to require that in order for shareholder resolutions to be placed on the agenda, they need to be supported by shareholders holding a specified market value or percentage of shares or voting rights. This threshold should be determined taking into account the degree of ownership concentration, in order to ensure that minority shareholders are not effectively prevented from putting any i tems on the agenda. Shareholder resolutions that are approved and fall within the competence of the shareholders meeting should be addressed by the board. Effective shareholder participation in key corporate governance decisions, such as the nomination and election of board members, should be facilitated. Shareholders should be able to make their views known on the remuneration policy for board members and key executives. The equity component of compensation schemes for board members and employees should be subject to shareholder approval. To elect the members of the board is a basic shareholder right. For the election process to be effective, shareholders should be able to participate in the nomination of board members and vote on individual nominees or on different lists of them. To this end, shareholders have access in a number of countries to the companys proxy materials which are sent to shareholders, although sometimes subject to conditions to prevent abuse. With respect to nomination of candidates, boards in many companies have established nomination committees to ensure proper compliance with established nomination procedures and to facilitate and coordinate the search for a balanced and qualified board. It is increasingly regarded as good practice in many countries for independent board members to have a key role on this committee. To further improve the selection process, the Principles also call for full disclosure of the experience and background of candidates for the board and the nomination process, which will allow an informed assessment of the abilities and suitability of each candidate. The Principles call for the disclosure of remuneration policy by the board. In particular, it is important for shareholders to know the specific link between remuneration and company performance when they assess the capability of the board and the qualities they should seek in nominees for the board. Although board and executive contracts are not an appropriate subject for approval by the general meeting of shareholders, there should be a means by which they can express their views. Several countries have introd