MKTG Essay Example | Topics and Well Written Essays - 500 words - 8

MKTG - Essay Example Firms usually seek to minimize turnover of salespeople possessing high transaction assets, which may be costly to the organization as this translates into an opportunity loss and direct costs flowing from fresh training. Executives within a company may be lured into believing that promoting the top salesperson and putting five people under them will translate into five times the sales. This may be an illusion and may be far from reality. Promotion to a management position should not be solely based on performance only. This stems from the fact that a selling role and managerial position require distinct abilities and diverse motivators (Ingram et al. 289). A core trait that should be sought in the promotion of salespersons into management is a demonstration of being a top salesperson with a possession of a solid work ethic, among other aspects. Promotion into management for a salesperson is not a soft option as the manager is expected to manage a successful sales team and deliver predictable performance. Moreover, top salespeople who get promoted are rarely awarded a functioning, highly-effective sales team. The pressure to turn around the fortunes heaps a lot of pressure on the manager. Critics to promotion based on a selling role point out that this is a prime example of promoting people to â€Å"a level of incompetence.† The move should not be inspired by â€Å"disciple selling,† as this is a recipe for failure. The motivation of the promotion should be a conviction that the salespersons have the potential to succeed in that capacity. This demands an application of a clear cut process and methodology in order to evaluate the best sales management candidates. The depressing aspect of most promotions from selling roles is that the vast majority of the new managers are not successful in their endeavors. The move from a technical or sales position into management is usually complicated

Compare and contrast a work of art in a specific classification Essay

Compare and contrast a work of art in a specific classification (Renaissance or Gothic) - Essay Example Renaissance paintings such as A young Hare and Sistine Chapel Ceiling marked the turning-point from the Medieval Era to the early Modern Age in European. The creation of the paintings in 1502 and 1508 respectively, clearly marked the huge influence of the Renaissance sensibilities that are believed to have taken off in the early 16th century. This paper compares and contrasts A young Hare and Sistine Chapel Ceiling. A Young Hare (fig. 1) is a painting that was made in 1502 by an artist known as Albrecht Dà ¼rer. The item measures 25cm by 23 cm and is available in a repertoire set up by the Graphische Sammlung, Albertina, Vienna (Nichols, 2013). The Northern Renaissance piece of art was created in the German artist’s workshop in 1502, and since then it has been popularly referred to as a classic example of an observational masterpiece. The English title of the item â€Å"The Young Hare† is ironically used to refer to the rather mature animal. Perhaps the German name â€Å"Feldhase† which literally means Field Hare is a more suitable title for the masterpiece. Durer made numerous visits to Italy from his homeland, Germany, during his long career perhaps to grasp and use some of the best qualities of Renaissance art in his work. Upon his comeback to Nuremburg in 1495, the artist opened a workspace where he made The Young Hare and several other items. As Nichols (2013) has said, Durer created the painting using a combination of body colour or gouache and watercolour; materials that he is known to have used almost on every item he made. The painting portrays a lonely hare, which is a clear depiction of the confusion and gloom facing the ancient European society in the wake of a dying Medieval Era and the uncertainty of the philosophical influences of the early Modern Age. Despite the solitary, thoughtful mood of the art, Durer managed to present a highly comprehensive and perfect depiction of a hare. The colour of the hare is a blend of

Information System Essay Example for Free

Information System Essay Information System In Hotel Seri Malaysia Kangar Hotel Seri Malaysia Kangar is currently using the Guest Centrix system. Being the first Hotel Seri Malaysia branch and the earlier hotel amongst hotels in Malaysia that using and implement the Guest Centrix system in their management. Guest Centrix system has built integration with Microsoft Word, Microsoft Excel, e-mail and many other. It offers a stable and friendly user-interface, improved by the wary use of colour and graphics. Hotel employees can learnt the system quickly, saving the time and money especially in the staff training. The flow of the guest cycle throughout the Hotel Seri Malaysia Reservation The customers or guests who decide to stay at Hotel Seri Malaysia can make their reservation or room booking through hotel’s website, travel agents such as Agoda or booking.com, or call the hotel itself. If the reservation is accepted, the reservation agent or hotel staffs will create a reservation record that linked with Guest Centrix system. This reservation status may include the guests detail and specific request which will help the hotel to provide modified service to the guests during his or her stay. All the details on guests may help the hotel staffs to complete the pre-registration activities such as assigning room according to the request from guest, room rate to be charged to the guest folio during the stay. The hotel staffs need to make sure that the room is available when the guests arrive at the hotel. Arrival After the guests arrive at the hotel, the front office will responsible for the registration and room assignment process. The front office need to clarify the query of the guests especially the details of the room rate or packages that had been booked on. Before that, front office need to make sure the guest’s reservation status before beginning the registration process and checking them in. The guests will filled in the registration form that contain the full name, identification card numbers, home address, billing instruction, reservation details and others. Once the method of payment confirmed and been signed by the guests, the registration process is complete. The guest may be given the key card and breakfast coupons during the stays. During The Accommodation Period During the occupancy, the front office is responsible for managing guest requests and providing the information and supplies to the guests. Also, front office should respond to the guest requests on time in accurate manner and meet the guest expectation of the hotel service. During this period, the security will be main consideration by the hotel. The front office should observe the hotel standard operating procedures in handling the guest key, guest personal property, emergencies that also important. The front office will observe the additional charges that need to be added into guest account that include the restaurant charges, or telephone bills. Departure The last element in guest cycle in hotel is checking out and creating the guests history record. During this stage, the guests will settle down all the outstanding bills or payment to the front office. After completing all the payment, the guest will return the room key card and leave the hotel. The role of Guest Centrix System in Hotel Operation Front Office Guest Centrix system has simplified the front officer in term of reservation, registration, check in and check out of the guests that staying at Hotel Seri Malaysia Kangar. The guests who make room reservation through website or travel agents, Guest Centrix system will create the booking status and store the reservation status in the hotel database. The hotel’s website has been designed to interact directly with Guest Centrix database that allows the guests or customers to see the hotel available rooms at certain date and packages offered. After the guests or customers finished their booking, the system also offers the payment option such as credit card or online banking and the confirmation will be sent by email. During the registration, the front office will indicate the guests booking status before checking in. all the details includes the room or packages that already booked should be available for the guests. The guest can check in to the hotel once the registration process complete. The key card that been given to the guests has linked with the hotel information system. The key card system will provide different information on the room occupancy status which is reserved, occupied, or available. For the checking out process, the front office will notified the guests with outstanding payment during the accommodation period. The outstanding payment is automatically been added in the guests account which is called guest folio. The guest can decide on payment method such as credit card, debit card or cash as long as the hotel accepted it. In addition, the guest information data will automatically store in the hotel information system. The record is called guest history and all the data such as guest personal information, special requirement or even past reservation is stored in Guest Centrix system. This enables the hotel staffs to identify the repeat or new guest that choose the hotel Seri Malaysia Kangar. Housekeeping The front office and housekeeping staffs were linked with each other. All the interactions between both departments especially about the room that need to be clean, inspect or repaired will automatically show in Guest Centrix system. For each room that is occupied or available, the room status will be clean or dirty. The housekeeping staffs are responsible to clean the room so that the room status changes through the Private Branch Exchange (PBX) Interface and record it as clean in Guest Centrix System. PBX interface is used to make connections amongst the internal telephone in all rooms with the Guest Centrix system. The front office will informed the housekeeping staffs by using the walkie-talkie to inspect the room and the housekeeping staffs will monitor the room. After the job done, the housekeeper will press certain code by using telephone at the inspected room and link with the Guest Centrix system and notified the system that the room is already inspected. Food and Beverages For the guests who dine in in the hotel restaurant, all the bills from the restaurant will be insert by the food and beverages staffs in the guest account that will automatically linked to the Guest Centrix system. During the checking out process, the front office may refer into the guests account to distinguish the total payment should be paid by the guests. Hotel Manual System Human Resource Human resource department in Hotel Seri Malaysia is using punch card system to organize the staffs working hour and daily attendance. The hotel will tracked the payroll total through the punch card system. Also, the human resource department using the filing system to manage the hotel staffs record. All the data of permanent, contract and leaving staffs are stored in hotel filing system. Security and maintenance For security and maintenance department, there are surveillance system which is CCTV system that monitors the hotel facilities, and surrounding areas. In Hotel Seri Malaysia Kangar, CCTV system is used to observe different areas from a central control room. In the central control room, there will be one or two security officer that will monitors through the CCTV screen display.

Social Work Case Study | Essay

Social Work Case Study | Essay Case study: Jenny Eleanor This essay will focus on the current situation of Jenny, a single parent, and Eleanor, her six year old daughter, who currently live on a large local authority housing estate. Whilst close attention will be paid to their situation and the needs arising out of it, it is not the substantive function of this paper to prescribe specific courses of action in their case only. Rather, it is to identify and discuss the issues raised by their case, considering the appropriate social work processes, policy, and legal framework. Overall, it will be argued that there are two significant issues to be explored through the circumstances of Jenny and Eleanor’s case. Firstly, the nature and effectiveness of multi-agency working in education and the human services, and secondly, the problems faced by these professionals when adults, either deliberately or through incapacity, are not fully cooperative in ensuring the appropriate care of their child. As McCullough points out, ‘Throughout th e UK, provision and means of delivering children’s services have been changing profoundly. Predominant among the reasons driving these changes is concern about the way in which children are kept safe.’ (McCullough 2007: p.27) The paper will therefore discuss these issues, taking into account how such issues may be dealt with in a context of evidence-based and anti-discriminatory practice. In the first instance it may be helpful to include a brief synopsis of the known facts about Jenny and Eleanor’s situation, as a guide to identifying their needs. The case study reports that they are from a White British background: they live in a local authority housing estate which, it is stated, is regarded as ‘rough’, i.e. socially problematical and economically deprived. This categorization is not supported by any objective assessment, such as referral to any social scales or indices, and so appears rather unscientific and possibly discriminatory. Jenny and Eleanor have experienced five different housing placements in the last seven years. Jenny has been the victim of domestic violence, both in previous relationships and from Derek, her current partner and Eleanor’s father. Eleanor was unfortunately the witness to many of the assaults on her mother, and is herself thought to have been the subject of violence from her father. As the result of one of the assault on Jenny, Derek was awarded two year custodial sentence, and is currently expected to be released in four months time: he requested contact with Eleanor whilst in custody. Eleanor is enrolled at a local primary school, where records reveal that her attendance is low and represents a cause for concern: she has appeared withdrawn, and on occasions been violent towards other pupils. Furthermore, the school nurse has registered concerns about Eleanor’s development. In the light of these facts, it is now up to the relevant services to make the appropriate arrangements, using such measures as the statutory and policy frameworks allow. One of the principle factors in their immediate future the matter of Derek’s release from custody is beyond the control of those agencies immediately involved in Jenny and Eleanor’s welfare, so it is up to them to make their dispositions accordingly in the light of this contingency. What follows is a discussion of the relevant issues as they arise out of the jurisdictions, expertise, and responsibilities of the various agencies involved. This discussion will start with the subject who is likely to be of most concern to the educational and human services, i.e. the most vulnerable individual, Eleanor. As a six year old, she is the only person in the situation who does not have self-determination, is consequently reliant on the various agencies appointed for her care: it is now up to them to ensure this is ensured. As Myers-Blair points out, ‘The basic equipment for emotional development (physical and neural) is present at birth, and in a very diffuse way emotional behaviour begins at birth, or perhaps even before.’ (Myers-Blair, 1975: p.60). The immediate concerns over Eleanor’s welfare devolve upon two separate but related spheres: her school and home life. The relevant professionals must unravel the intertwining requirements and responsibilities inherent in this situation. However, as the Department for Children, Schools and Families itself acknowledges, ‘The professional background of workers is both a strength and a barrier to multi-agency working. As each profession has developed its own language and body of knowledge, it not only serves to provide a professional identity but can alienate those outside the profession who do not share their language or way of thinking. Professionals also develop a different way of working in order to achieve their aims.’ (DCSF, 2007: p.5) Obviously, all of these considerations must proceed from the basis that Eleanor is physically safe, with possible physical abuse from Derek, the previously violent partner, being the most obvious threat to this. If sufficient evi dence of this threat is assembled, then the multi-agency effort is largely irrelevant, since the Local Authority, through the Social Services Directorate, will have a clear responsibility to act accordingly under sections 27 and 17 of the Children Act 1989, and remove her from the situation. The decision as to whether any contingent arrangements involve Eleanor only, or Eleanor and Jenny, will depend on the perceived or actual threat, and Jenny’s position in relation to this. As Asen pointedly reminds us, ‘When professionals are unable to decide whether to let the children remain with its natural family or not, this indecisiveness can be abusive in its own right: it leaves the child in a situation of limbo – which in some cases can last years – further adding to the child’s emotional or physical suffering.’ (Asen, 2000: p.227) Depending upon how matters proceed in relations between Jenny and Derek, Social Services will also be responsible for the next level of care, i.e. ensuring that Eleanor is not suffering from any forms of neglect or subsidiary abuse arising out of the situation. Assuming that this situation is being monitored, the weight of responsibility shifts back into the educational environment: this is not to say that the social worker loses control of the situation, or becomes less relevant to Eleanor’s care: quite the contrary. In fact, by virtue of the serious nature of Eleanor’s home situation, they may well become the ‘lead professional’ within the multi-agency effort, as will be discussed below. It is simply the case that the all the professionals involved effectively have their actions governed by overlapping and interlocking statutes. At present, the latter stipulate that Eleanor should be in school: that school will almost certainly be a mainstream school, i.e. not a PRU (Pupil Referral Unit) or other specialized facility: furthermore, the law provides that every professional effort should be made to ensure that Eleanor is supported in achieving the expected educational progress. This in essence is where the social w ork and educational efforts will interact: since achievement of the expected progress will hinge upon Eleanor’s mental and physical well-being, as well as her innate cognitive ability, the home and school environments will become linked around this effort. The essential point here is that the social services case worker will be reliant on the judgment and expertise of the school based professionals with respect to Eleanor’s learning and emotional well-being. This is very much an open-ended process: a number of successive measures and support systems will have to be put into place before any alternative or specialized provision is even considered. In the first instance, the school’s Child Protection Officer – usually the Headteacher in the context of a Primary school like Eleanor’s – will feedback directly to Social Services, if there is any evidence of abuse. The school Special Educational Needs Coordinator will subsequently be responsible f or ascertaining whether or not Eleanor has any educational or emotional special needs: if so, she must have an IEP (Individual Education Plan) classified as Step One, Two or Three, depending on their severity. The latter will also determine whether or not Eleanor may require a Statutory Statement of Educational Needs (usually referred to simply as a ‘statement’). If so, she may qualify for additional support through the Local Educational Authority’s Statutory Assessment Office. This in turn will involve the Educational Psychology Service, who will have to make a formal assessment based on observation of Eleanor in a school context. If it is deemed appropriate, she will also be referred to the Primary Behaviour Support Service, the School’s Pastoral Support Service, the Family Support Service, and the Primary Mental Health Service. What are the implications of these potential multiple referrals from a practical point of view? As the DCFS guidance advises, ‘It is the processes involved in building relationships between agencies and between providers of services and the communities they serve, which is vital, because this is where the real work has to be done. It is a real challenge to us all, not least finding the time and space to work on these issues when many services are provided from at least 8 am to 6 pm, five days a week.’ (DCSF, 2007: p2). What this euphemizes is the attempted integration of services which proceed from a series of parallel and successive statutes. This include the Children Act 1989, the Children Act 2004, the Education Act 2002, the Learning and Skills Act 2000, the Disability and Discrimination Act 1995, The Special Educational Needs Code of Practice 2001, the Special Educational Needs and Disability Act 2001, and the Data Protection Act 1998. The school based effort, into which the social worker must be integrated, is built around the role of the Inclusions Officer, who must in turn convene a school-specific inclusions team comprised of all the practitioners involved. Whilst all of this sounds fine on paper, the practical challenges of coordinating the support and care of a child in Eleanor’s situation cannot be underestimated. Take, for example, the role of the Lead Professional itself. As the Children’s Workforce Development Council concedes, ‘A lead professional is not a job title or a new role, but a set of functions to be carried out as part of the delivery of effective integrated support.’ (CWDC, 2007: p.5). In other words, the role is titular only and attracts no timetabling facility or resources, but must run parallel – and crucially, in addition to – the practitioner’s other responsibilities. As the CWDC frankly puts it, ‘†¦clear communication is necessary between both services so that the individual is not overwhelmed with lead professional and caseload responsibilities. Speak to your manager to ensure that they take account of any lead professional responsibilities in setting yo ur workload, and that your performance in delivering the lead professional functions is recognized and recorded.’ (CWDC 2007: p.2, para 3.14). This is far more than a Human Resources issue however. The whole rationale of the multi-agency movement and Every Child Matters initiative is to mitigate the kind of short-circuits, doublings-up and straightforward mismanagement which contributed to the Victoria Climbie tragedy. As McCullough reminds us, ‘In Laming’s detailed and damning report, twelve different occasions were identified when appropriate intervention by one or more of these agencies could have saved Victoria’s life†¦in his summing up, Laming noted that â€Å"the legislative framework for protecting children is basically sound. I conclude that the gap is not a matter of law but in its implementation.†.’ (McCullough 2007: p.28). The problem is that whilst the role of the lead practitioner is non-statutory, the responsibilities accru ed by the incumbent are not. As the CWDC again concedes, ‘†¦There are particular implications for staff who may be working part-time in a multi-agency setting and part-time in their home agency.’ (CWDC 2007: p.2, para 3.14). Arguably then, the same issues which underlay Victoria’s death are potential factors in any such case, including Eleanor’s. The mere creation of a job title, i.e., Lead Practitioner, or mechanisms such as the Common Assessment Framework, guarantees nothing if the staff involved are overstretched, unsupported and undirected. The fact that Jenny has cancelled two possible contact appointments so far is disappointing, and may well represent an impediment to the advancement of Eleanor’s care in the future. At present however, it does not constitute an insurmountable barrier to the coordinated effort of the multi-agency team, and definitely is not a pretext for inaction on their part. As the school has noted, Eleanor’s emotional well-being is questionable, indicating a serious potential impediment to her progress. As Meadows indicates, ‘Certain emotional states are frequent and salient, and become parts of feeling about the self, so that they can then influence a wide range of behaviours, such as perception, emotional expression, cognitive processing and social relations.’ (Meadows, 2006: p.438) Instruments in an around the curriculum, such as the SEAL (Social and Emotional Aspects of Learning) programme may be used to help Eleanor externalize and come to terms with the events whic h have shaped her experience: essentially these means must be tried in order to redress any lack of emotional support she is receiving at home. As Maslow points out, ‘†¦thwarting of these needs produces feelings of inferiority, of weakness, and of helplessness. These feelings in turn give rise to either basic discomfort, or else compensatory or neurotic trends.’ (Maslow, 1970: P.1) Also, as Samuels reminds us, ‘Basically, if the child’s needs are not met appropriately at each developmental level, the psyche becomes unable to adequately regulate self-esteem by the use of adequate mechanisms.’ (Samuels, 1977: p. 35). The problem is that, whilst the statutory framework stipulates that the school is currently the focus of support for Eleanor’s needs, the latter obviously do not stop there. As Schaefer et al. observe, since behavioural problems in the home usually precede those occurring elsewhere, part of the focus has to be behaviour in the home.’ (Schaefer et al. 1984 p.96). Consequently, whilst ‘Inter-Professional Collaboration’ has to be an overriding consideration for the social worker, it is likely to be the case worker themselves who initiates much of the strategic action, such as the proposed ‘cold-call’ home visit. The focus on Eleanor does not of course mean that Jenny’s needs, as an individual or as a parent, can be overlooked. A holistic approach, encapsulated within an action plan and developed with the Family Therapy or Support Service will be required. However, for environmental as much as professional reasons, as will be discussed below , Eleanor must remain the primary concern within this case. As this conclusion is being written, the manifest weaknesses of the supposedly revamped multi-agency framework have been revealed in the most devastating manner: through the death of a seventeen-month child, who was in the Child Protection Register’s ‘at risk’ category. Whilst any legislative or policy outcome of this tragedy is obviously some way off, some commentators have been quick to apportion responsibility to the inter-agency working framework. ‘When procedures become so exacting and time-consuming, the exercise of judgment is deemed neither necessary nor possible. Indeed, it will get you into trouble, because it is not part of the procedure.’ (Dalrymple 2008) Calls for less weight to be given to parental wishes and rights, and more to be placed on the safety of the child, are already being heard. The outcome of such debates, it may be argued, may have significant effects on the conduct of cases such as that of Jenny and Eleanor. Bibliography Adams, R., Dominelli, L. Payne, M. (2002) Social Work Themes, Issues and Critical Debates, Basingstoke, Palgrave Anning, A., and Edwards, A., (2006), Promoting Children’s Learning from Birth to Five: Developing the New Early Years Professional, Open University Press, Maidenhead. Asen, E., ‘Working with families where there is parenting breakdown’, in Reder, P., McClure, M., and Jolley, A., (eds), (2000), Family Matters: interfaces between child and adult mental health, Routledge, London, pp.227-236. Bowlby, J. (1969). Attachment and Loss: Vol I Attachment, London: Hogarth Press. Bowlby, J. (1973). Attachment and Loss: Vol II Separation, Anxiety and Anger, London: Hogarth Press. Bowlby, J. (1980). Attachment and Loss: Vol III Loss, Sadness and Depression, London: Hogarth Press. Bradley, G. and Parker, J. (2003) Social Work Practice: Assessment, Planning, Intervention and Review, Exeter, Learning Matters Ltd. Brayne, H and Carr, H. (2005) Law for social workers, Oxford, New York Butler, P. (2002) Failure to attend overshadowed Climbie inquiry [online] August 27  Available from: http://www.guardian.co.uk/society/2002/aug/27/climbie  [Accessed 16 November 2007] Children’s Workforce Development Council, (2007), The Lead Professional: Practitioner’s Guide, CWDC, Leeds. Crawford, K. Walker, J. (2003) Social Work and Human Development, Exeter, Learning Matters Ltd. Dalrymple, T., ‘We can’t be surprised by the death of baby P’ The Times Online, 12 Nov 2008, INTERNET, available at http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article5133966.ece?Submitted=true, [viewed 12.11.08] Davies, L (2007) The Big Picture: Is protection working? [online] November 15  Available from: http://www.communitycare.co.uk/Articles/2007/11/15/106450/the-big-picture-is-protection-working.html  [viewed 20.11.07] Department for Children, Schools and Families, (2007), Common Core of Skills and Kn owledge for the Children’s Workforce, DFES Nottingham. Department for Children, Schools and Families, (2007), Integrated Working Exemplar: Young child with behavioural problems: Integrated working to improve outcomes  for children and young people, HMSO, London. Department for Children, Schools and Families, (2007), Effective practice: Multi-agency Working, HMSO, London. Department of Health, (1999) Working Together to Safeguard Children, London, The Stationery Office. Department of Health, (2002) Modernising services to transform care: inspection of how councils are managing the modernisation agenda in social care [online] June 27  Available from:  www.dh.gov.uk/en/Publicationsandstatistics/Lettersandcirculars/Chiefinspectorletters/DH_4004590  [Accessed 21 November 2007] Department of Health, (2004) Executive Summary, National Service Framework for Children. Young People and Maternity Services [online] October 4  Available from: www.dh.gov.uk  [Accessed 15 November 2007] Department of Health, (2005) Background to Every Child Matters [online] May 10  Available from: www.everychildmatters.gov.uk/aims/background/  [Accessed 03 November 2007] Department of Health, (2006) Framework for the Assessment of Children in Need and their Families (fifth impression), United Kingdom, The Stationery Office. Department of Health, (2007) Local Safeguarding Children Boards [online] November 14  Available from: http://www.everychildmatters.gov.uk/socialcare/safeguarding/lscb/  [Accessed 26 November 2007] Friedrickson, N., and Clive, T., (2002) Special Educational Needs, Inclusion and Diversity, a Textbook, Open University Press, Buckingham. Goleman, D., (1996), Emotional Intelligence: Why It Can Matter More Than IQ, Bloomsbury, London. ‘Good to be Me’, (May 2005) Primary National Strategy: Excellence and Enjoyment, Social and Emotional Aspects of Learning, Department for Education and Skills, HMSO, Gurney, P., (1988) Self-Esteem in Children with Special Educational Needs, Routledge, London Gillen, S and Lovell C. (2007) Victoria Climbie Foundation head calls for child protection probe [online] November 5  Available from: www.communitycare.org/articles  [Accessed 12 November 2007] Glover-Wright, D. (2007) Social Work, As We See Ità ¢Ã¢â€š ¬Ã‚ ¦, Community Care, 5-11 April, p.28 Guardian Unlimited (2007) a. Ministers deliberately making asylum seekers destitute, say MPs [online] March 30 Available from: www.guardian.co.uk/immigration/story  [Accessed 04 November 2007] Healy, K (2005) Social Work Theories in Context, Basingstoke, Palgrave MacMillan. Hockey, J. James, A. (2003) Social Identities across the Life Course, Basingstoke, Palgrave Macmillan. Hopkins, G. Wetherall, G. (2007) Fatal Failings Community Care The voice of social care 11-17 January 2007, p. 34-38 Horner, N. (2003) What is Social Work? Context and Perspectives, Exeter, Learning Matters Ltd. Howe, D., Brandon, M., Hinnings, D. Schofield, G. (1999). Attachment Theory, Child Maltreatment and Family Support, London, Palgrave. Howe, D. (2005) Child Abuse and Neglect, Basingstoke, Palgrave Macmillan. Laming, L (2003) The Victoria Climbie Inquiry Report of an Inquiry by Lord Laming, London, Stationery Office. Meadows, S., (2006), The Child as Thinker: The Development and Acquisition of Cognition in Childhood, Routledge London. McCullough, M., (2007), ‘Integrating Children’s Services: the case for child protection’, in Siraj-Blatchford, I., Clarke, K., and Needham, M., (eds), (2007), The Team Around the Child: Multi-Agency Working in the Early Years, Trentham, Stoke-on-Trent. Mens Health Network (2000) Family Violence [online] September 1  Available from: http://www.menstuff.org/issues/byissue/domesticviolence.html#femalebatterers  [Accessed 11 November 2007] Myers Blair, G., Stewart Jones, R., Simpson, R.H., (1975), Educational Psychology, 4th Edition, MacMillan, NY. Office of the High Commissioner for Human Rights, (1989) Convention on the Rights of the Child [online]  Available from: www.unhchr.ch/html/menu2/b/k2crc.htm  [Accessed 15 November 2007] Parton, N. (2006) Safeguarding childhood, Basingstoke, Palgrave Macmillan Parton, N. OByrne, P. (2000) Constructive Social Work, Basingstoke, MacMillan Press. Pierson, J. Thompson, M. (2002) Dictionary of Social Work, Staffordshire University, Collins. Plummer, D., (2001) Helping Children to Build Self-Esteem: A Photocopiable Activities Book, Jessica Langley, London. Podesta, C., (2001) Self-Esteem and the Six-Second Secret, Corwin, Thousand Oaks, California. Quinney, A (2005) Collaborative Social Work Practice [online]  Available from: www.learningmatters.co.uk (sample chapters)  [Accessed 19 September 2007] Schaefer, C.E., Breismeister, J.M., and Fitton, M.E., (1984), Family Therapy Techniques fro problem behaviours of children and teenagers, Jossey-Bass, Sanfrancisco. De Shazer, (1982), Patterns of Brief Family Therapy: An Ecosystemic Approach, Guilford Press, NY. Nind, M., Rix, J., Sheehy, K., Simmons, K., (eds) (2003) Inclusive Education: Diverse Perspectives, Open University Press/David Fulton, Buckingham and London Schofield, G. (2002) Attachment Theory: An introduction for Social Workers, Norwich, Social Work Monograph. Siraj-Blatchford, I., Clarke, K., and Needham, M., (eds), (2007), The Team Around the Child: Multi-Agency Working in the Early Years, Trentham, Stoke-on-Trent. Taylor, J. Daniel, B. (2005) Child Neglect, London, Jessica Kingsley. Thompson, N. (2001) Anti-Discriminatory Practice, 3rd edition, Basingstoke, Palgrave Thompson, N. (2005) Understanding Social Work Second Edition, Basingstoke, Palgrave MacMillan Trevithick, P. (2005) Social Work Skills, Open University Press Ward, L. (2007) Not every child matters [online]  Available from: http://politics.guardian.co.uk/comment/story/0,,1995795,00.html  [Accessed 21 November 2007] Warren, J. (2007) Service User and Carer Participation in Social Work, Exeter, Learning Matters. Whelan, D (2003) Using Attachment Theory When Placing Siblings in Foster Care. Child and Adolescent Social Work Journal, 20(1), pp.21-36

Lord Of The Rings :: essays research papers

In The Hobbit the danger and the excitement reach a peak when the forces of good seem about to be overcome by the forces of evil. In The Lord of the Rings, Tolkien builds to two simultaneous peaks. One occurs at the point when Sauron's forces sweep down on the small army led by Aragorn at the gates of Mordor. The other occurs inside Mordor, as Frodo struggles with Gollum on the edge of the Crack of Doom, where the Ring is to be destroyed. Both the war and the quest reach their resolution in the same instant, when the Ring is destroyed and with it, Sauron's power. The fourth and final part of each story serves to wind things down. The hero returns home, looking forward to comfort. He finds instead that his home is threatened. But he has grown through his experiences and is able to regain what is his. Of course, there are many important differences between the two works. The Hobbit follows the story through Bilbo's eyes and tells of events in a chronological sequence. In other words, you hear about things as they happen, rather than jumping ahead to future events, or flashing back to something that happened in the past. When Tolkien departs from this chronological sequence in The Hobbit, he carefully guides you through the jump in time: "Now if you wish, like the dwarves, to hear news of Smaug, you must go back again to the evening when he smashed the door and flew off in a rage, two days before." The story line of The Lord of the Rings, on the other hand, is much more complicated. The Lord of the Rings is a trilogy, consisting of three volumes (Parts One to Three) divided into six sections (Books I through VI). The novel jumps back and forth in time, following the stories of several characters. The various story lines finally converge near the end when all the characters are reunited as Aragorn is crowned king of Gondor. Tolkien uses these shifts in viewpoint to good effect, often ending his scenes as cliff- hangers, slowly building the tension to its climax. But trying to follow the different story lines as he jumps back and forth from one to the other can be very difficult. Tolkien doesn't guide you through them as he did in The Hobbit. But he does give clues to help you put the pieces in

Ancient Greeces Obsession with Beauty Essay -- Ancient Greece Essays

Ancient Greece was one of the most important civilizations in the history of mankind. Ancient Greece spanned thousands of years, beginning in 1100 BC and ending with the end of the Hellenistic period in 146 BC. Ancient Greece made many contributions to the modern world, such as language, politics, philosophy, science, art, architecture, beauty, and much more. Beauty now a days is in most cases considered as how pretty something looks on the outside. Most people these days look at outer beauty rather than inner beauty. Beauty in ancient Greece is different than beauty now in many different ways. In ancient Greece, beauty can be defined in many things. Beauty in family, art, architecture, sculpture, and literature shows all the many definitions of beauty in ancient Greece. Family was important in ancient Greece. â€Å"The ancient Greeks had a society of Patriarchy and Misogyny† (Katz 71). Patriarchy is a society where the father had supreme authority over the family. Misogyny meant that the women were worthless. Women would usually get married at a very young age of around twelve to sixteen years old. Most women did not have a choice of whom to marry and instead their father, uncle, or brother chose for her. The richer the woman was the earlier she got married, but the poor woman got married at a bit higher age. They did not have the authority to do many things that men did. They were not able to go to the Olympics, the streets of the city, or even sometimes the marketplace. If they ever went anywhere they usually went to weddings and funerals and religious ceremonies, or to visit other women. Since they stayed in their houses for long periods of time they were usually in charge of the house when it comes to cleaning or or... ...aic Period, Archaic ‘patriarchy’ and high sexual culture in Classical Athens. Kats, Marilyn. â€Å"Ideology and ‘The Status of Women’ in Ancient Greece.† History and Theory, Beiheft 31: History and Feminist Theory. Vol. 31. Blackwell Publishing for Wesleyan University. 1992. 70-97. This chapter of the book focuses on the status of women in ancient Greece in comparison to the eighteenth through twentieth century. Levin, Saul. â€Å"Love and the Hero of the Iliad.† Transactions and Proceedings of the American Philological Association. Vol. 80. The Johns Hopkins University Press. 1949. 37-49. In this chapter it talks about the Iliad and what the Greeks point of view is over the Iliad. Plato. The Allegory of the Cave. This piece of literature is written by Plato and in it Plato explains through the use of many metaphors what it is to become the philosopher king.

Efficient Market Hypothesis and Behavioral Finance †Is a Compromise in Sight

Legend has it that once upon the time two economists were walking together when one of them saw something that struck his mind. â€Å"Look,† he exclaimed, â€Å"here’s a great research topic! † â€Å"Nonsense,† the other one said, â€Å"If it were, someone would have written a paper on it by now. † For a long time this attitude governed the view of economists toward the stock market. Economists simply believed that the stock market was not a proper subject for serious study.Indeed, most of the pre-1960 research on security prices was actually done by statisticians. The Pre-History: Statistical Research Most of the early statistical research of the stock market concentrated around the same question: are security prices serially correlated? Do security prices follow a random walk? Are prices on any given day as likely to go up as they are to go down? A number of studies concluded that successive daily changes in stock prices are mostly independent. Th ere seemed to be no pattern that could predict the future direction of price movements.One of the most interesting (and currently relevant) research projects of that earlier era was undertaken by Harry Roberts, a statistician at the University of Chicago. In his paper, â€Å"Stock Market ‘Patterns’ and Financial Analysis,† published in the Journal of Finance in 1959, Roberts wrote: If the stock market behaved like a mechanically imperfect roulette wheel, people would notice the imperfections and, by acting on them, remove them. This rationale is appealing, if for no other reason than its value as counterweight to the popular view of stock market â€Å"irrationality,† but it is obviously incomplete.Roberts generated a series of random numbers and plotted the results to see whether any patterns that were known to technical analysts would be visible. Figure 1 provides an example of Roberts’ plot: Efficient Market Hypothesis And Behavioral Financeâ€⠀Is A Compromise In Sight? Figure 1. Simulated stock price path Those somewhat acquainted with technical patterns might recognize a familiar head and shoulders formation, which technical analysts believe to be one of the surest indicators of a trend reversal. At this point, the reader may take pause. Are these stock price patterns of value or not?If they work even on decidedly random series, isn’t there a contradiction? Maybe not. Consider a hypothetical example of a stock price path in Figure 2. If tomorrow the price of this stock goes down, there will be a clearly visible head and shoulders pattern, which should signal a trend reversal. If, however, the price goes up, the resulting formation will look more like a pennant pattern, which, according to market technicians, signals the renewal of the trend. In other words, technical patterns are easy to see only when it is too late to act on them. P P t Figure 2. Hypothetical example of technical patterns formation tToday, anyo ne can replicate Roberts’ results using a common spreadsheet program. In his popular textbook, Financial Modeling, Simon Benninga of the Wharton Business School devotes an entire chapter to simulating stock price paths using Microsoft Excel. 2 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? Returning to Harry Roberts, his paper turned out to be almost prophetic in one major respect. He wrote: Perhaps the traditional academic suspicion about the stock market as an object of scholarly research will be overcome. As we shall see during the rest of this presentation, Roberts was right.The Pre-History: CRSP Another enabling factor for the soon-to-follow boom in stock market research was provided by an initially small outfit based at the University of Chicago, the Center for Research in Securities Prices (CRSP). CRSP was established by James H. Lorie in 1960 and provided comprehensive data on all stocks traded on the New York Stock Exchange since 1926. From day one, CRSP data were available in machine-readable form, a rare and pleasant occurrence to anyone involved in economic research at the time. Also important is the fact that CRSP data contained a negligibly small number of errors.Overall, CRSP database was one of the richest data sets available. Everything was ready for a revolution. Indeed, the revolution was soon to begin. The Origin of the Efficient Market Hypothesis The introduction of the term â€Å"efficient market† is usually attributed to Eugene Fama. In his 1965 paper, â€Å"Random Walks in Stock Market Prices,† published in the Financial Analysts Journal, Fama cites, among other things, his earlier study of serial correlations in daily price changes of 30 stocks that comprise the Dow Jones Industrial Average index (â€Å"The Behavior of Stock Market Prices†).He concluded that daily changes had a very small positive correlation, approaching zero for practical purposes. The stock market seem ed to work in a way that allowed all information reflected in past prices to be incorporated into the current price. In other words, the market efficiently processed the information contained in past prices. Fama defined an efficient market as: a market where there are large numbers of rational profit maximizers actively competing, with each trying to predict future market values of individual securities, and where important current information is almost freely available to all participants. Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? Note that this description is very similar to that of a perfectly competitive market out of a microeconomics textbook. And in a perfectly competitive market, every seller earns a normal profit, i. e. , the amount of profit sufficient to stay in business, but insufficient to attract a competitor. If we assume that this is true of the stock market, it follows that any new information that becomes available to the m arket will be very quickly reflected in the prices.Otherwise, there will be opportunities for abnormal returns. In Fama’s own words, In an efficient market, on the average, competition will cause the full effects of new information on intrinsic values to be reflected â€Å"instantaneously† in actual prices. The efficient market hypothesis has been formulated. The time has come to test it. Tests of Market Efficiency in the 1960s A number of different approaches were used to test the efficient market hypothesis. One of the most obvious ones was to do more studies on serial correlation of security prices.A variation of this approach would be to test various trading strategies recommended by technical analysts to see if they have any investment value. Both have been tried, and invariably came back with mostly negative results. An interesting area of research dealt with the nature of return distributions. There are some clearly visible asymmetries in stock returns. If we lo ok at the ten biggest one-day movements in S&P 500 index since 1947, nine of them would be declines. The market crash of October 1987 resulted in a negative return that was 20 standard deviations away from the mean.It turned out that stock returns are not normally distributed. They follow some sort of distribution, but, to our knowledge, no one has figured out what kind of distribution it is. On several occasions, stable Paretian distribution and Student t-distribution were found to be better approximations than the normal distribution. Needless to say, this poses a huge methodological problem for researchers who, for lack of a better assumption, are still assuming normal distributions for drawing statistical inferences. An important breakthrough in testing market efficiency came with the advent of the â€Å"event study† methodology.In an event study, researchers take a sample of similar events that occurred in different companies at different times and determine how, on aver age, this event impacted the stock price. And what would a researcher expect to see as the outcome of an event study? Assuming that we are studying favorable events, the outcome would depend on whether or not the event is anticipated by the market and, of course, on whether or not the market is efficient. In all cases, we would expect the stock price to go up. The question is, when? 4Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? Consider an unanticipated event first. If the market were efficient, the stock price would adjust upward very quickly. If not efficient, it will drift upward for some time following the event (see Figure 3). P Efficient Market P Inefficient Market Event Time t Event Time t Figure 3. Market reaction to an unanticipated favorable event If the event were anticipated, the price would drift upward for some time before the event, and, in an efficient market, likely stabilize on the event date (see Figure 4). PEfficient Market P Inefficient Market Event Time t Event Time t Figure 4. Market reaction to an anticipated favorable event The first event study was designed and conducted by Eugene Fama, Lawrence Fisher, Michael Jensen, and Richard Roll. Their article, â€Å"The Adjustment of Stock Prices to New Information,† was published in the International Economic Review in 1969 and quickly earned itself a nickname, â€Å"the FFJR study. † FFJR studied the stock market reaction to announcements of stock splits. Typically, stock splits are believed to be seemingly inexplicable good news for investors.One possible reason was reported by FFJR themselves: they found that 72% of firms in their sample announced above-average dividend increases in the year after the split. Stock splits seemed to â€Å"signal† future dividend increases. (Actually, the term â€Å"signaling† was proposed in the early 1970s by Michael Spence, who won the 2001 Nobel prize for, among other things, his research on signaling in labor markets. ) 5 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? What FFJR found is that, on average, stock prices around the date of the split behaved as shown in Figure 5. Figure 5.Averaged stock price performance around the split date According to FFJR findings, the market begins to anticipate a stock split more than two years before it actually happens and figures out the consequences of the split the day it is announced. The event study techniques were further refined by other researchers. Some of the research designs are quite clever. A bizarre example appeared in a 1985 article in the Journal of Accounting and Economics by Johnson, Magee, Nagarajan, and Newman. The title of the article, â€Å"An Analysis of the Stock Price Reaction to Sudden Executive Deaths,† is self-explaining.The authors found that unexpected CEO deaths are associated with stock price decreases. However, in cases when the CEO was the company foun der, the stock market tends to react by a price increase, begging the inference that the ability to create a business is different from the ability to run one. The efficacy of professional investors is another enduring question. Can they, on average, provide better investment performance? The research here was focused primarily on mutual funds. Regrettably, most professional money managers are not able to provide superior returns.By 1975, the preponderance of evidence argued that markets were efficient. Statistical studies showed that technical analysis did not add value (consistent with the weak form of market efficiency). Event studies found that the market quickly reacts to new information (consistent with the semi-strong form of market efficiency). And studies of professional investors’ performance made a strong case for the strong form market efficiency. Tests of Market Efficiency after 1975 As more and more researchers tested the efficient market hypothesis, some rather controversial evidence began to appear. Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? In 1976, Rozeff and Kinney published their article on stock market seasonality. They found that January stock returns were higher than in any other month. In 1981, Gibbons and Hess reported â€Å"the Monday effect† – stock prices tended to go down on Mondays. Both of these findings were clearly inconsistent with the weak-form market efficiency. Interestingly enough, Gibbons and Hess noticed that the Monday effect seemed to decrease over time (see Figure 6).Figure 6. The Monday effect In the nine-year period of 1962-1970, the S&P 500 returned about -0. 16% on an average Monday. In the following nine-year period, 1970-1978, the S&P 500 would only drop by 0. 10% on average. It appears that the effect has been known to some market participants for a while, and they were taking advantage of this private information, which, in turn, caused their gains to decrease over time. A growing body of research indicated that profitable selection rules could be based on publicly available information.In particular, stocks with low price-earnings ratio and high dividend yield outperformed the market. And, while small capitalization stocks have a greater risk than large-cap stocks, the return premium seemed to be too large for the degree of additional risk taken. The discovery of these and other â€Å"market anomalies† prompted the editorial board of the Journal of Financial Economics to publish a special issue in June 1978 on a dozen of those market anomalies. An unexpected blow to the efficient market hypothesis came from academic economists.In 1980, Sanford Grossman and Joseph Stiglitz published their article â€Å"On the Impossibility of Informationally Efficient Markets† in the American Economic Review. They argued that if all relevant information were reflected in market prices, market agents would have no incentive to acq uire the information on which prices are based. This line of reasoning came to be known as Grossman-Stiglitz paradox and, along with his other contributions, earned Joseph Stiglitz his Nobel prize in 2001. The empirical research, of course, did not stop there. 7Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? In 1981, Henry Oppenheimer tested stock selection criteria developed by Benjamin Graham. Most of us probably know Ben Graham as the author of the classic, Security Analysis, but he also wrote another, somewhat less technical, book, called The Intelligent Investor. In each new edition of the book, Graham updated his investment advice to his readers, whom he called â€Å"defensive investors†. Oppenheimer back-tested this advice as if he purchased every edition of The Intelligent Investor and acted on it after reading it.It turned out that Graham’s advice did have significant value. Moreover, it actually had more value than Graham h imself claimed. In 1982, Rendelman, Jones, and Latane published their article, â€Å"Empirical Anomalies Based on Unexpected Earnings and the Importance of the Risk Adjustments,† in the Journal of Financial Economics. They studied earnings surprises and their effect on the stock price. They divided their sample into ten categories (deciles in statistical parlance) according to how positive or negative the earnings surprise was.Then they calculated averaged price paths for stocks in each decile. Figure 7 presents a summary of their findings. Figure 7. Stock price paths around earnings announcement by decile While the market did react to earnings surprises quickly, the prices also drifted in the direction of the earnings surprise following the announcement. In other words, the market commonly underreacts to the quarterly earnings announcements. This suggests the validity of an â€Å"earnings momentum† strategy (buying stocks that just had a positive earnings surprise).A number of later studies produced results consistent with this thinking. However, in a somewhat puzzling twist, there were studies which suggested that the stock market actually overreacts to certain announcements. In 1981, Robert Shiller published his article, â€Å"Do Stock Prices Move Too Much to Be Justified by Subsequent Changes in Dividends? † in the American Economic Review and concluded that they do. This phenomenon came to be known as â€Å"excess volatility†. 8 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight?In 1985, Werner De Bondt and Richard Thaler published their article, â€Å"Does the Stock Market Overreact? † in the Journal of Finance. Their conclusion was that the stock market tends to overreact to long series of bad news. So by 1985, there were enough anomalies discovered to seriously doubt the validity of the efficient market hypothesis. Reconciling the Theory and the Reality This is a good point at which to consider the efficient market hypothesis and identify those assumptions that may be inconsistent with reality as we know it.First of all, as ironic as it sounds, there is no way to test market efficiency per se. We can only test a joint hypothesis stating that, first, the market is efficient in equating asset prices with their intrinsic values, and, second, we know what the intrinsic values are; i. e. , we have a perfect asset pricing model. Whenever an anomaly is found, we don’t know (and have no way of knowing) which part of this joint hypothesis did not work. Returning to Fama’s definition of an efficient market, he assumes that important current information is almost freely available to all participants.This appears to be an accurate assumption; however, both the processing of this information and the subsequent action have associated costs. An institutional investor must hire security analysts and portfolio managers. Even an individual investor faces an opportunit y cost with every portfolio evaluation. Both face transactional costs; large portfolios, in addition, may be subject to additional costs caused by market impact. The transactional cost considerations prompted Michael Jensen to argue that an efficient market should adjust prices within limits imposed by the cost of trading.In his 1978 paper, â€Å"Some Anomalous Evidence Regarding Market Efficiency,† published in the Journal of Financial Economics, he insisted that if, for example, transactional costs are 1%, an abnormal return of 1% must be considered within the bounds of efficiency. Indeed, if inefficiency cannot be exploited for profit net of costs, is the market really inefficient? This, of course, begs a question: what is the level of transactional costs at which we can no longer call a market efficient in spite of its being within the bounds of efficiency?There may also be some effects caused by the way security prices are reported (market microstructure effects, in the financial economics lingo). A typical research assumption has been that trades can be executed at the closing price as recorded by a data provider such as CRSP. However, the average NYSE-AMEX stock has a quoted bid-ask spread of about 3%. For NYSE-AMEX stocks priced under $5, the average spread is about 6%. In addition, sometimes it is impossible to execute at quoted spreads because of illiquidity or market impact. 9 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight?In fact, Donald Keim used precisely this argument to explain â€Å"the January effect. † In his 1989 paper, â€Å"Trading Patterns, Bid-Ask Spreads, and Estimated Security Returns,† published in the Journal of Financial Economics, he reported that stocks tend to close near the bid in late December, but close prices move toward the ask in early January (although we still have to come up with the explanation of why it happens). Also, there is a short-selling issue. In an effic ient market, short sales are unrestricted. In reality, 70% of mutual funds state in their prospectus that they will never engage in a short sale.Interestingly enough, recent empirical evidence seems to suggest that, while undervalued investments are hard to come by, overvalued ones are much more common. For example, a 1999 article by Mark Finn, Russell Fuller, and John Kling, â€Å"Equity Mispricing: It’s Mostly on the Short Side,† in the Financial Analysts Journal concludes that in 1983-1998 overvalued large-cap U. S. stocks tended to be overpriced by as much as four times the amount of underpricing observed in undervalued large-cap U. S. stocks. Finally, there is the unavoidable issue of investor heterogeneity. Investors are not identical.Even if they have precisely the same information available to them, they are likely to interpret it differently. More importantly, they tend to act on it differently. One obvious example is tax status. Tax-exempt, tax-deferred, and taxable investors acting rationally will often choose different courses of action when presented with the same problem. Liquidity needs can also play a role. Speaking more broadly, is Fama-style rational profit maximizing the only possible model of investor behavior? Are there other models? This, of course, leads us straight into the brave new world of behavioral finance.An Alternative Behavioral Model? Since the early 1980s, there has been a movement toward incorporating more behavioral science into finance. The proponents of behavioral finance cite several key areas where the reality seems to be most at odds with the efficient market hypothesis. One is the excess volatility problem that we discussed above. Price movements seem to be much greater than an efficient market would allow. A related puzzle is that of trading volume. If everyone knows that everyone (including themself) is rational, then every trader might wonder what information the seller has that the buyer doesn’ t, and vice versa.Figuring out exactly how little trading should be occurring under the efficient market hypothesis is difficult, because people have liquidity and rebalancing needs, but the proponents of behavioral finance believe it is safe to say that a billion or so shares a day on NYSE alone is a little more than one should expect in an efficient market. 10 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? Next is the great dividend puzzle. In a perfect world according to Modigliani and Miller, investors should be indifferent between dividends and capital gains.In the real world, because of the structure of the U. S. tax system, investors should prefer capital gains to dividends, and companies should prefer share repurchases to dividends. At the same time, most large companies do pay dividends. In addition, stock prices tend to rise when dividends are increased or initiated. The current literature treats dividends as yet another instance of sig naling—companies that increase or initiate dividends send a signal of their financial health to the investors. Another puzzle is that of the equity premium.Historically, this benefit has been much greater than can be explained by risk alone. (To the defense of the efficient market hypothesis, the equity premium implied in dividend yields tends to be significantly lower. ) Finally, it seems that future returns can, at least partially, be predicted on the basis of various historic measures such as price-earnings and price-to-book ratios, earnings surprises, dividend changes, or share repurchases. However, in spite of all these irregularities, real-world portfolio managers are still having a hard time trying to beat the market.Most of the studies of mutual funds and pension fund performance still show that, on average, active managers do no better than the market. Moreover, good performance this year consistently fails to predict good performance next year. With this in mind, le t's examine the case for behavioral finance. First of all, what is behavioral finance? In short, it postulates that investors have cognitive biases. What is a cognitive bias? Simply put, it is an imperfection in human perception of reality. (Have you ever noticed how much bigger the moon looks when it is just above the horizon compared to when it is high? Here are a few of the most common cognitive biases in finance. Mental accounting. It seems that the majority of people perceive a dividend dollar differently from a capital gains dollar. Dividends are perceived as an addition to disposable income; capital gains usually are not. Biased expectations. People tend to be overconfident in their predictions of the future. If security analysts believe with an 80% confidence that a certain stock will go up, they are right about 40% of the time. Between 1973 and 1990, earnings forecast errors have been anywhere between 25% and 65% of actual earnings.Reference dependence. Investment decisions seem to be affected by an investor’s reference point. If a certain stock was once trading for $20, then dropped to $5 and finally recovered to $10, the investor’s propensity to increase holdings of this stock will depend on whether the previous purchase was made at $20 or $5. 11 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? Representativeness heuristic. In cognitive psychology this term means simply that people tend to judge â€Å"Event A† to be more probable than â€Å"Event B† when A appears more representative than B.In finance, the most common instance of representativeness heuristic is that investors mistake good companies for good stocks. Good companies are well-known and in most cases fairly valued. Their stocks, therefore, may not have a significant upside potential. One of the most peculiar manifestations of cognitive biases in finance is the reluctance to realize losses. Investors seem to have a problem adm itting to themselves that they have made a mistake and avoid selling securities at a loss, even though such sale has some tax incentives.Now, what are the implications of behavioral finance for the markets? In his 1999 article, â€Å"The End of Behavioral Finance,† published in the Financial Analysts Journal, Richard Thaler offers this simple model: Suppose a market has two kinds of investors: rational investors (rationals), who behave like agents in economics textbooks, and quasi-rational investors (quasi’s), people who are trying to make good investment decisions but make predictable mistakes. Suppose also that two assets in this market, X and Y, are objectively worth the same amount but cannot be transformed from one into the other.Finally, assume that the quasi’s think X is worth more than Y, an opinion that could change (quasi’s often change their minds) while rationals know that X and Y are worth the same. What conditions are necessary to assure tha t the prices of X and Y will be the same, as they would be in a world with only rational investors? This question is complex, but some of the essential conditions are the following. First, in dollar-weighted terms, such a market cannot have too many quasi’s (in order for the rational investor to be marginal).Second, the market must allow costless short selling (so that if prices get too high, the rationals can drive them down). Third, only rational investors can sell short; otherwise, the quasi’s will short Y when the two prices are the same because they believe X is worth more than Y. Fourth, at some date T, the true relationship between X and Y must become clear to all investors. Fifth, the rationals must have long horizons, long enough to include date T. These conditions are tough to meet.Thaler seems to suggest that the belief by quasi-rational investors that certain assets are undervalued may lead to an asset bubble, which will burst as soon as quasi-rational inve stors sentiment changes. (Did somebody say Internet? ) Why is behavioral finance important? 12 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? As most marketers know, any product has its unique set of utilitarian and valueexpressive characteristics. The value-expressive characteristics are the most visible in jewelry and almost absent in laundry detergents.An interesting question to ask, then, is, do investments have value-expressive characteristics? If they do, we should not be surprised that pricing differences exist between otherwise identical investments, based entirely on their value-expressive characteristics. A casual look at stock exchange advertisements suggests a positive answer to this question. The NYSE promotes itself as solid, while NASDAQ claims it is innovative. A review of mutual funds marketing can also give us a few insights. In 1983, Fidelity Investments put Charles Jarvie in charge of marketing its mutual funds.Prior to joinin g Fidelity, Jarvie marketed Tide and Pringles at Procter ; Gamble. Jarvie immediately noticed two deficiencies in Fidelity’s marketing. Fidelity’s flagship product, the Magellan fund, was not advertised as Fidelity Magellan; the company was underemphasizing its brand name. Also, almost no attention was paid to cross-selling. Under Jarvie’s leadership, Fidelity redefined itself as a â€Å"family of funds† and built itself one of the strongest brands in the financial services industry. Other mutual fund companies followed quickly.Even more interesting are the studies of investment clubs. Over 35,000 of these clubs exist in the United States. An investment club usually includes 10-15 members (friends, co-workers, or relatives) who, on average, contribute $25 a month to the club’s account. In 1998, Brad Barber and Terrance Odean of the University of California at Davis studied performance of 166 investment clubs that had accounts with a large brokerage firm and found that 60% of the clubs lagged the market. The average underperformance was 3. 8% a year. So it seems that investment clubs lack utilitarian characteristics.What about value-expressive ones? Also in 1998, Brooke Harrington of Harvard University studied the identity formation in investment clubs. Her sample included three clubs: an all-men’s club where all members were sports car hobbyists, an all-women’s club where all members belonged to the American Association of University Women, and a mixed-gender club where all members met each other through a church singles group. She concluded that investment clubs are also social clubs. In terms of our marketing approach, they do have strong value-expressive characteristics.The importance of behavioral finance and its role in the professional’s decision making process appears self-evident. While it may fail to enhance our capacity to beat the market, it can help us understand the beliefs and motivations of our clients and improve the service provided. Is a Compromise in Sight? Are the differences between traditional finance and behavioral finance irreconcilable? Recent literature suggest a negative answer to this question. 13 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? One the one hand, the sensible proponents of behavioral finance recognize the limitations of this approach.Meir Statman of Santa Clara University said it best: Market efficiency has two meanings. To some, market efficiency means that there is no systematic way to beat the market. To others, it means that security prices are rational – that is, reflect only â€Å"fundamental† or â€Å"utilitarian† characteristics, such as risk, but not â€Å"psychological† or â€Å"value-expressive† characteristics, such as sentiment†¦ I argue that finance scholars and professionals would do well to accept market efficiency in the beat-the-market sense, but reject it in the rational-pricing sense.On the other hand, the standard finance begins to produce some research that models effects of opinion differences. Earlier, we talked about the seemingly excessive trading volumes. It appears that trading volume varies directly with the difference in investors’ opinions. Figure 8 provides a simple Marshallian cross analysis of a widening difference in opinions. Both supply and demand for a particular security shift to the right as both number of buyers and number of sellers increase.While the effect on price cannot be determined without additional information such as relative magnitude of shifts in supply and demand, the volume is bound to increase. P (price) S S’ D D’ Q0 Q1 Q (volume) Figure 8. Opinion difference and trading volume An interesting thing to discuss here would be the work of Joseph Chen and Harrison Hong of Stanford University and Jeremy Stein of Harvard Business School. In their 1999 paper, â€Å"Differen ces of Opinion, Rational Arbitrage and Market Crashes,† Hong and Stein propose the following model. 14 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight?There are two investors, A and B, and a class of fully rational, risk-neutral arbitrageurs. A and B each receive a different private signal affecting their rational perception of the value of the same stock. Both signals are useful, but A only pays attention to his signal, even if that of B is revealed to him, and vice versa. Arbitrageurs, on the other hand, recognize that the best estimate of the stock’s value is to be found by averaging both signals. However, if A and B face short sale constraints and the signals they receive are negative, the arbitrageurs simply will not see those signals.In other words, the negative private information will not have any effect on market price. This is consistent with the empirical research findings of equity mispricing being mostly on the short side. So if the arbitrageurs only hear the good news, the stock price may well be trending up, until some of the arbitrageurs begin to suspect overvaluation and take short positions in the stock. As a result, the trading volume would increase, reflecting the increasing difference of opinion among the arbitrageurs. If the stream of good news consequently ceases or private signals of A and/or B become public information, the stock price would collapse.In a later paper, â€Å"Forecasting Crashes,† Chen, Hong and Stein found that the probability of a crash is positively correlated with an increase in trading volume relative to trend over prior six months and positive returns over the prior thirty-six months. Overall, it appears that many stock market anomalies can be explained through either behavioral biases or institutional imperfections. In fact, Richard Thaler suggests applying the behavioral model to institutional investing and corporate finance. What immediately comes to mind he re is a Nobel-winning economist Herbert Simon and his 1947 book, Administrative Behavior.Here is how the outcome of Simon’s research was summarized by the Nobel committee: He rejects the assumption made in the classic theory of the firm as an omniscient, rational, profit-maximizing entrepreneur. He replaces this entrepreneur by a number of cooperating decision makers, whose capacities for rational action are limited, both by a lack of knowledge about the total consequences of their decisions, and by personal and social ties. A classic example of this approach is a 1956 paper by John Lintner, â€Å"Distribution of Incomes of Corporations among Dividends, Retained Earnings, and Taxes,† published in the American Economic Review.Lintner started by interviewing the corporate executives about their dividend policy decisions. These interviews led him to a very simple model. Companies move the dividend toward a desired payout ratio, but try to avoid having to cut the dividend. This model remains an accurate description of dividend policy to this day. Conclusion We conclude this presentation by quoting Meir Statman: 15 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? People are â€Å"rational† in standard finance; they are â€Å"normal† in behavioral finance.Rational people care about utilitarian characteristics, but not valueexpressive ones, are never confused by cognitive errors, have perfect selfcontrol, are always averse to risk, and are never averse to regret. Normal people do not obediently follow that pattern. Standard finance asks for too much when it asks for market efficiency in the rational sense, and investment professionals ask for too much when they insist that the primary contribution of behavioral finance is its potential help in beating the market.