Organisational change - Free Essay Example

Sample details Pages: 15 Words: 4482 Downloads: 5 Date added: 2017/06/26 Category Statistics Essay Did you like this example? 2. Literature Review The previous chapter provided background information on the area of research that lead to the problem argument and research question. This section presents a summary of the key research findings that have been discovered in the literature relating to change management in association with the change agent. Essentially, this chapter will review previously published literature studies with respect to the research investigation. Finally, a conceptual framework, based on theory is illustrated. 2.1 Change is always with us Hussey (2000) speaks of change as being one of the most crucial facets of successful management. Change is becoming increasingly common due to the chaotic and rather unstable business environment in which the majority of organisations operate. Furthermore the nature of change may be gradually more complex and thus is it often more widespread. Hussey (2000) also argues that most of the change situations that a manager may be engaged in are cumulative rather than fundamental. Fundamentally, firms are bound to embark on intricate changes with progressive pace, efficiency and success, so as to retain a competitive edge in the long term (Lilie, 2002). An array of diverse management theories have been developed over the last couple of years in an attempt to meet the challenges presented by such expeditiously shifting change in the business scenario. Whether it is reengineering, total quality management, reorganisation or an alternative reformation programme, the intention is to instigate o r encourage the necessary change processes in the organisation (Pfeifer and Bisenius, 2002). Don’t waste time! Our writers will create an original "Organisational change" essay for you Create order Several authors on leadership and change share the same opinion with Burns (1979) that the primary mission of leaders is to effectuate change and change necessitates proper leadership. Presumably the two most demanding challenges confronted by organisations nowadays are leadership and change: recruiting, retaining and, most decisively, developing managers as well as effectively managing change within organisations (Kanter, 1997; Mullins, 2002; Peters, 1997). 2.2 The nature of organisational change According to Balogun et al. (1999), organisational change has three core elements as shown in Figure 2.1: the change context, the change content and the change process. The change context is the why of change. The social, economic, political and competitive environment in which the organisation operates is referred to as outer context; whereas the culture, structure and capabilities of the organisation belong to the inner context. The latter also comprises the political context. Balogun et al. (1999), further argue that the change content is the what of change, and represents the selections that need to be undertaken about an organisations product range or service. It encompasses also the markets in which it participates, how it competes, and in what way it should be structured. Lastly, the change process is the how of change, which incorporates all means to deliver change. De Wit et al. (2004) speak of the extent of change in organisations, varying from a high to low amplitude. High amplitude refers to a radical change of the newly reformed company set-up concerning the organisational culture, structural composition, procedural activities or individuals from the previous state. On the contrary, a low amplitude of change implies a reasonable transformation to the former environmental conditions through the intended plan. Burnes (2003) speaks of three distinct types of organisational change which due to their recognised value, have attained significant consideration: the noticeable technological advancement in the 1980s, the application of total quality management (TQM) over the past 20 years, and the implementation of business process re-engineering (BPR) during the last 15 years. Burnes (2000) demonstrated that successful evidence in these fields is outstanding. It is crucial when striving to undertake organisational change to comprehend the causes of failure and the guidelines for successful accomplishment. 2.2.1 Why change fails? At present, it is a commonly shared outlook that firms are changing rapidly and in a more radical fashion than in the past (Carnall, 1999; Cummings and Worley, 2001; Kanter, 1997; Kotter, 1996; Peters, 1997). The majority of critics seem to agree with Hammer and Champys (1993, p. 23) opinion that change has become both pervasive and persistent. It is normality. Yet change is brought about in many variations. As Strickland (1998) remarks, occasionally change is progressive and barely recognised, such as the introduction of new machinery or computer application, or a new person becomes a member of the company. In contrast, change may be more widespread and remarkable: an absolute re-organisation, an amalgamation or a take-over, whereby each and every individual within the organisation is somehow affected. In view of these exhaustive transformations, Burnes (2000) poses a critical question: To what degree are these change efforts fruitful? Unlike an organisations profitability or performance assessment, nobody compiles statistical information in connection with how successful industries are coping with managing change. Thus, even for highly conspicuous change programmes sustained by plenty of advice and assistance, the rate of failure is noteworthy (Burnes, 2003). As the following tables reveal, several critics have attempted to recognise the right sources of unsuccessful change transformations, whether these be faults, barriers or obstacles. Although certain issues are common between the above tables, such as insufficient vision and excessive complacency along with an apathetic attitude, a number of dissimilarities are noticeable. Remarkably, nearly all of the items illustrated in the three lists denote unsuccessful management. This is evidently revealed in Table 2.3, which unambiguously exposes poor leadership and weak management (Burnes, 2003). As Figure 2.2 illustrates, resistance to change takes place for several reasons. Some of which are attributable to individuals, whilst others concern the kind and structure of the organisation (Balogun et al., 2004; Dent et al., 1999). The amalgamation of these two sources of resistance critically hinder the change process. Thus, managers and staff are required to identify and comprehend the causes for resistance to change and its sources (Slocum et al., 2007). 2.2.2 Successful change As well as recognising and distinguishing the plausible motives of failure, a number of authors have also attempted to determine the factors or actions which need to be undertaken to attain successful change (Dawson, 1994; Hardy, 1996; Kanter et al., 1992; Rye, 2001). Burnes (2003) states that one of the most valuable books in this regard is certainly Leading Change by Kotter (1996), which delineates an eight-step guide to championing change (Table 2.4). Kotters eight steps are informative and inestimable in recognising the essential actions to accomplish successful organisational change. They also highlight the significance for change projects to be led by managers who have the predisposed managerial and personal skills in order to put them into practice (Burnes, 2003). 2.3 Strategic change Machiavelli stated that: There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new (De Wit et al., 2004, p. 163). According to Thurley et al. (1989), strategic management presents existing or future managers with structural frameworks and approaches to be able to develop and enhance their strategic views, as well as strengthen their skills and readiness to undertake strategic programmes. Ohmaes (1982, p. 91) views of strategic management provide an understandable yet straightforward definition, whereby he refers to strategic management as the investigation for enhanced performance by means of a strategy that ensures a better or stronger matching of corporate strengths to customer needs than is provided by competitors (see Figure 2.3). Pettigrew et al. (1993) emphasise the relevance of suitably associating strategic and operational transformations, derived from their comprehensive investigation of specific organisations. Pettigrew et al. (1993) further argue that strategic initiatives ought to be broken down into what they refer to as actionable items, each assigned to the responsibility of a change driver. Inevitably organisations should change with the introduction of innovative technological development, ongoing economic transformation, inconsistent demographics, revolutionising political authorities, erratic consumer preferences and vigorous competition. Subsequently further consideration is given as to where, how and in what particular direction such firms must change. (De Wit et al., 2004). For living organisations, change is an accepted fact. Essentially, they must continuously be aligned with their surrounding environmental factors, either by responding to external circumstances, or by proactively contouring the industries in which they partake. De Wit et al. (2004) remarked that while change is widely spread, not all change in organisations is naturally strategic. As a matter of fact, most change processes transpire to be the progressive operational nature. Thus, organisations continuously make fine-tuning adjustments to remain competent and efficacious, by means of enhancing established procedures, further developing projects, and relocating employees to a more suitable business environment. In contrast, strategic changes are aimed at instituting a redesigned type of alignment an innovative relationship between the core set-up of the business and the distinctive aspects of the surrounding conditions. In essence, strategic changes significantly affect the way the business operates and the overall business structure. 2.4 Types of change One prevalent and broadly recognised systematic classification of strategic change identifies forms or organisational change in relation to various dimensions. A first dimension is the magnitude of change, extending from no change necessary to major reorganisation of the firm (Fopp and Schiessl, 1999). In this perspective, Nadler (1994) distinguishes between incremental and radical change. The second dimension is the sequential order of the change. Dissimilar characteristics are noted between anticipative and responsive change processes. In the context of these two dimensions, Nadler (1994) sets out a matrix illustrating the principal types of change strategies. Tuning refers to foreseeable circumstantial improvements to enhance company efficiency. On the contrary, adaptation denotes the acclimatisation of the organisation to the unstable environment. In both cases, change is referred to as evolutionary, and is triggered in divisions of the organisation. Alternatively, orientation signifies the restructuring of the entire company through fundamental transformation. In so-called reactive design, surrounding changes are reacted to which have already occurred. Similarly Balogun et al., (1999) speaks of four key forms of change, characterised in two dimensions: the end result of change and the nature of change (see Figure 2.4). The end result concerns the degree of which change is demanded, whereas the nature of change is the chosen change approach, either all together straight away or in a gradual progressive manner. Evolution relates to transformational change employed in stages through interdependent systems. Thus, it is a deliberate thought-out and practical change initiative in which direction is carried out by managers in reaction to their expectation of the necessity for the prospective change. Revolution is rudimentary change that is developed by making use of concurrent actions on several fronts, and generally in a rather short period of time. On the other hand, adaptation is less fundamental change realised slowly by means of more progressive phases, and reconstruction is change performed to realign the manner the business functions in a more striking fashion (Balogun et al., 1999). 2.5 Preparing change 2.5.1 Instigating feeling for urgency If the requisite of change is not clearly recognised and comprehended, it will not be easy to organise a group which has sufficient authority and influence to instigate the anticipated change programme. In consequence, generating a sensation for the urgency of change is essential to acquire the necessary collaboration of all employees and managerial staff (Kotter, 1997). The major hindrance to bring about a feeling for the exigency of the current circumstances is the domineering power and complacency, which so often exists in organisations. According to Kobi (1996) the following conditions can assist to make the urgency of change blatantly evident: demonstrating the appeal of the change; challenging members of staff with understandable prospects; explaining it can be accomplished; and establishing a positive approach to the change 2.5.2 Forming leadership alliance Notwithstanding the fact that remarkable transitions are habitually associated with a unique individual who is recognised by all members of the organisation, an influential leadership merger is crucial. Such formation is a fundamental element in preparation for the progression and succeeding realisation of a change programme (Pfeifer et al., 2005). The achievement of a successful leadership coalition is underpinned by a concoction of competent managers to supervise the change process and influential leadership personalities to drive the process forward. By and large, this change team is initiated with only one or two persons, and then expands in sizeable firms to comprise between 20 and 50 individuals (Kotter, 1997). 2.5.3 Convey vision and strategy It is only when all company employees acquire a shared awareness and appreciation of their aims and direction that the actual potential of a vision is totally unleashed (Pfeifer et al., 2005). As a result, the impetus for and harmonisation of the required processes is underpinned by this mutual agreement on an enticing future leading to the envisaged changes. Thus, proper dissemination of vision along with strategy is of vital importance. Yet, studies reveal that management announcements lack certain information or are somewhat misconstrued, and in turn, the required quality of communication is overlooked (Schleiken and Winkelhoder, 1997). Pfeifer et al. (2005) further discusses that the absolute realisation of a new vision and strategy may be achieved over a number of years. Thus, a tool for monitoring and manoeuvring the change process is highly recommended during such a lengthy process. 2.5.4 Planning initial successes Effectively, first achievements considerably contribute to the enthusiasm and driving force of those individuals engaged in and affected by the transformation. Such key employees demonstrate that the selected approach represents the correct way and that it is worth moving ahead with its implementation. Nevertheless, first accomplishments are meant to be though-out in advance. Schuh (1999) states that they must be designed into the development of the change programme altogether and coordinated appropriately. First successes ought to be comprehensible and noticeable for all company staff. In other words, they must absolutely prevent criticism and rumours. Kotter (1997) explains that first successes allow the supports of the change to stop briefly for a moment and mull over and celebrate the outcomes realised to this point. Optimistic feedback boosts morale and stimulus, while such achievements neutralise sceptical and egotistical rivals. 2.6 Formulating changes Supposedly, every innovative strategy endeavours to please and fulfil customers and staff members so as to assure the long-term company prosperity. Pfeifer (2001) remarks that in order to achieve this objective, collaboration between managing personnel and staff must be planned along the following features: awareness, desire, knowledge and ability. According to Lilie (2002), 70 per cent of change transformations fail at some stage in the implementation phase caused by unpredictably emerging difficulties. Subsequently, the identification of such constraints in the implementation stage is crucial to its success. In this context, the theory of constraints (TOC) by E. Goldratt (Dettmer, 1997) is an effective tool for recognising the constraints and evaluate methods to mitigate these restrictions. Similarly, Oakland et al. (2007) declares that an all-embracing organisational change necessitates significant investments in energy, time and resources. Oaklands personal experience has demonstrated that numerous change projects do not succeed. Publicly available estimates reveal that success levels can be as low as 10 per cent. Other researchers cite an average of 30 per cent success rate (Oakland et al., 2007). Indubitably, the sustainable cooperation of many employees is fundamental to the successful implementation of noteworthy organi sational changes. In spite of this, employees are not able to contribute to a change programme if they consider themselves rather powerless and having absolutely no liberty (Doppler and Lauterburg, 2002). Pfeifer et al. (2005) concludes that the participation of individuals affected by the change permits the maximum potential to be attained in a change programme. 2.7 Context-specific change Despite of the fact that managing change is a specialised competence that can be thought and, in turn, acquired over time, it is invariably argued that there is no one best recipe to carry out change. As a result, a context-specific approach is the correct way for addressing change programmes. The design and approach of any chance process should be tweaked according to the particular environmental conditions of each particular company. (Balogun et al., 1999). Figure 2.5 illustrates the phases in the design process of a context-sensitive conceptual application. Extensive research exists describing the implementation phase of change programmes, where the ensuing explanation is far away from a model based on a logical set of technological, economic and structural eventualities. (Senge 1990; Pettigew et al., 1992). Subsequently, sufficient supporting evidence advocates that common prescriptive concepts of change transformations are inappropriate to demonstrate the multiplicity of various approaches effectively employed by companies (Dunphy and Stace, 1993). Similarly, Balogun et al. (1999) refers to the formulaic approach to change management as being a precarious route. Thus, the inestimable value gained through previous experience or knowledge must be analysed in relation to the present environment. 2.8 The role of the change agent According to Balogun et al. (1999), the change agent is the accountable individual for making the change happen in any company. In actual fact, such people are not officially labelled change agents. Various people may be appointed, formally or informally, to satisfy this specific role. Buchanan and Badham (1999, p. 610) defines the change agent as a manager who attempts to reconfigure an organisations roles, responsibilities, structures, outputs, processes, systems, technology or other resources with the intention of enhancing the organisations efficacy. Buchanan and Boddy (1992) describe the skills required for successful change agents encompass communication and negotiation competencies, team building activities, simplicity of stipulating objectives, and influencing skills to achieve commitment to the ultimate destination. Balogun et al., (1999, p. 6-7) argue that change agents ought to extend their analytical, judgemental and implementation skills. In addition to these managerial abilities, change agents require particular personal skills, comprising the ability to deal with complexity, sensitivity and self-awareness. Burnes (2003, p. 631) remarks that those individuals who lead change projects must possess the appropriate skills, competencies and aptitude to put into practice the guidelines for success. Saka (2003) argues that members of an organisation are not only prospective change drivers but also recipients of change processes, and are probably to inquire about its significance. References Balogun, J. and Hope Hailey, V. (1999). Managing Strategic Change. 1st Edition. Prentice Hall. U.K. Balogun, J. and Johnson, G. (2004). Organizational restructuring and middle manager sensemaking, Academy of Management Journal. Vol. 46, p. 523-549. Buchanan, D. A. and Boddy, D. (1992). The Expertise of the Change Agent. Prentice-Hall, London. Cited in: Saka, A. (2003). Internal Change Agents View of the Management of Change Problem, Journal of Organisational Change Management, Vol. 16 No. 5, p. 480-496. Burnes, B. (2000). Managing Change: A Strategic Approach to Organisational Dynamics. 3rd Edition. FT/Prentice-Hall, Harlow. Cited in: Burnes, B. (2003). Managing change and changing managers from ABC to XYZ, Journal of Management Development, Vol. 22 No. 7, p 627-642. Burnes, B. (2003). Managing change and changing managers from ABC to XYZ, Journal of Management Development, Vol. 22 No. 7, p 627-642. Burnes, J.M. (1979). Leadership. Harper Row, New York, NY. Cited in: Burnes, B. (2003). Managing change and changing managers from ABC to XYZ, Journal of Management Development, Vol. 22 No. 7, p 627-642. Carnall, C. A. (1999). Managing Change in Organisations. 3rd Edition. FT-Pentrice-Hall, Harlow. Cited in: Burnes, B. (2003). Managing change and changing managers from ABC to XYZ, Journal of Management Development, Vol. 22 No. 7, p 627-642. 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Institute of Management, Corby. Cited in: Burnes, B. (2003). Managing change and changing managers from ABC to XYZ, Journal of Management Development, Vol. 22 No. 7, p 627-642. Hussey, D. E. (2000). How to Manage Organisational Change. 2nd Edition. Kogan Page Limited. London, U.K. Hyczynski, A. and Buchanan, D. (2001). Organisational Behaviour. 4th Edition. FT/Prentice-Hall, Harlow. Cited in: Burnes, B. (2003). Managing change and changing managers from ABC to XYZ, Journal of Management Development, Vol. 22 No. 7, p 627-642. Kanter, R.M, Stein, B.A. and Jick, T.D. (1992). The Challenge of Organizational Change. Free Press, New York, NY. Cited in: Burnes, B. (2003). Managing change and changing managers from ABC to XYZ, Journal of Management Development, Vol. 22 No. 7, p 627-642. Kanter, R.M. (1997). World Class: Thriving Locally in the Global Economy. Simon Schuster, New York, NY. Cited in: Burnes, B. (2003). Managing change and changing managers from ABC to XYZ, Journal of Management Development, Vol. 22 No. 7, p 627-642. Kanter, R.M. (1997). World Class: Thriving Locally in the Global Economy. Simon Schuster, New York, NY. Cited in: Burnes, B. (2003). Managing change and changing managers from ABC to XYZ, Journal of Management Development, Vol. 22 No. 7, p 627-642. Kobi, J-M. (1996). Management des Wandels: Die Weichen und Harten Bausteine Erfolgreicher Vernderung. Haupt, Stuttgart. Cited in: Pfeifer, T., Schmitt, R. and Voigt, T. (2005). Managing Change: Quality-oriented Design of Strategic Change Processes, The TQM Magazine, Vol. 17 No. 4, p. 297-308. Kotter, J. P. (1997). Chaos, Wandel, Fhrung Leading Change. ECON, Dsseldorf. Cited in: Pfeifer, T., Schmitt, R. and Voigt, T. (2005). Managing Change: Quality-oriented Design of Strategic Change Processes, The TQM Magazine, Vol. 17 No. 4, p. 297-308. Kotter, J.P. (1996). Leading Change. Harvard Business School Press, Boston, MA. 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Subalterns Free Essays

Concept of Subaltern and Subaltern Studies Dr. Abhishek Gopal* ‘Subaltern’ originally is a term for subordinates in military hierarchies which is elaborated in the work of Antonio Gramsci to refer to groups who are outside the established structure of political representation. Subaltern was first used in a nonmilitary sense by Marxist Antonio Gramsci. We will write a custom essay sample on Subalterns or any similar topic only for you Order Now Some believe that he used the term as a synonyms for proletariat, possibly as a codeword in order to get his writings past prison censors, while others believe his usage to be more nuanced and less clear cut (Morton, Stephen). It has also been emphasised that the term â€Å"subaltern† is an allusion to the work of Italian Marxist Antonio Gramsci (1881-1937) which literally, refers to any person or group of inferior rank and station, whether because of race, class, gender, sexual orientation, ethnicity or religion. The term ‘subaltern’ is used in post-colonial theory. The exact meaning of the term in current philosophical and critical usage is disputed. Some thinkers use it in a general sense to refer to marginalized groups and the lower classes – a person rendered without agency by his or her social status (Young, Robert J. C. , 2003). Others such as Gayatri Chakravorty Spivak use it in a more specific sense. She argues that ‘subaltern’ is not just a classy word for oppressed, for others, for somebody who’s not getting a piece of the pie†¦ In post-colonial terms, everything that has limited or no access to the cultural imperialism is Subaltern – a space of difference. Now who would say that’s just the oppressed? The working class is oppressed. It’s not subaltern†¦ Many people want to claim subalternity. They are the least interesting and the most dangerous. I mean, just by being a discriminated – against a minority on the university campus, they don’t need the word ‘Subaltern†¦ ‘. They should see what the mechanics of discrimination are. They are within the hegemonic discourse wanting a piece of the pie and not being allowed, so let them speak, use the hegemonic discourse. They should not call themselves subaltern (de Kock, Leon; 1992 : 29-47). Gayatri Spivak suggests that the subaltern is denied access to both mimetic and political forms of representation. * Ex-Lecturer, Sociology, Govt. Degree College, Jhakhini, Varanasi 2 It may also be pointed that in several essays, Homi Bhabha, a key-thinker within post-colonial thought, emphasizes the importance of social power relations in his working definition of ‘Subaltern’ groups as oppressed minority groups whose presence was crucial to the self-definition of the majority group : Subaltern social groups were also in a position to subvert the authority of those who had hegemonic power (Laura Garcia et. al. , 1996, pp. 191-207). It is noteworthy that Bonaventura de Sousa Santos (2002) uses the term ‘Subaltern Cosmopolitanism’ extensively in his book. He refers to this in the context of counter-hegemonic practices, movements, resistances and struggles against neoliberal globalization, particularly the struggle against social exclusion. He also uses the term interchangeably with cosmopolitan legality as the diverse normative framework for an ‘equality of differences’. Infact, here, the term subaltern is used to denote marginalized and oppressed people(s) specifically struggling against hegemonic globalization. It may be emphasized that subaltern is a term that commonly refers to the perspective of persons from regions and groups outside the hegemonic power structure. Infact, in the 1970s’ the term began to be used as a reference to colonized people in the South-Asian sub-continent. It provided a new perspective on the history of colonized place from the perspective of colonized rather than from the perspective of hegemonic power. In this context, Marxist historians had already begun to view colonial history from the perspective of the proletariat but this was unsatisfying as it was still a Euro-centric way of viewing the globe. However, Subaltern is now regularly used as a term in history, anthropology, sociology and literature. (Gyan, Prakash, 1994). â€Å"Subaltern studies began in the early 1980s’ as an intervention in South-Asian historiography. † While it began as a model for the sub-continent, it quickly developed into a vigorous post-colonial critique. The term subaltern studies group (SSG) or subaltern studies collective (SSC) are a group of South Asian scholars interested in the post-colonial and post-imperial societies of South Asia in particular and the developing world in general. It may be pointed out that the term subaltern studies is sometimes also applied more broadly to others who share many of their views. Infact, their approach is one of history from below, focused more on what happens among 3 the masses at the base levels of society than among the elite. It may be observed that the group associated with the subaltern studies arose in the 1980, influenced by the scholarship of Eric Stokes, to attempt to formulate a new narrative of the history of India and South Asia. Undoubtedly, as stated before this narrative strategy most clearly inspired by the writings of Gramsci was explicated in the writings of the ‘mentor’ Ranjit Guha, most clearly in his ‘manifesto’ in ‘Subaltern studies I’ and also in his classic monograph ‘The Elementary Aspects of Peasant Insurgency’ although they are, in a sense, on the left, they are very critical of the traditional Marxist narrative of Indian history, in which semi-feudal India was colonized by the British, became politicized, and earned its independence. In particular, they are critical of the focus of this narrative on the political consciousness of elites, who in turn inspire the masses to resistance and rebellion against the British. Instead, they focus on non-elitessubalterns as agents of political and social change. They, infact, have had a particular interest in the discourses and rhetoric of emerging political movements, as against only highly visible actions like demonstrations and uprisings. Thus, from the above discourse it can be observed that the Subaltern studies started in the early 1980 as an intervention in South Asian Historiography and emerged as a model for the subcontinent which quickly developed into a vigorous post-colonial critique. So far as the formation of subaltern studies group is concerned it was founded by Ranjit Guha. It may be pointed out that in more recent times, some former members have become disillusioned with the post-modern turn that the group has taken (notably Sumit Sarkar who left the group). A galaxy of eminent scholars such as Ranjit Guha, David Hardiman, Partha Chatterjee, Dipesh Chakrabarty, Gyan Pandey, Gayatri Chakravorty Spivak, Susie Tharu, Gyan Prakash, Sudipta Kaviraj, Edward Said, David Arnold, Gautam Bhadra, Ajay Skaria, Qadri Ismail, Kamran Asdar Ali, Shail Mayaram, Sumit Sarkar (later dissented), Lata Mani, Aamir Mufti, M. S. S. Pandian, Shahid Amin are associated with Subaltern studies. The subaltern concept has become so prominent now a days that it is being regularly used in various disciplines such as literature, history, anthropology and sociology etc. REFERENCES 1. Morton, Stephen, â€Å"The subaltern : Genealogy of a concept†, in Gayatri Spivak : Ethics. 2. Young, Robert J. C. Postcolonialism : A very short Introduction. New York : Oxford University Press, 2003. 3. de Kock, Leon, â€Å"Interview with Gayatri Chakravorty Spivak : New Nation Writers Conference in South Africa. † A Review of International English Literature. 23 (3) 1992 : 2 9-47. 4. Bhabha, Homi K. â€Å"Unsatisfied : notes on Vernacular Cosmopolitanism†. Text and Nation : Cross-Disciplinary Essays on Cultural and National Identities. Ed. Laura Garcia – Moreno and Peter C. Pfeiffer. Columbia, SC : Camden House, 1996 : 191-207. 5. Santos, Boaventura de Sousa (2002). Towards a New Legal Common Sense, 2nd ed. (London : Lexis Nexis Butterworths), particularly, pp. 458-493. 6. Gyan Prakash, â€Å"Subaltern Studies as Postcolonial Criticism†, The American Historical Review, December 1994, Vol. 99, No. 5, 1475-1490, 1476. 7. Chaturvedi, Vinayak, ed. , Mapping Subaltern Studies and the Postcolonial. London and New York, 2000. 8. Ludden, David, ed. , Reading Subaltern Studies. Critical History, Contested Meaning and the Globalization of South Asia, London, 2001. How to cite Subalterns, Essay examples

Cultural Of The Country And Religious Variation †Free Samples

Question: Discuss about the Cultural Of The Country And Religious Variation. Answer: Introduction India is a known as the largest country in the South Asia region. The country shares its border with countries like China, Nepal, Pakistan, Bangladesh and Sri Lanka (Spate Learmonth, 2017). The country is vast in its cultural and religious variation. India is regarded as largest democracy in the world. The country is expected to become the most populous country in the world by overtaking China by the year 2028. The country is selected because it is one of the fastest developing countries and a huge area for international business to enter and make a mark on. The country has an economy that is strong and the trade policies are lenient which further make it one of the most suitable countries to create a market report. 3 key attributes Economy- India is a country that is extensively dependent on agriculture and the various products from it. The working population of the country is mostly engaged into farming and other agriculture activities (Yadav et al., 2015). The income from agriculture and related activities make up for most of the annual income of the country. Around 21% of the national income was attributed to agriculture and related activities in the year 2004. The agricultural set up of the country has the maximum pressure on it to perform and deliver so that the economy of the country keeps progressing in the right direction. The country has a fertile land and the practice of agriculture is attributed to the history of the place. The rate of capital formation of the country is low and the income per capita is low in comparison to other countries. The wealth distribution pattern in the society is uneven and it is seen that the wealth is stagnated with a certain section of the society. Obsolete technologies used in the production process makes it further difficult for the country to gain economic boost. The use of backdated technology has held the country back in terms of the economic development that is expected from the country. Culture- The culture of the place is huge in terms of variety and this is primarily due to the huge geographical expanse of the nation. The country has mountains, plains and even deserts. It shows that the demography of the country is varied and hence their culture is varied too. The country is referred to as cultural museum due to the huge number of races it has within. The second most populous country in the world, India, has a variety of races that is unprecedented in other parts of the world. The variety in races reflects that the country has an immense diversity in the number of languages prevailing in the country. A total of 179 languages and 544 dialects exist in the country (Weiner, 2015). People from different regions have different languages that they use. The religious variety in India is huge and as it a country that allows the following of any religion without any barrier, the diversity in the culture is further enhanced. Each of the religious group has their different c ulture and practice that creates the Indian mainland into a pool of diversity. Geography- The huge expanse of the Indian mainland brings to the account the huge variety and list of features that it has in its geography. The country has many rivers flowing throughout the country. Each of these rivers have significant influence on the market and economy of the country. The country has some plains which are very fertile and they add to the economic growth of the nation. The Chhattisgarh Plateau is one of the most important source of minerals for the entire nation and it is rich in all kinds of minerals that can be excavated from under the ground (Bhausaheb et al., 2014). The Gangetic plain of the country is a hub of natural resource for the entire country and it provides huge amounts of required resource to the production process of the country. The mountains of the country have importance as they act as a shield to winds that may harm the country. The Himalayas make sure that the country does not face the cold winds that blow from the other side of the huge mount ains. It blocks such winds and also provides security from any kind of invaders easily entering the country. The mountains also act as a huge source of natural resource and play a major role in attracting tourists into the country. Cultural Analysis The culture of the country is hugely varied. The different regions and religions have their set of beliefs and code of conduct which they adhere to in the society. Some of the attributes of the culture are presented in brief below- People- The people of India are the best thing that a foreign person can witness in the country. The people are very celebrating in nature and fun loving. Each of the citizen is a passionate person and be it for cricket, movies, food or anything they are in the mood to celebrate the event. The people believe in making most of any celebration that takes place. The common characteristic for the people of India is that they are emotional in nature and have a strong sense of family. The level of attachment that each of the members have for each other in the family is huge and once a person is part of a family it is seen that the members stick around with the person even at the toughest of the times. The entire population is known to be great host for guests and the warmth and intimacy that the Indians will make a person feel is to be found in no other place on earth. The generosity that the Indians have is huge and they believe that the best practice is serving others. Any religious plac e in India serves free meals to thousands of people on a daily basis and this is done free of cost (Jatt, 2015). Language- India is a land with huge variety in its culture and the variety cannot be understood unless the language of the place is discussed. The country has a total of 18 languages that are regarded by the constitution as official language. The Indian currency has the 18 different languages imprinted on it and it shows the diversity the country holds within itself. Respect is provided to all the languages and due to such variation it is seen that no place has a fixed language the dialect changes after every mile shift in the country. Though the official numbers suggests 18 languages, unofficial figures suggest that India is house to over 2500 dialects in total (Harrison, 2015). The most widely and commonly used language in the country is Hindi. Hindi is now referred to as the second most used language in the entire world after Mandarin which of Chinese origin and stands in the first place. Traditions- India is a place that is rich in folk and traditional practices. The history of the country is rich and makes sure that all the ideas of tradition and culture are richly incorporated in the population. The Chhou and Kabelia folks of Bengal and Rajasthan respectively have earned a place in the global domain due to their eminent style unique presentation form (SARKAR MISTRI, 2015). The Ramlila, which is an ancient drama about the abduction of Sita by Ravana and the revenge story of Lord Ram, has been picked up by UNESCO and a documentary has been made on it (Gopalakrishnan, 2016). It is said the Indian culture dates back to 4500 years and it is the oldest of the cultures in this entire world. Unique cultural elements- The Namaste is a practice that is absolutely unique to the country and is a practice that has evolved in the country itself and hence unique to the entire world. It basically is a greeting to another person with folded hands showing pleasure and generosity on part of the host. The notion of Atithi Devo Bhava is unique to the country. It shows that the people of the country are very generous to the guests that come to the nation and they shall greet them as Gods (Yameen, 2013). The people of India believe that the guests are another form of God and they should hence be treated like one. Business culture of India As it is evident from the previous part of the report that India is a place that is rich with culture and certain formalities that are unique to the nation. The business practice in the country is marked with certain etiquettes that are needed to be followed by anyone trying to partner or build a business in the country. The openings and greetings in a business meeting are with a handshake or a namaste (Dahwa, Al-Hakim Ng, 2013). It is essential that respect is shown to all the people who are involved in the business meet. The seniors in the business meet should be greeted with the position they hold, it shows the respect that the person has in the society. One should refer to people as Sir or Madam and even the use of ji after the name shows immense respect to the person who is being referred to. The business attire of the country does not mention ties as mandatory and hence formal trousers and lightweight coats are appreciated for the business meets. The most widely used language in the business meets is English. It is to be understood that the people in India refrain from saying no and rather use other sentences such as we will see, we will try, It may be difficult and many more. The underlying meanings of such words should be understood and it should be made sure that too much pestering is not done. The timings and venue of an Indian business meet can be changed even at the last moment and interruptions are expected numerous times. The start and end time of a business meet should not be expected on time as people tend to delay such proceedings in India. For a country like India, trust and good relationship matters as much as statistics and data so it has to be made sure that a good relationship is built with the people before looking at getting a deal fixed with them. Comparison with Singapore business culture Efforts to make business in India easier has constantly been on rise but have yielded very low results as it remains a tough place for new businesses to develop. The world bank ease of doing business reports reflects that India is placed at #130 in the list whereas Singapore is positioned at #2 (Besley, 2015). The process of import for a new business is very difficult for India when compared with Singapore. In India the imports are delayed and at times forfeited due to theft and lack of security whereas in Singapore the imports are completely safe and the transportation system is so efficient that it makes sure that the shipments are delivered at the right time. The ease of getting a credit for a new business is easy for Singapore whereas in India the situation is completely adverse and it takes a lot of effort to make sure that credit is approved for a business to come into the country. The ease of getting land and security for a new business is easier in Singapore than in India. Th e land permitted for business may face revolt from the natives due to unfair encroachment policies. The revolt can lead to loss for the business and the company may face serious legal implications and notice for the same. These make it difficult for new businesses to enter into the country and make a positive mark. The taxation system of India imposes up to 30% of taxes on earning individuals whereas Singapore has a maximum of 22% tax to be imposed on the earning population. Hofstedes 5 cultural dimension analysis Individualism vs. Collectivism India has a score of 48 in this section of the Hofstede and it shows that the society has both individualistic and collectivist traits in it (Country Comparison - Hofstede Insights, 2018). The collectivist trait is reflective of the desire of the people to be part of larger social framework. With such traits, it is expected that a person is dependent on many of the social constraint around and makes decision which are influenced by the views and opinions of all the people around that individual such as family, society and friends. The individualist approach reflects that the people of India believe that a person is the one who is responsible for all the work that is done by the individual. The Hinduism and the theory of birth and death associated with it further instates the individualism. Power Distance India has a score of 78 in this section and it shows that the people of India have a highly structured society (Country Comparison - Hofstede Insights, 2018). The Indian idea is that a person is dependent on the boss who has the power to provide discretion. The element of control is huge in the society and it further ensures that the communication is one way in the society. The feedback, which is negative in nature, from the lower section of the society does not reach to the top order. Uncertainty Avoidance The score for India in this section is 40 (Country Comparison - Hofstede Insights, 2018). It reflects that India is a country that accepts that uncertainties that are prevalent in life. The country has a medium to low level of uncertainty avoidance. The people often use the idea of bypassing the rules to get their motives sanctioned. The quality of adjustment is high among the workforce and hence they do not react on unexpected events and at times feel happy as it breaks the monotony. Achievement vs. Nurturing The score for India in this section is 56 (Country Comparison - Hofstede Insights, 2018). It reflects that India is focused towards achievement and the country has high regards for power and success. The country is a spiritual land and hence the nurturing provided to the people is high as the religious texts provide motivation for the people. The people have regards for achievement but care is taken of those who are need of nurturing. Long-term orientation India has a score of 51 in this section and it reflects that the history and age old believes of the country has considerable impact on the present ethics of work (Country Comparison - Hofstede Insights, 2018). Time is not taken as an important aspect in the country but the ethics and good deeds are taken up into account. The idea of karma is used and everyone believes that if a sin is committed then the punishments of it shall be suffered in the same birth by the person. The society is pragmatic in the country and people are not judged based on punctuality but based on the event that leads to the consequent result or delay. Conclusion India is a country that is developing every single day and the resource and labor base of the country attracts new businesses. However it is seen that setting up a business is not that easy in a country like India because of the various governing and laws that persist in the nation. The people of the country are its biggest advantage as it makes sure that the foreign people feel comfortable and get the best of reception in the country. In comparison with Singapore, it has drawbacks as the business environment is not as rewarding as it should be. The country of India has its own nature and style and if adjustments are made then it could well be a suitable business destination for any new venture. References Besley, T. (2015). Law, regulation, and the business climate: The nature and influence of the World Bank Doing Business project.Journal of Economic Perspectives,29(3), 99-120. Retrieved from: https://pubs.aeaweb.org/doi/pdf/10.1257%2Fjep.29.3.99 Bhausaheb, K. S., Tiwari, S. P., Sahu, T., Naik, S. K., Gendley, M. K. (2014). Trace mineral status of soil, feed and animal in Chhattisgarh state (India).Int. J. Adv. Res,2(5), 443-448. Retrieved from: https://www.journalijar.com/uploads/438_IJAR-3281.pdf Country Comparison - Hofstede Insights. (2018).Hofstede Insights. Retrieved 23 March 2018, from https://www.hofstede-insights.com/country-comparison/india/ Dahwa, M. P., Al-Hakim, L., Ng, E. (2013). The importance of trust in procurement practices and its impact on business performance: An empirical investigation from the perspective of the buyersupplier dyad.Journal of Relationship Marketing,12(4), 280-300. Retrieved from: https://eprints.usq.edu.au/24492/7/Dahwa_Al-Hakim_Ng_JRM_2013_AV.pdf Gopalakrishnan, S. (2016). UNESCO Masterpieces Proclamation Programme and Safeguarding Strategies for Intangible Cultural Heritage: A View from India.Journal of Heritage Management,1(1), 12-21. Retrieved from: https://journals.sagepub.com/doi/full/10.1177/2455929616643803 Harrison, S. S. (2015).India: The most dangerous decades. Princeton University Press. ISBN 1400877806, 9781400877805 Jatt, Z. R. (2015). Exploring Tourism Opportunities: Documentation of the Use of Spaces of the Pre-Partitioned Temples and Gurudwaras in Punjab, Pakistan.Chitrolekha International Magazine on Art and Design, Volume 5, Number 2, 2015, 59. SARKAR, A., MISTRI, B. (2015). Folk Resource Utilization and Sustainability of Rural Livelihood: An Inquiry on Purulia Chhau Mask Making Art in Chorda Village, Baghmundi CD Block, Purulia District.The Journal of Social Science Researcher,4(7), 83-96. Retrieved from: https://ssresearcher.com/journals/pdf/108_8.pdf Spate, O. H. K., Learmonth, A. T. A. (2017).India and Pakistan: A general and regional geography(Vol. 12). Routledge. ISBN 135196898X, 9781351968980 Weiner, M. (2015).Sons of the soil: Migration and ethnic conflict in India. Princeton University Press. ISBN 1400871719, 9781400871711 Yadav, I. C., Devi, N. L., Syed, J. H., Cheng, Z., Li, J., Zhang, G., Jones, K. C. (2015). Current status of persistent organic pesticides residues in air, water, and soil, and their possible effect on neighboring countries: A comprehensive review of India.Science of the Total Environment,511, 123-137. Retrieved from: https://www.academia.edu/download/38032798/STOTEN_POPs_review.pdf Yameen, M. (2013). Marketing strategies of hotel industry in India.Global J. of Arts Mgmt,3(3). Retrieved from: https://rrjp.in/admin/papers/Marketing_strategies_of_hotel_industry_in_India.pdf

Condumetric and Gravemetric Lab Report Sample

Condumetric and Gravemetric Lab Report Paper Another way to calculate the molar concentration of barium hydroxide would be to calculate the number of moles of the insoluble barium sulfate by gravimetric determination. Data Analysis: 1. 7. 6 ; 10-4 mol HASPS 2. 0. 076 M 3. 0. 008351 mol Bass 4. 0. 0835 M 5. Equivalence Point: 24% error, Gravimetric determination: 17% error. The gravimetric determination was more accurate because an exact amount of precipitate was formed. Conclusion: In this lab an attempt was made to determine the concentration of a solution by using the countercyclical determined equivalence point of the reaction between and HASPS and by gravimetric determination. The military using the equivalence point was determined to be 0. 076 M, with a percent error tot 24% (actual value was 0. 100 M). The military using gravimetric termination was 0. 0835, an error of 17%. One possible error is the presence tot bubbles in the burette. Bubbles would have caused the burette reading to be too high, resulting in a larger equivalence point. Another possible error deals with the colloidal nature of barium hydroxide due to its relatively low solubility. The colloidal barium hydroxide would make it more difficult for barium sulfate to precipitate out when reacting. Decreasing the amount of precipitate would make the military lower than the actual, and would also account for the error experienced in this lab. We will write a custom essay sample on Condumetric and Gravemetric Lab Report specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Condumetric and Gravemetric Lab Report specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Condumetric and Gravemetric Lab Report specifically for you FOR ONLY $16.38 $13.9/page Hire Writer

Psychology Genetic essays

Psychology Genetic essays Interest is growing in the application of evolutionary and genetic behavioral ecological theory to problems of human lifetimes age specific fertility and mortality, population growth, and emerging population-environment interactions. An understanding of human evolution, particularly the effects of environmental constraints on age-specific fertility and mortality offers insights not only into our past, but into modern problems that are both large scale and urgent. Past theories have helped little to illuminate such issues as the transition to small family size. Evolutionary theory has attained the status of new paradigms for personality. Three challenges for the next generation of research are to integrate these disparate approaches to personality (particularly the trait and social-cognitive paradigms), to remedy the imbalance in the person-situation-behavior triad by conceptualizing the basic properties of situations and behaviors, and to add to personality psychology's thin inventory of basic facts concerning the relations between personality and behavior. In the past few years, three new basic paradigms for the study of personality have joined the four classics just considered. Two of thesethe social-cognitive and biological approachesgrew out of the behaviorist and trait paradigms, respectively. The thirdevolutionary psychologydeserves to be considered a new paradigm in its own right. The evolutionary approach to personality, by contrast, focuses on the possibility that behavioral patterns common to all peoplehuman nature itselfhas a biological foundation that can be illuminated by considering the evolutionary history of the human species. Evolutionary ideas became an important part of biology beginning. The modern field of evolutionary psychology can be said to have begun with the sociobiology. The key idea that during the environment of evolutionary adaptation humans with certain behavioral propensities was partic...

Sociology - Ubran Sociology & Crime and Criminology Research Proposal

Sociology - Ubran Sociology & Crime and Criminology - Research Proposal Example As part of examining the possible impact of implementing a diet program for police officers, the health benefits, identified positive work improvements, and social benefits of this program will be tackled in details. In relation to the implementation of a strict diet program for local police officers, the proposed research study is important in terms of improving the health and work performance of the local police officers. Because of the nature of work, the U.S. police officers live roughly 15 years less as compared to the average Americans (Tracy, 1993). This is possible due to the fact that approximately 50% of the local police officers are likely to develop a form of heart disease during their retirement age (Vonk, 2007). The problem with being overweight is highly associated with the risk of developing a long list of health problems including: (1) high blood pressure; (2) Type 2 diabetes or non-insulin dependent diabetes mellitus (NIDDM); (3) high blood pressure; (4) atherosclerosis; (5) high cholesterol levels; (6) gallbladder disease; (7) atherosclerosis; (8) cerebral hemorrhage; (9) coronary heart diseases; (10) osteoarthritis; (11) sleep apnea; and (12) certain types of cancer. (Alberti et al., 2007; Nazario, 2007; Nanchahal et al., 2005; WHO, 2005; Ballington, 2002; American Psychiatric Association, 2000; Lau et al., 2000; Yuan et al., 1998) On top of the health consequences of being overweight, it also contributes to the slow physical movements can endanger the lives of the local police officers. The proposed research design includes the use of qualitative and quantitative research survey questionnaire which will be distributed to a group of police officers. To determine the best diet program which can be designed for the specific nutritional needs of the police officers, a one-on-one interview will be conducted with a qualified nutritionist. After requesting

Sales Management Essay Example | Topics and Well Written Essays - 1500 words - 8

Sales Management - Essay Example Sales force automation not only involves automation of various activities related to sales department of a company but also assists the management in carrying out sales analysis, market analysis, and employee performance analysis. Implementation of sales forces automation system in any company or organization is considered an important managerial decision but where it brings various advantages for the companies, it also leads to some disadvantages. Sales Force Automation helps the management of a company update the sales management processes in order to enjoy sheer sales success (Anderson 1996). The key activities carried out by the Sales Force Automation system include lead management, opportunity management, account management, contact management, activity management, and sales forecast analysis (Wilkinson 2010). Sales Force automation helps the companies automate different sales activities, which results in making the sales related processes more accurate and reliable as compared to traditional sales management. Sales Force Automation also helps the companies achieve market domination in any competitive market by increasing the productivity through automated sales processes. Some of the key advantages of implementing Sales Force Automation system in a company include identification of risks, elimination of wastes, decreased administrative costs, improved contract management, better order tracking system, and increased profits for the company. SFA system automates various sales processes such as order placement system, order processing system, and order tracking system. These automated systems result in making the sales department staff of a company more efficient. De Sousa (2010) asserts, â€Å"Sales management software enables sales teams to concentrate more on their sales activities as opposed to administrative tasks†. Companies should implement appropriate techniques such as supervisory feedback and

Save the world proposal Essay Example | Topics and Well Written Essays - 750 words

Save the world proposal - Essay Example In this proposal, the threats facing this animal will be looked at especially the species belonging to the giant panda. Extinction results into complete eradication of an animal species from the earth surface which has a number of consequences to the ecosystem. The proposal will finally analyze some of the possible ways of saving this species of panda from the imminent eradication and extinction (Gong & Reid 246). The giant panda belongs to the bear family and occupies large parts of china and other areas of New Zealand and Australia. It is an omnivore eating both bamboo leaves and soft tissues sections and small animals found within its habitat. Moreover, it is one of the major sources of tourism revenue in china and New Zealand and foreigners troop these countries to be with this friendly animal. Furthermore, it presents many opportunities for the country that makes it essential for the world life conservancy authorities and groups to develop mechanisms of protecting the animal (Ou yang et al 622). The giant panda is considered as one of the rare species of bear currently available that depends on bamboos and soft tissue plants to survive. Bamboo has however attracted a number of economic applications across different levels of economic activities in the world. As a result, bamboo cutting has significantly increased as people use them for economic purposes or clear the land for farming activities due to increased human population. This deprives the giant panda of its main source of food, thus leaving the animal with small animals as the only alternative source of food. Additionally, the giant panda is slow to reproduce which means that the animal has minimal number of offspring during its lifetime, further increasing its vulnerability to extinction (Entwistle & Dunstone 87). The giant panda should be saved from extinction considering the significant role it plays in reinforcing the efforts of conservation of the flora and fauna. It is considered as one of the most loved animal species not just in china but also in other parts of the country. The region where the giant panda is found is considered as the heartland of Chinese which makes it essential to ensure sustainability in the region. Encouraging sustainability in this region will not only protect the giant panda from extinction but also improve the lifelines of the people around the Yangtze Basin in China. This area acts as the heartland of economic activities in china, being home to both tourist activities, subsistence fisheries and a number of economic activities essential for the growth of the country (Li et al 48). The extinction of the giant panda has a number of ecological, economical and agricultural impacts not just to china but also to the rest of the world. In the event of this extinction, China will end up losing a symbol of its national pride and conservancy efforts. The rate of bamboo consumption in the country will increase tremendously as there will be no concern arisi ng from the existence of the giant panda. This will create significant ecological and agricultural implications to the areas where bamboo is widely grown (Entwistle & Dunstone 87). Despite the widespread concerns on animal and plant conservancy, the benefits achieved maybe are overshadowed by the challenges. Extinction to some scholars is created by natural forces as explained by Darwin theories in relations to the available natural resources. The continued

Theories of Merger and Takeover Waves

Theories of Merger and Takeover Waves Merger Wave The American economy experienced two great takeover waves in the postwar period, first in the 1960s and the second in the 1980s. Both waves had a deep affect on the structure of corporate America. The main trend in the 60s was diversification and conglomeration. In contrast the 1980s takeover reversed the previous process and brought US corporations back to specialization. In this respects, the last thirty years were a roundtrip for corporate America. This paper is an overview of the salient features of the two takeover waves. 1.1 The 1960s Conglomerate Merger Wave The merger wave of the 1960s was the major since the turn of the century (Stigler, 1968). A typical characteristic of the 1960s transaction was a friendly acquisition, frequently for stock, of a smaller private or public firm which was outside the acquiring firms main line of business. During this period unrelated diversification was widespread among the large companies. Rumelt (1974) has reported that the fraction of single business companies in the Fortune 500 decreased from 22.8% in 1959 to 14.8% in 1969. Further, the portion of conglomerates with no dominant businesses increased to 18.7% from 7.3%. There was also a considerable move to diversification among companies that retained their core business. The driving force behind the 1960s wave was high valuations of company stocks and large corporate cash flows. However the management was unwilling to pay out the high cash flows as dividends, and on the other hand able to issue equity at attractive terms therefore, turned their atte ntion to acquisitions (Donaldsoni. 1984).Dividends were considered as a complete waste, and acquisitions as a very attractive way to conserve corporate wealth. There are two sets of arguments used to explain why companies diversify. The first set argues that firms diversify to increase shareholder wealth. A number of authors have discussed different aspects of diversification that can potentially raise shareholder wealth. Williamson (1970), suggest that firms diversify to beat imperfections in external capital markets. Through diversification, managers create internal capital markets, which are less prone to asymmetric information problems. Lewellen (1971), argues that conglomerates can carry on higher levels of debt since corporate diversification reduces earnings variability. if conglomerate firms are more valuable than companies operating in a single industry If the tax shields of debt increase. Shleifer and Vishny (1992), state that conglomerates may have a higher debt capacity since they can sell assets in those industries that suffer the least from liquidity problems in bad states of the world. Finally, Teece (1980) argues that divers ification leads to economics of scale. The second set of arguments states diversification as a product of the agency problems between shareholder and managers. Amihud and Lev (1981) argue that managers follow a diversification strategy to protect the value of their human capital. However, Jensen (1986) suggests that companies diversify to increase the private benefits of managers. Similarly, Shleifer and Vishny (1989) suggest that managers diversify because they are better at managing assets in other industries. Thus, diversifying will make skills more indispensable to the firm. 1.2 The 1980s Merger Wave Form a longer historical perspective, Golbe and White (1988) presented time series evidence of U.S. takeover activity from the late 1800s to the mid-1980s. Their findings have suggested that takeover activity above 2 to 3 percent of GDP is unusual. However, the greatest level of merger activity occurred around 1980s, at roughly 10 percent of GNP. By this measure, takeover activity in the 1980s is historically high. The size of the average target in the 1980s had increased extremely from the modest level of the 60s. By 1989 28%, of Fortune 500 companies were acquired and many transactions, particularly the large ones, were hostile. Further the medium of exchange in takeovers was cash rather than stock, they were characterized by heavy use of leverage. Firms were purchased by other firms by leveraged takeovers by borrowing rather than by issuing new stock or using solely cash on hand. Other firms restructured themselves, borrowing to repurchase their own shares. The 80s was also characterized by latest forms of control changes, which included bustup takeovers. Bustup takeovers involved the sell off of a substantial fraction of the targets assets to other firms. (Bhagat, Shleifer, and Vishny, 1990; Kaplan, 1997). 2 Merger Motives The following sections will explain the motive behind the two merger waves. 2.1 Managerial Motives Agency theory predicts that unless managers are strictly monitored by large block of shareholders they will certainly act out of self-interest. Amihud and Lev (1981) have provided proof that unless closely monitored by large block shareholders managers will attempt to reduce their employment risk through diversification. Lane et al.(1998) in this study have reexamined Amihud and Lev findings about agency theory Using a sample of 309 US firms that diversified between 1962 1970, from the Federal Trade Commission (FTC) Statistical Report on Mergers and Acquisitions (1976). This study falls in the third broad category[1] of agency studies. However this analysis only examines the strategic behaviors of managers when they are not under siege and are also not in a situation, in which their interests are clearly in conflict with those of shareholders. Specifically, firms without large block shareholders are expected to engage in more unrelated acquisitions and show higher levels of diversif ication than firms with large block shareholders (Jensen and Meckling (1976)) Using Multiple Regression, the study found no evidence for the standard agency theory predictions that management controlled firms are linked with strategically lower levels of diversification and lower levels of returns than are firms with large block shareholders. It was found that Ownership structure and diversification are largely independent constructs. Thus, managers may be are worthy of more trust and autonomy than what the agency theorists have prearranged for them. Rather than seeking to restrict managerial discretion through extreme oversight, a more balanced approach by principals is needed. Some safeguards are essential as conflicts of interests between managers and shareholders do arise in certain situations, therefore, the assumption that such conflicts dominate the day-to-day management is not realistic. Matsusaka,(1993) takes a deep look at the astonishingly high pre-merger profit rates of target companies during the conglomerate merger wave. The main goal of the study is to assess how important was managerial discipline as a takeover motive. The analysis uses an extensive data set of 806 manufacturing sector acquisitions that took place in 1968, 1971 and 1974. The sample was collected from New York Stock Exchange listing statements. Sample of 609 observations was taken from 1968, 117 from 1971, and 129 from 1974. The results did not differ in any vital way by year, so observations from the three periods were pooled. Because antitrust enforcement was strict in the late 1960s and early 1970s, it was safely assumed that the sample mergers were not motivated to increase market power Ravenscraft and Scherer (1987). This allowed the investigation to focus on a narrow set of merger motives. Profitability[2] throughout the study was measured as a rate of return on assets. The theory identified two basic characteristics of mergers motivated to discipline target management. First it wsa observed that the target was underperforming its industry and the only reason to discipline the managers was that they were not maximizing profit. It could be because of incompetence that they were pursuing their own objectives. The second, the target company had publicly traded stock and the only posibility to discipline management was by electing an appropriate board of directors. In this situation a takeover was necessary to effect a change as the diffused stock ownership resulted in free-rider problems. Owners can remove bad managers of privately owned firms, as they are closely held. The problem occurs in large publicly traded firms with diffuse ownership. The statistical results revealed that both public and private targets had extremely high profit rates prior to acquisition compared to their size classes and industries. Therefore, takeovers were not motivated to discipline target managers during the conglomerate merger wave. The second finding of the study is that public targets were not as particularly profitable as private targets. It was also found that the largest public targets had the lowest profit rates. A credible interpretation of the evidence is that managerial discipline may have been significant for just a small set of acquisitions that involved large publicly-traded targets. Matsusaka (1993) leaves the bigger question unexplained. Why buyers time and again sought high profit targets during the merger wave. There is a simple clarification, that high quality assets are generally favored to low quality assets, as high quality assets are more expensive. In addition to explaining why firms seek high-profit targets, an asset complementarity theory implies that firms tend to divest their low-profit divisions Palmer and Barber (2001) have determined the factors that led large firms to participate in the1960s wave. The theoretical approach, of the study conceptualizes corporate elites (managers and directors) as actors. However it is assumed that these actors have interests which have arisen from positions held in organizational and institutional environments, and from multidimensional social class structure. Often Acquisitions are deviant and innovative ways by which corporate these elites can increase their status and wealth. Corporate elite diversify to the extent that their place in the class structure provides them with the capacity and interest to augment their wealth and status in this way. The authors have examined how the firms top directors and managers class position influenced its tendency to employ diversification in the 1 960s. More specifically the following arguments on social status[3] have been tested empirically. Firstly, Firms run by top managers who attended an exclusi ve secondary school or whose family was listed in a metropolitan social register were less likely than other firms to complete diversifying acquisitions in the 1960s. Secondly, Firms run by top managers who were Jewish were more likely than other firms to complete diversifying acquisitions in the 1 960s. Thirdly, Firms run by top managers situated in the South or west were more likely than other firms to complete diversifying acquisitions in the 1960s. The study selected a sample of the largest 461 publicly traded U.S. industrial corporations from the Federal Trade Commissions Statistical Report on Mergers and Acquisitions (1976), between January 1, 1963, and December 31, 1968. This particular time period was chosen because as the merger wave took off at the end of 1962 and crested in 1968. The results of the study were found through count and binary regression models. The findings of the study are consistent with that of Zeitlin (1974). According to him top managers capacities and interests are shaped by their social class position. Corporate elite members differ in their social class position. It is this variation that influences the behavior of the firms they command. The results indicate that social club memberships and upper-class background influenced a firms propensity to complete diversifying acquisitions in the 1960s. Network embeddedness and status influenced acquisition likelihood in opposite directions. Corporations that were run by chief executives who were central in social networks but marginal with respect to status were more likely than other firms to complete diversifying acquisitions in the 1960s. Therefore, individuals with high status had small interest in adopting innovation. Corporate elites can inhibit the spread of an innovation when it threatens their interests. As observed by Hayes and Taussig (1967), One must never under estimate the moral suasion that the business and financial communities can bring to bear on those who engage in practices of which they disapprove. In this respect, the analysis provides additional evidence that intraclass conflict shaped corporate behavior during the 1960s merger wave. It seemed that in the 1960s, it was not concentrated ownership but, ownership in the hands of capitalist families that reduced a firms tendency to complete diversifying acquisitions. Further, as predicted by agency theory , concentrated ownership would lower acquisition rates most when in the hands of the CEO or other top managers, as opposed to outsiders, However it was found the reverse to be the case. Overall, there was very little support for any of the agency theory in the 1960s merger wave. Further, the results provided no support for several of the class-theory hypotheses. Firms headquartered in the South or West run or by Jewish CEOs did not have a greater propensity to complete diversifying acquisitions during the 1960s. The process of diversification of American firms reached its height during the merger wave of the late 1960s. Matsusaka(1993)evaluated the 1960s merger wave. In an attempt to do so the author has proposed a number of explanations that drove managers to diversify during the conglomerate merger wave. There are reasons to suspect that managers may have pursued a diversification strategy even when it impaired the shareholder. They may have entered new lines of business to protect their organization-specific human capital or establish themselves. On the other hand, they may have been pursuing size as an end and because of strict antitrust opposition to horizontal and vertical mergers they had to expand by buying into unrelated industries. The study has evaluated whether manager were diversifying for their own advantage or in the interest of shareholders returns .To do so the author inspected the effect of diversification on the value of his firms equity. Thus, if the value of a firm declined upon announcement of an acquisition, then its management was not acting to maximize shareholder wealth. One explanation for conglomeration stated in the study, stems from Managerial-Discipline theory. Firstly, Firms were taken over to discipline or replace their bad managers ie â€Å"Managerial-Discipline. Secondly, Managerial Synergy theory states that the bidder management wanted to work with target management, not replace it. In this case the acquirer management believed that the target management would complement to their skills. Therefore firm that had Managerial-discipline problem were likely to have had low profits, and on the other hand managerial-synergy targets were likely to have had high profits. Another explanation is that buyers were motivated by earnings-per- share (EPS) manipulation. This explanation states that conglomerates have a high price-earnings ratio (P/E). [4] Therefore the bidder management was bootstrapping, by buying firms with low P/Es. Construction of the dataset began with a list of mergers from the sample of 1968, 1971 and 1974 .The sample was identified from the takeovers from New York Stock Exchange listing statements and the results were presented through regression. The announcement-period return to the bidders shareholders was measured through dollar return, [5] .Regression of the dollar-return measure found that the return to a diversification acquisition was significantly positive. On average their shareholders enjoyed an $11.0 million value increase in value when bidders made a diversification acquisition,. This rejects the hypothesis that diversification hurt shareholders and is thus inconsistent with the idea that diversification was driven by managerial objectives. On the other hand, bidders who made related acquisitions cost their shareholders $6.4 million on average. Thus, the hypothesis that the markets reaction was the same to related acquisitions and diversification is rejected, suggesting that there was a market premium to diversification. Using descriptive statistical summaries it was found that both diversifying and horizontal buyers preferred to buy firms that were profitable. For both type of acquisitions the average operating profit was more than 5% in excess of the targets industry average. Therefore fame of high-profit targets argues against the importance of a managerial-discipline motive for both types of acquisition and in favor of a managerial-synergy motive. This is because Managerial-discipline takeovers should have been directed at low-profit firms, whose profitability needed improved. The motive was Managerial-synergy as the targets were takeovers were high- profit firms, this is because synergy-motivated managers were looking for good partners Matsusaka(1993). Another factor linked to the managerial theories is whether or not the targets management was retained.Top management is said to have been retained if it meet the following criteria. Firstly It was reported in the Wall Street Journal that the acquired firms management would continue to operate under the new management. Secondly, it was indicated in the buyers listing statement that the targets management would be retained. Lastly, when the merger took place at least one of the top three executives of the target firm was still managing the firm three years later from when the merger took place. According to the above mentioned definitions, 61.8% of the managers in the sample were retained and only 3.5% of the acquisitions fell in the Replaced category. The main finding is that buyers earned significantly positive announcement-period returns during the conglomerate merger wave when they made diversifying acquisitions. The hypothesis that conglomerates were driven by empire building or some other managerial objective can be rejected because such explanations imply value decreases to unrelated acquisitions. Another explanation of the conglomerate merger wave is that mergers were driven by an accounting trick rather than expected efficiencies. Therefore, investors watched EPS; when the EPS went up they bid up the price of the stock. According to this argument, Conglomerates, tended to buy companies with lower P/E ratios than their own in order to increase their EPS and boost their stock prices. There was no evidence that firms earned positive returns which inflated EPS in this way. The study indicated that early conglomerators earned significantly positive returns simply because they were first. They may have gained some rents to organizational innovation. Possibly the men who built the first conglomerates had a unique talent for diversification, which the market rewarded. Hubbard, Palia (1999), have examined the likelihood that internal capital markets were formed to alleviate the information costs associated with the less well-developed external capital markets of the time; that is, whether they were expected to create value by the external capital markets in the 1960s.In this paper, the authors have inspected a form of cross-subsidization that occurs when a financially unconstrained bidding firm takes over a financially constrained target firm and as a result forms an internal capital market.The study examined whether the external capital markets expected that the formation of internal capital markets in the 1960s were value-maximizing for the bidding firm. However, existing research has argued that internal capital markets can be value-enhancing. As argued by Geneen(1997), the financing and budgeting expertise that a firm possesses is not necessarily related to its degree of diversification. Accordingly, the internal capital market hypothesis for all acquisitions is tested. The study also tests the bootstrapping explanation for conglomeration in the 1960s, which takes place when firms with a high price-earnings ratio (P/E) took over low P/E target firms and fooled the stock market with an increased combined earnings-per-share. In the 1960s, external capital markets were less developed in terms of company-specific information production than in later years. The authors have classified company-specific information into two general categories. Firstly, production information; and secondly, financing and budgeting expertise. However, in this study information-intensive activities were introduced. This was because; it assists the manager to internally allocate capital across divisions of a diversified firm. It was suggested that diversified firms were perceived by the external capital markets to have an informational advantage, because external capital markets were less well developed at that time. Comparing it to the current decade, there was less access by the public to computers, data- bases, analyst reports, and other sources of company-specific information. Not only this there was less large institutional money managers and the market for risky debt was illiquid. The authors selected a sample of 392 acquisitions that occurred during the period from 1961 through 1970. Diversifying acquisitions were defined as those in which the bidder and target do not share any two- digit SIC code Matsusaka(1993), and related acquisitions as those in which they do share a two-digit SIC code. Further the Wall Street Journal was used for announcement date as the event date. Four measures of abnormal returns to the conglomerate bidding firm were calculated. These measures are as follows. Firstly, the usual percentage returns or the cumulative abnormal returns from five days before to five days after the event date. Secondly the percentage returns until date of last revision or the cumulative abnormal returns from five days before to five days after the date of the last revision (Lang et al. (1991)). Thirdly, the dollar returns or the percentage return times the market value of the bidder six days before the announcement (Malatesta(1983); Matsusaka(1993)). Lastly , the investment return defined as the change in the value of the bidder divided by the purchase price (Morck et al. (1990)). Tobins r ratio[6] is used as a proxy for a firms capital market opportunities. The evidence from these measures is mixed. Positive abnormal returns for all four measures were shown for related acquisitions. On the other hand, two of the four measures had shown statically significant positive abnormal returns for diversifying acquisitions in. Not only that diversifying acquisitions do not significantly earn less than related acquisitions in two of the four measures. Thus, evidence suggests, the capital markets believed acquisitions to be generally good for bidder shareholders during the 1960s. More significantly, it was found that when financially unconstrained buyers acquired constrained target firms, highest bidder returns were earned. Further, bidders generally retain target management, signifying that management may have provided company- specific operational information and the bidder on his part also provided capital budgeting expertise. Therefore, external capital markets expected information benefits from the formation of the internal capital markets. The study found no evidence in support of the bootstrapping hypothesis, as the coefficient on the dummy variable[7] was not statistically different from zero. This result is consistent with Matsusaka, (1993), who also finds no evidence for bootstrapping.Therefore, firms merged to form their own internal capital markets as there was a deficiency of well-developed external capital markets in the 1960s. Some firms apparently had an information advantage over the external capital markets and were expected to produce value in an internal capital market. In the 1960s diversified acquisitions were rewarded by financial markets, the informational advantage that acquiring firms appeared to possess was likely to be in the capital budgeting, allocation process and operational aspects of each division. Bidder firms generally retained the target management as it would facilitate them running the operational part of each target firm. The Motives discussed in the above mentioned articles are appealing; however evidence from the stock market suggests that shareholders preferred their firms to diversify. Using a data set from the 60s and early 70s, Matsusaka (1993) reported that, when the company announced an unrelated acquisition, the stock price of the bidder increased on average of $8 million. However, on the announcement of a related acquisition, the bidding firms stock price fell by $4 million. The difference between the two returns is quite significant. Thus it appears that investors fully believed that unrelated acquisitions benefited their firms relative to the alternatives. Thus the managers just did what the stock market told them to do that is to diversify. Evidence from 1980s stock market suggested that shareholders, again, liked what was happening. Shleifer, and Vishny (1992) found that in the 1980s, stock prices of the bidding firms rose when they bought other firms in the same industry, and fell with unrelated diversification. It is clear that the market disapproved unrelated diversification. Therefore it does not astonish that, in light of such market reception, managers stopped diversifying and did what the stock market directed them to do. 2.2 Legal Motives Matsusaka (1996) investigated whether the antitrust enforcement of the 1960s led firms to take on the diversification goal, by preventing them from expanding within their own core industries. If correct, diversification should have occurred more less frequently when small firms merged than when large firms merged since small mergers were less likely to have attracted antitrust attention. Further the author examined the diversification patterns in the United Kingdom, Canada, Germany, and France in the late 1960s and early 1970s, where none of these countries had legal restrictions on horizontal growth similar to those in the Unites States. The US Clayton Antitrust Act was the antitrust legislation in the postwar period (1950 Celler-Kefauver amendment to Section 7). The act, prohibited mergers that would substantially lessen competition, or tend to create a monopoly. This new law was used by the antitrust authorities and the courts to limit the number of mergers between vertically related and firms in the same lines of business. The strictness of the antitrust environment in 1968 is illustrated by the observation that in the earlier 12 years, all antitrust cases that reached the Supreme Court had been resolved in support of the government. The study indicates the following two implications. Firstly, large horizontal mergers were more liable to have been challenged on antitrust grounds than small horizontal mergers. Secondly mergers between unrelated firms were unlikely to have been blocked, regardless of size. Firms diversified in 1960s, since antitrust authorities prevented them from expanding in their home industries. Later when antitrust policy became less rigid in the 1980s, firms expanded horizontally, leading them to refocus on their core business. Stigler (1966) was perhaps the first to present evidence on the antitrust hypothesis, concluding that, the 1950 Merger Act has had a strongly adverse effect on horizontal mergers by large companies. The author selected a sample of 549 mergers (that took place in 1968) from the New York Stock Exchange. Results of the study were reported through Logit regressions .It was found that bidders were as likely to have entered new industries when they made small acquisitions as when they made large acquisitions, and small buyers were as likely to have diversified as large buyers. Further the total number of diversification acquisitions concerning small companies was high.Though, according to the antitrust hypothesis; diversification should have been widespread primarily in large mergers where same industry acquisitions were prohibited by tough antitrust enforcement. Secondly assembled international evidence indicated that diversification took place in many industrialized nations in the 1960s and 1970s, although restrictions against horizontal combinations were unique to the United States. Yet, most other industrialized Western nations[8] experienced diversification merger waves and general movements toward diversification in their largest companies (Chandler (1991)).Thus most of the evidence, is not consistent with the antitrust hypothesis, signifying that other explanations for corporate diversification should be emphasized not the anti trust hypothesis. Scholes and Wolfson (1990) state, that the changes in U.S. tax laws[9] in the 1980s had obvious affect on the desirability of mergers and acquisitions. However such transactions were not only motivated by tax factors but also non tax factors[10]. Tax laws can have number of affects on mergers and acquisitions , which can include the following capital losses, presence of tax-attribute carry forwards such as net operating losses , investment tax credits, and foreign tax credits, among others, that might be cashed in more quickly and more fully by way of a merger; the desire to step up the tax basis of assets for depreciation purposes to their fair market value; the desire to sell assets to permit a change in the depreciation schedule to one that is more highly accelerated. The authors in this study have examined the effect of changes in tax laws passed in 1980s on merger and acquisition activity in the United States. The authors selected the annual values of mergers and acquisitions from 1968 through 1987 in nominal dollars. The data source for nominal values was W. T. Grimm and Company for 1968-85 and Mergers Acquisitions (1987-88, rev. quarterly) for 1986 and 1987. Using time series analysis it was found that the dollar volume of merger activity between 1980-1981 increased from $44.35 billion to $82.62 billion (86%) in nominal terms. The percentage increase was approximately twice as large as the next largest percentage increase in annual merger and acquisition activity over the 1970-86 periods. There was spectacular increase in merger activity that began with the passage of the Economic Recovery Tax Act of 1981, however this was not the only merger wave that occurred in that time frame. Unusual merger activity was also witnessed in the 1960s. The termination of 1960s wave was accompanied by quite a few regulatory events that depressed such transactions. Firstly, the Williams Amendments had en larged the cost and difficulty of effecting tender offers. Secondly the issuance of Accounting Principles Board Opinions 16 and 17, forced many acquiring firms to boost depreciation expense, goodwill amortization and cost of goods sold. Thirdly the Tax Reform Act of 1969, made transferability of tax attributes (net-operating-loss carry forwards) more restrained. Therefore there was a sudden decline in merger activity from the peak in 1968. Relative to the tax benefits when the non tax benefits of the transaction were small, current management were the most efficient purchasers, as they had an advantage along the hidden information dimension. Therefore 1981 act had increased the incidence of cases in which non tax benefits were less than the common tax benefits of mergers and acquisitions. As a result, there was an increase in the number of transactions involving management buyouts. The annual dollar value of unit management buyouts between 1978-80 increased by a factor of 3, and by a factor in excess of 20 for the period 1981-86. The antitrust proposition mentioned above is appealing as one of the most important reason for diversification, during the 60s and 70s, which simply disallowed mergers of firms in the same industry, regardless of the effects of these mergers o Theories of Merger and Takeover Waves Theories of Merger and Takeover Waves Merger Wave The American economy experienced two great takeover waves in the postwar period, first in the 1960s and the second in the 1980s. Both waves had a deep affect on the structure of corporate America. The main trend in the 60s was diversification and conglomeration. In contrast the 1980s takeover reversed the previous process and brought US corporations back to specialization. In this respects, the last thirty years were a roundtrip for corporate America. This paper is an overview of the salient features of the two takeover waves. 1.1 The 1960s Conglomerate Merger Wave The merger wave of the 1960s was the major since the turn of the century (Stigler, 1968). A typical characteristic of the 1960s transaction was a friendly acquisition, frequently for stock, of a smaller private or public firm which was outside the acquiring firms main line of business. During this period unrelated diversification was widespread among the large companies. Rumelt (1974) has reported that the fraction of single business companies in the Fortune 500 decreased from 22.8% in 1959 to 14.8% in 1969. Further, the portion of conglomerates with no dominant businesses increased to 18.7% from 7.3%. There was also a considerable move to diversification among companies that retained their core business. The driving force behind the 1960s wave was high valuations of company stocks and large corporate cash flows. However the management was unwilling to pay out the high cash flows as dividends, and on the other hand able to issue equity at attractive terms therefore, turned their atte ntion to acquisitions (Donaldsoni. 1984).Dividends were considered as a complete waste, and acquisitions as a very attractive way to conserve corporate wealth. There are two sets of arguments used to explain why companies diversify. The first set argues that firms diversify to increase shareholder wealth. A number of authors have discussed different aspects of diversification that can potentially raise shareholder wealth. Williamson (1970), suggest that firms diversify to beat imperfections in external capital markets. Through diversification, managers create internal capital markets, which are less prone to asymmetric information problems. Lewellen (1971), argues that conglomerates can carry on higher levels of debt since corporate diversification reduces earnings variability. if conglomerate firms are more valuable than companies operating in a single industry If the tax shields of debt increase. Shleifer and Vishny (1992), state that conglomerates may have a higher debt capacity since they can sell assets in those industries that suffer the least from liquidity problems in bad states of the world. Finally, Teece (1980) argues that divers ification leads to economics of scale. The second set of arguments states diversification as a product of the agency problems between shareholder and managers. Amihud and Lev (1981) argue that managers follow a diversification strategy to protect the value of their human capital. However, Jensen (1986) suggests that companies diversify to increase the private benefits of managers. Similarly, Shleifer and Vishny (1989) suggest that managers diversify because they are better at managing assets in other industries. Thus, diversifying will make skills more indispensable to the firm. 1.2 The 1980s Merger Wave Form a longer historical perspective, Golbe and White (1988) presented time series evidence of U.S. takeover activity from the late 1800s to the mid-1980s. Their findings have suggested that takeover activity above 2 to 3 percent of GDP is unusual. However, the greatest level of merger activity occurred around 1980s, at roughly 10 percent of GNP. By this measure, takeover activity in the 1980s is historically high. The size of the average target in the 1980s had increased extremely from the modest level of the 60s. By 1989 28%, of Fortune 500 companies were acquired and many transactions, particularly the large ones, were hostile. Further the medium of exchange in takeovers was cash rather than stock, they were characterized by heavy use of leverage. Firms were purchased by other firms by leveraged takeovers by borrowing rather than by issuing new stock or using solely cash on hand. Other firms restructured themselves, borrowing to repurchase their own shares. The 80s was also characterized by latest forms of control changes, which included bustup takeovers. Bustup takeovers involved the sell off of a substantial fraction of the targets assets to other firms. (Bhagat, Shleifer, and Vishny, 1990; Kaplan, 1997). 2 Merger Motives The following sections will explain the motive behind the two merger waves. 2.1 Managerial Motives Agency theory predicts that unless managers are strictly monitored by large block of shareholders they will certainly act out of self-interest. Amihud and Lev (1981) have provided proof that unless closely monitored by large block shareholders managers will attempt to reduce their employment risk through diversification. Lane et al.(1998) in this study have reexamined Amihud and Lev findings about agency theory Using a sample of 309 US firms that diversified between 1962 1970, from the Federal Trade Commission (FTC) Statistical Report on Mergers and Acquisitions (1976). This study falls in the third broad category[1] of agency studies. However this analysis only examines the strategic behaviors of managers when they are not under siege and are also not in a situation, in which their interests are clearly in conflict with those of shareholders. Specifically, firms without large block shareholders are expected to engage in more unrelated acquisitions and show higher levels of diversif ication than firms with large block shareholders (Jensen and Meckling (1976)) Using Multiple Regression, the study found no evidence for the standard agency theory predictions that management controlled firms are linked with strategically lower levels of diversification and lower levels of returns than are firms with large block shareholders. It was found that Ownership structure and diversification are largely independent constructs. Thus, managers may be are worthy of more trust and autonomy than what the agency theorists have prearranged for them. Rather than seeking to restrict managerial discretion through extreme oversight, a more balanced approach by principals is needed. Some safeguards are essential as conflicts of interests between managers and shareholders do arise in certain situations, therefore, the assumption that such conflicts dominate the day-to-day management is not realistic. Matsusaka,(1993) takes a deep look at the astonishingly high pre-merger profit rates of target companies during the conglomerate merger wave. The main goal of the study is to assess how important was managerial discipline as a takeover motive. The analysis uses an extensive data set of 806 manufacturing sector acquisitions that took place in 1968, 1971 and 1974. The sample was collected from New York Stock Exchange listing statements. Sample of 609 observations was taken from 1968, 117 from 1971, and 129 from 1974. The results did not differ in any vital way by year, so observations from the three periods were pooled. Because antitrust enforcement was strict in the late 1960s and early 1970s, it was safely assumed that the sample mergers were not motivated to increase market power Ravenscraft and Scherer (1987). This allowed the investigation to focus on a narrow set of merger motives. Profitability[2] throughout the study was measured as a rate of return on assets. The theory identified two basic characteristics of mergers motivated to discipline target management. First it wsa observed that the target was underperforming its industry and the only reason to discipline the managers was that they were not maximizing profit. It could be because of incompetence that they were pursuing their own objectives. The second, the target company had publicly traded stock and the only posibility to discipline management was by electing an appropriate board of directors. In this situation a takeover was necessary to effect a change as the diffused stock ownership resulted in free-rider problems. Owners can remove bad managers of privately owned firms, as they are closely held. The problem occurs in large publicly traded firms with diffuse ownership. The statistical results revealed that both public and private targets had extremely high profit rates prior to acquisition compared to their size classes and industries. Therefore, takeovers were not motivated to discipline target managers during the conglomerate merger wave. The second finding of the study is that public targets were not as particularly profitable as private targets. It was also found that the largest public targets had the lowest profit rates. A credible interpretation of the evidence is that managerial discipline may have been significant for just a small set of acquisitions that involved large publicly-traded targets. Matsusaka (1993) leaves the bigger question unexplained. Why buyers time and again sought high profit targets during the merger wave. There is a simple clarification, that high quality assets are generally favored to low quality assets, as high quality assets are more expensive. In addition to explaining why firms seek high-profit targets, an asset complementarity theory implies that firms tend to divest their low-profit divisions Palmer and Barber (2001) have determined the factors that led large firms to participate in the1960s wave. The theoretical approach, of the study conceptualizes corporate elites (managers and directors) as actors. However it is assumed that these actors have interests which have arisen from positions held in organizational and institutional environments, and from multidimensional social class structure. Often Acquisitions are deviant and innovative ways by which corporate these elites can increase their status and wealth. Corporate elite diversify to the extent that their place in the class structure provides them with the capacity and interest to augment their wealth and status in this way. The authors have examined how the firms top directors and managers class position influenced its tendency to employ diversification in the 1 960s. More specifically the following arguments on social status[3] have been tested empirically. Firstly, Firms run by top managers who attended an exclusi ve secondary school or whose family was listed in a metropolitan social register were less likely than other firms to complete diversifying acquisitions in the 1960s. Secondly, Firms run by top managers who were Jewish were more likely than other firms to complete diversifying acquisitions in the 1 960s. Thirdly, Firms run by top managers situated in the South or west were more likely than other firms to complete diversifying acquisitions in the 1960s. The study selected a sample of the largest 461 publicly traded U.S. industrial corporations from the Federal Trade Commissions Statistical Report on Mergers and Acquisitions (1976), between January 1, 1963, and December 31, 1968. This particular time period was chosen because as the merger wave took off at the end of 1962 and crested in 1968. The results of the study were found through count and binary regression models. The findings of the study are consistent with that of Zeitlin (1974). According to him top managers capacities and interests are shaped by their social class position. Corporate elite members differ in their social class position. It is this variation that influences the behavior of the firms they command. The results indicate that social club memberships and upper-class background influenced a firms propensity to complete diversifying acquisitions in the 1960s. Network embeddedness and status influenced acquisition likelihood in opposite directions. Corporations that were run by chief executives who were central in social networks but marginal with respect to status were more likely than other firms to complete diversifying acquisitions in the 1960s. Therefore, individuals with high status had small interest in adopting innovation. Corporate elites can inhibit the spread of an innovation when it threatens their interests. As observed by Hayes and Taussig (1967), One must never under estimate the moral suasion that the business and financial communities can bring to bear on those who engage in practices of which they disapprove. In this respect, the analysis provides additional evidence that intraclass conflict shaped corporate behavior during the 1960s merger wave. It seemed that in the 1960s, it was not concentrated ownership but, ownership in the hands of capitalist families that reduced a firms tendency to complete diversifying acquisitions. Further, as predicted by agency theory , concentrated ownership would lower acquisition rates most when in the hands of the CEO or other top managers, as opposed to outsiders, However it was found the reverse to be the case. Overall, there was very little support for any of the agency theory in the 1960s merger wave. Further, the results provided no support for several of the class-theory hypotheses. Firms headquartered in the South or West run or by Jewish CEOs did not have a greater propensity to complete diversifying acquisitions during the 1960s. The process of diversification of American firms reached its height during the merger wave of the late 1960s. Matsusaka(1993)evaluated the 1960s merger wave. In an attempt to do so the author has proposed a number of explanations that drove managers to diversify during the conglomerate merger wave. There are reasons to suspect that managers may have pursued a diversification strategy even when it impaired the shareholder. They may have entered new lines of business to protect their organization-specific human capital or establish themselves. On the other hand, they may have been pursuing size as an end and because of strict antitrust opposition to horizontal and vertical mergers they had to expand by buying into unrelated industries. The study has evaluated whether manager were diversifying for their own advantage or in the interest of shareholders returns .To do so the author inspected the effect of diversification on the value of his firms equity. Thus, if the value of a firm declined upon announcement of an acquisition, then its management was not acting to maximize shareholder wealth. One explanation for conglomeration stated in the study, stems from Managerial-Discipline theory. Firstly, Firms were taken over to discipline or replace their bad managers ie â€Å"Managerial-Discipline. Secondly, Managerial Synergy theory states that the bidder management wanted to work with target management, not replace it. In this case the acquirer management believed that the target management would complement to their skills. Therefore firm that had Managerial-discipline problem were likely to have had low profits, and on the other hand managerial-synergy targets were likely to have had high profits. Another explanation is that buyers were motivated by earnings-per- share (EPS) manipulation. This explanation states that conglomerates have a high price-earnings ratio (P/E). [4] Therefore the bidder management was bootstrapping, by buying firms with low P/Es. Construction of the dataset began with a list of mergers from the sample of 1968, 1971 and 1974 .The sample was identified from the takeovers from New York Stock Exchange listing statements and the results were presented through regression. The announcement-period return to the bidders shareholders was measured through dollar return, [5] .Regression of the dollar-return measure found that the return to a diversification acquisition was significantly positive. On average their shareholders enjoyed an $11.0 million value increase in value when bidders made a diversification acquisition,. This rejects the hypothesis that diversification hurt shareholders and is thus inconsistent with the idea that diversification was driven by managerial objectives. On the other hand, bidders who made related acquisitions cost their shareholders $6.4 million on average. Thus, the hypothesis that the markets reaction was the same to related acquisitions and diversification is rejected, suggesting that there was a market premium to diversification. Using descriptive statistical summaries it was found that both diversifying and horizontal buyers preferred to buy firms that were profitable. For both type of acquisitions the average operating profit was more than 5% in excess of the targets industry average. Therefore fame of high-profit targets argues against the importance of a managerial-discipline motive for both types of acquisition and in favor of a managerial-synergy motive. This is because Managerial-discipline takeovers should have been directed at low-profit firms, whose profitability needed improved. The motive was Managerial-synergy as the targets were takeovers were high- profit firms, this is because synergy-motivated managers were looking for good partners Matsusaka(1993). Another factor linked to the managerial theories is whether or not the targets management was retained.Top management is said to have been retained if it meet the following criteria. Firstly It was reported in the Wall Street Journal that the acquired firms management would continue to operate under the new management. Secondly, it was indicated in the buyers listing statement that the targets management would be retained. Lastly, when the merger took place at least one of the top three executives of the target firm was still managing the firm three years later from when the merger took place. According to the above mentioned definitions, 61.8% of the managers in the sample were retained and only 3.5% of the acquisitions fell in the Replaced category. The main finding is that buyers earned significantly positive announcement-period returns during the conglomerate merger wave when they made diversifying acquisitions. The hypothesis that conglomerates were driven by empire building or some other managerial objective can be rejected because such explanations imply value decreases to unrelated acquisitions. Another explanation of the conglomerate merger wave is that mergers were driven by an accounting trick rather than expected efficiencies. Therefore, investors watched EPS; when the EPS went up they bid up the price of the stock. According to this argument, Conglomerates, tended to buy companies with lower P/E ratios than their own in order to increase their EPS and boost their stock prices. There was no evidence that firms earned positive returns which inflated EPS in this way. The study indicated that early conglomerators earned significantly positive returns simply because they were first. They may have gained some rents to organizational innovation. Possibly the men who built the first conglomerates had a unique talent for diversification, which the market rewarded. Hubbard, Palia (1999), have examined the likelihood that internal capital markets were formed to alleviate the information costs associated with the less well-developed external capital markets of the time; that is, whether they were expected to create value by the external capital markets in the 1960s.In this paper, the authors have inspected a form of cross-subsidization that occurs when a financially unconstrained bidding firm takes over a financially constrained target firm and as a result forms an internal capital market.The study examined whether the external capital markets expected that the formation of internal capital markets in the 1960s were value-maximizing for the bidding firm. However, existing research has argued that internal capital markets can be value-enhancing. As argued by Geneen(1997), the financing and budgeting expertise that a firm possesses is not necessarily related to its degree of diversification. Accordingly, the internal capital market hypothesis for all acquisitions is tested. The study also tests the bootstrapping explanation for conglomeration in the 1960s, which takes place when firms with a high price-earnings ratio (P/E) took over low P/E target firms and fooled the stock market with an increased combined earnings-per-share. In the 1960s, external capital markets were less developed in terms of company-specific information production than in later years. The authors have classified company-specific information into two general categories. Firstly, production information; and secondly, financing and budgeting expertise. However, in this study information-intensive activities were introduced. This was because; it assists the manager to internally allocate capital across divisions of a diversified firm. It was suggested that diversified firms were perceived by the external capital markets to have an informational advantage, because external capital markets were less well developed at that time. Comparing it to the current decade, there was less access by the public to computers, data- bases, analyst reports, and other sources of company-specific information. Not only this there was less large institutional money managers and the market for risky debt was illiquid. The authors selected a sample of 392 acquisitions that occurred during the period from 1961 through 1970. Diversifying acquisitions were defined as those in which the bidder and target do not share any two- digit SIC code Matsusaka(1993), and related acquisitions as those in which they do share a two-digit SIC code. Further the Wall Street Journal was used for announcement date as the event date. Four measures of abnormal returns to the conglomerate bidding firm were calculated. These measures are as follows. Firstly, the usual percentage returns or the cumulative abnormal returns from five days before to five days after the event date. Secondly the percentage returns until date of last revision or the cumulative abnormal returns from five days before to five days after the date of the last revision (Lang et al. (1991)). Thirdly, the dollar returns or the percentage return times the market value of the bidder six days before the announcement (Malatesta(1983); Matsusaka(1993)). Lastly , the investment return defined as the change in the value of the bidder divided by the purchase price (Morck et al. (1990)). Tobins r ratio[6] is used as a proxy for a firms capital market opportunities. The evidence from these measures is mixed. Positive abnormal returns for all four measures were shown for related acquisitions. On the other hand, two of the four measures had shown statically significant positive abnormal returns for diversifying acquisitions in. Not only that diversifying acquisitions do not significantly earn less than related acquisitions in two of the four measures. Thus, evidence suggests, the capital markets believed acquisitions to be generally good for bidder shareholders during the 1960s. More significantly, it was found that when financially unconstrained buyers acquired constrained target firms, highest bidder returns were earned. Further, bidders generally retain target management, signifying that management may have provided company- specific operational information and the bidder on his part also provided capital budgeting expertise. Therefore, external capital markets expected information benefits from the formation of the internal capital markets. The study found no evidence in support of the bootstrapping hypothesis, as the coefficient on the dummy variable[7] was not statistically different from zero. This result is consistent with Matsusaka, (1993), who also finds no evidence for bootstrapping.Therefore, firms merged to form their own internal capital markets as there was a deficiency of well-developed external capital markets in the 1960s. Some firms apparently had an information advantage over the external capital markets and were expected to produce value in an internal capital market. In the 1960s diversified acquisitions were rewarded by financial markets, the informational advantage that acquiring firms appeared to possess was likely to be in the capital budgeting, allocation process and operational aspects of each division. Bidder firms generally retained the target management as it would facilitate them running the operational part of each target firm. The Motives discussed in the above mentioned articles are appealing; however evidence from the stock market suggests that shareholders preferred their firms to diversify. Using a data set from the 60s and early 70s, Matsusaka (1993) reported that, when the company announced an unrelated acquisition, the stock price of the bidder increased on average of $8 million. However, on the announcement of a related acquisition, the bidding firms stock price fell by $4 million. The difference between the two returns is quite significant. Thus it appears that investors fully believed that unrelated acquisitions benefited their firms relative to the alternatives. Thus the managers just did what the stock market told them to do that is to diversify. Evidence from 1980s stock market suggested that shareholders, again, liked what was happening. Shleifer, and Vishny (1992) found that in the 1980s, stock prices of the bidding firms rose when they bought other firms in the same industry, and fell with unrelated diversification. It is clear that the market disapproved unrelated diversification. Therefore it does not astonish that, in light of such market reception, managers stopped diversifying and did what the stock market directed them to do. 2.2 Legal Motives Matsusaka (1996) investigated whether the antitrust enforcement of the 1960s led firms to take on the diversification goal, by preventing them from expanding within their own core industries. If correct, diversification should have occurred more less frequently when small firms merged than when large firms merged since small mergers were less likely to have attracted antitrust attention. Further the author examined the diversification patterns in the United Kingdom, Canada, Germany, and France in the late 1960s and early 1970s, where none of these countries had legal restrictions on horizontal growth similar to those in the Unites States. The US Clayton Antitrust Act was the antitrust legislation in the postwar period (1950 Celler-Kefauver amendment to Section 7). The act, prohibited mergers that would substantially lessen competition, or tend to create a monopoly. This new law was used by the antitrust authorities and the courts to limit the number of mergers between vertically related and firms in the same lines of business. The strictness of the antitrust environment in 1968 is illustrated by the observation that in the earlier 12 years, all antitrust cases that reached the Supreme Court had been resolved in support of the government. The study indicates the following two implications. Firstly, large horizontal mergers were more liable to have been challenged on antitrust grounds than small horizontal mergers. Secondly mergers between unrelated firms were unlikely to have been blocked, regardless of size. Firms diversified in 1960s, since antitrust authorities prevented them from expanding in their home industries. Later when antitrust policy became less rigid in the 1980s, firms expanded horizontally, leading them to refocus on their core business. Stigler (1966) was perhaps the first to present evidence on the antitrust hypothesis, concluding that, the 1950 Merger Act has had a strongly adverse effect on horizontal mergers by large companies. The author selected a sample of 549 mergers (that took place in 1968) from the New York Stock Exchange. Results of the study were reported through Logit regressions .It was found that bidders were as likely to have entered new industries when they made small acquisitions as when they made large acquisitions, and small buyers were as likely to have diversified as large buyers. Further the total number of diversification acquisitions concerning small companies was high.Though, according to the antitrust hypothesis; diversification should have been widespread primarily in large mergers where same industry acquisitions were prohibited by tough antitrust enforcement. Secondly assembled international evidence indicated that diversification took place in many industrialized nations in the 1960s and 1970s, although restrictions against horizontal combinations were unique to the United States. Yet, most other industrialized Western nations[8] experienced diversification merger waves and general movements toward diversification in their largest companies (Chandler (1991)).Thus most of the evidence, is not consistent with the antitrust hypothesis, signifying that other explanations for corporate diversification should be emphasized not the anti trust hypothesis. Scholes and Wolfson (1990) state, that the changes in U.S. tax laws[9] in the 1980s had obvious affect on the desirability of mergers and acquisitions. However such transactions were not only motivated by tax factors but also non tax factors[10]. Tax laws can have number of affects on mergers and acquisitions , which can include the following capital losses, presence of tax-attribute carry forwards such as net operating losses , investment tax credits, and foreign tax credits, among others, that might be cashed in more quickly and more fully by way of a merger; the desire to step up the tax basis of assets for depreciation purposes to their fair market value; the desire to sell assets to permit a change in the depreciation schedule to one that is more highly accelerated. The authors in this study have examined the effect of changes in tax laws passed in 1980s on merger and acquisition activity in the United States. The authors selected the annual values of mergers and acquisitions from 1968 through 1987 in nominal dollars. The data source for nominal values was W. T. Grimm and Company for 1968-85 and Mergers Acquisitions (1987-88, rev. quarterly) for 1986 and 1987. Using time series analysis it was found that the dollar volume of merger activity between 1980-1981 increased from $44.35 billion to $82.62 billion (86%) in nominal terms. The percentage increase was approximately twice as large as the next largest percentage increase in annual merger and acquisition activity over the 1970-86 periods. There was spectacular increase in merger activity that began with the passage of the Economic Recovery Tax Act of 1981, however this was not the only merger wave that occurred in that time frame. Unusual merger activity was also witnessed in the 1960s. The termination of 1960s wave was accompanied by quite a few regulatory events that depressed such transactions. Firstly, the Williams Amendments had en larged the cost and difficulty of effecting tender offers. Secondly the issuance of Accounting Principles Board Opinions 16 and 17, forced many acquiring firms to boost depreciation expense, goodwill amortization and cost of goods sold. Thirdly the Tax Reform Act of 1969, made transferability of tax attributes (net-operating-loss carry forwards) more restrained. Therefore there was a sudden decline in merger activity from the peak in 1968. Relative to the tax benefits when the non tax benefits of the transaction were small, current management were the most efficient purchasers, as they had an advantage along the hidden information dimension. Therefore 1981 act had increased the incidence of cases in which non tax benefits were less than the common tax benefits of mergers and acquisitions. As a result, there was an increase in the number of transactions involving management buyouts. The annual dollar value of unit management buyouts between 1978-80 increased by a factor of 3, and by a factor in excess of 20 for the period 1981-86. The antitrust proposition mentioned above is appealing as one of the most important reason for diversification, during the 60s and 70s, which simply disallowed mergers of firms in the same industry, regardless of the effects of these mergers o