Organisational Behaviour in Action Essay Example | Topics and Well Written Essays - 1500 words

Organisational Behaviour in Action - Essay Example Similarly Mill, Bentham and Locke tried to include the principles of pleasure, pain and hedonism in describing human motivation but could not distinguish what factors accounted for differences in individual motivation. It was Douglas McGregor who pointed out that in order to achieve organizational objectives, it was better to treat workers with respect and compassion (McGregor, 1960, 12). One’s morale can suffer on account of undue pressures at work, bad supervision or the state of the economy when others are being laid off. In this paper we will try to discover how to keep the employees motivated and happy despite the dismal conditions all around them. Using Equity Theory to Motivate Employees at Bain & Company Psychologists and social scientists have developed various theories to explain how to motivate employees towards greater productivity and satisfaction in the workplace. Among these are Maslow’s Hierarchy of Needs theory, Herzberg’s Two Factor or Hygiene t heory, Vroom’s Expectancy theory, J. Stacy Adams’ Equity theory and so forth. In the case cited, we have the example of Bain and Company, where the worldwide Managing Director Steve Ellis is still not afraid to hire new employees in hot growth areas despite the recessionary trends in the economy as of 2009. He has managed to placate and address employee fears of being fired by reducing their goals to achievable levels looking at the state of the economy. He is also raised the rewards for lower level and temporary employees, so that they remain motivated and happy to have a job despite the economic slowdown. The equity theory states that there should be a balance between the output or productivity of an employee on the job and the rewards given to them. If the rewards given are perceived to be less than equal, the employee becomes dissatisfied and his productivity will drop in the near future. If the rewards given to an employee are perceived to be matching the level of his efforts at work, he will be suitably satisfied and his productivity will remain at the same level in the near future. The theory also states that if we want to increase an employee’s productivity, we should reward him a little bit more than he expects for his efforts. The employee will thus be pleasantly surprised and will definitely be motivated to work harder considering the faith that management has put into him. This is what Bain and Company is trying to do with the lower level employees by reducing goals and giving more rewards at lower levels of achievement across the organization. It is also seen that when employees are made to work harder and longer hours without a commensurate rewards program, ultimately they will leave the organization when things get better in the economy. Perhaps this is the very thing that Bain and Company wants to avoid. So by rewarding employees in this fashion, staff is not only happy to come to work every day but also learn not to worry like their counterparts in other organizations who are living in fear and despair. They can produce without undue worry about tomorrow. Using Expectancy Theory to Explain Motivation in Bain & Company The case cited also mentions that Bain and Company is hiring employees in hot growth areas. Steve Ellis thinks that a downturn is the best time to hire some outstanding employees away from the competition because of economic uncertainty and layoffs adding to the fear

Identifying stakeholders and Interest Article Example | Topics and Well Written Essays - 500 words

Identifying stakeholders and Interest - Article Example Therefore, because of their contributions towards educational provisions in the district, parents will be involved in the formulation of this policy. It will directly affect them because it concerns the safety of their children. Meaning, their input will be required (May, S. & S. Aikman, 2003). Before making any final decision, the parents will have to be consulted, if they approve the new policy, it will be enforced. They know what is good for their children hence, they can not be overlooked. The police department will have to be incorporated as a party to this policy. Their contributions are important. As professional law enforcers, they have a wider knowledge on how the issue of pupil security can be tackled. Hence, it implies that they must be consulted anything is done. Meaning, their suggestions will be taken into account and given a lot of considerations. If they object to it, necessary amendments will be made in order to refine it and make it be up to the required standard. As community elected leaders, the politicians will have to be considered as part of the stakeholders. Both the local civic leaders, senators and the congressmen will have to be consulted. As opinion leaders, the politicians will be included because they are representatives and can speak on behalf of the larger community (Bruce S., 2007). In this regard, they will be urged to participate in the drafting of this new policy since it will have to affect them. As people’s representatives, it is their responsibility to support educational provisions in their areas of jurisdiction. However, everyone knows that such a goal can not be accomplished if there is no safety both within and out of schools. Before making such a new policy, the school management boards will have to be consulted. As school managers, they have a lot of say on whatever activity that happens in schools. They must be involved in the formulation of this new policy because it will affect the success of their schools. They

Impact of Mergers and Acquisitions on the TATA Group

Impact of Mergers and Acquisitions on the TATA Group IMPACT OF MERGERS AND ACQUISITIONS ON THE FINANCIALS AND PERFORMANCE OF TATA GROUP In the current globalised economy, mergers and acquisitions are being progressively more used the world over, for increasing competitiveness of companies through gaining better market share, expansion of the portfolio to reduce business risk, to capitalize on the economies of scale and for entering new geographies, etc. This research study was intended to analyze the consequence of going global market through merger and acquisition and traders long and short term earnings .Thereby study the impact of mergers on the financials by examining some pre- merger and post-merger financial ratios, with the sample of firms chosen as three major mergers/acquisitions of TATA Group. The results put forward that there are small variations in terms of post merger financial performance of the joint firm is not considerably different from the aggregate performance of the acquirer and target companies before the merger. INRODUCTION Merger and acquisitions have emerged as chief forces in the contemporary financial and economic environment. They have been a source of corporate growth and in India, it has changed radically after the liberalization of Indian economy. Mergers and acquisitions came up as one of the most efficient methods of such corporate restructuring, and became an essential part of the long-term trade strategy of corporates in India. The sole three chief objectives at the back any MA transaction were found to be: Improving Profitability Rapid growth in scale and closer time to market Acquirement of new technology Many in corporate India would be jealous of the Tata Groups strategy around mergers and acquisition. In the past 8 years, the Tata Group had made 35 overseas acquisitions, including coal and iron ore mines, adding up Rs 78,000 crore, mostly in the past 3 years. Research problem To examine the consequence of going global through mergers and acquisitions and the traders long term and short term earnings respectively. This would aid in studying the impact on companies financials past the merger or acquisition. To also determine the enterprise value of the corporation by comparing it with the peer group and studying the value of the firm Objective of the study To analyze the a thorough detailed case study of 3 companies of Tata Group who merged or acquired in the past years. To evaluate the closing price of 3 companies previous to and post acquisition To weigh up the key financial ratios of 3 companies pre and post acquisition To do valuation of two companies through enterprise value and contrast the value with peer group and examine in detail Review of literature The subsequent studies are the few existing work reviewed which were conducted by researchers in the sight of analyzing the financial performance during and post merger activity across different time periods. Effect of mergers on corporate performance in India, writer Mrs. Vardhana Pawaskar (2001), considered the impact of mergers on corporate performance. A case study, assessed the financial performance of a cloth unit by using ratio analysis. It compared the before and after merger performance of the corporations between 1992 and 2000 to identify their financial character. The study found that the financial fitness was never in the strong zone during the whole study period and ratio analysis highlighted that decision-making incompetence accounted for a good number of the problems. Forecasting the viability and operational efficiency by Mr Mulla through use of ratio analysis, suggested matching up efficiency and success of all facets of management and put the company on a lucrative footing. The study of a sample of firms, restructured through mergers, showed that the merging firms were at the inferior end in terms of liquidity of the industry. The merged firms gave better performance than industry in terms of profitability. Mergers and operating performance by Mr. Mantravadi: An Indian perspective, attempted to examine the impact of mergers on the performance post industrial reforms, by investigating some pre- and post-merger financial ratios, with chosen sample firms, and all mergers linking public and private limited companies The study results suggested that there are minor variations in terms of impact on financial performance of subsequent mergers across different intervals of time in India. It also indicated that for mergers between the same groups of companies in India, there has been deterioration in performance and ROI. Mergers acquisitions in the banking sector presents the Indian scenario, author Mr. Selvam (2007) has analyzed the impacts of stock price changes to mergers and acquisitions behavior taken place in banking industry with particular reference to private and public sector banks. Found that share prices are market sensitive. From the financial analysis it was noted that greater part of the banks went for branch extension and this has affected profitability to some extent and it resulted in harmful competition among the players. To add up the review of literature, many offerings have offered diverse perspectives of merger in different industries globally and explained the valuation techniques followed by merging companies, and shareholders possessions effect due to merger. From the review of several papers evaluating the pre and post merger performance of merged companies, it is incidental that majority of the studies powerfully support the concept of improved post merger performance due to merger and it is valuable to the acquirer companies. METHODOLOGY Methodology of the study Sample selection There are several mergers within the TATA Group during the study period from 01.04.2006 to 31.03.2009. For the purpose of corporate analysis, it was decided to select three of the highest deals which merged/ acquired under the TATA Group during the study period. Hence, the sample size of this study is confined to 3. Besides, while selecting the sample, following points were taken into account. Acquirer and target companies ought to belong to the same industry. Availability of information on the merger and industry. Period of the study The present study covers a period of one year from April 1, 2006 to March 31, 2009. But in order to evaluate the financial performance of sample companies on a comparative basis, 15-20 days before merger and after merger were considered. Sources of data The present study fundamentally depends on secondary data. The required data on financial performance prior and post merger were composed and they were obtained from Prowess software, Internet sources, Business Journals (ICFAI JOURNAL ON M A) The data were also collected from books, and newspapers. Tools used In order to study the financial performance of acquirer and target companies, ratios Debt-Equity Ratio, ROCE (%),net profit margin, P/E, EPS, OPM(%) and valuation. (1) Analysis of financial performance The pre-merger average performance of the companies were compared with the post- merger performance of the joint firm. The present study attempts to calculate and study the pre and post merger performance of acquirer and target companies by using financial ratios in order to determine whether mergers resulted in shareholders wealth or not. Accordingly, the following null hypothesis has been tested: H0: The post merger financial performance of the combined firm is not significantly different from the aggregate performance of the acquirer and target companies prior to the merger. (2) Ratios Debt-Equity Ratio: A gauge of a companys financial leverage obtained by dividing  the total liabilities  by  stockholders equity. It shows what proportion of equity and debt the company is presently using to finance their assets. Return On Capital Employed (ROCE) : ROCE compares earnings with the invested capital in the company. It is like Return on Assets (ROA), but also considers sources of financing Net profit margin: The profit margin says how much profit a company makes for every 1 Rupee it generates in revenue or sales. Profit margins vary with industry to industry, but all else being equal, the greater a companys profit margin compared to its competitors, the better. P/E: It is a gauge of the price paid for a share relative to the annual net income or the net profit earned by the firm per share. EPS: The portion of a companys profit which is allocated to each outstanding share of common stock.  Earnings per share  acts as an indicator of  a companys profitability. OPM: Operating margin is a measurement of the proportion of a companys revenue that is left over after variable costs of production such as wages, and raw materials have been paid. A healthy operating margin is required for a company to be able to pay for its fixed costs, such as interest on debt. Also known as operating profit margin and net profit margin. (3) Enterprise Value Enterprise value is a figure that, in theory, represents the entire cost of a company if someone were to acquire it. Enterprise value is a more accurate estimate of takeover cost than market capitalization because it takes includes a number of important factors such as preferred stock, debt, and cash reserves that are excluded from the latter metric. ANALYSIS OF DATA TATA GROUP OF COMPANIES One of the Indias largest business groups in the country. It has about 96 operating companies. Diverse business in 7 sectors. Revenues equivalent to 5.3% of Indias GDP. Group revenue FY 2008: Rs 251,543 Cr. / $ 62.5 b. Group profit FY 2008: Rs 21,578 Cr. / $ 5.4 b .Its 27 publicly listed companies have a combined market capitalization which is the 2nd highest among all business houses in India. Largest employer in private sector over 300,000 employees. A shareholder base of over 2.9 million. Operations in over 80 countries. Products and services exported to 85 countries Tata is a rapidly growing business group based in India with significant international operations. Revenues in 2007-08 are estimated at $62.5 billion (around Rs251, 543 crore), of which 61 per cent is from business outside India. The group employs around 350,000 people worldwide. The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics. The business operations of the Tata group currently encompass seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. The groups major companies are beginning to be counted globally. Considering two of the largest mergers of TATA Group -Tata Steel became the sixth largest steel maker in the world after it acquired Corus. -Tata Communications is a leading global provider of a new world of communications. With a leadership position in emerging markets, Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers. TATA STEEL-CORUS About the acquisition Date: 30th March 2007 Acquirer: Tata Steel Limited Target company: Corus Plc. Stake: 100 % Deal amount: US$ 12201 m Sector: Steel sector MERGER On January 31, 2007, India based Tata Steel Limited (Tata Steel) acquired the Anglo Dutch steel company, Corus Group Plc (Corus) for US$ 12.20 billion. The merged entity, Tata-Corus, employed 84,000 people across 45 countries in the world. It had the capacity to produce 27 million tons of steel per annum, making it the fifth largest steel producer in the world as of early 2007. Before the acquisition, the major market for Tata Steel was India. The Indian market accounted for sixty nine percent of the companys total sales. Almost half of Corus production of steel was sold in Europe (excluding UK). The UK consumed twenty nine percent of its production. After the acquisition, the European market (including UK) would consume 59 percent of the merged entitys total production. DEAL : An auction was initiated on January 31, 2007, and after nine rounds of bidding, TATA Steel could finally clinch the deal with its final bid 608 pence per share, almost 34% higher than the first bid of 455 pence per share of Corus. Synergies There were many likely synergies between Tata Steel, the lowest-cost producer of steel in the world, and Corus, a large player with a significant presence in value-added steel segment and a strong distribution network in Europe. Among the benefits to Tata Steel was the fact that it would be able to supply semi-finished steel to Corus for finishing at its plants, which were located closer to the high-value markets The Pitfalls Though the potential benefits of the Corus deal were widely appreciated, some analysts had doubts about the outcome and effects on Tata Steels performance. They pointed out that Corus EBITDA (earnings before interest, tax, depreciation and amortization) at 8 percent was much lower than that of Tata Steel which was at 30 percent in the financial year 2006-07 COMPANYS RETURN BEFORE AND AFTER ACQUISITION PRE-ACQUISITION POST-ACQUISITION FINDINGS As we can see from the line chart that the %cumulative abnormal return before acquisition was sharply decreasing since past month with not even a single glimpse of positive return on any single day. But as soon as the acquisition took place, the earnings showed a marginal rise and again got back to the level where it was just before the acquisition. This happened due to very large debt generated due to overpaying by acquiring the Corus at a very high price of 608 pence per share as compared to previously valued 455 pence per share. INTERPRETATION Debt equity ratio on post acquisition increase because Corus debt was high it was GBP1.6b to buy Corus and so its debt is almost 116% more than in pre acquisition. ROCE shows that post acquisition is very less as compared to pre acquisition it has negative percentage because company has short term returns after one year it will improve in the long run. Net profit margin has very less change as profit is not much affected. P/E increases in post acquisition by 30.2% which show high future cash flow. ROE is decreasing by 37.7 which show that it has more debt than equity. EPS has a very minor change. Operating profit margin is reduced by 9.1% which shows that it has low profit. TATA COMMUNICATION-NTT DOCOMO About the acquisition Date: 13th November 2008 Acquirer: Ntt-Docomo Target company: Tata Teleservices Ltd. Stake: 26 % Deal amount: US$ 2700 m Sector: Tele-communication MERGER Tata Teleservices has sold a stake of 26% to Japans NTT DoCoMo. The deal value is $2.7 bn. Tata Tele has 30 million CDMA subscribers and is rolling out its GSM services. Some say the deal is over-valued and some say its not easy to put value on the fastest growing mobile market in the world. India is the fastest growing market second only to China. It adds 10mn subscribers every month. The current subscriber base stands at 300+million and is expected to be 700 million in 2012. That is almost double to todays numbers. The Road ahead Great deal it may be, but it has its risks. One reason is that telecom deals have been controversial in recent times. This goes back to late last year when the government sold pan-India licenses for $333 million apiece, amid a welter of controversy. DoCoMo, in accordance with regulations of the Securities and Exchange Board of India, expects to make an open offer to acquire up to 20 per cent of outstanding equity shares of Tata Teleservices Maharashtra (TTML), a Tata telecommunication company, through a joint tender offer along with Tata Sons. TTSL and TTML through the Tata Indicom brand, have increased their combined share of the fast-growing Indian mobile market and their combined subscriber base now stands at over 30 million. TTSL expects to leverage DoCoMos expertise in the development and delivery of value-added services, where DoCoMo is a firmly established market leader. FINDINGS Debt equity ratio on post acquisition debt is increasing which shows company debt is increasing after merger. ROCE is constant it has not change much.Net profit margin increases by 11.10 as it income increases in post acquisition as compared to pre acquisition. P/E highly increases in post acquisition from 0 to 12%. ROE is decreasing by 1.53% which shows that it slightly more debt than equity. EPS is increasing drastically by 24.27% which is very profitable for investors. Operating profit margin is increased by 15.43% which shows that company profit margin is very fairly profitable. COMPANYS RETURN BEFORE AND AFTER ACQUISITION PRE-ACQUISITION POST-ACQUISITION INTERPRETATION The return of the target company Tata Communication has been very poor since the past 15 to 20 days before the acquisition but it almost got to break-even soon after the acquisition date. This sustained for the next 8 to 10 days but again got back into negative returns zone due to poor customer support to the newly entered Docomo brand in highly competitive communications market in India. TATA MOTOR JLR About the acquisition Date: 27th March 2008 Acquirer: Tata Motors Ltd Target company: Jaguar Land Rover Stake: 100 % Deal amount: US$ 2300m Sector: Automotive Detailed Case Study In June 2008, India-based Tata Motors Ltd. announced that it had completed the acquisition of the two iconic British brands Jaguar and Land Rover (JLR) from the US-based Ford Motors for US$ 2.3 billion. Tata Motors stood to gain on several fronts from the deal. One, the acquisition would help the company acquire a global footprint and enter the high-end premier segment of the global automobile market. After the acquisition, Tata Motors would own the worlds cheapest car the US$ 2,500 Nano, and luxury marquees like the Jaguar and Land Rover. Though there was initial skepticism over an Indian company owning the luxury brands, ownership was not considered a major issue at all. According to industry analysts, some of the issues that could trouble Tata Motors were economic slowdown in European and American markets, funding risks, currency risks etc. The Challenges Morgan Stanley reported that JLRs acquisition appeared negative for Tata Motors, as it had increased the earnings volatility, given the difficult economic conditions in the key markets of JLR including the US and Europe. Moreover, Tata Motors had to incur a huge capital expenditure as it planned to invest another US$ 1 billion in JLR. This was in addition to the US$ 2.3 billion it had spent on the acquisition. Tata Motors had also incurred huge capital expenditure on the development and launch of the small car Nano and on a joint venture with Fiat to manufacture some of the companys vehicles in India and Thailand. This, coupled with the downturn in the global automobile industry, was expected to impact the profitability of the company in the near future CURRENT SCENARIO In less than three years after its acquisition, Jaguar Land Rover has metamorphosed from a millstone around Tata Motors neck into its crowning jewel. In the June 2010 quarter, JLR division accounted for nearly 70% of the companys net profit and over 60% of its revenues on the consolidated basis. This was more than what the market has expected and the stock is up by nearly 150% in the past two trading sessions. JLR benefited from an improvement in its pricing power and a favourable exchange rate in the US dollar and the euro. The two worked in tandem and resulted in a sharp 60% jump in JLR revenue per unit to around  £38,000 in June 2010 quarter compared to the  £23,800 a year ago. With the raw material costs remaining benign, it led to a sharp improvement in the divisions operating margin and its reported net profit of  £221 million (`1,613.3 crore) in the first quarter as against a net loss of  £64 million (`467 crore) a year ago. FINDINGS Debt equity ratio is increasing by 42.27% as Tata took loan of banks to acquire JLR.ROCE increases vey high by 343.60% as compared to pre acquisition as it gauges that company that generate its earnings from the total pool of capital which indicates profitability.Net profit margin increases as it income increases in post acquisition as compared to pre acquisition. P/E highly decreases in post acquisition by 60.1% which in investor point of view they will be profitable to invest to get high earning. ROE is highly increasing by 480.15% which shows that it has more equity than debt. EPS is increasing drastically by 480.15% which is very profitable for investors. Operating profit margin is reduced by 41.44% which shows that company profit margin is very less. COMPANYS RETURN BEFORE AND AFTER ACQUISITION PRE-ACQUISITION POST-ACQUISITION INTERPRETATION As we can see from the line chart that the cumulative return before merger was negative and the entire trend is moving in the negative direction due to poor returns of tata motors. A soon as the acquisition took place, the highly profit generating Jaguar as well as Land Rover added to the profit and earnings of the tata motors. The brand value of JLR added to the highly reputable Tata Group and the companys balance sheet. This can be clearly seen in the line chart above. VALUATION AND INTERPRETATION EV Multiples of Tata Corus Tata Steel and Corus Group deal happened at high multiples compared to its peers. We can observe that the average multiples of the peer group company stands half compared to the deal multiples. Sales Multiple: The average sales multiple of its peers is 1.17x compared to the deal of 0.68x of Corus Groups sales. This can be possible due to high sales value, reducing the multiple to 0.68x. The lowest multiple (Steel Authority of India) is at 0.73x. EBITDA Multiple: EBITDA multiple of its peers averages at 4.38x compared to the deal multiple of 7.02x of Corus Groups sales. Even the highest multiple (Jindal Steel Power) is at 4.38x. This is almost half of the deal multiple. It can be observed that Tata played very aggressively. EBIT Multiple: EBIT multiple of its peers averaged at 5.54x compared to the deal of 10.19x of Corus Groups sales. Even the highest multiple (Jindal Steel Power) is at 8.39x. PE Multiple: The PE multiple of the deal is very high on the account that the margins of Corus are very low compared to Tata Steel and other peers. The average PE multiples is 7.95x compared to 68.23x at which the deal haapened. EV Multiples of Tata NTT Docomo The deal of Tata Teleservices and NTT Docomo happened at very high multiples. We can observe that the average multiples of the peer group company stands very low compared to the deal multiples. Sales Multiple: The average sales multiple of its peers is 5.37x compared to the deal of 26.98x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 9.24x. Thus we can conclude that Tata Teleservices got very good price for its stake dilution for NTT Docmo. EBITDA Multiple: Again the average EBITDA multiple of its peers is very less, 16.35x compared to the deal of 99.81x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 26.74x. This is a huge difference. NTT Docomo paid 6 times more what it should have paid to Tata. EBIT Multiple: EBIT multiple of its peers is 25.5x compared to the deal of 952.96x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 41.02x. PE Multiple: The PE multiple for Tata Teleservices is negative as its net income is negative Note: The multiples are high on account that Sales and the profitability of Tata Teleservices is low, inturn giving very high multiples. Its sales stands at Rs. 1,815.5 Cr. compared to the average sales of Rs. 11,490.6 Cr. of its peers. FINDINGS FROM VALUATION OF ENTERPRISE VALUE MULTIPLE Tata Corus Tata Steel and Corus Group deal happened at high multiples compared to its peers. We can observe that the average multiples of the peer group company stands half compared to the deal multiples. Even the highest multiple (Jindal Steel Power) is at 4.38x. This is almost half of the deal multiple It can be observed that Tata played very aggressively as it paid high enterprise value as compared to our analysis. A reason for Corus to be sold is chance to Bail out of Debt and Financial stress. TATA Steel Paid 7.02 Times EBITDA of Corus Enterprise Value. The PE multiple of the deal is very high on the account that the margins of Corus are very low compared to Tata Steel and other peers the only company who has high P/E is Jindal steel. Tata NTT Docomo The deal of Tata Teleservices and NTT Docomo happened at very high multiples. We can observe that the average multiples of the peer group company stands very low compared to the deal multiples. The average sales multiple of its peers is 5.37x compared to the deal of 26.98x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 9.24x. Thus we can conclude that Tata Teleservices got very good price for its stake dilution for NTT Docomo. The PE multiple for Tata Teleservices is negative as its net income is negative. EBITDA multiple of its peers is very less, 16.35x compared to the deal of 99.81x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 26.74x. This is a huge difference. NTT Docomo paid 6 times more what it should have paid to Tata. The multiples are high on account that Sales and the profitability of Tata Teleservices is low, in turn giving very high multiples. Its sales stands at Rs. 1,815.5 Cr. compared to the average sales of Rs. 11,490.6 Cr. of its peers. SUMMARY Except Tata Steel- Corus deal, all the other 2 acquisitions was well accepted by not only well accepted by the owners of the company (the shareholders) but even made the entire Tata group come into the eyes of fortune 500 list. In-fact it ranked at 56th position at a global level in 2009 CONCLUSION This study was undertaken to test what is the impact of mergers on the financials of acquiring corporate by examining some pre- merger and post-merger financial, in terms of impact on operating performance. The results from the analysis of pre- and post-merger operating performance ratios for the acquiring firms in the sample showed that there was a differential impact of mergers, for different industry sectors in India. Type of industry does seem to make a difference to the post-merger operating performance of acquiring firms. Expansion through mergers and acquisition is one of the best ways for any domestic company to step outside the shores of India in an international market place and acquit itself as a global player Company can turn into conglomerate in reasonably less time by capitalizing on its strengths of efficiency and effectiveness by acquiring relatively poor performing companies as TATA did in almost all its group of companies Recent examples of companies which adopted similar pattern of expansion are Renuka Sugars, Arcelor Mittal, Reliance, Essar Group, Aditya Birla Group, etc. One can study any of the above mentioned company and conclude that the key underlying decision of these companies expanding quickly and efficiently is their timely decision of merging and acquiring appropriate companies Impact of Mergers and Acquisitions on the TATA Group Impact of Mergers and Acquisitions on the TATA Group IMPACT OF MERGERS AND ACQUISITIONS ON THE FINANCIALS AND PERFORMANCE OF TATA GROUP In the current globalised economy, mergers and acquisitions are being progressively more used the world over, for increasing competitiveness of companies through gaining better market share, expansion of the portfolio to reduce business risk, to capitalize on the economies of scale and for entering new geographies, etc. This research study was intended to analyze the consequence of going global market through merger and acquisition and traders long and short term earnings .Thereby study the impact of mergers on the financials by examining some pre- merger and post-merger financial ratios, with the sample of firms chosen as three major mergers/acquisitions of TATA Group. The results put forward that there are small variations in terms of post merger financial performance of the joint firm is not considerably different from the aggregate performance of the acquirer and target companies before the merger. INRODUCTION Merger and acquisitions have emerged as chief forces in the contemporary financial and economic environment. They have been a source of corporate growth and in India, it has changed radically after the liberalization of Indian economy. Mergers and acquisitions came up as one of the most efficient methods of such corporate restructuring, and became an essential part of the long-term trade strategy of corporates in India. The sole three chief objectives at the back any MA transaction were found to be: Improving Profitability Rapid growth in scale and closer time to market Acquirement of new technology Many in corporate India would be jealous of the Tata Groups strategy around mergers and acquisition. In the past 8 years, the Tata Group had made 35 overseas acquisitions, including coal and iron ore mines, adding up Rs 78,000 crore, mostly in the past 3 years. Research problem To examine the consequence of going global through mergers and acquisitions and the traders long term and short term earnings respectively. This would aid in studying the impact on companies financials past the merger or acquisition. To also determine the enterprise value of the corporation by comparing it with the peer group and studying the value of the firm Objective of the study To analyze the a thorough detailed case study of 3 companies of Tata Group who merged or acquired in the past years. To evaluate the closing price of 3 companies previous to and post acquisition To weigh up the key financial ratios of 3 companies pre and post acquisition To do valuation of two companies through enterprise value and contrast the value with peer group and examine in detail Review of literature The subsequent studies are the few existing work reviewed which were conducted by researchers in the sight of analyzing the financial performance during and post merger activity across different time periods. Effect of mergers on corporate performance in India, writer Mrs. Vardhana Pawaskar (2001), considered the impact of mergers on corporate performance. A case study, assessed the financial performance of a cloth unit by using ratio analysis. It compared the before and after merger performance of the corporations between 1992 and 2000 to identify their financial character. The study found that the financial fitness was never in the strong zone during the whole study period and ratio analysis highlighted that decision-making incompetence accounted for a good number of the problems. Forecasting the viability and operational efficiency by Mr Mulla through use of ratio analysis, suggested matching up efficiency and success of all facets of management and put the company on a lucrative footing. The study of a sample of firms, restructured through mergers, showed that the merging firms were at the inferior end in terms of liquidity of the industry. The merged firms gave better performance than industry in terms of profitability. Mergers and operating performance by Mr. Mantravadi: An Indian perspective, attempted to examine the impact of mergers on the performance post industrial reforms, by investigating some pre- and post-merger financial ratios, with chosen sample firms, and all mergers linking public and private limited companies The study results suggested that there are minor variations in terms of impact on financial performance of subsequent mergers across different intervals of time in India. It also indicated that for mergers between the same groups of companies in India, there has been deterioration in performance and ROI. Mergers acquisitions in the banking sector presents the Indian scenario, author Mr. Selvam (2007) has analyzed the impacts of stock price changes to mergers and acquisitions behavior taken place in banking industry with particular reference to private and public sector banks. Found that share prices are market sensitive. From the financial analysis it was noted that greater part of the banks went for branch extension and this has affected profitability to some extent and it resulted in harmful competition among the players. To add up the review of literature, many offerings have offered diverse perspectives of merger in different industries globally and explained the valuation techniques followed by merging companies, and shareholders possessions effect due to merger. From the review of several papers evaluating the pre and post merger performance of merged companies, it is incidental that majority of the studies powerfully support the concept of improved post merger performance due to merger and it is valuable to the acquirer companies. METHODOLOGY Methodology of the study Sample selection There are several mergers within the TATA Group during the study period from 01.04.2006 to 31.03.2009. For the purpose of corporate analysis, it was decided to select three of the highest deals which merged/ acquired under the TATA Group during the study period. Hence, the sample size of this study is confined to 3. Besides, while selecting the sample, following points were taken into account. Acquirer and target companies ought to belong to the same industry. Availability of information on the merger and industry. Period of the study The present study covers a period of one year from April 1, 2006 to March 31, 2009. But in order to evaluate the financial performance of sample companies on a comparative basis, 15-20 days before merger and after merger were considered. Sources of data The present study fundamentally depends on secondary data. The required data on financial performance prior and post merger were composed and they were obtained from Prowess software, Internet sources, Business Journals (ICFAI JOURNAL ON M A) The data were also collected from books, and newspapers. Tools used In order to study the financial performance of acquirer and target companies, ratios Debt-Equity Ratio, ROCE (%),net profit margin, P/E, EPS, OPM(%) and valuation. (1) Analysis of financial performance The pre-merger average performance of the companies were compared with the post- merger performance of the joint firm. The present study attempts to calculate and study the pre and post merger performance of acquirer and target companies by using financial ratios in order to determine whether mergers resulted in shareholders wealth or not. Accordingly, the following null hypothesis has been tested: H0: The post merger financial performance of the combined firm is not significantly different from the aggregate performance of the acquirer and target companies prior to the merger. (2) Ratios Debt-Equity Ratio: A gauge of a companys financial leverage obtained by dividing  the total liabilities  by  stockholders equity. It shows what proportion of equity and debt the company is presently using to finance their assets. Return On Capital Employed (ROCE) : ROCE compares earnings with the invested capital in the company. It is like Return on Assets (ROA), but also considers sources of financing Net profit margin: The profit margin says how much profit a company makes for every 1 Rupee it generates in revenue or sales. Profit margins vary with industry to industry, but all else being equal, the greater a companys profit margin compared to its competitors, the better. P/E: It is a gauge of the price paid for a share relative to the annual net income or the net profit earned by the firm per share. EPS: The portion of a companys profit which is allocated to each outstanding share of common stock.  Earnings per share  acts as an indicator of  a companys profitability. OPM: Operating margin is a measurement of the proportion of a companys revenue that is left over after variable costs of production such as wages, and raw materials have been paid. A healthy operating margin is required for a company to be able to pay for its fixed costs, such as interest on debt. Also known as operating profit margin and net profit margin. (3) Enterprise Value Enterprise value is a figure that, in theory, represents the entire cost of a company if someone were to acquire it. Enterprise value is a more accurate estimate of takeover cost than market capitalization because it takes includes a number of important factors such as preferred stock, debt, and cash reserves that are excluded from the latter metric. ANALYSIS OF DATA TATA GROUP OF COMPANIES One of the Indias largest business groups in the country. It has about 96 operating companies. Diverse business in 7 sectors. Revenues equivalent to 5.3% of Indias GDP. Group revenue FY 2008: Rs 251,543 Cr. / $ 62.5 b. Group profit FY 2008: Rs 21,578 Cr. / $ 5.4 b .Its 27 publicly listed companies have a combined market capitalization which is the 2nd highest among all business houses in India. Largest employer in private sector over 300,000 employees. A shareholder base of over 2.9 million. Operations in over 80 countries. Products and services exported to 85 countries Tata is a rapidly growing business group based in India with significant international operations. Revenues in 2007-08 are estimated at $62.5 billion (around Rs251, 543 crore), of which 61 per cent is from business outside India. The group employs around 350,000 people worldwide. The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics. The business operations of the Tata group currently encompass seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. The groups major companies are beginning to be counted globally. Considering two of the largest mergers of TATA Group -Tata Steel became the sixth largest steel maker in the world after it acquired Corus. -Tata Communications is a leading global provider of a new world of communications. With a leadership position in emerging markets, Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers. TATA STEEL-CORUS About the acquisition Date: 30th March 2007 Acquirer: Tata Steel Limited Target company: Corus Plc. Stake: 100 % Deal amount: US$ 12201 m Sector: Steel sector MERGER On January 31, 2007, India based Tata Steel Limited (Tata Steel) acquired the Anglo Dutch steel company, Corus Group Plc (Corus) for US$ 12.20 billion. The merged entity, Tata-Corus, employed 84,000 people across 45 countries in the world. It had the capacity to produce 27 million tons of steel per annum, making it the fifth largest steel producer in the world as of early 2007. Before the acquisition, the major market for Tata Steel was India. The Indian market accounted for sixty nine percent of the companys total sales. Almost half of Corus production of steel was sold in Europe (excluding UK). The UK consumed twenty nine percent of its production. After the acquisition, the European market (including UK) would consume 59 percent of the merged entitys total production. DEAL : An auction was initiated on January 31, 2007, and after nine rounds of bidding, TATA Steel could finally clinch the deal with its final bid 608 pence per share, almost 34% higher than the first bid of 455 pence per share of Corus. Synergies There were many likely synergies between Tata Steel, the lowest-cost producer of steel in the world, and Corus, a large player with a significant presence in value-added steel segment and a strong distribution network in Europe. Among the benefits to Tata Steel was the fact that it would be able to supply semi-finished steel to Corus for finishing at its plants, which were located closer to the high-value markets The Pitfalls Though the potential benefits of the Corus deal were widely appreciated, some analysts had doubts about the outcome and effects on Tata Steels performance. They pointed out that Corus EBITDA (earnings before interest, tax, depreciation and amortization) at 8 percent was much lower than that of Tata Steel which was at 30 percent in the financial year 2006-07 COMPANYS RETURN BEFORE AND AFTER ACQUISITION PRE-ACQUISITION POST-ACQUISITION FINDINGS As we can see from the line chart that the %cumulative abnormal return before acquisition was sharply decreasing since past month with not even a single glimpse of positive return on any single day. But as soon as the acquisition took place, the earnings showed a marginal rise and again got back to the level where it was just before the acquisition. This happened due to very large debt generated due to overpaying by acquiring the Corus at a very high price of 608 pence per share as compared to previously valued 455 pence per share. INTERPRETATION Debt equity ratio on post acquisition increase because Corus debt was high it was GBP1.6b to buy Corus and so its debt is almost 116% more than in pre acquisition. ROCE shows that post acquisition is very less as compared to pre acquisition it has negative percentage because company has short term returns after one year it will improve in the long run. Net profit margin has very less change as profit is not much affected. P/E increases in post acquisition by 30.2% which show high future cash flow. ROE is decreasing by 37.7 which show that it has more debt than equity. EPS has a very minor change. Operating profit margin is reduced by 9.1% which shows that it has low profit. TATA COMMUNICATION-NTT DOCOMO About the acquisition Date: 13th November 2008 Acquirer: Ntt-Docomo Target company: Tata Teleservices Ltd. Stake: 26 % Deal amount: US$ 2700 m Sector: Tele-communication MERGER Tata Teleservices has sold a stake of 26% to Japans NTT DoCoMo. The deal value is $2.7 bn. Tata Tele has 30 million CDMA subscribers and is rolling out its GSM services. Some say the deal is over-valued and some say its not easy to put value on the fastest growing mobile market in the world. India is the fastest growing market second only to China. It adds 10mn subscribers every month. The current subscriber base stands at 300+million and is expected to be 700 million in 2012. That is almost double to todays numbers. The Road ahead Great deal it may be, but it has its risks. One reason is that telecom deals have been controversial in recent times. This goes back to late last year when the government sold pan-India licenses for $333 million apiece, amid a welter of controversy. DoCoMo, in accordance with regulations of the Securities and Exchange Board of India, expects to make an open offer to acquire up to 20 per cent of outstanding equity shares of Tata Teleservices Maharashtra (TTML), a Tata telecommunication company, through a joint tender offer along with Tata Sons. TTSL and TTML through the Tata Indicom brand, have increased their combined share of the fast-growing Indian mobile market and their combined subscriber base now stands at over 30 million. TTSL expects to leverage DoCoMos expertise in the development and delivery of value-added services, where DoCoMo is a firmly established market leader. FINDINGS Debt equity ratio on post acquisition debt is increasing which shows company debt is increasing after merger. ROCE is constant it has not change much.Net profit margin increases by 11.10 as it income increases in post acquisition as compared to pre acquisition. P/E highly increases in post acquisition from 0 to 12%. ROE is decreasing by 1.53% which shows that it slightly more debt than equity. EPS is increasing drastically by 24.27% which is very profitable for investors. Operating profit margin is increased by 15.43% which shows that company profit margin is very fairly profitable. COMPANYS RETURN BEFORE AND AFTER ACQUISITION PRE-ACQUISITION POST-ACQUISITION INTERPRETATION The return of the target company Tata Communication has been very poor since the past 15 to 20 days before the acquisition but it almost got to break-even soon after the acquisition date. This sustained for the next 8 to 10 days but again got back into negative returns zone due to poor customer support to the newly entered Docomo brand in highly competitive communications market in India. TATA MOTOR JLR About the acquisition Date: 27th March 2008 Acquirer: Tata Motors Ltd Target company: Jaguar Land Rover Stake: 100 % Deal amount: US$ 2300m Sector: Automotive Detailed Case Study In June 2008, India-based Tata Motors Ltd. announced that it had completed the acquisition of the two iconic British brands Jaguar and Land Rover (JLR) from the US-based Ford Motors for US$ 2.3 billion. Tata Motors stood to gain on several fronts from the deal. One, the acquisition would help the company acquire a global footprint and enter the high-end premier segment of the global automobile market. After the acquisition, Tata Motors would own the worlds cheapest car the US$ 2,500 Nano, and luxury marquees like the Jaguar and Land Rover. Though there was initial skepticism over an Indian company owning the luxury brands, ownership was not considered a major issue at all. According to industry analysts, some of the issues that could trouble Tata Motors were economic slowdown in European and American markets, funding risks, currency risks etc. The Challenges Morgan Stanley reported that JLRs acquisition appeared negative for Tata Motors, as it had increased the earnings volatility, given the difficult economic conditions in the key markets of JLR including the US and Europe. Moreover, Tata Motors had to incur a huge capital expenditure as it planned to invest another US$ 1 billion in JLR. This was in addition to the US$ 2.3 billion it had spent on the acquisition. Tata Motors had also incurred huge capital expenditure on the development and launch of the small car Nano and on a joint venture with Fiat to manufacture some of the companys vehicles in India and Thailand. This, coupled with the downturn in the global automobile industry, was expected to impact the profitability of the company in the near future CURRENT SCENARIO In less than three years after its acquisition, Jaguar Land Rover has metamorphosed from a millstone around Tata Motors neck into its crowning jewel. In the June 2010 quarter, JLR division accounted for nearly 70% of the companys net profit and over 60% of its revenues on the consolidated basis. This was more than what the market has expected and the stock is up by nearly 150% in the past two trading sessions. JLR benefited from an improvement in its pricing power and a favourable exchange rate in the US dollar and the euro. The two worked in tandem and resulted in a sharp 60% jump in JLR revenue per unit to around  £38,000 in June 2010 quarter compared to the  £23,800 a year ago. With the raw material costs remaining benign, it led to a sharp improvement in the divisions operating margin and its reported net profit of  £221 million (`1,613.3 crore) in the first quarter as against a net loss of  £64 million (`467 crore) a year ago. FINDINGS Debt equity ratio is increasing by 42.27% as Tata took loan of banks to acquire JLR.ROCE increases vey high by 343.60% as compared to pre acquisition as it gauges that company that generate its earnings from the total pool of capital which indicates profitability.Net profit margin increases as it income increases in post acquisition as compared to pre acquisition. P/E highly decreases in post acquisition by 60.1% which in investor point of view they will be profitable to invest to get high earning. ROE is highly increasing by 480.15% which shows that it has more equity than debt. EPS is increasing drastically by 480.15% which is very profitable for investors. Operating profit margin is reduced by 41.44% which shows that company profit margin is very less. COMPANYS RETURN BEFORE AND AFTER ACQUISITION PRE-ACQUISITION POST-ACQUISITION INTERPRETATION As we can see from the line chart that the cumulative return before merger was negative and the entire trend is moving in the negative direction due to poor returns of tata motors. A soon as the acquisition took place, the highly profit generating Jaguar as well as Land Rover added to the profit and earnings of the tata motors. The brand value of JLR added to the highly reputable Tata Group and the companys balance sheet. This can be clearly seen in the line chart above. VALUATION AND INTERPRETATION EV Multiples of Tata Corus Tata Steel and Corus Group deal happened at high multiples compared to its peers. We can observe that the average multiples of the peer group company stands half compared to the deal multiples. Sales Multiple: The average sales multiple of its peers is 1.17x compared to the deal of 0.68x of Corus Groups sales. This can be possible due to high sales value, reducing the multiple to 0.68x. The lowest multiple (Steel Authority of India) is at 0.73x. EBITDA Multiple: EBITDA multiple of its peers averages at 4.38x compared to the deal multiple of 7.02x of Corus Groups sales. Even the highest multiple (Jindal Steel Power) is at 4.38x. This is almost half of the deal multiple. It can be observed that Tata played very aggressively. EBIT Multiple: EBIT multiple of its peers averaged at 5.54x compared to the deal of 10.19x of Corus Groups sales. Even the highest multiple (Jindal Steel Power) is at 8.39x. PE Multiple: The PE multiple of the deal is very high on the account that the margins of Corus are very low compared to Tata Steel and other peers. The average PE multiples is 7.95x compared to 68.23x at which the deal haapened. EV Multiples of Tata NTT Docomo The deal of Tata Teleservices and NTT Docomo happened at very high multiples. We can observe that the average multiples of the peer group company stands very low compared to the deal multiples. Sales Multiple: The average sales multiple of its peers is 5.37x compared to the deal of 26.98x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 9.24x. Thus we can conclude that Tata Teleservices got very good price for its stake dilution for NTT Docmo. EBITDA Multiple: Again the average EBITDA multiple of its peers is very less, 16.35x compared to the deal of 99.81x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 26.74x. This is a huge difference. NTT Docomo paid 6 times more what it should have paid to Tata. EBIT Multiple: EBIT multiple of its peers is 25.5x compared to the deal of 952.96x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 41.02x. PE Multiple: The PE multiple for Tata Teleservices is negative as its net income is negative Note: The multiples are high on account that Sales and the profitability of Tata Teleservices is low, inturn giving very high multiples. Its sales stands at Rs. 1,815.5 Cr. compared to the average sales of Rs. 11,490.6 Cr. of its peers. FINDINGS FROM VALUATION OF ENTERPRISE VALUE MULTIPLE Tata Corus Tata Steel and Corus Group deal happened at high multiples compared to its peers. We can observe that the average multiples of the peer group company stands half compared to the deal multiples. Even the highest multiple (Jindal Steel Power) is at 4.38x. This is almost half of the deal multiple It can be observed that Tata played very aggressively as it paid high enterprise value as compared to our analysis. A reason for Corus to be sold is chance to Bail out of Debt and Financial stress. TATA Steel Paid 7.02 Times EBITDA of Corus Enterprise Value. The PE multiple of the deal is very high on the account that the margins of Corus are very low compared to Tata Steel and other peers the only company who has high P/E is Jindal steel. Tata NTT Docomo The deal of Tata Teleservices and NTT Docomo happened at very high multiples. We can observe that the average multiples of the peer group company stands very low compared to the deal multiples. The average sales multiple of its peers is 5.37x compared to the deal of 26.98x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 9.24x. Thus we can conclude that Tata Teleservices got very good price for its stake dilution for NTT Docomo. The PE multiple for Tata Teleservices is negative as its net income is negative. EBITDA multiple of its peers is very less, 16.35x compared to the deal of 99.81x (as on 31st March, 2008) of Tata Teleservicess sales. Even the highest multiple (Reliance Communication) is at 26.74x. This is a huge difference. NTT Docomo paid 6 times more what it should have paid to Tata. The multiples are high on account that Sales and the profitability of Tata Teleservices is low, in turn giving very high multiples. Its sales stands at Rs. 1,815.5 Cr. compared to the average sales of Rs. 11,490.6 Cr. of its peers. SUMMARY Except Tata Steel- Corus deal, all the other 2 acquisitions was well accepted by not only well accepted by the owners of the company (the shareholders) but even made the entire Tata group come into the eyes of fortune 500 list. In-fact it ranked at 56th position at a global level in 2009 CONCLUSION This study was undertaken to test what is the impact of mergers on the financials of acquiring corporate by examining some pre- merger and post-merger financial, in terms of impact on operating performance. The results from the analysis of pre- and post-merger operating performance ratios for the acquiring firms in the sample showed that there was a differential impact of mergers, for different industry sectors in India. Type of industry does seem to make a difference to the post-merger operating performance of acquiring firms. Expansion through mergers and acquisition is one of the best ways for any domestic company to step outside the shores of India in an international market place and acquit itself as a global player Company can turn into conglomerate in reasonably less time by capitalizing on its strengths of efficiency and effectiveness by acquiring relatively poor performing companies as TATA did in almost all its group of companies Recent examples of companies which adopted similar pattern of expansion are Renuka Sugars, Arcelor Mittal, Reliance, Essar Group, Aditya Birla Group, etc. One can study any of the above mentioned company and conclude that the key underlying decision of these companies expanding quickly and efficiently is their timely decision of merging and acquiring appropriate companies

How can one truly define love :: essays papers

How can one truly define love Love is a wonderful thing; a wise man once said that to me. Although this statement leaves sparse room for argument, it does little to define what love is beyond the vague realm of wonderful. It is my duty as a stanch romantic to embark upon the seemingly tricky task of defining love by looking at the history, explaining what love is not, and investigative the uses of love and the results of which it brings. The origin of the word is probably the most understandable place to start. As with many words in the English language, love is a derivative of the Latin word "notquitesurewhatimdoing" which means "You think you want it when don’t have it, but when you have it your not sure if you want it." The word was created to explain the phenomenon that existed when certain couples came into contact with each other and either stayed together forever throughout the end of time, or went about their lives miles apart down separate roads of travel. Regardless of the outcome, the relat ionship was usually attributed of throat lumps, knotted stomachs, weak knees, speech impediment, sweaty palms, nausea, sneezing, and occasional runny nose. Quarrelsome insanity also resulted. History clearly defines this. Can we ever forget the face that launched a thousand ships? Federally expressing Van Gough's ear; Eric Clapton stealing away George Harrison’s first wife? When Ronnie left Jessie for Susie, then found out that Jessie had already left Ronnie for Karen, on â€Å" Days of our Lives†. All of these were results of love and love lost. Ill-fated lovers have stated that love is not hand nor foot nor any part belonging to a man. Matrimonial ceremonies also claim that love is not jealous or boastful. Let it be stated hear that love also is not a gourmet dish, a domesticated animal, or a latest trend. Love is neither a premeditated security instrument nor the most hidden secret at the Pentagon. Love is not another seasoning to bottle and stick on the dust-lined shelves of the spice rack. Love is not to be confused with adhesive tape. Instead, love is a great complement to late, evening thunderstorms on warm June nights. Love goes well with chicken soup and the sniffles. Love is cold, wet sand between bare toes.

Shackleton Moral Challenge

Earnest Shackleton: Moral Challenge Earnest Shackleton, leader of the Imperial Trans-Antarctic Expedition showed great moral leadership in the choosing, leading and ultimate saving of his crew of 27 men. Shackleton led his men with strength and respect. He had a great ability to showcase the strength of individual men, while leading them as a team. In choosing his crew, he not only looked at the work that they would do, but also how they would interact with the rest of the men. In the most trying of circumstances. Once it became apparent that the original goal of the mission was lost, Shackleton kept his crew working together towards the common goal of survival. Shackleton shows great leadership using six fundamental leadership traits: â€Å"Planning, Team Building, Flexibility, Communication, Conflict Resolution, and Lead by Example. † (Harris 21) Even as a child, Shackleton was seen as both a strong leader and an empathetic friend. A classmate recalled that Shackleton had â€Å"beaten up a schoolyard bully who had been picking on a smaller boy. From an early age, Shackleton gravitated to the role of protector, stepping up to the front to insist on fair play. † (Morrell and Capparell, 17) Shackleton has a history of putting his men above the goal. In 1907, he was 97 miles from the South Pole when he turned back in order to return his party safely back to the ship. This ability to both lead and protect would prove to be invaluable in the Trans-Antarctic expedition. Shackleton plans his expedition carefully. He is aware of the environment and conditions, having been on expeditions in the Antarctic and to the South Pole in the past. He overstocks on provisions to keep his men fed and stimulated. There was food, books, music and the best equipment available at the time, including rations to prevent scurvy and specially designed tents. Shackleton only takes risks when necessary and when lives were at stake. â€Å"He often referred to himself as â€Å"Old Cautious† and took pleasure when his men called him the same. † (Morrell and Capparell, 34) â€Å"Shackleton built the crew list around a nucleus of tested veterans. † (Lansing, 16) These included men who had been with him in expeditions to the Antarctic with Scott (1901, 1910-1911) or the race to the pole (1908-1909). Other crew members were chosen with their personalities and ability to work together in mind. Shackleton hired a meteorologist with practically no qualifications for the position, simply because he thought that he â€Å"looked funny† and had recently returned from an expedition to the Sudan. One surgeon was hired in part because he joked about wearing glasses. Another was asked if he was good natured and if he could sing. â€Å"Despite the instantaneous nature of these decisions, Shackleton’s intuition of selecting compatible men rarely failed. (Lansing, 17) Shackleton shows an ability to change his tactics and goals during the course of the expedition. At the start, he is focused on the goal of a trans-Antarctic crossing. When it becomes apparent that the Endurance is locked in ice and the crossing will not happen, he focuses on the immediate need to survive the upcoming Antarctic winter. â€Å"He was careful, however, not to betray his disappointment to the men, and he cheerfully supervised the routine of readying the ship for the long winter’s night ahead. (Lansing, 34) Once it is determined that the ship is being crushed, the focus lies on moving to, and surviving on, the ice floe. As the ice is breaking up, Shackleton sets his sights on land. The unpredictable winds and currents are what finally determine the choice of Elephant Island. This is a rocky, uninhabited island, but it was land, and a place where the men could stay while he led a small crew of six in a single boat to South Georgia Island. Communication is an important facet of Shackleton’s leadership. He is available to his men, but still keeps enough of a distance to maintain authority and order. His men call him â€Å"boss†. This shows a sense of familiarity – they don’t feel that they need to call him Captain Shackleton, but also respect for his position and that they look to him as their leader. Shackleton shows a great skill in talking to his crew so that they work well together. When Vincent, a member of the crew tries to gain advancement through the use of tyranny, Shackleton listens to the complaints of the other crewmembers, speaks to Vincent privately and the behavior is corrected. It is not known what was said, but the attitude was improved. This shows an ability to both manage a potential bad situation, but also to do it privately so that Vincent is not reprimanded in front of his co-workers. Shackleton seeks the advice and opinions of the crew when determining a course of action, allowing them to have a say in the decision. However, when it comes time to make the decision, Shackleton takes full ownership and sees it through. Conflicts were bound to arise during the course of the expedition and Shackleton used a variety of means to avoid or end the conflicts in a timely manner. Knowing the personalities of his crew was an asset. Shackleton knew that Hurley had an ego that needed to be stroked and included him in many of the high level meetings to prove that he was important to the expedition. Certain crew members were more negative and prone to cause problems. â€Å"In their tents on the ice, Shackleton ensured that the ability of such â€Å"bad actors† to erode morale was checked by having them reside in Shackleton’s own tent or Wild’s tent. † (Chappell, 2) Shackleton leads by example. He does not take special privileges for himself and often works harder than his men. He is the first one up and the last one to sleep – often staying up to watch the ice and the currents so that his men can rest. Shackleton also leads the final crew in the more than 700 mile trip from Elephant Island to South Georgia Island. He shows a positive attitude at all times, which keeps his crew optimistic as they work together to survive. This is no small feat as he is responsible for 27 lives and has to give up the main goal of the expedition, which was to cross the Antarctic. Shackleton never gives up. Even after he reaches the whaling station on South Georgia Island, he does not wait for a ship to be delivered to rescue his men. As he has done the entire journey, he uses the resources available until he is able to meet his goal of bringing his entire crew back to safety and civilization. I believe that Shackleton shows moral leadership in that he is more concerned for his crew than he is for himself and his reputation as an explorer. Instead of following Scott’s example of meeting the original goal, he considers the consequences of losing his crew and chooses life over glory. Scott ruled by brute force an intimidation. He refused to look beyond his goals and while he did reach the South Pole, he also lost his life and the lives of his crew in the process. Shackleton showed a respect for others his entire life and this did not change when he became a leader of expeditions. He turned back from the South Pole in 1909 because he felt that reaching his goal would sacrifice his crew. During the Endurance expedition he sets the goal for survival and rescue and sees it through to the end. No lives were lost and his crew shows respect and obedience to â€Å"the boss† throughout. Endurance scholar Caroline Alexander says that the crew had a saying about Sir Earnest: â€Å"For scientific discovery give me Scott. For speed and efficiency give me Amundsen. But when you're in a hopeless case and disaster strikes, get down on your knees and pray for Shackleton. † Works Cited Lansing, Alfred. Endurance: Shackleton’s Incredible Voyage. New York: Carroll and Graf, 1959. Harris, Michael. â€Å"Leadership in a Time of Crisis: The Shackleton Way. † E Academic Affairs, 2003: 14-28. Jan 15, 2012. http://www. iuk. edu/chancellor/assets/pdf/leadership-in-a-time-of-crisis. pdf Morrell, Margo and Capparell, Stephanie. Shackleton's Way: Leadership Lessons from the Great Antarctic Explorer. New York: Viking Penguin, 2001. Chappell, Charles. â€Å"Shackleton’s Leadership of the Endurance Expedition. † Wharton Executive MBA Program, Class of 2001. Pages 1-5

Eyewitness Auschwitz

During the attempted extermination of the entire Jewish population, many Jewish prisoners were ordered to assist in the killing of their own people. Sonderkommandos were a major part of this eradication. A sonderkommando aided in the disposal of the corpses that were victims to the gas chambers. Through the vivid testimony by Filip Muller, â€Å"Eyewitness Auschwitz† allows the reader to fully understand the difficulties and graphic situations that occurred daily at Auschwitz. Filip Muller was born on January 3, 1922 in Sered, Czechoslovakia.In 1942 at the age of 20, he was deported to the death camp. He was one of the few Sonderkommandos to have survived Auschwitz. The memoir greatly details the resilience of the human spirit, the choices individuals were faced with and decided to act upon and, the treatment of those who had succumbed. The personal choices that some made were extremely unmoral. â€Å"†Every day we saw thousands and thousands of innocent people disappea r up the chimney. With our own eyes, we could truly fathom what it means to be a human being.There they came, men, women, children, all innocent. They suddenly vanished, and the world said nothing .. † An example of an unmoral prisoner was the Kapo Mietek, who was trusted to discipline the working prisoners. According to Muller, it was not necessary for Mietek to treat his fellow prisoners as human beings but rather beat them mercilessly to gain appreciation from the Nazi leaders. Another theme that Muller presents in his testimony is dehumanization of the camp’s victims.Approximately seventy percent of the prisoners that arrived at Auschwitz were immediately gassed. Their hair was shaven and their bodies were exploited in order to find valuables for the Nazi’s economic gain. A memoir is by definition â€Å"a  record  of  events  written  by  a  person  having  intimate knowledge  of  them  and  based  on  personal  observationâ⠂¬ . While Filip Muller’s testimony could be extremely accurate, it could also be extremely flawed. As a prisoner at a death camp-watching people die daily, it can weigh heavily on one’s conscious.This in turn can alter one’s memory and/or create an entire new memory that never happened. The validity of Muller’s memoir could all be a figment of his imagination due to the emotional and physical stress and agony of being a prisoner although I highly doubt that the validity is compromised. â€Å"Eyewitness Auschwitz† is a key document of the Holocaust. It is published with an association of the United States Holocaust Memorial Museum, which is highly renown. â€Å"Eyewitness Auschwitz† is a personal testimony of the hell that resided within the death camps.Filip Muller does an excellent job of describing the daily activities of a Sonderkommando, which few lived to tell about. At times it is extremely difficult to read due to the graphic nature of the text. Muller discusses themes that the entire camp system was set on such as dehumanization and the immorality of the soldiers as well as fellow prisoners. Filip Muller wrote a very powerful book that reaches deep within the reader and wrenches on their emotions.