Republic of South Africa Essay

South Africa contains some of the oldest archaeological sites in the world.[19][20][21] Extensive fossil remains at the Sterkfontein, Kromdraai and Makapansgat caves suggest that various australopithecines existed in South Africa from about three million years ago.[22] These were succeeded by various species of Homo, including Homo habilis, Homo erectus and modern humans, Homo sapiens. Settlements of Bantu-speaking peoples, who were iron-using agriculturists and herdsmen, were already present south of the Limpopo River by the fourth or fifth century CE. (see Bantu expansion). They displaced, conquered and absorbed the original Khoisan speakers. The Bantu slowly moved south. The earliest ironworks in modern-day KwaZulu-Natal Province are believed to date from around 1050. The southernmost group was the Xhosa people, whose language incorporates certain linguistic traits from the earlier Khoisan people. The Xhosa reached the Great Fish River, in today’s Eastern Cape Province. As they migrated, these larger Iron Age populations displaced or assimilated earlier peoples, who often had hunter-gatherer societies.[citation needed] Republic of South Africa (1961–present) In 1487, the Portuguese explorer Bartolomeu Dias became the first European to reach the southernmost point of Africa. Initially named the Cape of Storms, The King of Portugal, John II, renamed it the Cabo da Boa Esperanà §a or Cape of Good Hope, as it led to the riches of India. Dias’ great feat of navigation was later immortalised in Camà µes’ epic Portuguese poem, The Lusiads (1572). In 1652, Jan van Riebeeck established a refreshment station at the Cape of Good Hope on behalf of the Dutch East India Company. The Dutch transported slaves from Indonesia, Madagascar, and India as labour for the colonists in Cape Town. As they expanded east, the Dutch settlers met the south-westerly expanding Xhosa people in the region of the Fish River. A series of wars, called the Cape Frontier Wars, ensued, mainly caused by conflicting land and livestock interests. Great Britain took over the Cape of Good Hope area in 1795, ostensibly to stop it from falling under Revolutionary French control. Given its standing interests in Australia and India, Great Britain wanted to use Cape Town as an interim port for its merchants’ long voyages. The British returned Cape Town to the Dutch in 1803, but soon afterwards the Dutch East India Company declared bankruptcy. The British annexed the Cape Colony in 1806. The British continued the frontier wars against the Xhosa, pushing the eastern frontier eastward through a line of forts established along the Fish River. They consolidated the territory by encouraging British settlement. Due to pressure of abolitionist societies in Britain, the British parliament first stopped its global slave trade with the passage of the Slave Trade Act 1807, then abolished slavery in all its colonies with the Slavery Abolition Act 1833. Boers in combat (1881)In the first two decades of the 19th century, the Zulu people grew in power and expanded their territory under their leader, Shaka.[23] Shaka’s depredations led indirectly to the Mfecane (â€Å"Crushing†) that devastated the inland plateau in the early 1820s.[24] An offshoot of the Zulu, the Matabele, created an even larger empire under their king Mzilikazi, including large parts of the highveld. During the 1830s, approximately 12,000 Boers (later known as Voortrekkers), departed from the Cape Colony, where they had been subjected to British control. They migrated to the future Natal, Orange Free State and Transvaal regions. The Boers founded the Boer Republics: the South African Republic (now Gauteng, Limpopo, Mpumalanga and North West provinces) and the Orange Free State (Free State). The discovery of diamonds in 1867 and gold in 1884 in the interior encouraged economic growth and immigration. This intensified the European-South African subjugation of the indigenous people. The struggle to control these important economic resources was a factor between Europeans and the indigenous population, and also between the Boers and the British.[25] The Boer Republics successfully resisted British encroachments during the First Boer War (1880–1881) using guerrilla warfare tactics, which were well suited to local conditions. However, the British returned with greater numbers, more experience, and more suitable tactics in the Second Boer War (1899–1902), which was won by the British. 20th century After four years of negotiating, the Union of South Africa was created from the Cape and Natal colonies, as well as the republics of Orange Free State and Transvaal, on 31 May 1910, exactly eight years after the end of the Second Boer War. The newly created Union of South Africa was a dominion of Great Britain. The Natives’ Land Act of 1913 severely restricted the ownership of land by ‘blacks’; at that stage they had control of a mere 7% of the country. The amount of land reserved for indigenous peoples was later marginally increased.[26] In 1931 the union was effectively granted independence from the United Kingdom with the passage of the Statute of Westminster. In 1934, the South African Party and National Party merged to form the United Party, seeking reconciliation between Afrikaners and English-speaking â€Å"Whites†. In 1939 the party split over the entry of the Union into World War II as an ally of the United Kingdom, a move which the National Party followers strongly opposed. â€Å"For use by white persons† – sign from the apartheid eraIn 1948, the National Party was elected to power. It intensified the implementation of racial segregation begun under Dutch and British colonial rule, and subsequent South African governments since the Union was formed. The Nationalist Government systematised existing segregationist laws, classifying all peoples into three races, developing rights and limitations for each, such as pass laws and residential restrictions. The white minority controlled the vastly larger black majority. The system of segregation became known collectively as apartheid. While the White minority enjoyed the highest standard of living in all of Africa, often comparable to First World western nations, the Black majority remained disadvantaged by almost every standard, including income, education, housing, and life expectancy. On 31 May 1961, following a whites-only referendum, the country became a republic and left the Commonwealth. Queen Elizabeth II ceased to be head of state, and the last Governor-General became State President. Apartheid became increasingly controversial, leading to widespread international sanctions, divestment and growing unrest and oppression within South Africa. A long period of harsh suppression by the government, and at times violent resistance, strikes, marches, protests, and sabotage by bombing and other means, by various anti-apartheid movements, most notably the African National Congress (ANC), followed. In the late 1970s, South Africa began a programme of nuclear weapons development. In the following decade, it produced six deliverable nuclear weapons. The Mahlabatini Declaration of Faith, signed by Mangosuthu Buthelezi and Harry Schwarz in 1974, enshrined the principles of peaceful transition of power and equality for all, the first of such agreements by acknowledged black and white political leaders in South Africa, which would ultimately end with the negotiations between F.W. de Klerk and Nelson Mandela in 1993. In 1990 the National Party government took the first step towards dismantling discrimination when it lifted the ban on the African National Congress and other political organisations. It released Nelson Mandela from prison after twenty-seven years’ incarceration on a sabotage sentence. A negotiation process known as the Convention for a Democratic South Africa was started. The government repealed apartheid legislation. South Africa destroyed its nuclear arsenal and acceded to the Nuclear Non-Proliferation Treaty. South Africa held its first multi-racial elections in 1994, which the ANC won by an overwhelming majority. It has been in power ever since. In post-apartheid South Africa, unemployment has been extremely high. While many blacks have risen to middle or upper classes, the overall unemployment rate of blacks worsened between 1994 and 2003.[27] Poverty among whites, previously rare, increased.[28] While some have attributed this partly to the legacy of the apartheid system, increasingly many attribute it to the failure of the current government’s policies. In addition, the current government has struggled to achieve the monetary and fiscal discipline to ensure both redistribution of wealth and economic growth. Since the ANC-led government took power, the United Nations Human Development Index of South Africa has fallen, while it was steadily rising until the mid-1990s.[29] Some of this could possibly be attributed to the AIDS pandemic and the failure of the government to take steps to address it.[30] Nelson Rolihlahla Mandela (Xhosa pronunciation: [xoˈliÉ ¬aÉ ¬a manˈdeË la];), born 18 July 1918, [1] served as President of South Africa from 1994 to 1999, the first South-African president to be elected in a fully representative democratic election. Before his presidency, Mandela was an anti-apartheid activist, and the leader of the African National Congress’s armed wing Umkhonto we Sizwe. The South African courts convicted him on charges of sabotage, as well as other crimes committed while he led the movement against apartheid. In accordance with his conviction’s sentence, Mandela served 27 years in prison, spending many of these years on Robben Island. Following his release from prison on 11 February 1990, Mandela supported reconciliation and negotiation, and helped lead the transition towards multi-racial democracy in South Africa. Since the end of apartheid, many have frequently praised Mandela, including former opponents. In South Africa he is often known as Madiba, an honorary title adopted by elders of Mandela’s clan. The title has come to be synonymous with Nelson Mandela. Mandela has received more than 250 awards over four decades, most notably the 1993 Nobel Peace Prize. In November 2009, the United Nations General Assembly announced that Mandela’s birthday, 18 July, is to be known as ‘Mandela Day’ to mark his contribution to world freedom.[2] Apartheid (Afrikaans pronunciation: [É Ã‹Ë†pÉ rtÉ ¦Ã‰â„¢it], separateness) was a system of legal racial segregation enforced by the National Party government in South Africa between 1948 and 1994, under which the rights of the majority black inhabitants of South Africa were curtailed and minority rule by whites was maintained. Racial segregation in South Africa began in colonial times, but apartheid as an official policy was introduced following the general election of 1948. New legislation classified inhabitants into racial groups (â€Å"black†, â€Å"white†, â€Å"coloured†, and â€Å"Yellow†), and residential areas were segregated by means of forced removals. From 1958, Blacks were deprived of their citizenship, legally becoming citizens of one of ten tribally based self-governing homelands called bantustans, four of which became nominally independent states. The government segregated education, medical care, and other public services, and provided black people with services inferior to those of whites. Apartheid sparked significant internal resistance and violence as well as a long trade embargo against South Africa.[1] A series of popular uprisings and protests were met with the banning of opposition and imprisoning of anti-apartheid leaders. As unrest spread and became more violent, state organizations responded with increasing repression and state-sponsored violence. Reforms to apartheid in the 1980s failed to quell the mounting opposition, and in 1990 President Frederik Willem de Klerk began negotiations to end apartheid, culminating in multi-racial democratic elections in 1994, which were won by the African National Congress under Nelson Mandela. The vestiges of apartheid still shape South African politics and society.[2] After decades in a Robben Island prison, Nelson Mandela (Morgan Freeman) is released in 1990 and works immediately to bring about the end of apartheid and the initiation of full democratic elections where the black majority population can vote. Mandela wins the race for President of South Africa and takes office in 1994. His immediate challenge is â€Å"balancing black aspirations with white fears.† The country’s still-present racial tensions are shown, in part, through Mandela’s security team, which is composed both of new black and old white officials. The black and white groups are immediately hostile to one another despite sharing the same job and goal. While Mandela attempts to tackle the country’s largest problems – including crime and unemployment – he attends a game of the Springboks, the country’s rugby union team. Non-whites in the stadium cheer against their home squad, as the Springboks (their history, players and even their colours) represent prejudice and apartheid in their mind. Knowing that South Africa is set to host the 1995 Rugby World Cup in one year’s time, Mandela convinces the South African rugby board to keep the Springbok team, name and colours the same. He then meets with the Springboks’ captain Franà §ois Pienaar (Matt Damon). Though Mandela never verbalizes his true meaning during their meeting, Pienaar understands the message below the surface: if the Springboks can gain the support of non-white South Africans and succeed in the upcoming World Cup, the country will be unified and inspired. Mandela also shares with Pienaar that a poem, Invictus, had been inspiring to him during his time in prison, helping him to â€Å"stand when all he wanted to do was lie down†. Pienaar and his teammates train, but the players (all but one are white) voice disapproval that they are to be envoys to the poor and public – fearing exhaustion from overwork. Mandela, too, hears disapproval from friends and family. Many more, both white and non-white citizens and politicians, began to express doubts on using sport to unite a nation torn apart by some 50 years of racial tensions. For many non-white, especially the radicals, the Springboks symbolised white supremacy and they did not want to support their national team. As the tournament approaches, Mandela collapses from exhaustion and the Springboks’ only non-white player, Chester Williams, is sidelined with a pulled hamstring. Things begin to change, however, as the players went around interacting with the locals. During the opening games, support for the Springboks begins to grow amongst the non-white population. By the second game Williams is fit once again. Citizens of all races turn out in numbers to show their unanimous support for the Springboks. At the suggestion of several security guards, Mandela decides to sport a Springbok jersey with Pienaar’s number 6 on it to show his support and his name is chanted repeatedly by the home crowd during his entrance, a contrast to a previous rugby match scene, in which Mandela is booed by some of the whites in the crowd. As momentum builds, even the security team members become at ease with each other and the black members who disliked rugby eventually began to enthusiastically support their national team alongside their white colleagues. The Springboks, possessing a sub-par record, were not expected to go very far and are expected to lose in the quarterfinals. They surpass all expectations and make the final, only to face the New Zealand rugby team – called the All Blacks – the most successful rugby team in the world, the favourites to win the World Cup and historically the Springboks’ greatest rivals. Roared on by a large home crowd of both whites and non-white, Pienaar motivates his team to overcome their doubts and push their bodies to the limits. After ending in a tie, the game goes into extra time, where the Springboks win on a long drop kick from fly-half Joel Stransky (Scott Eastwood) and a score of 15-12. Mandela and Pienaar meet on the field together to celebrate the improbable victory amidst a crowd of some 62,000 fans—of all races. Once there, Mandela thanks Pienaar for his service to the nation, but Pienaar insists the President that he deserves the real thanks. In one particular scene, some white police officers celebrate by hoisting a young black boy, who had been lingering near their vehicle to listen to the radio broadcast of the game, onto their shoulders.

An Analysis Of The Financial Annual Report Of Victrex Plc Accounting Essay

1.0 IntroductionThis paper comprises of two subdivisions. The first subdivision involves an analysis of the fiscal one-year study of Victrex Plc in 2010, and appraisal of the public presentation of the concern in 2010 in comparing to the old twelvemonth 2009. The analysis will be carried out by reexamining the fiscal information provided in the company ‘s one-year study allocated for this paper. The type of information included in said one-year study are the Chairman ‘s statement, the Chief Executive Officer ‘s reappraisal, Financial Director ‘s study, the Director ‘s study & A ; the fiscal statements such as income statement, balance sheet and hard currency flow statement. An overview of the concern public presentation over the last five old ages will besides be discussed. The relevant ratios will be computed in order to analyze the public presentation of the concern and suggestion decisions and tax write-offs where appropriate. Other relevant informati on such as corporate administration and accounting policies will be considered and discussed. The 2nd subdivision of this paper will analyze the relevancy of working capital direction in a concern and discoursing how the author playing the function of financial officer impacted on working capital.Furthermore, techniques such as fringy costing and budgeting and their benefits in the decision-making procedure will be compared to the existent universe state of affairs.1.1 COMPANY OVERVIEWVictrex Plc is a taking planetary maker of high public presentation thermoplastics polymers which began utilizing the VICTREXA ®PEEK in Western Europe and United States to turn to the demands in the automotive and transit sector. As concern became planetary, Victrex expanded into high turning markets such as Japan, China, India, Russia, and Brazil. The company has over 30years experience in the production of polyketone. Within this clip of operation, Victrex Plc has a production, engineering, client service and distribution squad that spans over 30 states worldwide. Victrex Plc portions are li sted in the London Stock Exchange. Victrex Plc comprises of two divisions viz. the Victrex Polymer Solution and the Invibio Biomaterial Solutions. Victrex Polymer Solution focuses on the conveyance, industrial and the electronic markets. This division specialises in the development and industry of high public presentation polyaryletherketones such as VICTREXA ®PEEKa„? polymer, VICOTEA ® coatings and APTIVa„? movies. On the other manus, Invibio Biomaterial Solutions focuses on supplying specialist solutions for medical device makers. This division provides entree to extremely specialized biocompatible PEEK- based stuffs and services for medical device makers. Their trade names are PEEK-OPTIMA, MOTIS, PEEK-CLASSIX and ENDOLIGN. VICTREXA ®PEEK Polymer is behind most of today ‘s invention in markets runing from automotive, energy, electronics, aerospace, semi music directors, medical, nutrient processing and fabrics.1.2 FIVE Year FINANCIAL SUMMARY REVIEWThe one-year study 2010 of Victrex Plc has some information over the last five old ages of the public presentation of the Organisation. Information in the one-year study high spots consequences on gross, net income before revenue enhancement, balance sheets, hard currency flow ratios and sale volume. However, this study shows that the gross of the company for the past five old ages increased by 6.9 % between 2006 ( ? 122.5m ) and 2007 ( ? 131.0m ) . This growing was due to an addition in gross revenues of their industrial market which went up 16 % above the old twelvemonth due to increase in demand for oil and gas and chemical processing clients. The conveyance market besides increased by 6 % as a consequence of increased commercial aerospace gross revenues. Regionally, United States was up 9 % due to growing in the automotive, commercial aerospace and oil and gas sections, but was partly offset by a decrease in semiconducting material gross revenues. Asia Pacific gross revenues were up 13 % as a growing in addition gross revenues of conveyance and electronics ( Victrex, 2010 ) . In the old ages 2007 and 2008, the company experienced an addition of 7.7 % from ?131.0m in 2007 to ?141.1m in 2008. This growing was as a consequence of addition in gross revenues in Japan and the United States. Besides addition in the commercial aerospace gross revenues in United States and Europe led to the growing in gross ( Victrex, 2010 ) . In Year 2008 and Year 2009, Based on the impact of clients destocking, there was a lessening of ( 26.4 ) % in gross from ?141.1m in 2008 to ?103.8 in 2009. This decrease was as a consequence of decrease of gross revenues volume based on the economic downswing. Transport gross revenues decreased by 41 % in 2009 due to important diminution in automotive gross revenues across all parts. Industrial sale volume besides decreased by 35 % in 2009 as a consequence of reduced oil and gas demand, this besides became resilient based on the economic downswing ( Victrex, 2010 ) . Finally, the study shows that the greatest addition in gross within the five twelvemonth period was between 2009 and 2010 as gross addition was 82.6 % from ?103.8 in 2009 to ?189.5 in 2010. This was as a consequence of addition in gross revenues volume from 1547 metric tons to 2535 metric tons. The benefit of improved implicit in exchange rates as the sterling weakened against their currencies during the twelvemonth besides had a positive impact. Increased gross revenues in electronics were up by 96 % over 2009 which reflected strong gross revenues into the client electronics and semi music director fabrication sector. High demand of merchandises resulted in an addition of gross revenues in the geographical and industrial market which allowed for high stock list degrees and fabrication rates. The addition in gross revenues was as a consequence of restocking tendencies. Other markets such as transport gross revenues volume increased by 59 % over 2009, Industrial gross revenues increas ed by 53 % over 2009. Aerospace showed strong growing due to a combination of higher production degrees and new aircrafts orders driven by positive tendencies and prognosis for both concern and touristry travel, and new application development for the merchandises to assist run into demands ( Victrex, 2010 ) . From the one-year study given for the operating net income ( Net income before involvement and revenue enhancement ) , it can be seen that in twelvemonth 2006 it was ?46.1m and increased in twelvemonth 2007 to ?52.0m, amounting to an addition of ?5.9m. Besides in old ages 2007 and twelvemonth 2008, there was an addition of ?3.0m with operating net income in 2007 as ?52.0m and in 2008 as ?55.0m. However, there was a lessening of ( ?29.9m ) in twelvemonth 2008 and 2009, with operating net income of in 2008 as ?55.0m and in 2009 as ?25.1m. In twelvemonth 2010, the company made the greatest addition of ?49.8m in operating net income between twelvemonth 2009 as ?25.1m and twelvemonth 2010 as ?74.9m ( Victrex, 2010 ) . These figures are illustrated in the diagram belowFigure 1: Victrex Plc ‘s Five Year Gross and Net income before Interest and TaxFrom the chart, it can be deduced that the company had an addition in gross and net income before involvement and revenue enhancement from Y ear 2006- 2008, a decrease in Year 2009 and a important addition in Year 2010.2.0 VICTREX ANNUAL REPORT ANALYSISIn measuring the fiscal state of affairs of Victrex Plc, it is required to look at its Amalgamate Income Statement, Consolidated Balance sheet and Cash Flow Statement. The Ratio Analysis is deduced utilizing four wide countries such as Profitability Ratios, Efficiency Ratios, Liquidity Ratios and Investment Ratios ( White et al. , 2003 ) . For the intent of this paper, the figures used are from the 2010 Annual Report and are calculated in ?million ( m ) .2.1 INTERPRETATION OF ACCOUNTSRatios are indexs to an penetration on countries that need to be examined in more inside informations by comparing the old twelvemonth ( 2009 ) to the undermentioned twelvemonth ( 2010 ) of Victrex Plc ( Perry, 2011 ) . Hence, the ratios are interconnected and used to pull decisions from the analysis by measuring a company ‘s public presentation. To this terminal, Victrex Plc will be ana lysed utilizing the four wide countries of ratio analysis.2.1.1 GrossThe company ‘s income statement shows that gross was up by 82 % to ?189.5m in 2010 from ?103.8m in 2009. This addition was as a consequence of addition in gross revenues volume by 64 % due to a strong recoil in demand across all markets in Europe, Middle East and Africa ( ‘EMEA ‘ ) , America, Asia Pacific and United Kingdom. Besides there was depreciation in sterling as this resulted in the addition of gross of other markets, which enabled the company benefit from the exchange rate derived function. The one-year study shows that the changeless exchange rate of the gross was up 47 % compared to 2009 ( Victrex, 2010 ) .2.1.2 PROFITABILITY RATIOProfitability ratios are used to find how productively the concern is runing. Thus Net income is a step of a concern success ; therefore these ratios are watched by both internal users and external users such as direction and stockholders ( Jones, 2006 ) . Pro fitability ratios comprises of Return on Capital Employed, Return on Total Assets, Return on Shareholders Fund, Gross net income Ratio, Operating Profit Ratio and Mark-up Ratio ( Perry, 2011 ) .2.1.2.1 RETURN ON CAPITAL EMPLOYEDThis ratio considers how efficaciously a company uses its capital employed ( Jones, 2006 ) .According to Perry ( 2011 ) , Return on Capital Employed is defined as: ROCE= Net income before Interest & amp ; Tax ( Operating Profit ) x 100 Entire Assets- Current Liabilities ( Capital Employed ) In 2010, it was 74.9m Ten 100 = 74.9m A-100 = 31.67 % 279.0m – 42.5m 236.5m In 2009, it was 25.1m Ten 100 = 25.1m A- 100 = 12.89 % 221.0m – 26.3m 194.7m From the computation above, it shows that there was an addition of 18.78 % in 2010 compared to 2009. This was due to the operating net income, entire assets and current liabilities. In footings of the operating net income, the addition was up 198 % to ?74.9m in 2010 from ?25.1m in 2009 and this was as a consequence of an addition in gross net income which was impacted by the addition in gross and cost of gross revenues. The gross net income increased 87 % with the gross border at 63.6 % of the gross in 2010.The gross border was 62.1 % in 2009 and was up 63.6 % in 2010. The 1.5 % difference was due to positive impact of currency partly offset by an addition in ‘cost per metric ton ‘ as gross revenues were mostly out of stock list produced in 2009. There was a lessening in production volumes in 2009 as a consequence in increased fixed production costs per metric ton. Gross saless, selling and administrative disbursals increased by 16 % to ?45.7m in 2010 from ?39.4m in 2009 as a consequence of elements of staff wage being linked to the fiscal public presentation. There were besides investings in resources to drive new application development across both divisions. The one-year study besides shows the changeless exchange rate was up 53 % compared to 2009. The Entire Assets besides increased by 26.2 % to ?279m in 2010 from ?221m in 2009, this was as a consequence of an addition in hard currency with ?77.2m in 2010 from ?18.6m in 2009 which reflects the strong recoil in gross revenues generated from operations which was shown on the hard currency flow statement. The current liabilities were up due to an addition in trade and other payables that were affected by accumulations of ?18.7m in 2010 from ?8.8m in 2009 which implies the company still has hard currency to pay to their creditors ( Victrex, 2010 ) .2.1.2.2 RETURN ON TOTAL ASSETSThis ratio shows how good a concern is profitable in relation to its invested assets and what it has taken to fund it ( Dys on, 2007 ) . Harmonizing to Perry ( 2011 ) , Return on Total Assets can be defined as: ROTA = Net income before Interest and Tax A- 100 Entire Assetss In 2010, it was 74.9m A- 100 = 26.85 % 279m In 2009, it was 25.1m A- 100 = 11.36 % 221m The computation above shows that there is an addition of 15.49 % in 2009 to 2010. But this addition was due to an increased operating net income every bit good as an addition in entire assets. As discussed in ROCE, the operating net income increased due to increase in gross net income of 87 % within 2009 and 2010, cost of gross revenues of 75.3 % in 2009 and 2010 and gross of 82 % in 2009 and 2010. Besides in footings of the entire assets, there was an addition in hard currency and hard currency equivalents of 315 % between 2009 and 2010, addition in trade and other receivables which implies addition in money owed to the company by debitors of 21.6 % between 2009 and 2010 and an addition in deferred Tax assets of 36.6 % between 2009 and 2010 ( Victrex, 2010 ) .2.1.2.3 RETURN ON SHAREHOLDERS FundssThis ratio measures how good the direction turned the return on capital employed to a return on the financess invested by the stockholders ( Millichamp, 1997 ) . Harmonizing to Perry ( 2011 ) , Return on Shareholders Fundss can be defined as: ROSF = Profit after Tax ( Net incomes ) A- 100 Stockholders Fundss In 2010, it was 54m A- 100 = 25.60 % 211m In 2009, it was 17.8m A- 100 = 10.60 % 168m From the computation above, there was a 15 % addition between 2009 and 2010 in the return of stockholder ‘s financess. This addition is due to an addition of gross which was as a major accelerator in hiking gross revenues and besides depreciation in the sterling which increased the gross from other markets. Besides there was an addition in the stockholders financess of ?43m between 2009 and 2010, due to the fact that the managers recommended the payment of a concluding dividend of 18.6p per ordinary portion and a particular dividend of 50.0p per ordinary portion, as a consequence of this, there was an addition in the portion premium. Based on the ROSF, it is likely the stockholders will appreciate the consequences, as this shows an addition from the old twelvemonth and the company is doing net income in 2010 ( Victrex, 2010 ) .2.1.2.4 GROSS PROFIT MARGINThis ratio calculates the net income earned through trading, it is utile in a concern where stock is purchased, marked up and so resold ( Jones, 2006 ) . Harmonizing to Perry ( 2011 ) , Gross Profit Margin can be defined as: Gross Profit Margin = Gross Profit A- 100 Gross saless In 2010, it was 120.6m A- 100 = 63.64 % 189.5m In 2009, it was 64.5m A-100 = 62.14 % 103.8m As can be seen above, the Gross net income border difference between 2009 and 2010 is 1.50 % . This addition was based on increased Cost of gross revenues every bit good as in addition in gross. The gross net income increased 87 % with the gross border at 63.6 % of the gross in 2010. The gross border grew to 63.6 % in 2010 from 62.1 % in 2009.The 1.5 % difference was due to positive impact of currency partly offset by an addition in ‘cost per metric ton ‘ as gross revenues were mostly out of stock list produced in 2009. There was a lessening in production volumes in 2009 as a consequence of increased fixed production costs per metric ton. Besides, there was an addition in gross revenues which led to the addition in gross to 82 % to ?189.5m in 2010 from ?103.8m in 2009. Besides depreciation in sterling besides helped the company ‘s growing as the gross of the other markets increased ( Victrex, 2010 ) .2.1.2.5 OPERATING Net income MarginThis is an of import fiscal ind ex ; it is calculated after disbursal in the net income and loss history. It is largely used for internal comparing due to the fact that differing accounting policies applied by different concerns make external comparing complicated ( Perry, 2011 ) . Operating Net income Margin can be defined as: Operating Net income Margin = Net income before Interest and Tax A- 100 ( Perry, 2011 ) Gross saless In 2010, it was 74.9m A- 100 = 39.53 % 189.5m In 2009, it was 25.1m A- 100 = 24.18 % 103.8m The operating net income border difference between 2009 and 2010 is 15.35 % as this was as a consequence of the addition in the operating net income which was up 198 % to ?74.9m in 2010 from ?25.1m in 2009. This was as a consequence of addition in the gross revenues, selling and administrative disbursals and gross net income, every bit good as increased gross revenues. Gross saless, selling and administrative disbursals increased by 16 % to ?45.7m in 2010 from ?39.4m in 2009 as a consequence of elements of staff wage being linked to the fiscal public presentation. There were besides investings in resources to drive new application development across both divisions. The one-year study besides shows the changeless exchange rate was up 53 % compared to 2009. As discussed above, the addition in gross to 82 % to ?189.5m in 2010 from ?103.8m in 2009 was as a consequence of addition in gross revenues. Besides depreciation in sterling besides helped the company ‘s growing as the gross of the other markets increased ( Victrex, 2010 ) .2.1.2.6 MARK UP RATIOThe Mark up Ratio is another manner of mensurating the profitableness of a concern. It besides measures the sum of net income added to the cost of gross revenues, in add-on it can be the cost of goods sold peers to the gross revenues gross ( Perry, 2011 ) . Mark up Ratio can be defined by Dyson ( 2007 ) as: Mark up Ratio = Gross Profit A- 100 Cost of Gross saless In 2010, it was 120.6m A- 100 = 175.04 % ( 68.9 ) m In 2009, it was 64.5m A- 100 = 164.12 % ( 39.3 ) m The Mark up ratio difference between 2009 and 2010 is 10.92 % . This implies that the gross net income increased 87 % with the gross border at 63.6 % of the gross in 2010. The gross border grew to 63.6 % in 2010 from 62.1 % in 2009. The 1.5 % difference was due to positive impact of currency partly offset by an addition in cost per metric tons as gross revenues were mostly out of stock list produced in 2009. There was a lessening in production volumes in 2009 as a consequence of increased fixed production costs per metric ton. Besides, there was an addition in gross revenues which led to an 82 % addition in gross to ?189.5m in 2010 from ?103.8m in 2009. Besides depreciation in Sterling besides helped the company ‘s growing as the gross from other markets increased. Although, Cost of Goods increased by 75.3 % between 2009 and 2010 and this was as a consequence of addition in demand of Victrex Peek Polymers across all markets, the company still made an addition in gross ( Victrex , 2010 ) .2.1.3 EFFICIENCY RATIOThis ratio is besides known as the activity ratio. The efficiency ratio is used to mensurate how efficaciously a concern endeavor is runing. It is concerned about the chiefly usage of assets ( Jones, 2006 ) . This ratio is used to find how a concern uses its assets to keep its activities and gross revenues ( White et al. , 2003 ) . Four of the efficiency ratios will be used to analyze Victrex Plc.2.1.3.1 SALES PER ?1 CAPITAL EMPLOYED ( NET ASSET TURNOVER )This ratio is besides known as Asset Turnover Ratio. It indicates how efficaciously the stockholders financess are bring forthing money ( Perry, 2011 ) . Harmonizing to Perry ( 2011 ) , It can be defined as: Gross saless per ?1 Capital Employed = Gross saless = Gross saless Capital Employed Total Assets – Current Liabilitiess In 2010, it is 189.5m = 189.5m = 0.80 times 278.9m -42.5m 236.5m In 2009, it is 103.8m = 103.8m = 0.53 times 221.0m – 26.3m 194.7m The consequences above show that the stockholders financess generated more money in 2010 than in the old twelvemonth. There was an addition in gross due to an addition in gross revenues and a depreciation of Sterling besides helped the company ‘s growing as the gross from other markets increased. Capital employed increased by ?41.8m between 2009 and 2010. This was as a consequence of addition in hard currency and hard currency equivalents, trade and other receivables, deferred revenue enhancement rates & A ; trade and other payables. Giving a proper account, the entire assets besides increased by 26.2 % to ?279m in 2010 from ?221m in 2009, this was as a consequence of an addition in hard currency with ?77.2m in 2010 from ?18.6m in 2009 which reflects the strong recoil in gross revenues generated from operations which was shown on the hard currency flow statement. The current liabilities were up due to an addition in trade and other payables that were affected by accumulations o f ?18.7m in 2010 and ?8.8m in 2009 which implies the company still has hard currency to pay to their creditors ( Victrex, 2010 ) .2.1.3.2 NON- CURRENT ( FIXED ) ASSET TURNOVERThis ratio provides an analysis of how expeditiously the fixed assets are at bring forthing gross revenues. It is effectual as an internal index when comparing one period with another ( Perry, 2011 ) .According to Perry ( 2011 ) , it can be defined as: Non- Current ( Fixed ) Asset Turnover = Gross saless Non-Current ( Fixed ) Assetss In 2010, it was 189.5m = 1.31 145.1m In 2009, it was 103.8m = 0.71 146.8m Looking at the consequences above, Victrex Plc used its fixed assets more efficaciously in 2010 compared to 2009 therefore the concern is less at hazard in 2010 than in 2009. This can be explained stating â€Å" for every GBP ( ? ) tied up in non-current assets, the sum generated from gross revenues was higher † . This can be farther explained due to the addition in gross which was due to a encouragement in gross revenues and depreciation of the Sterling as before discussed in the old subdivision. There was a lessening in fixed assets and this can be explained looking at the lessening in belongings, works and equipment which was ?125.3m in 2010 from ?129.5m in 2009, this lessening was as a consequence of depreciation over the utile economic life of the assets. Besides Intangible assets besides decreased in 2010 to ?10.1m from ?10.3m in 2009 due to the good will of the acquisition of Victrex Polymer Solution being tested for damage, therefore cut downing the good will of the ac quisition. Besides the impact of the know-how of the acquisition associated with the natural stuff BDF was to the full amortised by 2010 ensuing to no consequence on the intangible assets ( Victrex, 2010 ) .2.1.3.3 INVENTORY TURNOVER RATIOThis ratio is besides known as stock turnover ratio. This ratio efficaciously measures the velocity with which stock moves through the concern. This varies from concern to concern and merchandise to merchandise ( Jones, 2006 ) . Harmonizing to Perry ( 2011 ) , it can be defined as: Inventory Turnover Ratio = Cost of Goods Sold Inventory In 2010, it was 68.9m = 2.00 times 34.5m In 2009, it was 39.3m = 1.06 times 37.2m The computation above shows that the stock list turnover increased 2.00 times in 2010, this implies that for every sale of two, there was one stock list held while in 2009, for every sale of one, there was one stock list held. Thus Victrex Plc was more effectual in 2010 at buying and merchandising of goods, farther explicating that there was more sale compared to the degree of stock list held and the company was able to turn over its stock list better compared to the old twelvemonth ( 2009 ) .This consequence is affected by the addition in cost of goods sold which was ?68.9m in 2010 from ?39.3m in 2009 as there was a higher demand of merchandises in 2010 and the betterment over the period reflects the favorable effectual exchange rates together with a lower implicit in cost of gross revenues per metric ton in the 2nd half ensuing from lower fixed costs per metric ton as production volume increased. Inventory decreased to ?34.5m in 2010 from ?37.2m in 2009, although natural stuffs inc reased due to the company carrying natural stuffs to enable them keep supplies during any short term break but finished goods decreased in 2010 compared to 2009 because there was a short term rush in the demand for goods ( Victrex, 2010 ) .2.1.3.4 RECEIVABLES COLLECTION PERIODThis ratio seeks to mensurate how long clients take to pay their debts. Therefore, the quicker the concern collects and Bankss the money, the better it is for the company. This ratio can be used monthly, hebdomadal or day-to-day footing ( Jones, 2006 ) . Harmonizing to Perry ( 2011 ) , it can be defined as: Receivables Collection Period = Receivables A- 365 Gross saless In 2010, it was 19.1m A- 365 = 36.79 yearss 189.5m In 2009, it was 15.7m A- 365 = 55.21 yearss 103.8m Looking at the computations above, this implies that the concern was more efficient at retrieving its debts from clients as the consequences were lower in 2010 with 36.79days compared to 55.21days in 2009. This was as a consequence of addition in gross revenues of goods produced in 2010 compared to 2009. This besides indicates that in 2010 there was better hard currency flow as it took a shorter clip to have money owed by clients compared to 2009 ( Victrex, 2010 ) .2.1.4 LIQUIDITY RATIOThese ratios are derived from the balance sheets and seek to prove how easy a company can pay its debts. These ratios are of import to loan creditors such as bankers who have loaned to the concern ( Jones, 2006 ) . There are two types of ratios viz. the ‘current ratio ‘ and the ‘acid trial ratio ‘ ( Perry, 2011 ) . These ratios will be used to analyze Victrex Plc ‘s liquidness.2.1.4.1 CURRENT RATIOThis ratio tests whether the short term assets cover the short term liabilit ies. If this is non the instance, so there will be deficient liquid financess instantly to pay to the creditors ( Jones, 2006 ) . Harmonizing to Perry ( 2011 ) , Current ratio can be defined as: Current Ratio = Inventory + Receivables + Cash and Cash Equivalents Payabless + Short Term Borrowings In 2010, it was 34.52m + 0.74m + 19.11m + 2.24m +77.27m = 133.88m = 3.15: 1 ( 25.15 ) m + ( 15.11 ) m + ( 2.27 ) m ( 42.53 ) m In 2009, it was 37.17m + 1.02 m+15.66 m+ 1.70m +18.56m = 74.11m = 2.82: 1 ( 6.30 ) m + ( 5.42 ) m + ( 14.58 ) m ( 26.3 ) m From the computation above, current ratio increased from 2.82 in 2009 to 3.15 in 2010. Therefore in 2010, for every ?1 in current liabilities, there is ?3.15 in current assets compared to 2009 during which for every ?1 in current liabilities, there is ?2.82 in current liabilities. This implies that the concern has adequate hard currency to cover its liabilities. If the current assets exceed the current liabilities, this could bespeak sufficient hard currency in the concern ( Dyson, 2007 ) . However, the major impact on the addition in current ratio was as a consequence of addition in hard currency of ?58.7m between 2009 and 2010, which reflects the strong recoil in gross revenues and the Group has a committed bank installation of ?40m, all of which was undrawn at the twelvemonth terminal and this expires in September 2012. Besides looking at the hard currency flow statement, the company generated hard currency from operations. There was an addition in receivables of ?3.4m between 200 9 and 2010. The current liabilities were up due to an addition in trade and other payables that were affected by accumulations of ?18.7m in 2010 from ?8.8m in 2009 which implies the company still has hard currency to pay to their creditors and besides an addition in current income revenue enhancement liabilities of ?9.7m between 2009 and 2010 ( Victrex, 2010 ) .2.1.4.2 ACID TEST RATIOThis is besides known as the Quick Ratio. It is a step of utmost short -term liquidness, therefore the acerb trial ratio excludes stock lists, which is the least liquid of the current assets to get at an immediate trial of the company ‘s liquidness ( Jones, 2006 ) . The importance of this ratio is that it has a clearer image of the state of affairs as a house may non be able to dispose of its stock lists instantly ( Dyson, 2007 ) .According to Perry ( 2011 ) , Acid Test Ratio can be defined as: Acid Test Ratio = Receivables + Cash and Cash Equivalents Payabless + Short Term Borrowings In 2010, it was 0.74m + 19.11m + 2.24m +77.27m = 99.36m = 2.34: 1 ( 25.15 ) m + ( 15.11 ) m + ( 2.27 ) m ( 42.53 ) m In 2009, it was 1.02m +15.66m + 1.70m +18.56m = 36.94m = 1.40: 1 ( 6.30 ) m + ( 5.42 ) m + ( 14.58 ) m ( 26.30 ) m Looking at the computation above, there is an addition in Acid trial ratio of 2.34 in 2010 from 1.40 in 2009, even after the stock lists were removed. This means that the concern has adequate hard currency to cover its liabilities. This implies that the stock lists did non hold an impact in the ratio as the major part to this alteration were the addition in hard currency every bit good as the addition in trade and other receivables, addition in payables and current income revenue enhancement liabilities, as these were explained above in the current ratio ( Victrex, 2010 ) . Therefore an acerb trial ratio above one ( 1 ) implies the company can still change over hard currency at easiness.2.1.5 FINANCIAL GEARING RATIOSThese ratios measure the ability of the concern to run into its longer-term duties and they indicate the sum of hazard to which stockholders are exposed through the sum of debt nowadays in the concern capital construction ( Jones, 2006 ) . Gearing ratio and Interest Cover will be used to analyze Victrex Plc.2.1.5.1 GEARING RATIOThis ratio measures the relationship between equity and debt capital of a company. The geartrain of a concern demonstrates how reliant the concern is on borrowed money, instead than portion capital. ( Perry, 2011 ) . Harmonizing to Perry ( 2011 ) , pitching ratio can be defined as: Gearing Ratio = Net Borrowings ( Debts ) A- 100 Stockholders Fundss ( Equity ) Harmonizing to Annual Report, the geartrain ratio could non be calculated as there were no net adoptions in 2009 and 2010. Based on the fact that the Group had a committed bank installation of ?40m, all of which was undrawn at the twelvemonth terminal and this expires in September 2012 ( Victrex, 2010 ) .2.1.5.2 Interest ScreenThis ratio is of peculiar involvement to those who have loaned money to the company ( Jones, 2006 ) . Harmonizing to Perry ( 2011 ) , it can be defined by demoing the relationship during the trading period between runing net incomes and the involvement charges ensuing from the degree of debt during the period. The expression is: Interest Cover = Operating Profit = Operating Net income Net Interest/ Finance charges Finance Cost – Finance Income In 2010, it was 74.9m = 74.9m = 1.63 ( 93 ) m -139m ( 46 ) m In 2009, it was 25.1m = 25.1m = 0.81 ( 60 ) m – 91m ( 31 ) m Deducing from the computation above, the involvement screen has increased in 2010 to 1.63 from 0.81 in 2009. This addition implies that the company is bring forthing adequate gross to pay its debts. This addition in 2010 is due to the fact that the operating net income increased which is as a consequence of addition in gross as there was more demand of the merchandises taking to an addition in gross revenues compared to the old twelvemonth ( 2009 ) . Therefore in 2009, the concern could hold been in a fiscal hazard as at that place might non hold been sufficient hard currency to sit out sudden downswing as a consequence of the lessening in gross. The finance income increased in 2010 to ?139m from ?91m in 2009. The Finance Cost increased by ?33m between 2009 and 2010. This ratio is of import to stockholders ( Victrex, 2010 ) .3.0 DecisionRatio Analysis is a really of import manner of measuring the overall public presentation of an Organisation. Many administrations use this technique to compare the company ‘s public presentation over clip or compare it with the fiscal public presentation of other companies. However, holding analysed Victrex ‘s Plc ‘s, it can be said that Victrex Plc is a traveling concern as it has sufficient hard currency and resources to command its operational being. Looking at the five twelvemonth fiscal sum-up, it can be said that that twelvemonth 2010 has proven to be the best fiscal twelvemonth over the period. These analysis show that the company had an addition in hard currency and hard currency equivalents, addition in gross revenues volume, high gross border and besides an addition in the operating net income. Therefore, in footings of its profitableness, the company had an addition in the gross border demoing an betterment which was based on addition in gross with the the major accelerator to this being the favorable exchange rates and increase in gross revenues. The operating border besides increased as a consequence of the addition of gross revenues, selling and disposal disbursals which emanated from elements of staff wage being linked to the fiscal public presentation. There was besides an addition in the return of capital employed, return on entire assets and besides return on stockholders financess. This addition in 2010 indicates that the company has done better overall compared to the old old ages in footings of a step in the concern success doing the company attractive as an investing. Looking at the efficiency ratio, the stock list turnover increased as a consequence of high demand of merchandises across different markets. The non-current assets ratio increased although Property, works and equipment decreased as a consequence of depreciation of the assets, Besides the receivables aggregation period reduced bespeaking that the company is better at recovering its debts from its debitors, and eventually Net plus turnover besides increased as a consequence of addition in hard currency and hard currency equivalent as its impact reflected on the capital employed. Therefore, this addition in 2010 indicates that the company is better at utilizing its assets efficaciously in bring forthing gross revenues compared to the old old ages. Sing the liquidness of the company, a decision can be drawn based on the current plus ratio and the acerb trial ratio which indicate an addition due to hard currency and hard currency equivalents and besides the addition in the trade and other receivables, therefore bespeaking that the company will be able to pay off any debt if a state of affairs occurs in twelvemonth 2010. In footings of the fiscal geartrain ratios, this helps to bespeak how stable the company is, looking at Victrex Plc, there was no pitching ratio calculated as the house had no net adoptions but there was an addition in involvement screen this was as a consequence of the addition in operating net income and besides based on the addition in portion premium, therefore this addition in 2010 will let stockholders to appreciate the growing of the concern compared to the old twelvemonth. Conclusively, Victrex Plc appears to be a well positioned company for continued growing in its section of the market in twelvemonth 2010 compared to the old twelvemonth. The direction of Victrex Plc have a good apprehension of the markets they operate in by proactively expecting the expected demands of their clients and go oning to take advantage of chances within the market topographic point and spread out its skylines as a market leader in the production of high public presentation thermoplastics polymers.WORD COUNT: 5579Section 24.0 THE ROLE OF WORKING CAPITAL MANAGEMENT IN MANAGING A BUSINESSWorking Capital can be defined as the current assets less current liabilities. The major constituents of the current assets are stock lists, trade and other receivables and hard currency and hard currency equivalents while current liabilities constituents are trade and other payables, bank overdraft and short term adoptions ( Mclaney & A ; Atrill, 2008 ) . Working Capital Management can be defined as the direction and control of the current assets and current liabilities which are the chief components of the on the job capital ( Mathur, 2002 ) . The importance of working capital direction is an indispensable portion of a concern short-run planning procedure. Management should do determinations on how much of each constituent should be held ( Mclaney & A ; Atrill, 2008 ) .According to Vijayakumar ( 2001 ) , the significance of working capital direction comprises of two grounds viz. 1 ) A significant part of a entire investing is invested in the current assets and 2 ) degree of the current assets and current liabilities will alter as a consequence in fluctuation in gross revenues. Working capital direction is of import to the fiscal wellness of the concern from all industries. The on the job capital demands of a peculiar concern are likely to alter over clip as a consequence of alterations in the concern environment, giving room for determinations to be made invariably ( Mclaney & A ; Atrill, 2008 ) . Therefore Working Capital has acquired a great significance and sound place for two duplicate objects of profitableness and liquidness. The importance of working capital direction and its satisfactory proviso can take non merely to material nest eggs in the economical usage of capital but besides assist in fostering the ultimate purpose of the concern by maximizing the fiscal returns on the minimal sum of capital that needs to be employed ( Vijayakumar, 2001 ) . If on the job capital is mismanaged, it can take to loss of net incomes in the short-term but will consequences to a ruin of the house in the long-term. Thus the adequateness of working capital together with efficient managing determines the endurance or death of the house. In the existent universe scenario, a house can be and last without doing net income but it can non last without working capital financess, therefore this could take to bankruptcy and closing over a period of clip. Therefore in footings of the working capital direction, one should see the short-run liquidness place of the house. The investing determination in the current assets trades with a few jobs with working capital direction as profitableness and liquidness are dependent on the current assets direction. Therefore an appropriate degree of current assets and current liabilities in the concern determines the degree of working capital that affects the house ‘s liquidness ( Vijayakumar, 2001 ) . The victorious game was a simulation during the fiscal analysis and control faculty, the author ‘s function in this game was a financial officer. The financial officer ‘s duty in the game was to rede the squad on hard currency planning, to manage, control and record hard currency motions and fix the hard currency flow statement. After readying of the hard currency flow statement, the financial officer reconciled the hard currency records to the existent hard currency place throughout the twelvemonth. The financial officer worked closely with the fiscal director to jointly command all hard currency motions whether receivables or payables. The financial officer besides advised the squad to win gross revenues from the place market as receivable period was one one-fourth and the sale to the foreign markets was two quarters. Selling to the place market helped increase the hard currency flow state of affairs as hard currency was gotten faster for goods sold. The beginnings of financess were through loans, discounting and bing stockholder ‘s equity. The squad merely indulged in the discounting option one time as seen in twelvemonth one in the income statement as it was seen as less profitable. However, high sums of loans were borrowed in twelvemonth two to back up the technology and quality in order to be able to win commands as this can be shown in the balance sheet for twelvemonth one and two. Overall, looking at the direction of the on the job capital of the game, one can infer that as a consequence of hapless squad determination doing which led to high stock list degree based on purchase of natural stuffs which were non planned decently, the purchase of new equipments increased the work in advancement, we did non profit in gross revenues as we had insufficient contract to run into capacity and besides big unfilled contracts led to increase in the degree of stock list. Receivables were besides delayed due to the type of contract we bided for and besides dependant on the foreign market which took a long clip to have hard currency. Therefore in the existent universe state of affairs, the financial officer should give considerable clip in effectual control and the supervising of working capital constituents as this generates growing and net income of the concern.WORD COUNT: 7785.0 MARGINAL CostingFringy costing can be defined as a technique which divides costs in two classs viz. fixed cost and variable cost when bring forthing an excess unit of a merchandise. A fixed cost can be defined in the short tally as it does non change in entire when end product fluctuates, for illustration ; rent for a mill, while variable costs are those that entire cost varies pro rata with the volume of end product, for illustration, Direct Material and Direct Labour ( Mott, 2008 ) . Harmonizing to Perry ( 2011 ) , a circumstance whereby a merchandise is already being produced and an extra merchandise is demanded by a client, the cost of bring forthing the extra merchandise is referred to as Marginal Costing. In the winning border game, the fringy costing enabled the squad to do determinations based on what type of merchandises to be manufactured and what is required in the production. In Year 3 of the game, the squad explored chances in order to increase profitableness by puting in merchandise support to guarantee all merchandises are sold. It besides helped in optimizing part by measuring the difference between the best and worst scenarios of the terrier and the tiger ‘s sale values, variable cost and unit part. Therefore, the benefit of the fringy costing in the game helped the squad purpose at winning orders closer to the best terminal of the part where it was profitable. In the existent universe state of affairs, Marginal Costing is used by direction to assist do determinations to the best cost of action in the short term ( Millichamp, 1997 ) . Decisions made by direction by the aid of fringy costing can be classified harmonizing to Mott ( 2008 ) as: Make or Buy Decisions One -off pricing Decisions The effects of a alteration in Product Mix The Volume requires to interrupt even or do a specified net income A pick between Alternative Cost StructuresWORD COUNT: 3126.0 BUDGETINGBudgeting can be defined as an of import tool for pull offing and commanding a concern ( Mclaney & A ; Atrill, 2008 ) . Harmonizing to Perry ( 2010 ) , a budget aim identifies where the concern demands to be at the terminal of a fiscal twelvemonth. A budget should be prepared as a resource program to enable that both fiscal and market aims are achieved. Therefore Harmonizing to Drury ( 2004 ) and Millichamp ( 1997 ) , the intent of budgeting are classified into several features ; some of these features would be used by the author to discourse the budgeting technique used in the winning border game. These Features are as follows: Planning: Budgets are used for future planning of activities in a company. It is used to benchmark to guarantee companies run into their ends. In the winning border, the squad made programs based on what merchandise should be produced, what market to put in and programs based on fiscal issues such as loans to enable be aftering on hard currency influx and escape. Profitableness: Budgets can be used for measuring future profitableness of direction programs. This is used in comparing the budget program to the existent consequences as this was done in the winning border in twelvemonth two in ciphering the production budget and gross revenues budget which was compared to the existent program. Coordination: The benefit of a budget is to enable assorted sections to collaborate and compromise when there is limited resources. In the winning game, the squad cooperated in respects to the production capacity as to what contract to travel for, what market to put in and what stock to buy and this helps observe any coordination jobs and better efficiency. Communication: Budgeting enabled different sections in the winning border game exchange information and thoughts as the financial officer recorded hard currency motions, fiscal director handled the fiscal policies, the buying director was in charge of stock list, the commercial director was cognizant of what market to put in and the production director was cognizant of what equipment to purchase. Resource Allocation: Budget aid in easing resource allotment in a company. In the winning border, resources were distributed across the assorted sections as hard currency escape was as a consequence of technology and quality, merchandise support and equipments. In the existent universe, Budgeting can be used to advance frontward thought and it is a short term agencies of working towards a concern aims.WORD COUNT: 394

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Maritime Transportation Security Act - Essay Example While the attacks focused attention on our aviation system's vulnerability, it became obvious that our maritime domain needed greater attention. Besides being gateways through which dangerous materials could enter, ports are attractive targets because they are often large and sprawling, accessible by water and land, close to crowded centers, and interwoven with highways, roads, factories, and businesses (Flynn, 2004). Security is made difficult by the number of stakeholders involved in port operations, which include local, state, and federal agencies; multiple law enforcement jurisdictions; transportation and trade companies; factories and other businesses. The MTSA imposed an ambitious schedule of requirements on federal agencies and called for a comprehensive framework that included planning, personnel security, and careful monitoring of vessels, facilities, and cargo. Table 1 contains the MTSA's key security-related activities. However, "Haste makes waste", and the urgent nature of the legislative and implementation efforts of the MTSA 2002 proved this to be true (Bouchard, 2005; Ervin, 2006; Haveman et al., 2007). The MTSA 2002, through the Department of Homeland Security (DHS), gave the U.S. Coast Guard (USCG) lead responsibility for most of its requirements. Timetables for implementing the provisions were tight, and adding difficulty was the need to implement MTSA after the most extensive federal reorganization after the Second World War. Most of the 22 agencies with MTSA responsibilities were reorganized into the DHS in March 2003, less than 5 months after enactment. Some departments such as the Transportation Security Agency (TSA) were new, while others such as the USCG, Customs Service, and the Immigration and Naturalization Service were transferred from various executive departments. This recombination of organizational cultures and the need to coordinate with other agencies such as the State, Transportation, and Justice Departments introduced complex chains of command and reporting responsibilities (MTSA,2002; DHS, 2005; USCG, 2007). The deadline for implementing MTSA of July 1, 2004 was tight. Unlike other areas of critical infrastructure security where the government was unwilling to set clear mandates for the private sector and push for meaningful change, the MTSA was a catalyst for action. Unfortunately, in the face of unrealistic deadlines and disjointed implementation milestones, good intentions were not necessarily translated into greater security at the pier. And to add insult to injury, the USCG not only proved incapable of managing the projects designed to improve its capability but became open to graft and corruption and overspending (Economist 2007, p. 36). The priorities

Solar energy Essay Example | Topics and Well Written Essays - 2500 words - 1

Solar energy - Essay Example While comparing the solar energy with respective other renewable and non-renewable energy resources, solar energy remains advantageous in most situations. Non-renewable energy resources like coal and oil, solar energy is not only cheaper but environment friendly too. Solar energy is free from hazardous emissions that are mostly associated with the fossil fuel resources. Some of the perspective advantages of the solar energy are given below.2.1 Advantage:2.1.1 PredictableSolar energy remains predictable as solar thermal power generation units remain functional throughout the day without any influence of external resource or fossil fuel resource. In daytime, in the presence of sun, solar energy directly converts the thermal content of the solar energy into electrical energy, while some content of this thermal energy is used to enhance the temperature of molten salt that remains hot for longer terns and used to generate electrical energy during night.2.1.2 No Pollution and it save the e co-systems and livelihoods Solar energy is free from emission that are associated with the fossil fuel resources that solar energy is environment friendly and preserves the biodiversity of the planet by maintain the healthy environment for the humans. Solar thermal power generation units are thermal power generation units which require the thermal energy o change the water to super saturated stream for the generation of energy through turbines. Solar thermal energy requires no extra equipment in the power generation process.

Report on the company Essay Example | Topics and Well Written Essays - 2000 words

Report on the company - Essay Example Coca-Cola is a 128 year old multinational company that has its presence in over 200 countries, and produces over 3500 products (Lim and Wong, 2014). It does not take a single hand to accomplish that amount of success within those numbers of years in all these countries that include USA, Britain, Kenya and many others. Its success depends on the several suppliers that it depends on to provide raw materials and valuable resources. . These provide the system with materials such as ingredients, packaging and machinery, as well as goods and services (The Coca-Cola Company 2014). Coca-Cola products range from soft drinks to drinking water, such as coke, Fanta, sprite, Dasani, Aquapure among others. This diversity in production calls for a long list of supply products to manufacture these include syrups and concentrates, sweeteners; juices; mineral waters; finished product; carbon dioxide; fuel; PET (plastic) preforms; glass, aluminum, and plastic bottles; aluminum and steel cans; pouches; closures; post-mix (fountain syrup) packaging; and other packaging materials (Wikinvest 2014). The supply chain of Coca-Cola Company involves all the companies that come into contact with the company’s products. This includes every company involved in making parts for the product, putting it together, delivering and finally selling. In other words it involves the suppliers, Manufacturers and retailers (Investopedia 2014). Due to the fact that the whole process begins with the supplier, the whole process cannot stand without the suppliers. This makes them a very key element. To understand the impact of suppliers to the Coca-Cola Company, their roles must be laid out clearly. One of the roles of the suppliers is acquisition. They provide the company with equipment, spare parts and raw materials. This enables the company to service and repair machinery, and produce end products. During the process of acquisition, they keep in contact with clients to make

Modern transparencies and unwanted-exposures Essay Example for Free

Modern transparencies and unwanted-exposures Essay Human beings have been constructing shelters to serve different purposes since the beginnings of civilization. How a building was constructed depended on three qualities set out by Vitruvius, the Roman architect in his treatise De Architectura †¢ Durability †¢ Utility †¢ Beauty Across the ages, one of these three criteria has been more important than the other. The precept of modern architecture is ‘form follows function’. The function of the building determines its structure. But built into this precept are many other modern and post-modern conceptions of notions such as privacy, publicity, sexuality, art, etc. Some of the key components of design are space, volume, mass, texture, shadow, light, materials, structure, etc. Each of these components has been given varied importance in the different times. Modernist architecture has been influenced heavily by the Austrian architect Adolf Loos who believed that ‘ornament is crime. ’ He said, The evolution of culture marches with the elimination of ornament from useful objects. He believed that the influence of culture on ornamentation would change with changing culture and therefore ornamentation itself would become obsolete. Adolf Loos said, â€Å"Does it follow that the house has nothing in common with art and is architecture not to be included in the arts? Only a very small part of architecture belongs to art: the tomb and the monument. Everything else that fulfils a function is to be excluded from the domain of art. † Ornamentation is tantamount to art, which Loos completely discredits by saying, â€Å"The house has to please everyone, contrary to the work of art which does not. The work is a private matter for the artist. The house is not. † He differentiates designing a house and depicting art in these words, â€Å"The work of art is brought into the world without there being a need for it. The house satisfies a requirement. The work of art is responsible to none; the house is responsible to everyone. The work of art wants to draw people out of their state of comfort. † Loos echoes the philosophy of Deleuze when he says, â€Å"The work of art shows people new directions and thinks of the future. The house thinks of the present. † According to Deleuze, art is supposed to provide signs reading which a person is supposed come out of the rote of daily quotidian life and move towards creativity. Entailed in this function of art is deep discomfort which is why a house is not supposed to perform the function of art. Entailed in the notion of a house is a feeling of comfort in the present. â€Å"The house has to please everyone, contrary to the work of art which does not. The work is a private matter for the artist. The house is not. † â€Å"The house has to serve comfort. The work of art is revolutionary; the house is conservative. † Adolf Loos strived to strip culture of ‘art’ and ‘ornament’ and bring to it pragmatism, functionality and rationalism. Each of these qualities is attributed to the male. They are in stark contrast to the Jugendstil artists from the Wagner school. According to Susan Henderson, â€Å"Loos maintained that strict gender distinctions were basic to the ordered logic of modern society, and he decried the ambiguous gender roles that had invaded art and culture. Jugendstil decadence lay in its unrealistic attitude towards the capitalist economy, its regressive fascination for a dying aristocratic tradition, and a benighted love of ornament that sapped the productive energies from Viennese culture. His call for cultural reclamation through a reinvigorated rhetoric set the stage for embedding a new masculinism in the language of early modernism and the reassertion of middle-class values after a generation of retreat from the productive enterprise. † There exists an in-built contradiction between notion of perfect space that the architect harbours and the real mess of daily life. In both cases the woman is positioned as hidden and within and is always object subject to the male gaze. The domestic space of the Josephine Baker is converted into an erotic space. Josephine is present ‘in absentia’. The architecture is incorporated into the body of Josephine Baker and the body is entrenched in the architecture. â€Å"This is a wide-ranging and multifaceted notion of circulation, which includes passages, traversals, transitions, transitory states erotic circulations. † (Bruno, 1992) Given this understanding of Loos’ psychology it is a little complicated to learn the aesthetics of the Josephine Baker villa in Paris. This villa stands in contrast to many other designs of Loos. Feres el-DahDah says, â€Å"It is an epistolary attempt to detail her image in ‘various points’ through a kind of writing that stretches a third skin between the body of the architect and that of the dancer. The house is an apparatus†¦through which one can somehow rub against, or trap, a dancer’s exoticized body. It is a building designed as a tactical enterprise, as the imaginary ‘prose’ of an amorous conquest in between whose lines (in between the stripes of its facades and the distribution of its rooms) one is to decode a longing to signify desire. In other words, this house corroborates someone’s yearning to touch the absent body of Josephine. † This ‘present absence’ of Josephine Baker is called by Adolf Loos, ‘modern distinction’. The intense longing for the absent object brings to life that objects giving it a surreal physical manifestation. The elevations of the Baker house support this Freudian argument. The empty spaces represent Loos’ phallocentric desired for the absent object. If the Josephine Baker house is a modern depiction of sexuality that uses large unwanted space as a representation of desire for the body of Josephine Baker, large space is also used to represent violence and inspire fear through the designs of panopticons. Panopticon is a prison designed by Jeremy Bentham, the eighteenth century English Philosopher. The function of a panoticon is to watch the prisons without the prisoners themselves being aware either of the observer or of the process of observation. Jeremy Bentham called it ‘sentiment of an invisible omniscience. ’ â€Å"the more constantly the persons to be inspected are under the eyes of the persons who should inspect them, the more perfectly will the purpose †¦ of the establishment have been attained. Ideal perfection, if that were the object, would require that each person should actually be in that predicament, during every instant of time. This being impossible, the next thing to be wished for is, that, at every instant, seeing reason to believe as much, and not being able to satisfy himself to the contrary, he should conceive himself to be so. This point, you will immediately see, is most completely secured by my brothers plan; and, I think, it will appear equally manifest, that it cannot be compassed by any other, or to speak more properly, that if it be compassed by any other, it can only be in proportion as such other may approach to this. † The fundamental structure of a panopticon consists of a circular building. The rooms of the prisoners are present in the circumference of the building. Iron grating is present on the inner circumference. But this grating is virtually invisible to the prisoner. Such a grating traps the prisoner between the feelings of freedom and imprisonment. The prisoner knows that there is a grating but he cannot see it. It places him a limbo between privacy and publicity. Violation of private space is violence nonetheless. The room of the inspector is at the centre of the building. The windows of the prisoners’ room ‘radiate’ through the centre of the inspector’s room such that the inspector has a direct view into the rooms of all the prisoners. The windows would be covered by blinds till the eye level of the prisoners. This function of a window is opposed to that perceived by Adolf Loos, â€Å"to let the light in; not to let the gaze pass through†. Of course, the context of the windows in both cases is very different. In a panopticon, light is allowed to pass through only to the extent that allows the inspector to see the inside of the cell. In a house, light must be let in to brighten the house and make it comfortable to the inhabitants.

Demographic Analysis of Software Piracy Users

Demographic Analysis of Software Piracy Users Software Piracy: Most common factors that influence the intention to use among college students in Selangor, Malaysia Abstract Software piracy is one of the worst problems facing the software industry, and the piracy rate around the world is rising and in 2008 alone software industry lost more than US$ 5.3 billion due to software piracy, and in the same time frame Malaysian software industry lost around US$ 368 million. Many previous researches concluded that software piracy is common among college students, preventive and deterrents techniques were no effective in combating the piracy problem, therefore there is a great urgency to identify the factors that leads to software piracy in order to formulate better strategies to overcome the problem. This research identified six variables that influence the intention of college students to use pirated software; they are Gender, Age, Value Consciousness, Attitude, Peer pressure and Novelty seeking. A survey was conducted with students who are attending colleges in Selangor, Malaysia, with a total of 247 respondents participated in the survey. The study found out that Value consciousness, Attitude, Peer pressure and Novelty seeking are the factors that has significant relationship with intention to use pirated software, however gender and age was not found to be significant factors that influence the intention to use pirated software. 1.0 Chapter 1: Introduction: Software piracy can be considered as robbery, an infringement of copyrights, and anything that is copyrighted can be pirated and almost anything worth copying is worth pirating (Honick and Craig, 2005). Independent study sponsored by Business software Alliance (BSA) shows that software piracy is the worst problem that software industry faced, BSA defines software piracy as the unauthorized copying or distribution of softwares. When the end users purchase the software they do not become the owner of the product, however they have the rights to use the software under the terms and conditions oppose by the copyright owner of the software. According to Microsoft there are 5 basic type of piracy, 1- End user copying: Here individuals or organizations copy and distribute unlicensed copies of the software or purchase a licensed copy and use beyond the allowed limits. 2- Hard disk loading: this is practiced by computer manufacturers who use a legal copy of a software to install as many PC they want and sold to end users who are not aware of the wrong doing 3- Counterfeiting: software and its packaging are illegally produced in a large scale. 4- Online: Online piracy occurs when the end user download the software from an online source without the permission of the copyright owner. 5- License misuse: software distributed with a discount rates for the high-volume customers, computer manufactures, and academic institutions that then redistribute these software to others who are not qualified for the software. 1.1 Background of the problem TA study conducted by BSA (200X), shows that piracy rates went up from 38% in 2007 to 41% in 2008 worldwide, however the encouraging news is that among the 110 countries the study was conducted, in 57 counties (52%) the piracy went down and in one third of the countries piracy remained unchanged (35%).The monetary losses for software vendors grew from US $ 5.1 billion to US $ 5.3 billion from 2007 to 2008. Lowest piracy countries according to the BSA(200x), research were the United States Luxemburg, New Zealand and Japan, at around 20% and highest piracy rates were among Armenia, Georgia, Bangladesh and Zimbabwe around 90%. Research conducted by International Data Corporation (IDC 200X) shows that, if piracy is lowered 10% in four years it will create more that 600,000 jobs worldwide. Robert Holleyman, the president and CEO of Business software Alliance stated that in 2008 more that 40% of the software installed worldwide was obtained illegally and cost US $ 50 billion of losses to the software industry. For every dollar of the software sold another 3 or 4 dollars are paid to the local IT farms, in other words software piracy means less jobs in Information Technology Industry, as per IDC (200x) study if piracy is reduced 10%, governments will generate more that US $ 24 billion in revenue without increasing tax. According to Rothken (1998) buyers of legitimate software has to pay an additional 15 dollars to every 100 dollars spent on software, meaning software add 15% to the price of legitimate software because of software piracy. Software piracy will also increase cybercrime and security problems, a study conducted by IDC in 2006 shows that more than 29% of the websites and 61% of peer-to-peer sites offering illegal software infect the computers with virus and other types of identity theft tools. Software piracy is somewhat out of controlled in the real world, Microsoft investigators found pirated software in the computers of a police department who were investigating piracy, and also one out of three software used in business are pirated ( Carbon 1997). The population of Malaysia is estimated at 28 million and spends more than US$ 4.6 billion in information technology, which is 2.9% of the annual GDP. There are more than 6,900 companies employing 222,100 employers in the field of information technology (BSA, 2007). 1.2 Problem statement In Malaysia piracy increased by 1% (from 58% in 2007 to 59% in 2008) and it terms of financial losses, Malaysia lost over US $ 368 million compare to US $ 311 million in 2007. If piracy could be brought down to 10% in next 4 years (2008-2011), Malaysia could create an additional 2,600 jobs, financial gain of US $ 660 million to Malaysian software companies and US $ 144 million in tax revenue for federal, regional and local governments (BSA, 2007). This research aim to find the common factors that influences the intention of college students in Malaysia to use pirated software, as finding these factors will help to combat the issue of software piracy more efficiently. 1.3 Objective of the study: Software piracy has become a worldwide dilemma due to the financial and economic losses the software industry and governments has to face, also extra cost, viruses and other identity theft problems the consumers have to bear. For an issue that has gone out of control, like software piracy, its important to identify grass root problems. In the case of software piracy it is important to identify what factors influence the intention of individuals to use pirated software; this will help the software industry to come up with better strategies in the fight against software piracy. TAs colleges and universities are identified as breeding grounds for software piracy by Hinduja (2007,) and use of pirated software is a common problem in universities and which even happens inside classrooms (Kurger 2003) and college students believe its ethical to use pirated software (Cohen and Cornwell, 1989), its important to find what factors that influence these behaviors in college students in Malaysian context. 1.4 Purpose of the study: TA study conducted by Cohen and Cornwell (1989) shows that software piracy is acceptable among the college students, research done by Hinduja (2007) illustrate that colleges and universities are breeding grounds for software piracy. Protecting the intellectual property is a key factor for the copyright holder and for the consumers as well. The financial loss the software companies are facing is due to the casual attitude of the consumers towards intellectual property rights (SIIA KPMG 2001). Unauthorized distribution and use of software without copyright owners permission is illegal. Number of legal cases conforms that copy right and patent laws apply to computer software. In the case of Whelan Association Inc v. Jaslow Dental Laboratories, Inc (1986), Lotus Development Corp v. Paperback software Intl (1990), Plains Cotton Corporative International Inc v. Altai Inc (1992) court ruled that intellectual properties were protected (Lau, 2006). According to the Malaysian copy right act 1987, if an individual or a corporation was found in position with unauthorized software, the user may face criminal charges, they will face a fine of not exceeding RM 10,000 for each infringing copy, or prison sentence of not exceeding five years, or both. Preventives and deterrents are the commonly used techniques in the fight against software piracy (Gopal and Sanders, 1997), preventives makes it difficult for software crackers to crack the software by increasing the security features. The idea behind the preventive concept is that, when it becomes difficult to crack, the software hackers will find cracking softwares are hard and eventually give up. Deterrent uses the laws and regulation to prevent software piracy. The truth is preventives and deterrents are not so effective, the higher security that is placed in the softwares are checked by more advanced tools, its only a matter of time for software crackers to crack the security codes, the fact that deterrents are not working can be seen from the fact that only 1-5% of the computer abuse is detected. This proves the need to find the influential factors that derives individuals towards software piracy, understanding these factors will help to formulate better strategies to deal with the problem of software piracy. 1.5 Justification of the study: There have been number of studies conducted in relation with software piracy among the college students, however a study focused on college students in Malaysia is not found, Since Malaysia also looses enormous amount of revenue and jobs as a result of software piracy, and the fact that colleges and universities are identified as the breeding ground of software piracy and these are the people who are going to be professionals tomorrow, its important to identify the factors the influence the intention of college students in Malaysia to use pirated software. Since most of the current studies are conducted outside Malaysia, there might be some significant difference in the behavior of the college students in Malaysia compare to previous research done in other countries. As there are no researches done on college students in Malaysia, it will be difficult to guaranty that those factors brought in by other literature can we applied to college students in Malaysia. T 1.6 Research questions This study aims to answer following questions. Will factors like Value consciousness, Attitude, Peer pressure and Novelty Seeking influence the intention to use pirated software among college student in Malaysia? Will demographic factors like Age and gender influence the intention to use pirated software among college students in Malaysia? 1.7 Organization of the study: This study has five chapters; the chapter one includes the background of the problem, problem statement, objective and purpose of the research, justification and research questions. The second chapter is a Literature review, which talks about different theories related to behavior and ethics, findings of the previous literature and few models used in articles writing in the subject of software piracy are discussed. Third chapter is the methodology, which talks about the research philosophy, purpose, approach, and strategy and sample selection used in this study. The forth chapter talks about the findings of the study and the fifth chapter is a conclusion of this study, along with the limitation of the study and further research suggestions. 2.0 Chapter 2: Literature Review First part of this chapter reviews different theories related to behavior and ethics, particularly the Theory of Reasoned Actions by Fishbein and Ajzen, Theory of planned behavior by Ajzen and theory of moral development by Kohlberg were discussed, which will be useful in understanding the factors influence an individuals intention to use pirated software. Second part of this chapter is focused on the findings of the previous literatures, specifically the literatures related to factors the influence individuals to use pirated software will be examined and finally the models used in some literatures will be used to explain software piracy. 2.1 Theory of reasoned action Theory of Reasoned Action, developed by Icek Ajzen and Martin Fishbein (1980) were used to explain why an individual behaves in a certain manner. The theory is based on the assumption that humans are rational and information available to them will be used systematically. TRA uses attitude and norms to predict behavioral intentions, that is when attitude leads to certain behavior but the relevant norms suggest something else, then both factors influence the behavior. The Theory of Reasoned Actions (TRA) identifies that behavior is a function of intention and intention is a function of both attitude and subjective norms. Theory of Reasoned Action is an useful tool used in predicting certain behaviors, its has been applied in predicting number of behaviors like dental hygiene, smoking, breast cancer examinations and the use of seatbelts. (Change, 1998) Enker (1987) examined how attitude and normative belief is related to cheating and he found out that theory of reasoned action was a useful tool in understanding moral behavior of an individual. The motive behind explaining the theory of reasoned action is to understand the sequence of actions that leads to a certain behavior such as software piracy. 2.2 Theory of planned behavior In 1985, Ajzen concluded that Theory of Reasoned Action was not fully completed; he explained that TRA was insufficient, as it does not give consideration to situations where behavior is not under the individuals control. To address these restrictions in TRA, Ajzen developed the Theory of Planned behavior (TPB), which was an extension of Theory of Reasoned Actions The new model proposed by Ajzen included the Perceived Behavior Control (PBC) which was not found in TRA. PBC could be easily measured, and identifies the individuals belief on the difficulty level in performing a certain behavior (Ajzen and Madden, 1986). The Theory of Planned Behavior states that an intention to behave in a particular fashion originates from persons attitude, subjective norms and perceived behavioral control. Similar to the Theory of Reasoned Action (TRA), Theory of Planned Behavior (TPB) is used is in wide range of situation to predict a behavior (Flanny and May, 2000) Chang (1998) tested the validity of both Theory of Reasoned Action and Theory of Planned behavior in software piracy. The research was conducted to see the capacity of TRA to explain software piracy behavioral intentions and to see whether TPB can predict software piracy more accurately than TRA. Chang (1998) concluded that perceived behavioral control is the most important factor that influences individuals to used pirated software. Individuals who behave unethically most of the time do not have the full control of the situation. Opportunities must be available to the individual for him to use pirated software. 2.3 Kohlbergs theory of moral development Kohlberg (1969) developed the theory of moral development, which consists of 3 level of moral development and each level contains 2 stages. The concept behind the moral development stages is that, an individual mature morally when they mature intellectually. Preconvention is the first level of moral development, this is the beginning of the moral development process, and in the first stage of preconvention level (Punishment and obedience orientation) an individual will have full respect for the authority and only concentrate on avoiding any punishment. At the second stage of the first level (reward orientation) an individual will focus on achieving personal benefits such and rewards. At this stage an individual will concentrate more on satisfying his or her own needs rather than fulfilling the needs of others or society as a whole. Conventional is the second level of moral development, in this level individuals focus more on a group, this is the level where peer pressure begins to influence the decision of an individual. At the first stage of this level an individual will think in terms of social convention, someone is labeled good or bad based on familial and social norms. If individuals turn to second stage of level two, they mature morally and focus on law and regulations, at this stage the focus is on maintaining social order, so that societies can function in an orderly manner. Post conventional is the final level of the moral development proposed by Kohlberg, if an individual reaches the first stage of post conventional level one should be able emphasize on what could be legally binding, however one should be able to understands that laws can be amended to meet the social demand. When an individual is at the final stage of moral development or the universal ethical principle orientation individuals see himself as a judge for the moral problems. Individuals at this stage are more concern about human rights, justices and equity in decision making. According to Kohlberg, most people are stuck at the conventional level, authority orientation stage, where law and order is the key aspect of moral decision making. A study conducted by Lane and Lane (1996) on the subject of softlifting (pirating software for personal use) found out that many students who participated in their study remained in the conventional level, authority orientation stage, of the moral development, based on their research they concluded that moral reasons behind software piracy was less important to the student compare to the benefit from softlifting. 2.4 Software piracy literature 2.4.1 Age Prior research conduct on software piracy shows that age had a significant influence on software piracy, hence younger responded were found more acceptable to use pirated software (Al-Rafee and Cronan 2006; Peace 1997 and Gopal and Sanders 1997). Research conducted by Liebowitz (2004) on piracy in the music industry showed that 41% of internet users between the age group of 18 29 download music illegally compare to 21% in the age group of 33-44. However a study conducted by Kini et al, (2004) concluded that age has no significant influence on software piracy. 2.4.2 Gender Kini et al.., (2004), suggest that female students have a higher morality than male students, thus female students use pirated software less than their male counterparts. Ford and Richardson in their research in 1994 also concluded that females are more ethical than males; therefore females will use pirated software less than males, as software piracy can be considered unethical. Even thought the research conducted by Weng et al, (2005) explained that gender was not a significant factor in the behavior to use pirated software, and one possible factor that researches shows male use pirated software is because they are more risk takers than female, this explanation seconds the research done by Solomon and OBrien, (1990) Banjerjee (1992) and Sim et al (1996),as they concluded that gender was practically accountable to the decision of an individual to use pirated software. 2.4.3 Consequences of using pirated software Using pirated software could be costly for an organization, even thought their employees used the pirated software without the knowledge of the top management, the management could be held liable for the action on their employees (Robinson and Reithel.., 1994). However individuals do not see the use of pirated software as a crime or unethical behavior (Im and Van Epps, 1991, Reid et al.., 1992). Also risk of been prosecuted was not identified as a significant factor in the study conducted by Hsu and Shiue (2008), because in reality its highly unlikely to get caught and been prosecuted for using pirated software. Kini et al, (2004) suggest that there is lack of recognition and enforcement to intellectual property laws, making software piracy a common phenomenon. 2.4.4 Income and economic conditions related to software piracy The study conducted by Gopal and Sanders, (2000) and Yang et al.., (2009) indicated that ability for an individual to purchase the original softwares is related to his or her income. Countries with higher Gross National Income (GNI) such as United States, Japan and Luxemburg has a lower piracy rate (less than 21%) compare to Georgia, Bangladesh, and Armenia, where piracy rate is more than 92% (BSA, 2008), and for these poor countries software piracy rate remains an economic issue (Moores, 2008). Individuals who earns a high income tend to use pirated software lesser than the individuals who earns a lower income (Wee et al.., 1995). Lamayem et al.., (2004) also backed this concept by stating that economic growth declines the piracy rate in a country; however some individuals might continue to use pirated software due to hobbits. Yang et al, (2009), also stressed that economic improvement tend to reduce the use of software piracy. 2.4.4.1 Top 10 high and low piracy rates Countries with high piracy rate % Countries with low piracy rate % Georgia 95 United States 20 Bangladesh 92 Japan 21 Armenia 92 Luxembourg 21 Zimbabwe 92 New Zealand 22 Sri Lanka 90 Austria 24 Azerbaijan 90 Belgium 25 Moldova 90 Denmark 25 Yemen 89 Sweden 25 Libya 87 Switzerland 25 Table 2.2: Top 10 High and Low piracy rate Source: BSA piracy report 2008 Moores (2008) in his study on â€Å"An Analysis of the impact of economic Wealth and National Culture on the rise and fall of software piracy rates† found out that Software Piracy Rate (SPR) in a country is related to its economic wellbeing and Individualism-collectivism (IDV) of a country. 2.4.5 Cost of original software At an individual level, the cost of original software is considered as prime factor that influences the decision of an individual to use pirated software or not (Cheng et al, 1997). Moores and Dhillion, (2000), Rawlinson et al, (2007,) in their research found out that most university students do not have much discretionary income with which to purchase original software, they also point out that reduction of the price of the original software will reduce the software piracy rate. Studies conducted by many researchers in the subject of software piracy identifies that financial gain that an individual gets from using pirated software is the most common reason to use pirated software (Cheng et al..,1997, Moores and Dhillion, 2000; Traphagan Griffith, 1998; Wee et al.., 1995). According to Al-Rafee and Cronan (2006) many users believed that original softwares are overpriced, this concept was also supported by the studies conducted by Albert-Miller (1999);Block et al.., (1993); Cheng et al.., (1997). 2.4.6 Software piracy in an ethical context Banerjee et al.., (1998,) developed a research framework based on the Theory of Planned Behavior (TPB) to model the ethical behavior intentions of Information system (IS) professionals and found that individual and situational characteristics do influence ethical behavior intentions. Loch and Conger (1996) in their study found that attitude and social norms play an important role in ethical decision making situation which can be related to the use of pirated software. Researches done on the subject of software piracy found that software piracy was a normative and accepted behavior, (Cohen and Cornwell 1989), and many individuals do not consider software piracy as a moral issue and use of pirated software is widely common among the business students (Soloman and OBrien 1990) Simpson et al.., (1994,) examined factors influencing softlifting, and identified five factors that influence and individuals decision making process, they are, stimulus to act, socio- cultural factors, legal factors, personal factors, situational factors. They found out that personal and situational factor influence the softlifting behavior. Thong and Yap .., (1998,) also attempted to explain soft lifting behavior using ethical decision making theory (the theory suggest that individuals are influence by deontological[1]F and teleological[2]F consequences of behavior) study showed both were found to influence the decision to use pirated software. Peace et al.., (2003,) generated a software piracy model using Theory of Planned behavior (TPB) as a framework to explain the intention to use pirated software. The study concluded that attitude (which is affected by the cost of original software, punishment severity and punishment certainty), subjective norms and perceived behavioral control were found to be significant factors that influence the intention of and individual to use pirated software. Zhang et al.., 2009 used the general theory of crime and deterrence theory to explain behavior that leads to digital piracy and they found out that only risk taking and punishment certainty leads to digital piracy. Simpson et al.., (1994,) found out that, Academic institutions are increasingly including ethical education in their curriculum. However many studies done on software piracy suggest that ethical education in academic institution had no or minimal effect on the intention of the students to use pirated software (Simpson et al.., 1994; Taylor and Shim.., 1993). Even though, individuals who felt a moral obligation or guilt towards software piracy have less intention to use pirated software (Cronan and Al-Rafee.., 2007). Logsdon et al.., (1994) and Al-Rafee and Cronan (2006) in their studies tested the assumption that individuals with higher level of moral development, are less likely to use pirated software, however they did not find a strong relationship between level of moral judgment and attitude towards using software piracy. The researchers also warn the software developers that even individuals with higher moral reasoning may engage in software piracy. Its believed that culture of a country influences the development of an individuals moral judgment and on understanding of moral intensity regarding software piracy. Christensen and Eining (1990) indicated that individual do not see piracy as inappropriate behavior and they do not believe their friends and superiors believe its inappropriate behavior. Researches concludes that use of pirated softwares in colleges and universities are more common than the general public (Kini et al, 2004). A study conducted by Taylor and Shim (1993) found out that professors use pirated softwares more than business executives. With a sample size of 243 college students , Kuo and Hsu (2001) conducted a research based on Banduras social cognitive theory (Bandura, 1982) and they discovered that self-efficacy was an important element in software piracy, subject with higher self-efficacy were more likely to engage in piracy. The famous psychologist Albert Bandura defines self-efficacy as â€Å"over belief in our ability to succeed in a specific situation†. Kini et al (2004) studied the cultural differences between the students of United States and Thailand in relation to software piracy, and they found out that students of United States has higher moral understanding towards software piracy compare to the students in Thailand. Swinyard et al (1990) in their research suggested that Asians have a more casual attitude towards software piracy than Americans, they are more likely to copy or buy software and less likely to criticize anyone who uses pirated software. Ferrell and Gresham (1985) emphasized the importance of peer group working supervisors in affecting ethical behavior. Christensen and Eining (1991), identified that the decision to use pirated software are influenced by the attitudes of friends and organization, these researchers also indicated that students do not perceive software piracy as inappropriate since they also believe their friends and superiors share this same view. 2.4.7 Problem of software piracy Softwares were the first product thats copied electronically in a large scale (Swinyard et al.., 1990). According to Yang, (2009) software piracy is a huge problem for policy makers and consumers alike, due to the uncertainty involving cross border conflicts, business losses and consumer exposing to virus and different kind of identity theft. McDonald and Roberts (1994) also considered software piracy as a very serious problem though out the world and the reason that it has become so hard to deal with this problem is the easiness in duplicating a copyrighted product. Tang and Farn (2005) concluded that supply to the pirated software will exists as long as there is a demand for pirated software, enforcement of laws and regulation and awareness programs may minimize the piracy rates, but it will not stop people from using pirated software. 2.4.8 Software piracy from a different angle Researchers who try to take the use of software piracy positively suggests that, software piracy can be seen as a form of product sampling, and that sampling can aid in the diffusion of a good (Gupta et al, 2004).As per Mahajan and Muller 1995, the success of excel over lotus 1, 2, and 3 was due to the high tolerance level towards software piracy. Givon et al, (1995), in their paper, â€Å"Software Piracy: Estimation of lost sales and impact on software diffusion† used a diffusion modeling approach to estimate the sale of software piracy, and they concluded software piracy creates shadow diffusion of the software same as the diffusion of original software in the market, the shadow diffusion is a major influential factor on the diffusion of the original software. They argue that the sellers of the pirated softwares may influence the potential buyers to adopt the pirated software, and some of these adopters might even purchase the original software. However, Solomon and OBrien.., (1990,) had a different view; they think software piracy will de-motivate the software developers to bring quality products to the market. Also the consumers have to pay a higher price to use original software; because the price of the legitimate software is inflated in order to make up to the loss of revenue from software piracy (Eining and christensen.., 1991; Taylor and Shim, 1993,). In the fight against software piracy, Germany has started enforcing a charge on every CD burner that is sold to compensate the loss of revenue due to piracy (Cronan and Al-Rafee.., 2007,) 2. 5 Models used in literatures of software piracy In this section, previous research models are discussed in order to explain software piracy. Five models related to software piracy will be examined here, as shown below. 2.5.2 Tim Goles et al Model Tim Goles et al.., 2007 proposed a model to identify the intention to softlift, their model is shown below: The model shows that there is a significant positive relationship between Perceived usefulness, past behavior, technical personal identity, and risk taking personal identity towards attitude to softlift. And negative relation between awareness of the law, moral personal obligation, and legal personal identity towards attitude to softlift. Furthermore the past behavior and attitude towards softlifting has a positive relation with the persons intention Demographic Analysis of Software Piracy Users Demographic Analysis of Software Piracy Users Software Piracy: Most common factors that influence the intention to use among college students in Selangor, Malaysia Abstract Software piracy is one of the worst problems facing the software industry, and the piracy rate around the world is rising and in 2008 alone software industry lost more than US$ 5.3 billion due to software piracy, and in the same time frame Malaysian software industry lost around US$ 368 million. Many previous researches concluded that software piracy is common among college students, preventive and deterrents techniques were no effective in combating the piracy problem, therefore there is a great urgency to identify the factors that leads to software piracy in order to formulate better strategies to overcome the problem. This research identified six variables that influence the intention of college students to use pirated software; they are Gender, Age, Value Consciousness, Attitude, Peer pressure and Novelty seeking. A survey was conducted with students who are attending colleges in Selangor, Malaysia, with a total of 247 respondents participated in the survey. The study found out that Value consciousness, Attitude, Peer pressure and Novelty seeking are the factors that has significant relationship with intention to use pirated software, however gender and age was not found to be significant factors that influence the intention to use pirated software. 1.0 Chapter 1: Introduction: Software piracy can be considered as robbery, an infringement of copyrights, and anything that is copyrighted can be pirated and almost anything worth copying is worth pirating (Honick and Craig, 2005). Independent study sponsored by Business software Alliance (BSA) shows that software piracy is the worst problem that software industry faced, BSA defines software piracy as the unauthorized copying or distribution of softwares. When the end users purchase the software they do not become the owner of the product, however they have the rights to use the software under the terms and conditions oppose by the copyright owner of the software. According to Microsoft there are 5 basic type of piracy, 1- End user copying: Here individuals or organizations copy and distribute unlicensed copies of the software or purchase a licensed copy and use beyond the allowed limits. 2- Hard disk loading: this is practiced by computer manufacturers who use a legal copy of a software to install as many PC they want and sold to end users who are not aware of the wrong doing 3- Counterfeiting: software and its packaging are illegally produced in a large scale. 4- Online: Online piracy occurs when the end user download the software from an online source without the permission of the copyright owner. 5- License misuse: software distributed with a discount rates for the high-volume customers, computer manufactures, and academic institutions that then redistribute these software to others who are not qualified for the software. 1.1 Background of the problem TA study conducted by BSA (200X), shows that piracy rates went up from 38% in 2007 to 41% in 2008 worldwide, however the encouraging news is that among the 110 countries the study was conducted, in 57 counties (52%) the piracy went down and in one third of the countries piracy remained unchanged (35%).The monetary losses for software vendors grew from US $ 5.1 billion to US $ 5.3 billion from 2007 to 2008. Lowest piracy countries according to the BSA(200x), research were the United States Luxemburg, New Zealand and Japan, at around 20% and highest piracy rates were among Armenia, Georgia, Bangladesh and Zimbabwe around 90%. Research conducted by International Data Corporation (IDC 200X) shows that, if piracy is lowered 10% in four years it will create more that 600,000 jobs worldwide. Robert Holleyman, the president and CEO of Business software Alliance stated that in 2008 more that 40% of the software installed worldwide was obtained illegally and cost US $ 50 billion of losses to the software industry. For every dollar of the software sold another 3 or 4 dollars are paid to the local IT farms, in other words software piracy means less jobs in Information Technology Industry, as per IDC (200x) study if piracy is reduced 10%, governments will generate more that US $ 24 billion in revenue without increasing tax. According to Rothken (1998) buyers of legitimate software has to pay an additional 15 dollars to every 100 dollars spent on software, meaning software add 15% to the price of legitimate software because of software piracy. Software piracy will also increase cybercrime and security problems, a study conducted by IDC in 2006 shows that more than 29% of the websites and 61% of peer-to-peer sites offering illegal software infect the computers with virus and other types of identity theft tools. Software piracy is somewhat out of controlled in the real world, Microsoft investigators found pirated software in the computers of a police department who were investigating piracy, and also one out of three software used in business are pirated ( Carbon 1997). The population of Malaysia is estimated at 28 million and spends more than US$ 4.6 billion in information technology, which is 2.9% of the annual GDP. There are more than 6,900 companies employing 222,100 employers in the field of information technology (BSA, 2007). 1.2 Problem statement In Malaysia piracy increased by 1% (from 58% in 2007 to 59% in 2008) and it terms of financial losses, Malaysia lost over US $ 368 million compare to US $ 311 million in 2007. If piracy could be brought down to 10% in next 4 years (2008-2011), Malaysia could create an additional 2,600 jobs, financial gain of US $ 660 million to Malaysian software companies and US $ 144 million in tax revenue for federal, regional and local governments (BSA, 2007). This research aim to find the common factors that influences the intention of college students in Malaysia to use pirated software, as finding these factors will help to combat the issue of software piracy more efficiently. 1.3 Objective of the study: Software piracy has become a worldwide dilemma due to the financial and economic losses the software industry and governments has to face, also extra cost, viruses and other identity theft problems the consumers have to bear. For an issue that has gone out of control, like software piracy, its important to identify grass root problems. In the case of software piracy it is important to identify what factors influence the intention of individuals to use pirated software; this will help the software industry to come up with better strategies in the fight against software piracy. TAs colleges and universities are identified as breeding grounds for software piracy by Hinduja (2007,) and use of pirated software is a common problem in universities and which even happens inside classrooms (Kurger 2003) and college students believe its ethical to use pirated software (Cohen and Cornwell, 1989), its important to find what factors that influence these behaviors in college students in Malaysian context. 1.4 Purpose of the study: TA study conducted by Cohen and Cornwell (1989) shows that software piracy is acceptable among the college students, research done by Hinduja (2007) illustrate that colleges and universities are breeding grounds for software piracy. Protecting the intellectual property is a key factor for the copyright holder and for the consumers as well. The financial loss the software companies are facing is due to the casual attitude of the consumers towards intellectual property rights (SIIA KPMG 2001). Unauthorized distribution and use of software without copyright owners permission is illegal. Number of legal cases conforms that copy right and patent laws apply to computer software. In the case of Whelan Association Inc v. Jaslow Dental Laboratories, Inc (1986), Lotus Development Corp v. Paperback software Intl (1990), Plains Cotton Corporative International Inc v. Altai Inc (1992) court ruled that intellectual properties were protected (Lau, 2006). According to the Malaysian copy right act 1987, if an individual or a corporation was found in position with unauthorized software, the user may face criminal charges, they will face a fine of not exceeding RM 10,000 for each infringing copy, or prison sentence of not exceeding five years, or both. Preventives and deterrents are the commonly used techniques in the fight against software piracy (Gopal and Sanders, 1997), preventives makes it difficult for software crackers to crack the software by increasing the security features. The idea behind the preventive concept is that, when it becomes difficult to crack, the software hackers will find cracking softwares are hard and eventually give up. Deterrent uses the laws and regulation to prevent software piracy. The truth is preventives and deterrents are not so effective, the higher security that is placed in the softwares are checked by more advanced tools, its only a matter of time for software crackers to crack the security codes, the fact that deterrents are not working can be seen from the fact that only 1-5% of the computer abuse is detected. This proves the need to find the influential factors that derives individuals towards software piracy, understanding these factors will help to formulate better strategies to deal with the problem of software piracy. 1.5 Justification of the study: There have been number of studies conducted in relation with software piracy among the college students, however a study focused on college students in Malaysia is not found, Since Malaysia also looses enormous amount of revenue and jobs as a result of software piracy, and the fact that colleges and universities are identified as the breeding ground of software piracy and these are the people who are going to be professionals tomorrow, its important to identify the factors the influence the intention of college students in Malaysia to use pirated software. Since most of the current studies are conducted outside Malaysia, there might be some significant difference in the behavior of the college students in Malaysia compare to previous research done in other countries. As there are no researches done on college students in Malaysia, it will be difficult to guaranty that those factors brought in by other literature can we applied to college students in Malaysia. T 1.6 Research questions This study aims to answer following questions. Will factors like Value consciousness, Attitude, Peer pressure and Novelty Seeking influence the intention to use pirated software among college student in Malaysia? Will demographic factors like Age and gender influence the intention to use pirated software among college students in Malaysia? 1.7 Organization of the study: This study has five chapters; the chapter one includes the background of the problem, problem statement, objective and purpose of the research, justification and research questions. The second chapter is a Literature review, which talks about different theories related to behavior and ethics, findings of the previous literature and few models used in articles writing in the subject of software piracy are discussed. Third chapter is the methodology, which talks about the research philosophy, purpose, approach, and strategy and sample selection used in this study. The forth chapter talks about the findings of the study and the fifth chapter is a conclusion of this study, along with the limitation of the study and further research suggestions. 2.0 Chapter 2: Literature Review First part of this chapter reviews different theories related to behavior and ethics, particularly the Theory of Reasoned Actions by Fishbein and Ajzen, Theory of planned behavior by Ajzen and theory of moral development by Kohlberg were discussed, which will be useful in understanding the factors influence an individuals intention to use pirated software. Second part of this chapter is focused on the findings of the previous literatures, specifically the literatures related to factors the influence individuals to use pirated software will be examined and finally the models used in some literatures will be used to explain software piracy. 2.1 Theory of reasoned action Theory of Reasoned Action, developed by Icek Ajzen and Martin Fishbein (1980) were used to explain why an individual behaves in a certain manner. The theory is based on the assumption that humans are rational and information available to them will be used systematically. TRA uses attitude and norms to predict behavioral intentions, that is when attitude leads to certain behavior but the relevant norms suggest something else, then both factors influence the behavior. The Theory of Reasoned Actions (TRA) identifies that behavior is a function of intention and intention is a function of both attitude and subjective norms. Theory of Reasoned Action is an useful tool used in predicting certain behaviors, its has been applied in predicting number of behaviors like dental hygiene, smoking, breast cancer examinations and the use of seatbelts. (Change, 1998) Enker (1987) examined how attitude and normative belief is related to cheating and he found out that theory of reasoned action was a useful tool in understanding moral behavior of an individual. The motive behind explaining the theory of reasoned action is to understand the sequence of actions that leads to a certain behavior such as software piracy. 2.2 Theory of planned behavior In 1985, Ajzen concluded that Theory of Reasoned Action was not fully completed; he explained that TRA was insufficient, as it does not give consideration to situations where behavior is not under the individuals control. To address these restrictions in TRA, Ajzen developed the Theory of Planned behavior (TPB), which was an extension of Theory of Reasoned Actions The new model proposed by Ajzen included the Perceived Behavior Control (PBC) which was not found in TRA. PBC could be easily measured, and identifies the individuals belief on the difficulty level in performing a certain behavior (Ajzen and Madden, 1986). The Theory of Planned Behavior states that an intention to behave in a particular fashion originates from persons attitude, subjective norms and perceived behavioral control. Similar to the Theory of Reasoned Action (TRA), Theory of Planned Behavior (TPB) is used is in wide range of situation to predict a behavior (Flanny and May, 2000) Chang (1998) tested the validity of both Theory of Reasoned Action and Theory of Planned behavior in software piracy. The research was conducted to see the capacity of TRA to explain software piracy behavioral intentions and to see whether TPB can predict software piracy more accurately than TRA. Chang (1998) concluded that perceived behavioral control is the most important factor that influences individuals to used pirated software. Individuals who behave unethically most of the time do not have the full control of the situation. Opportunities must be available to the individual for him to use pirated software. 2.3 Kohlbergs theory of moral development Kohlberg (1969) developed the theory of moral development, which consists of 3 level of moral development and each level contains 2 stages. The concept behind the moral development stages is that, an individual mature morally when they mature intellectually. Preconvention is the first level of moral development, this is the beginning of the moral development process, and in the first stage of preconvention level (Punishment and obedience orientation) an individual will have full respect for the authority and only concentrate on avoiding any punishment. At the second stage of the first level (reward orientation) an individual will focus on achieving personal benefits such and rewards. At this stage an individual will concentrate more on satisfying his or her own needs rather than fulfilling the needs of others or society as a whole. Conventional is the second level of moral development, in this level individuals focus more on a group, this is the level where peer pressure begins to influence the decision of an individual. At the first stage of this level an individual will think in terms of social convention, someone is labeled good or bad based on familial and social norms. If individuals turn to second stage of level two, they mature morally and focus on law and regulations, at this stage the focus is on maintaining social order, so that societies can function in an orderly manner. Post conventional is the final level of the moral development proposed by Kohlberg, if an individual reaches the first stage of post conventional level one should be able emphasize on what could be legally binding, however one should be able to understands that laws can be amended to meet the social demand. When an individual is at the final stage of moral development or the universal ethical principle orientation individuals see himself as a judge for the moral problems. Individuals at this stage are more concern about human rights, justices and equity in decision making. According to Kohlberg, most people are stuck at the conventional level, authority orientation stage, where law and order is the key aspect of moral decision making. A study conducted by Lane and Lane (1996) on the subject of softlifting (pirating software for personal use) found out that many students who participated in their study remained in the conventional level, authority orientation stage, of the moral development, based on their research they concluded that moral reasons behind software piracy was less important to the student compare to the benefit from softlifting. 2.4 Software piracy literature 2.4.1 Age Prior research conduct on software piracy shows that age had a significant influence on software piracy, hence younger responded were found more acceptable to use pirated software (Al-Rafee and Cronan 2006; Peace 1997 and Gopal and Sanders 1997). Research conducted by Liebowitz (2004) on piracy in the music industry showed that 41% of internet users between the age group of 18 29 download music illegally compare to 21% in the age group of 33-44. However a study conducted by Kini et al, (2004) concluded that age has no significant influence on software piracy. 2.4.2 Gender Kini et al.., (2004), suggest that female students have a higher morality than male students, thus female students use pirated software less than their male counterparts. Ford and Richardson in their research in 1994 also concluded that females are more ethical than males; therefore females will use pirated software less than males, as software piracy can be considered unethical. Even thought the research conducted by Weng et al, (2005) explained that gender was not a significant factor in the behavior to use pirated software, and one possible factor that researches shows male use pirated software is because they are more risk takers than female, this explanation seconds the research done by Solomon and OBrien, (1990) Banjerjee (1992) and Sim et al (1996),as they concluded that gender was practically accountable to the decision of an individual to use pirated software. 2.4.3 Consequences of using pirated software Using pirated software could be costly for an organization, even thought their employees used the pirated software without the knowledge of the top management, the management could be held liable for the action on their employees (Robinson and Reithel.., 1994). However individuals do not see the use of pirated software as a crime or unethical behavior (Im and Van Epps, 1991, Reid et al.., 1992). Also risk of been prosecuted was not identified as a significant factor in the study conducted by Hsu and Shiue (2008), because in reality its highly unlikely to get caught and been prosecuted for using pirated software. Kini et al, (2004) suggest that there is lack of recognition and enforcement to intellectual property laws, making software piracy a common phenomenon. 2.4.4 Income and economic conditions related to software piracy The study conducted by Gopal and Sanders, (2000) and Yang et al.., (2009) indicated that ability for an individual to purchase the original softwares is related to his or her income. Countries with higher Gross National Income (GNI) such as United States, Japan and Luxemburg has a lower piracy rate (less than 21%) compare to Georgia, Bangladesh, and Armenia, where piracy rate is more than 92% (BSA, 2008), and for these poor countries software piracy rate remains an economic issue (Moores, 2008). Individuals who earns a high income tend to use pirated software lesser than the individuals who earns a lower income (Wee et al.., 1995). Lamayem et al.., (2004) also backed this concept by stating that economic growth declines the piracy rate in a country; however some individuals might continue to use pirated software due to hobbits. Yang et al, (2009), also stressed that economic improvement tend to reduce the use of software piracy. 2.4.4.1 Top 10 high and low piracy rates Countries with high piracy rate % Countries with low piracy rate % Georgia 95 United States 20 Bangladesh 92 Japan 21 Armenia 92 Luxembourg 21 Zimbabwe 92 New Zealand 22 Sri Lanka 90 Austria 24 Azerbaijan 90 Belgium 25 Moldova 90 Denmark 25 Yemen 89 Sweden 25 Libya 87 Switzerland 25 Table 2.2: Top 10 High and Low piracy rate Source: BSA piracy report 2008 Moores (2008) in his study on â€Å"An Analysis of the impact of economic Wealth and National Culture on the rise and fall of software piracy rates† found out that Software Piracy Rate (SPR) in a country is related to its economic wellbeing and Individualism-collectivism (IDV) of a country. 2.4.5 Cost of original software At an individual level, the cost of original software is considered as prime factor that influences the decision of an individual to use pirated software or not (Cheng et al, 1997). Moores and Dhillion, (2000), Rawlinson et al, (2007,) in their research found out that most university students do not have much discretionary income with which to purchase original software, they also point out that reduction of the price of the original software will reduce the software piracy rate. Studies conducted by many researchers in the subject of software piracy identifies that financial gain that an individual gets from using pirated software is the most common reason to use pirated software (Cheng et al..,1997, Moores and Dhillion, 2000; Traphagan Griffith, 1998; Wee et al.., 1995). According to Al-Rafee and Cronan (2006) many users believed that original softwares are overpriced, this concept was also supported by the studies conducted by Albert-Miller (1999);Block et al.., (1993); Cheng et al.., (1997). 2.4.6 Software piracy in an ethical context Banerjee et al.., (1998,) developed a research framework based on the Theory of Planned Behavior (TPB) to model the ethical behavior intentions of Information system (IS) professionals and found that individual and situational characteristics do influence ethical behavior intentions. Loch and Conger (1996) in their study found that attitude and social norms play an important role in ethical decision making situation which can be related to the use of pirated software. Researches done on the subject of software piracy found that software piracy was a normative and accepted behavior, (Cohen and Cornwell 1989), and many individuals do not consider software piracy as a moral issue and use of pirated software is widely common among the business students (Soloman and OBrien 1990) Simpson et al.., (1994,) examined factors influencing softlifting, and identified five factors that influence and individuals decision making process, they are, stimulus to act, socio- cultural factors, legal factors, personal factors, situational factors. They found out that personal and situational factor influence the softlifting behavior. Thong and Yap .., (1998,) also attempted to explain soft lifting behavior using ethical decision making theory (the theory suggest that individuals are influence by deontological[1]F and teleological[2]F consequences of behavior) study showed both were found to influence the decision to use pirated software. Peace et al.., (2003,) generated a software piracy model using Theory of Planned behavior (TPB) as a framework to explain the intention to use pirated software. The study concluded that attitude (which is affected by the cost of original software, punishment severity and punishment certainty), subjective norms and perceived behavioral control were found to be significant factors that influence the intention of and individual to use pirated software. Zhang et al.., 2009 used the general theory of crime and deterrence theory to explain behavior that leads to digital piracy and they found out that only risk taking and punishment certainty leads to digital piracy. Simpson et al.., (1994,) found out that, Academic institutions are increasingly including ethical education in their curriculum. However many studies done on software piracy suggest that ethical education in academic institution had no or minimal effect on the intention of the students to use pirated software (Simpson et al.., 1994; Taylor and Shim.., 1993). Even though, individuals who felt a moral obligation or guilt towards software piracy have less intention to use pirated software (Cronan and Al-Rafee.., 2007). Logsdon et al.., (1994) and Al-Rafee and Cronan (2006) in their studies tested the assumption that individuals with higher level of moral development, are less likely to use pirated software, however they did not find a strong relationship between level of moral judgment and attitude towards using software piracy. The researchers also warn the software developers that even individuals with higher moral reasoning may engage in software piracy. Its believed that culture of a country influences the development of an individuals moral judgment and on understanding of moral intensity regarding software piracy. Christensen and Eining (1990) indicated that individual do not see piracy as inappropriate behavior and they do not believe their friends and superiors believe its inappropriate behavior. Researches concludes that use of pirated softwares in colleges and universities are more common than the general public (Kini et al, 2004). A study conducted by Taylor and Shim (1993) found out that professors use pirated softwares more than business executives. With a sample size of 243 college students , Kuo and Hsu (2001) conducted a research based on Banduras social cognitive theory (Bandura, 1982) and they discovered that self-efficacy was an important element in software piracy, subject with higher self-efficacy were more likely to engage in piracy. The famous psychologist Albert Bandura defines self-efficacy as â€Å"over belief in our ability to succeed in a specific situation†. Kini et al (2004) studied the cultural differences between the students of United States and Thailand in relation to software piracy, and they found out that students of United States has higher moral understanding towards software piracy compare to the students in Thailand. Swinyard et al (1990) in their research suggested that Asians have a more casual attitude towards software piracy than Americans, they are more likely to copy or buy software and less likely to criticize anyone who uses pirated software. Ferrell and Gresham (1985) emphasized the importance of peer group working supervisors in affecting ethical behavior. Christensen and Eining (1991), identified that the decision to use pirated software are influenced by the attitudes of friends and organization, these researchers also indicated that students do not perceive software piracy as inappropriate since they also believe their friends and superiors share this same view. 2.4.7 Problem of software piracy Softwares were the first product thats copied electronically in a large scale (Swinyard et al.., 1990). According to Yang, (2009) software piracy is a huge problem for policy makers and consumers alike, due to the uncertainty involving cross border conflicts, business losses and consumer exposing to virus and different kind of identity theft. McDonald and Roberts (1994) also considered software piracy as a very serious problem though out the world and the reason that it has become so hard to deal with this problem is the easiness in duplicating a copyrighted product. Tang and Farn (2005) concluded that supply to the pirated software will exists as long as there is a demand for pirated software, enforcement of laws and regulation and awareness programs may minimize the piracy rates, but it will not stop people from using pirated software. 2.4.8 Software piracy from a different angle Researchers who try to take the use of software piracy positively suggests that, software piracy can be seen as a form of product sampling, and that sampling can aid in the diffusion of a good (Gupta et al, 2004).As per Mahajan and Muller 1995, the success of excel over lotus 1, 2, and 3 was due to the high tolerance level towards software piracy. Givon et al, (1995), in their paper, â€Å"Software Piracy: Estimation of lost sales and impact on software diffusion† used a diffusion modeling approach to estimate the sale of software piracy, and they concluded software piracy creates shadow diffusion of the software same as the diffusion of original software in the market, the shadow diffusion is a major influential factor on the diffusion of the original software. They argue that the sellers of the pirated softwares may influence the potential buyers to adopt the pirated software, and some of these adopters might even purchase the original software. However, Solomon and OBrien.., (1990,) had a different view; they think software piracy will de-motivate the software developers to bring quality products to the market. Also the consumers have to pay a higher price to use original software; because the price of the legitimate software is inflated in order to make up to the loss of revenue from software piracy (Eining and christensen.., 1991; Taylor and Shim, 1993,). In the fight against software piracy, Germany has started enforcing a charge on every CD burner that is sold to compensate the loss of revenue due to piracy (Cronan and Al-Rafee.., 2007,) 2. 5 Models used in literatures of software piracy In this section, previous research models are discussed in order to explain software piracy. Five models related to software piracy will be examined here, as shown below. 2.5.2 Tim Goles et al Model Tim Goles et al.., 2007 proposed a model to identify the intention to softlift, their model is shown below: The model shows that there is a significant positive relationship between Perceived usefulness, past behavior, technical personal identity, and risk taking personal identity towards attitude to softlift. And negative relation between awareness of the law, moral personal obligation, and legal personal identity towards attitude to softlift. Furthermore the past behavior and attitude towards softlifting has a positive relation with the persons intention