The Failures of Communism - Free Essay Example

Sample details Pages: 4 Words: 1198 Downloads: 6 Date added: 2019/03/18 Category Analytics Essay Level High school Tags: Failure Essay Did you like this example? Communism is a terrible ideology that prevents the deserved freedoms of those living under that countrys rule, leaving behind distressed civilians and a corrupt sovereignty. The word is originated from comun in the French language, meaning common, or community. Communism comes in different forms, whether it is just a mere social label or a pure following of certain degrees; however any form is mutually unhealthy. Don’t waste time! Our writers will create an original "The Failures of Communism" essay for you Create order The leading source of distress within a communistic state or nation is due to the belief that economic equality a valuable idea and is properly achieved through the abolishment of private properties. This would mean a man could be legally allowed to enter another mans house without his prior consent. That eliminates all consideration of privacy an individual may want. The elimination of private properties is one of many heavily established bits of the Communistic studies. This comes from the Communist Manifesto, written by Karl Marx and Frederick Engels in early 1848. In the Communist Manifesto text, authors Karl Marx and Frederick Engels both imply the means and goals of Communism. With what they wrote, they did not have quite an idea as to how much their book would affect the world. Creativity is valued amongst many people from all sorts of social rankings. This is not quite the case for a government based on the principals of Communism. Being a nation formed on the requirement of repeating your daily steps for your communistic model, needs all attention diverted on the forced economy. This repeated economical schedule demands nothing but absolute copies of everything, not allowing for a change in ones routine. A change in an individuals routine is considered at its core to be creativity, a symbol of humanly design. The model of Communism forces a symbol of automated design, set apart from human instinct and creativity. A cause of such forcible repeating within a nation is the direct limitation or dissolving of the rights to which a human should be entitled. In the Communist Manifesto, Karl Marx states ten different ways to oppress the people into redistributing everything they own. This would be considered a community share, which means you can take whatever yo u want from anybody and they are required to give everything they make to the community. When a man is forced to collect and give unwillingly, that is immediate oppression and a way of showing how that individual has no rights. With the never-ending policy fulfillments of Communism, the government ensures a good communistic figure is always placed into office. There is no room for anything to exist except for rotten, untainted corruption. The people often follow in this poor example, being corrupt themselves. An example of this would be briberies of any sort. If wanted, a parent could bribe their childs teacher into giving their student better grades. There is a social ladder for what is legal as well. While your average bureaucrats have a relatively low salary for work, it is legal for them to money from briberies, often involving a violent act of some sort as the leverage. All of corruption may be started by one corrupt individual. For example, in 1921, Romanias government had been overrun by Communism. This ruined the economy for Romania and the health of civilians. In 1965, the people of Romania had believed to rid the nation of its Communist ways, soon electing a new president into office. The presiden ts name was Nicolae Ceau?â„ ¢escu, who seemed to have brilliant ideas of running the country at first. This all turned out to be false however, as he oppressed the Romanians more than they had ever been. One day in 1989, the corrupt president and his wife were executed by the civilians in what was called the Romanian Revolution. Corruption under Communism leads to crime, which ends in death and destruction. In a Communist country, you need to always be careful about what you say; or it may cost you your life. In some cases, you may be told by a government official to spy on one of your friends and report back to the officer. If you lie to the officer in an attempt to save your friend, both parties may be killed by the acting officer. If you tell the truth as to what your friend or target is doing, your chances of living are much higher. To avoid making enemies is the best idea you can have, because your enemy could report you for falsefully saying you despise the government. There is no right to a lawyer or to try making a court appeal, the government is the court, and you are always guilty. Under communism, the state makes the rules. Unfortunately, every state follows the model for Communism, some states are worse than others though. This includes having no rights to any private property, no freedom of religion, or any religion for that matter, and many other humanly-restricting laws. This may seem like a God-awful situation any civilian may face, but what if a citizen was to somehow leave that county? It may seem like it would be the end of all issues as an individual, but it in all realization is a very difficult objective to carry out. Firstly, if you were to make it to the border or tell any of your friends about you leaving the country, an official may be listening and report you. Severe punishments or lifetime imprisonment would be the result of an attempted escape going awry. It can also be difficult to leave the country for there is always border patrol seeking to arrest anyone trying to leave. If you do however manage to escape to another country, the chances are that your neighboring country is a Communist nation as well. This is what made it so difficult to flee a Communist country during the Cold War in Eastern Europe, every neighboring country was under the same rule you were forced to endure. The Soviet Union in Russia was especially brutal for this idea this during the Cold War. The bureaucracy would often beat anyone to death that they believed was an attempting refugee, even without asking them questions many times. If you successfully escape to a non-communistic country and ever return home, you will most likely be killed or thrown in prison for life. For all of the provided reasons, Communism has been shown to have no valuable forms. Whether you may be facing anything above adversity, negative affects internally, not having a chance to express creativity, not having any rights, consistently viewing corruption in its raw form, and fearing for your life as your friends may turn their backs on you and foes may report you, the importance is found in seeing how negative of an affect Communism delivers. Everybody deserves freedom, yet not everybody earns them either. There is no way of earing freedom, we are just given it sometimes, and often take it for granted. Communism is a horrific ideology which limits the freedoms humans should have while under that nations reign. Communism has failed in Russia, Romania, and many other countries, which leaves behind certain unwanted aftermaths. Communism will always fail, because it never worked in the first place.

Human Trafficking And Its Effects On Society - 1206 Words

Human rights are something that everyone receives as soon as they are born in the world. These rights are given to everyone just for simply living on the earth no matter their race, sex, religion, or ethnicity. When someone tries to take one of those rights away it is called a human rights violation. A right that is interesting is the Right to Freedom. Something that violates the Right to Freedom is human trafficking, which also violates the 13th Amendment which abolished slavery in 1865, with the help of Abraham Lincoln. Human trafficking can be used for many different things such as torture, forced labor, sexual diminuendos, organ removal and debt bondage, all of these resulting in the profit of money. The use of humans for money is†¦show more content†¦The image is in black and white like a barcode is. The people in the image are of various ages because people who are trafficked usually have different values depending on their age and/or condition. The quote that is on th e image states, â€Å"Each year, thousands of women and girls, men and boys are trafficked in this country and around the world† (Hudson, et. al). This quote on the image is from the All We Want is Love website, which is all about the protection of people and fighting things like human trafficking. The only visible figurative language, is that everyone is just a number and a statistic. This is because if you look at the image, they all have a different number barcode and sku. This is because no two people are alike, so the people used in trafficking will never have the same number, so they are just another number with a face in the twisted system of human trafficking. Seeing these images can let people think about what they could do if they see someone in a situation like this, do they walk away and do nothing or do they stop and report it? The use of pathos in this image helps make the image’s message effective because it wants people to see that everyone is a human being, but to others, they are just an item with a price tag for sale. Although less effective than pathos, logos is another rhetorical appeal used in this image. It is used by giving the rough number of how many people are used for

Study Of Behavioral Finance A Project Report Batch Free Essays

STUDY OF BEHAVIORAL FINANCE A PROJECT REPORT BATCH: 2010-12 To Dr. Sampada Kapse Program Co-ordinator (PGDM) In partial fulfillment of the requirements of Tolani Institute of Management Studies, Adipur For the award of the degree of Post Graduate Diploma in Management [pic] Tolani Institute of Management Studies PB No. 11, LilashahKutiya Road, Adipur – 370 205 (Kachchh). We will write a custom essay sample on Study Of Behavioral Finance A Project Report Batch or any similar topic only for you Order Now Ph: (02836) 261466, 262187 Email: tims@tolani. org, www. tolani. org/tims JUNE 2011 acknowledgement With deep respect and immense gratitude, we express our profound sense of thanks to DR. SAMPADA S. KAPSE OF TOLANI INSTITUTE OF MANAGEMENT STUDIES ADIPUR for her supportive role and guidance, who give her precious time, thanking special interest in our final project. Secondly, we thank all the professors of TOLANI INSTITUTE OF MANAGEMENT STUDIES ADIPUR for their support and co-operation during our project. Thirdly, we thank all investors of Bhuj and Adipur who filled our long questionnaire and also who directly or indirectly helped at the time of need. – Sachin Abda -Pratik Chothani DECLARATION We Sachin Abda Pratik Chothani, the student of M. B. A. 6TH Trimester TIMS (TOLANI INSTITUTE OF MANAGEMENT STUDIES) hereby declare that the Project Report on â€Å"Behavioral Finance† Is our original work and has not been submitted by any other person. We also declare that We have done our work sincerely and accurately even then if any mistake or error had kept in, We request to the readers to point out these errors and guide us to remove theses errors in future. – Sachin Abda -Pratik Chothani EXECUTIVE SUMMARY Basically we were interested in stock market and we have read some theories related to stock market but never understand that why people take irrational decision when coming to real situations. They speak in a different way and act in a different way. So we were curious to know the answers of this question. In our 4th trimester we come to know about the theory from Internet so we thought it might be interesting and may be helpful to answer our question. Behavioral finance is an emerging field. Many things have researched but still it is new, different types of behavior have been studied. In our project we have tried to understand theories, history and answers to our questions. We had also carried survey in Adipur and Bhuj to know how investors of bhuj and adipur react in different situation and how these various anomalies can be relate to them. one of main good reason for finalizing this project as per name suggest finance but it is very less related to balance sheet, accounting and figures . t is mainly related to pshcycology of investor. TABLE OF CONTENTS |Sr. No. |Contents Name |Page No | |1 |Introduction of behavioral finance |8 | |2 |Literature review |13 | |3 Objectives |38 | |4 |Methodology |39 | |5 |Findings analysis |40 | |6 |Conclusion |116 | |7 |Appendix |118 | |8 |Bibliography |156 | LIST OF FIGURE/CHART/IMAGE |Sr. No. Title of Figure/Chart |Page No | |1 |Analysis and finding related charts and tables |40 | |2 |Analysis and finding related charts and tables(In Appendix) |126 | Introduction of Behavioural Finance Behavioural finance is the study of the influence of psychology on the behaviour of financial practitioners and the subsequent effect on markets. Sewell (2005) ‘I think of behavioral finance as simply â€Å"open-minded finance†. ’Thaler (1993) ‘This area of enquiry is sometimes referred to as â€Å"behavioral finance,† but we call it â€Å"behavioral economics. † Behavioral economics combines the twin disciplines of psychology and economics to explain why and how people make seemimgly irrational or illogical decisions when they spend, invest, save, and borrow money. Belsky and Gilovich (1999) ‘This paper examines the case for major changes in the behavioral assumptions underlying economic models, based on apparent anomalies in financial economics. Arguments for such changes based on claims of â€Å"excess volatility† in stock prices appear flawed for two main reasons: there are serious questions whether the phenomenon exists in the first place and, even if it did exist, whether radical change in behavioral assumptions is the best avenue for current research. The paper also examines other apparent anomalies and suggests conditions under which such behavioral changes are more or less likely to be adopted. ’ Kleidon (1986) For most economists it is an article of faith that financial markets reach rational aggregate outcomes, despite the irrational behavior of some participants, since sophisticated players stande ready to capitalize on the mistakes of the naive. (This process, which we camm poaching, includes but is not limited to arbitrage. ) Yet financial markets have been subject to speculative fads, from Dutch tulip mania to junk bonds, and to occasional dramatic losses in value, such as occurred in October 1987, that are hard to interpret as rational. Descriptive decision theory, especially psychology (see D. Kahneman et al. , 1982), can help to e xplain such aberrant macrophenomena. Here we propose some behavioral explanations of overall market outcomes—specifically of financial flows, that are of considerable practical consequence to both policymakers and finance practitioners. ’Patel, Zeckhauser and Hendricks (1991) ‘Because psychology systematically explores human judgment, behavior, and well-being, it can teach us important facts about how humans differ from traditional economic assumptions. In this essay I discuss a selection of psychological findings relevant to economics. Standard economics assumes that each person has stable, well-defined preferences, and that she rationally maximizes those preferences. Section 2 considers what psychological research teaches us about the true form of preferences, allowing us to make economics more realistic within the rationalchoice framework. Section 3 reviews research on biases in judgment under uncertainty; because those biases lead people to make systematic errors in their attempts to maximize their preferences, this research poses a more radical challenge to the economics model. The array of psychological findings reviewed in Section 4 points to an even more radical critique of the economics model: Even if we are willing to modify our familiar assumptions about preferences, or allow that people make systematic errors in their attempts to maximize those preferences, it is sometimes misleading to conceptualize people as attempting to maximize well-defined, coherent, or stable preferences. ’Rabin (1996) ‘Market effciency survives the challenge from the literature on long-term return anomalies. Consistent with the market effciency hypothesis that the anomalies are chance results, apparent overreaction to information is about as common as underreaction, and post-event continuation of pre-event abnormal returns is about as frequent as post-event reversal. Most important, consistent with the market effciency prediction that apparent anomalies can be due to methodology, most long-term return anomalies tend to disappear with reasonable changes in technique. ’ Fama (1998) ‘Recent literature in empirical finance is surveyed in its relation to underlying behavioral principles, principles which come primarily from psychology, sociology and anthropology. The behavioral principles discussed are: prospect theory, regret and cognitive dissonance, anchoring, mental compartments, overconfidence, over- and underreaction, representativeness heuristic, the disjunction effect, gambling behavior and speculation, perceived irrelevance of history, magical thinking, quasimagical thinking, attention anomalies, the availability heuristic, culture and social contagion, and global culture. ’ Shiller (1998) ‘The field of modern financial economics assumes that people behave with extreme rationality, but they do not. Furthermore, people’s deviations from rationality are often systematic. Behavioral finance relaxes the traditional assumptions of financial economics by incorporating these observable, systematic, and very human departures from rationality into standard models of financial markets. We highlight two common mistakes investors make: excessive trading and the tendency to disproportionately hold on to losing investments whil e selling winners. We argue that these systematic biases have their origins in human psychology. The tendency for human beings to be overconfident causes the first bias in investors, and the human desire to avoid regret prompts the second. ’ Barber and Odean (1999) ‘Behavioral Economics is the combination of psychology and economics that investigates what happens in markets in which some of the agents display human limitations and complications. We begin with a preliminary question about relevance. Does some combination of market forces, learning and evolution render these human qualities irrelevant? No. Because of limits of arbitrage less than perfect agents survive and influence market outcomes. We then discuss three important ways in which humans deviate from the standard economic model. Bounded rationality reflects the limited cognitive abilities that constrain human problem solving. Bounded willpower captures the fact that people sometimes make choices that are not in their long-run interest. Bounded self-interest incorporates the comforting fact that humans are often willing to sacrifice their own interests to help others. We then illustrate how these concepts can be applied in two settings: finance and savings. Financial markets have greater arbitrage opportunities than other markets, so behavioral factors might be thought to be less important here, but we show that even here the limits of arbitrage create anomalies that the psychology of decision making helps explain. Since saving for retirement requires both complex calculations and willpower, behavioral factors are essential elements of any complete descriptive theory. ’ Mullainathan and Thaler (2000) ‘Behavioral finance is a rapidly growing area that deals with the influence of psychology on the behavior of financial practitioners. ’Shefrin (2000) ‘Behavioral finance is the application of psychology to financial behavior—the behavior of practitioners. ’Shefrin (2000) ‘Behavioral finance is the study of how psychology affects financial decision making and financial markets. ’Shefrin (2001) ‘Behavioral finance argues that some financial phenomena can plausibly be understood using models in which some agents are not fully rational. The field has two building blocks:  limits to arbitrage, which argues that it can be diffcult for rational traders to undo the dislocations caused by less rational traders; and  psychology, which catalogues the kinds of deviations from full rationality we might expect to see. We discuss these two topics, and then present a number of behavioral finance applications: to the aggregate stock market, to the cross-section of average returns, to individual trading behavior, and to corporate finance. We close by assessing progress in the field and speculating about its future course. ’ Barberis and Thaler (2001) ‘This essay provides a perspective on the trend towards integrating psychology into economics. Some topics are discussed, and arguments are provided for why movement towards greater psychological realism in economics will improve mainstream economics. ’ Rabin (2001) ‘The basic paradigm of asset pricing is in vibrant flux. The purely rational approach is being subsumed by a broader approach based upon the psychology of investors. In this approach, security expected returns are determined by both risk and misvaluation. This survey sketches a framework for understanding decision biases, evaluates the a priori arguments and the capital market evidence bearing on the importance of investor psychology for security prices, and reviews recent models. ’ Hirshleifer (2001) Behavioral finance  and  behavioral economics  are closely related fields which apply scientific research on human and social cognitive and emotional biases to better understand economic decisions and how they affect market prices, returns and the allocation of resources. ’ Literature Review (1)Title: Testing Behavioral Finance Theories Using Trends and Sequences in Financial Performance Author: Wesley S. Chan, Richard Frankel and S. P. Kothari Objective: to examine a central psychological bias, representativeness, which underlies many behavioral-finance theories? According to this bias, individuals form predictions about future outcomes based on how closely past outcomes fit certain categories Methodology: Secondary Data Conclusion: Overall, these results suggest that multi-month momentum and long-term reversal are not due investors’ mental biases as modeled in the behavioral theories and/or the maintained hypothesis of limited arbitrage is not descriptive. Our results suggest pricing is not as if investors extrapolate firms’ growth rates too far into the future. Nor do investors seem to under react to incipient trends in performance. All of these conclusions cast doubt on the representativeness heuristic-based theories of behavioral finance. One could conclude that representativeness has no place in describing stock return behavior (and also perhaps investor behavior). However, the predictability of returns documented in the literature remains an interesting and problematic phenomenon potentially at odds with market efficiency. Investors may think in categories, but using current theory as our guide, we are unable to the stock price implications predicted in those theories. Alternatively, we failed to identify the correct categories, metrics, or horizons necessary to document the consequences of behavioral information processing biases. Our evidence poses a challenge to behavioral finance theories and therefore researchers should consider refining their models to guide further empirical work. (2) Title: Lessons from Behavioral Finance for Retirement Plan Design Author: Olivia Mitchell and Stephen Utkus Objective: to evaluate some of the key lessons of behavioral economics and finance research over the last decade for pension plan design Methodology: Secondary Data Conclusion: by outlining plan design alternatives that would be of use to plan sponsors and policymakers seeking to design more cost-effective and efficient retirement plans for the future. (3) Title: Risk Perception Primer: A Narrative Research Review of the Risk Perception Literature in Behavioral Accounting and Behavioral Finance Author: Victor Ricciardi Objective: to provides an overview of the concepts of risk, perception, and risk perception To present concept of behavioral finance and themes that might influence an individual’. s perception of risk for different types of financial services Methodology:Secondary Data Conclusion: author has developed a structured approach known as the Statistically Significant Method for Risk Perception Studies With the utilization of an 18-step process from the Statistically Significant Method for Risk Perception Studies has resulted in the development of 6 financial risk indicators based on 15 proxy risk measurements from accounting, finance, and investments The 6 financial risk indicators are (1) A company’s balance sheet liquidity (2) The financial condition (health) of the firm (3) The degree of volatility (4) The concern for downside risk in percentage term (5) The significance of earnings (6) The expected investment performance for the stock. The selection of the 6 behavioral risk characteristics and the 5 decision-making Attributes was based on the narrative review of the 17 works from the risk perception studies in Psychology associated with hazardous activities. The 6 psychological risk indicators are: (1) The role of affect or feelings, (2) The influence of worry, (3) The notion of perceived control, (4) The significance of expert knowledge, (5) The issues of overconfidence, (6) The concern or potential losses in dollar terms. The 5 judgment attributes are: (1) The role of familiarity, (2) The overall perceived riskiness of a stock, (3) The overall perceived return of a stock, (4) The significance of the investment time horizon (short-term vs. ong run), (5) The likelihood of investing in the stock. Title: A Research Starting Point for the New Scholar: A Unique Perspective of Behavioral Finance Author: Victor Ricciardi Objective: to provide an extensive catalog of the concepts, and books by behavioral finance which inv estigates the cognitive factors and emotional issues those individuals, financial experts, and traders exhibit within the securities markets. Methodology: Secondary Data Conclusion: Although modern finance has been the established theory of academics since the 1960s, the discipline of behavioral finance offers a new point of view of finance and investments for the new research scholar. In the early to mid-1990s, the literature on behavioral finance that began to emerge challenged many of the assumptions and theories of standard finance. The foundation for this body of work was created from earlier research by behavioralists during the decades of the 1960s and 1970s particularly from their dissertation work. The new behavioral finance researcher should appreciate that the discipline is based on the notion of an interdisciplinary perspective that incorporates the philosophies from the social sciences and business fields. (4) Title: Behavioral Finance and Retirement Plan Contributions: How Participants Behave, and Prescriptive Solutions Author: by Jodi DiCenzo Objective: to offer new retirement plan design alternatives and empirically tested their efficacy in overcoming identified suboptimal behavior Methodology: Secondary Data Conclusion: Behavioral research has made important, relevant contributions to retirement saving and investing. This work has cast a new light on participant behavior and its underpinnings: By and large, individuals are inert—with good intentions, poor follow-through, and bounded rationality. Loss aversion and decision-making biases often lead to unfortunate outcomes, including a poorly funded retirement. Further, behavioral economists have demonstrated that education and communication programs alone may not be effective in changing behavior. Instead, with their behavioral insights, they have offered new retirement plan design alternatives and empirically tested their efficacy in overcoming identified suboptimal behavior. These efforts are helping to pave a path of least resistance that should lead to greater retirement security. (5) Title: A SURVEY OF BEHAVIORAL FINANCE Author: Othmar M. Lehner Objective: present a survey of this huge, vastly expanding field of research by summarizing working papers recently published at the â€Å"National Bureau of Economic Research† Methodology: Secondary Data Conclusion: Many of the studies presented above show evidence that, although the EMH in principle works, there are many factors that have been left out of consideration, like for example costs and risks. Especially when it comes to arbitrage, this is very seldom a guaranteed profit, as the EMH would propose, but rather almost all real world arbitrage activity is risky, with the expected profit highly relative to the risk involved. So without a suitable tool to reverse irrational trading, mispricing will be able to occur and more important – persist for quite long time-spans. (6) Title: Cognitive biases and instability of preferences in the portfoliochoices of retail investors Policy implications of behavioral finance Author: R. Linciano Objective: to stimulate debate on the behavioral analysis of the abovementioned policy issues, in order to strengthen the efficiency of instruments made available to investors to understand the characteristics of financial products. Methodology: Secondary Data Conclusion: Financial market regulation is based on the classical theoretical paradigm of individual rationality, which requires, among other things, that investment choices be made after acquiring and processing all the available information, on the basis of pre-existent, stable and Consistent preferences and by using a cognitive process of utility maximization. This theoretical apparatus underpin the measures enacted for investor’s protection, based on rules of conduct and on very detailed disclosure obligations which the issuers offinancial products and brokers have to apply so that investors can decide on an informed basis. Moreover, when advising on investments or portfolio management, intermediaries are obliged to acquire from the investors the required information on knowledge and xperiences on investments, financial situation and objectives of investment in order to be able to recommend suitable products. However, individuals do not act rationally, nor do they seem abl e to acquire and correctly process the available information. Vice versa, when choosing under uncertainty, they seem inclined to apply rules of thumb that allow simplifying problems. Moreover, preferences do not appear stable and well-defined, since they may change depending on whether prospects of loss or gains prevail and according to the presentation format. These factors lead to systematic evaluation errors as well as violations of the assumption of rationality. (7) Title: NBER WORKING PAPER SERIES: A SURVEY OF BEHAVIORAL FINANCE Author: Nicholas Barberis,Richard Thaler Objective: to discuss these two topics, and then present a number of behavioral finance applications: to the aggregate stock market, to the cross-section of average returns, to individual trading behavior, and to corporate finance Methodology: Secondary Data Conclusion: most of the empirical facts are agreed upon by most of the profession, although the interpretation of those facts is still in dispute. Limits of arbitrage can permit substantial mispricing. Also the absence of a profitable investment strategy, because of risks and costs doesn’t imply the absence of mispricing. UNDERSTANDING BOUNDED RATIONALITY: Models of bounded rationality are both possible and also much more accurate descriptions of behavior than purely rational model. (8) Title: What explains the market: finance theories or psychology? Author: Sampada Kapse, Mamta Keswani Objective: To understand investor’s behavior while investing in stock market and to find out the behavioral influences ,on the investment decisions of retail individual investors in the Indian stock market Methodology: This is empirical research arguing mainly on two parameters 🙠 1) anomalies in the stock market and (2) analysis of the human behavior while investing in stock market. The tool used for this is survey and the instrument was questionnaire. Conclusion: The application of behavioral finance is still to explore like how can an investor beat the market and can make the money. It tell us that psychology causes market prices and fundamental values to diverge for a long time and can help investors train themselves how to be watchful of their behavior and, in turn, avoid mistakes that will decrease their behavior personal wealth. Behavioral finance does give insights relating to the investor decision making process. However, its utility as an investment tool is yet to be proved. (9) Title: Factors Influencing Individual Investor Behavior: An Empirical study of the UAE Financial Markets Author: Hussein A. Hassan Al-Tamimi Objective: This paper aims at identifying the most and the least influencing factors on the UAE Investor behavior. Methodology: In order to get responses on the research questions, 350 questionnaires were Randomly distributed to 350 individual investors in both Dubai Financial Market and Abu Dhabi Securities Market. Conclusion: The main findings: (i) accounting information or the classical wealth–maximization criteria is the most influencing group on the UAE investor behavior; (ii) neutral information is the least influencing group on the UAE investor behavior; (iii) two factors unexpectedly had the least influence on the behavior of the UAE investors’ behavior, namely religious reasons and the factor of family member opinions. (10) Title: Behavioral finance and the change of investor behavior during and after the speculative bubble at the end of the 1990s Author: Malena Johnsson,Henrik Lindblom,Peter Platan Objective: to conduct a research on how private as well as institutional investors have changed their investment behavior and human judgment as a consequence of the speculative bubble during the period from fall 1998 to march 2000. To establish what factors lies behind the speculative bubble and further investigate whether the investment objectives and factors influencing decision making are different today than speculative bubble. Methodology: To achieve purpose they had apply a quantitative as well as qualitative method. Quantitative method to refer questionnaire form. Qualitative method is implemented through their attempt to describe the reasons and existence of the speculative bubble during the end of 1990’s with the help of existing theories. Conclusion: the result obtained suggests that the behavior of market participants during the speculative bubble was to some extent irrational and that the composition of investments has changed as consequences of speculative bubble. However company’s information considered as the least significant reason for overvaluation of the market. After speculative bubble information from companies gain importance for both group especial institutional investor. This indicate that increase in importance of fundamental data and valuations today than during the speculative bubble when intuition and other more vogue valuation method seem to have influenced more. Theory of Behavioral Finance Definition of ‘Efficient Market Hypothesis – EMH’ An investment theory that states it is impossible to â€Å"beat the market† because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information. According to the EMH, stocks always trade at their fair value on stock exchanges, making it impossible for investors to either purchase undervalued stocks or sell stocks for inflated prices. As such, it should be  impossible to outperform the overall market through expert stock selection or market timing, and that the only way an investor can possibly obtain higher returns is by purchasing riskier investments Theory of Behavioral finance Key Concept No. 1. Anchoring Similar to how a house should be built upon a good, solid foundation, our ideas and opinions Should also be based on relevant and correct facts in order to be considered valid. However, this is not always so. The concept of  anchoring  draws on the tendency to attach or â€Å"anchor† our thoughts to a reference point – even though it may have no logical relevance to the decision at hand. Although it may seem an unlikely phenomenon, anchoring is fairly prevalent in situations where people are dealing with concepts that are new and novel. A Diamond Anchor Consider this classic example: Conventional wisdom dictates that a diamond engagement ring should cost around two months’ worth of salary. Believe it or not, this â€Å"standard† is one of the most illogical examples of anchoring. While spending two months worth of salary can serve as a benchmark, it is a completely irrelevant reference point created by the jewelry industry to maximize profits, and not a valuation of love. Many men can’t afford to devote two months of salary towards a ring while paying for living expenses. Consequently, many go into debt in order to meet the â€Å"standard†. In many cases, the â€Å"diamond anchor† will live up to its name, as the prospective groom struggles to keep his head above water in a sea of mounting debt. Although the amount spent on an engagement ring should be dictated by what a person can afford, many men illogically anchor their decision to the two-month standard. Because buying jewelry is a â€Å"novel† experience for many men, they are more likely to purchase something that is around the â€Å"standard†, despite the expense. This is the power of anchoring. Academic Evidence admittedly, the two-month standard used in the previous example does sound relatively plausible. However, academic studies have shown the anchoring effect to be so strong that it still occurs in situations where the anchor is absolutely random. Investment Anchoring Anchoring can also be a source of frustration in the financial world, as investors base their decisions on irrelevant figures and statistics. For example, some investors invest in the stocks of companies that have fallen considerably in a very short amount of time. In this case, the investor is anchoring on a recent â€Å"high† that the stock has achieved and consequently believes that the drop in price provides an opportunity to buy the stock at a discount. Anchoring While, it is true that the fickleness of the overall market can cause some stocks to drop substantially in value, allowing investors to take advantage of this short- term volatility. However, stocks quite often also decline in value due to changes in their underlying fundamentals. For instance, suppose that XYZ stock had very strong revenue in the last year, causing its share price to shoot up from $25 to $80. Unfortunately, one of the company’s major customers, who contributed to 50% of XYZ’s revenue, had decided not to renew its purchasing agreement with XYZ. This change of events causes a drop in XYZ’s share price from $80 to $40. By anchoring to the previous high of $80 and the current price of $40, the investor erroneously believes that XYZ is undervalued. Keep in mind that XYZ is not being sold at a discount, instead the drop in share value is attributed to a change to XYZ’s fundamentals (loss of revenue from a big customer). In this example, the investor has fallen prey to the dangers of anchoring. AvoidingAnchoring When it comes to avoiding anchoring, 1. There’s no substitute for rigorous critical thinking. Be especially careful about which figures you use to evaluate a stock’s potential. 2. Successful investors don’t just base their decisions on one or two benchmarks, they evaluate each company from a variety of perspectives in order to derive the truest picture of the investment landscape. 3. For novice investors especially, it’s never a bad idea to seek out other perspectives. Listening to a few â€Å"devil’s advocates† could identify incorrect benchmarks that are causing your strategy to fail. Key Concept No. 2: Mental Accounting Mental accounting  refers to the tendency for people to separate their money into separate accounts based on a variety of subjective criteria, like the source of the money and intent for each account . According to the theory, individuals assign different functions to each asset group, which has an often irrational and detrimental effect on their consumption decisions and other behaviors. Although many people use mental accounting, they may not realize how illogical this line of thinking really is. For example, people often have a special â€Å"money jar† or fund set aside for a vacation or a new home, while still carrying substantial credit card debt. In this example, money in the special fund is being treated differently from the money that the same person is using to pay down his or her debt, despite the fact that diverting funds from debt repayment increases interest payments and reduces the person’s net worth. Simply put, it’s illogical (and detrimental) to have savings in a jar earning little to no interest while carrying credit-card debt accruing at 20% annually. In this case, rather than saving for a holiday, the most logical course of action would be to use the funds in the jar (and any other available monies) to pay off the expensive debt. This seems simple enough, but why don’t people behave this way? The answer lies with the personal value that people place on particular assets. For instance, people may feel that money saved for a new house or their children’s college fund is too â€Å"important† to relinquish. As a result, this â€Å"important† account may not be touched at all, even if doing so would provide added financial benefit. The Different Accounts Dilemma To illustrate the importance of different accounts as it relates to mental accounting, consider this real-life example: You have recently subjected yourself to a weekly lunch budget and are going to purchase a $6 sandwich for lunch. As you are waiting in line, one of the following things occurs: 1) You find that you have a hole in your pocket and have lost $6; or 2) You buy the sandwich, but as you plan to take a bite, you stumble and your delicious sandwich ends up on the floor. In either case (assuming you still have enough money), would you buy another sandwich? (To read more, see The Beauty Of Budgeting. ) Logically speaking, your answer in both scenarios should be the same; the dilemma is whether you should spend $6 for a sandwich. However, because of the mental accounting bias, this isn’t so. Because of the mental accounting bias, most people in the first scenario wouldn’t consider the lost money to be part of their lunch budget because the money had not yet been spent or allocated to that account. Consequently, they’d be more likely to buy another sandwich, whereas in the second scenario, the money had already been spent. Different Source, Different Purpose Another aspect of mental accounting is that people also treat money differently depending on its source. For example, people tend to spend a lot more â€Å"found† money, such as tax returns and work bonuses and gifts, compared to a similar amount of money that is normally expected, such as from their paychecks. This represents another instance of how mental accounting can cause illogical use of money. Logically speaking, money should be interchangeable, regardless of its origin. Treating money differently because it comes from a different source violates that logical premise. Where the money came from should not be a factor in how much of it you spend – regardless of the money’s source, spending it will represent a drop in your overall wealth. Mental Accounting In Investing The mental accounting bias also enters into investing. For example, some investors divide their investments between a safe investment portfolio and a speculative portfolio in order to prevent the negative returns that speculative investments may have from affecting the entire portfolio. The problem with such a practice is that despite all the work and money that the investor spends to separate the portfolio, his net wealth will be no different than if he had held one larger portfolio. Avoiding Mental Accounting The key point to consider for mental accounting is that money is fungible; regardless of its origins or intended use, all money is the same. You can cut down on frivolous spending of â€Å"found† money, by realizing that â€Å"found† money is no different than money that you earned by working. As an extension of money being fungible, realize that saving money in a low- or no-interest account is fruitless if you still have outstanding debt. In most cases, the interest on your debt will erode any interest that you can earn in most savings accounts. While having savings is important, sometimes it makes more sense to forgo your savings in order to pay off debt. Key Concept No. 3: Confirmation and Hindsight Biases Confirmation Bias It can be difficult to encounter something or someone without having a preconceived opinion. This first impression can be hard to shake because people also tend to selectively filter and pay more attention to information that supports their opinions, while ignoring or rationalizing the rest. This type of selective thinking is often referred to as the confirmation bias. In investing, the confirmation bias suggests that an investor would be more likely to look for information that supports his or her original idea about an investment rather than seek out information that contradicts it. As a result, this bias can often result in faulty decision making because one-sided information tends to skew an investor’s frame of reference, leaving them with an incomplete picture of the situation. Consider, for example, an investor that hears about a hot stock from an unverified source and is intrigued by the potential returns. That investor might choose to research the stock in order to â€Å"prove† its touted potential is real. What ends up happening is that the investor finds all sorts of green flags about the investment (such as growing cash flow or a low debt/equity ratio), while glossing over financially disastrous red flags, such as loss of critical customers or dwindling markets. Hindsight Bias where a person believes (after the fact) that the onset of some past event was predictable and completely obvious, whereas in fact, the event could not have been reasonably predicte For example, many people now claim that signs of the technology bubble of the late 1990s and early 2000s were very obvious. This is a clear example of hindsight bias: If the formation of a bubble had been obvious at the time, it probably wouldn’t have escalated and eventually burst. For investors and other participants in the financial world, the hindsight bias is a cause for one of the most potentially dangerous mindsets that an investor or trader can have: overconfidence. In this case, overconfidence refers to investors’ or traders’ unfounded belief that they possess superior stock-picking abilities. Avoiding Confirmation Bias Confirmation bias represents a tendency for us to focus on information that confirms some pre-existing thought. Part of the problem with confirmation bias is that being aware of it isn’t good enough to prevent you from doing it. One solution to overcoming this bias would be finding someone to act as a â€Å"dissenting voice of reason†. That way you’ll be confronted with a contrary viewpoint to examine. Key Concept No. 4: Gambler’s Fallacy In the gambler’s fallacy, an individual erroneously believes that the onset of a certain random event is less likely to happen following an event or a series of events. This line of thinking is incorrect because past events do not change the probability that certain events will occur in the future. For example, consider a series of 20 coin flips that have all landed with the â€Å"heads† side up. Under the gambler’s fallacy, a person might predict that the next coin flip is more likely to land with the â€Å"tails† side up. This line of thinking represents an inaccurate understanding of probability because the likelihood of a fair coin turning up heads is always 50%. Each coin flip is an independent event, which means that any and all previous flips have no bearing on future flips. Another common example of the gambler’s fallacy can be found with people’s relationship with slot machines. We’ve all heard about people who situate themselves at a single machine for hours at a time. Most of these people believe that every losing pull will bring them that much closer to the jackpot. What these gamblers don’t realize is that due to the way the machines are programmed, the odds of winning a jackpot from a slot machine are equal with every pull (just like flipping a coin), so it doesn’t matter if you play with a machine that just hit the jackpot or one that hasn’t recently paid out. Gambler’s Fallacy In Investing It’s not hard to imagine that under certain circumstances, investors or traders can easily fall prey to the gambler’s fallacy. For example, some investors believe that they should liquidate a position after it has gone up in a series of subsequent trading sessions because they don’t believe that the position is likely to continue going up. Conversely, other investors might hold on to a stock that has fallen in multiple sessions because they view further declines as â€Å"improbable†. Just because a stock has gone up on six consecutive trading sessions does not mean that it is less likely to go up on during the next session. Avoiding Gambler’s Fallacy With the amount of noise inherent in the stock market, the same logic applies: Buying a stock because you believe that the prolonged trend is likely to reverse at any second is irrational. 1. Investors should instead base their decisions on fundamental and/or technical analysis before determining what will happen to a trend. Key Concept No. 5: Herd Behavior One of the most infamous financial events in recent memory would be the bursting of the internet bubble. However, this wasn’t the first time that events like this have happened in the markets. How could something so catastrophic be allowed to happen over and over again? The answer to this question can be found in what some people believe to be a hardwired human attribute: herd behavior, which is the tendency for individuals to mimic the actions (rational or irrational) of a larger group. Individually, however, most people would not necessarily make the same choice. There are a couple of reasons why herd behavior happens. (1)social pressure of conformity: You probably know from experience that this can be a powerful force. This is because most people are very sociable and have a natural desire to be accepted by a group, rather than be branded as an outcast. Therefore, following the group is an ideal way of becoming a member. (2) common rationale that it’s unlikely that such a large group could be wrong. After all, even if you are convinced that a particular idea or course or action is irrational or incorrect, you might still follow the herd, believing they know something that you don’t. This is especially prevalent in situations in which an individual has very little experience. The Dotcom Herd A strong herd mentality can even affect financial professionals. The ultimate goal of a money manager is to follow an investment strategy to maximize a client’s invested wealth. The problem lies in the amount of scrutiny that money managers receive from their clients whenever a new investment fad pops up. For example, a wealthy client may have heard about an investment gimmick that’s gaining notoriety and inquires about whether the money manager employs a similar â€Å"strategy†. In many cases, it’s tempting for a money manager to follow the herd of investment professionals. After all, if the aforementioned gimmick pans out, his clients will be happy. If it doesn’t, that money manager can justify his poor decision by pointing out just how many others were led astray. The Costs of Being Led Astray Herd behavior, as the dotcom bubble illustrates, is usually not a very profitable investment strategy. Investors that employ a herd-mentality investment strategy constantly buy and sell their investment assets in pursuit of the newest and hottest investment trends. For example, if a herd investor hears that internet stocks are the best investments right now, he will free up his investment capital and then dump it on internet stocks. If biotech stocks are all the rage six months later, he’ll probably move his money again, perhaps before he has even experienced significant appreciation in his internet investments. Keep in mind that all this frequent buying and selling incurs a substantial amount of transaction costs, which can eat away at available profits. Furthermore, it’s extremely difficult to time trades correctly to ensure that you are entering your position right when the trend is starting. By the time a herd investor knows about the newest trend, most other investors have already taken advantage of this news, and the strategy’s wealth-maximizing potential has probably already peaked. This means that many herd-following investors will probably be entering into the game too late and are likely to lose money as those at the front of the pack move on to other strategies. Avoiding the Herd Mentality 1. While it’s tempting to follow the newest investment trends, an investor is generally better off steering clear of the herd. Just because everyone is jumping on a certain investment â€Å"bandwagon† doesn’t necessarily mean the strategy is correct. Therefore, the soundest advice is to always do your homework before following any trend. 2. Just remember that particular investments favored by the herd can easily become overvalued because the investment’s high values are usually based on optimism and not on the underlying fundamentals. KeyConcept  No. 6:  Overconfidence In a 2006 study entitled â€Å"Behaving Badly†, researcher James Montier found that 74% of the 300 professional fund managers surveyed believed that they had delivered above-average job performance. Of the remaining 26% surveyed, the majority viewed themselves as average. Incredibly, almost 100% of the survey group believed that their job performance was average or better. Clearly, only 50% of the sample can be above average, suggesting the irrationally high level of overconfidence these fund managers exhibited. As you can imagine, overconfidence (i. e. , overestimating or exaggerating one’s ability to successfully perform a particular task) is not a trait that applies only to fund managers. Consider the number of times that you’ve participated in a competition or contest with the attitude that you have what it takes to win – regardless of the number of competitors or the fact that there can only be one winner. Keep in mind that there’s a fine line between confidence and overconfidence. Confidence implies realistically trusting in one’s abilities, while overconfidence usually implies an overly optimistic assessment of one’s knowledge or control over a situation. Overconfident Investing In terms of investing, overconfidence can be detrimental to your stock-picking ability in the long run. In a 1998 study entitled â€Å"Volume, Volatility, Price, and Profit When All Traders Are Above Average†, researcher Terrence Odean found that overconfident investors generally conduct more trades than their less-confident counterparts. Odean found that overconfident investors/traders tend to believe they are better than others at choosing the best stocks and best times to enter/exit a position. Unfortunately, Odean also found that traders that conducted the most trades tended, on average, to receive significantly lower yields than the market. Avoiding Overconfidence 1. Keep in mind that professional fund managers, who have access to the best investment/industry reports and computational models in the business, can still struggle at achieving market-beating returns. 2. The best fund managers know that each investment day presents a new set of challenges and that investment techniques constantly need refining. Just about every overconfident investor is only a trade away from a very humbling wake-up call. Key Concept No. 7: Overreaction and the Availability Bias One consequence of having emotion in the stock market is the overreaction toward new information. According to market efficiency, new information should more or less be reflected instantly in a security’s price. For example, good news should raise a business’ share price accordingly, and that gain in share price should not decline if no new information has been released since. Reality, however, tends to contradict this theory. Oftentimes, participants in the stock market predictably overreact to new information, creating a larger-than-appropriate effect on a security’s price. Furthermore, it also appears that this price surge is not a permanent trend – although the price change is usually sudden and sizable, the surge erodes over time. Winners and Losers In 1985, behavioral finance academics Werner De Bondt and Richard Thaler released a study in the Journal of Finance called â€Å"Does the Market Overreact? † In this study, the two examined returns on the New York Stock Exchange for a three-year period. From these stocks, they separated the best 35 performing stocks into a â€Å"winners portfolio† and the worst 35 performing stocks were then added to a â€Å"losers portfolio†. De Bondt and Thaler then tracked each portfolio’s performance against a representative market index for three years. Surprisingly, it was found that the losers portfolio consistently beat the market index, while the winners portfolio consistently underperformed. In total, the cumulative difference between the two portfolios was almost 25% during the three-year time span. In other words, it appears that the original â€Å"winners† would became â€Å"losers†, and vice versa. According to the availability bias, people tend to heavily weight their decisions toward more recent information, making any new opinion biased toward that latest news. This happens in real life all the time. For example, suppose you see a car accident along a stretch of road that you regularly drive to work. Chances are, you’ll begin driving extra cautiously for the next week or so. Although the road might be no more dangerous than it has ever been, seeing the accident causes you to overreact, but you’ll be back to your old driving habits by the following week. Avoiding Availability Bias Perhaps the most important lesson to be learned here is to retain a sense of perspective. While it’s easy to get caught up in the latest news, short-term approaches don’t usually yield the best investment results. If you Objectives To study the influence of behavioral finance on investor’s decisions. †¢ To explore the area of behavioral finance and analyze behavioral finance’s potential and understanding the investment practices in specified area of Bhuj and Adipur †¢ To study a specified type of people within spe cified income level Methodology †¢ Type of data required ? Primary and secondary both †¢ Data collection method ? Survey through questionnaire ? Study of secondary data †¢ Sample design ? Target population: Investors of Bhuj and Adipur ? Sampling method: Convenient sampling ? Sample size : 150 investors of Bhuj and Adipur FINDING Introduction to questionnaire We had done literature review and found some interesting questions which were helpful and relevant to our topic and made a questionnaire with the help of literature review. The questionnaire which helped us to achieve our objective which was to understand Behavior of investors of Bhuj and Adipur. With this questionnaire we had tried to check out theory of Behavioral finance and also we tried to analyze Behavior of Bhuj and Adipur’s investors. Questionnaire Analysis Gender | |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |Male |121 |80. 7 |80. 7 |80. | | |Female |29 |19. 3 |19. 3 |100. 0 | | |Total |150 |100. 0 |100. 0 | | In our project 80% respondents are male and 20% females. because still males are more investing but no of women investors are surely increase in future as girls are getting more and more educated What is your current occupation? Age group | |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |Under 25 years |90 |60. 0 |60. 0 |60. | | |26-35 years |42 |28. 0 |28. 0 |88. 0 | | |36-50 years |13 |8. 7 |8. 7 |96. 7 | | |51-60 years |3 |2. 0 |2. 0 |98. 7 | | |Above 60 |2 |1. 3 |1. 3 |100. 0 | | |Total |150 |100. 0 |100. 0 | | In our project 60% respondents are under 25 years and 28% are in age group of 26-35 years. What is your current occupation? |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |Service |54 |36. 0 |36. 0 |36. 0 | | |Bussiness |24 |16. 0 |16. 0 |52. 0 | | |Independent professsion |16 |10. 7 |10. 7 |62. 7 | | |Students |56 |37. 3 |37. 3 |100. 0 | | |Total |150 |100. 0 |100. 0 | | Occupation In our project 36% respondents are doing service where 37% are students What is your Education Qualification? | |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |Under graduate |52 |34. 7 |34. 7 |34. 7 | | |Graduate |64 |42. 7 |42. 7 |77. 3 | | |Post graduate |34 |22. 7 |22. 7 |100. 0 | | |Total |150 |100. 0 |100. 0 | | In our project 42% respondents are graduate and we also take 34% undergraduate to know their view What is your income per annum? | |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |Less than 1. 5 Lacs |67 |44. 7 |44. 7 |44. 7 | | |1. 5-3 Lacs |46 |30. 7 |30. 7 |75. 3 | | |;3-5 Lacs |19 |12. 7 |12. 7 |88. 0 | | |;5-7 Lacs |9 |6. 0 |6. 0 |94. | | |;7-10 Lacs |4 |2. 7 |2. 7 |96. 7 | | |;10 Lacs |5 |3. 3 |3. 3 |100. 0 | | |Total |150 |100. 0 |100. 0 | | In our project 75% respondents are having income less than 3 lacks while we also have 4%people who have income above 10 lacks. In normal condition, people who have high income are more risk taker and people who have low income are risk averse so, we can say that most of our respondent are risk averse Since how many years do you invest in share market? | |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |1 Year |61 |40. 7 |40. 7 |40. 7 | | |2 Year |45 |30. 0 |30. 0 |70. 7 | | |3 Year |24 |16. 0 |16. 0 |86. 7 | | |4 Year |11 |7. 3 |7. 3 |94. 0 | | |5 Year or more than 5|9 |6. 0 |6. 0 |100. | | |Years | | | | | | |Total |150 |100. 0 |100. 0 | | ? Purpose: To know that whether our respondents are experienced or they are in experienced. ? Analysis: In our project our 71% respondent have less than 2 year experience in share market and 6% have more than 5 year experience. What is the number of dependent members in your family? | |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |0 |31 |20. 7 |20. 7 |20. | | |1 |28 |18. 7 |18. 7 |39. 3 | | |2 |29 |19. 3 |19. 3 |58. 7 | | |3 |30 |20. 0 |20. 0 |78. 7 | | |4 |24 |16. 0 |16. 0 |94. 7 | | |More than 5 |8 |5. 3 |5. 3 |100. 0 | | |Total |150 |100. 0 |100. 0 | | In our project our 58% respondent have less than 2 dependent members in family and 5% have more than 5 dependent members in family 1 What is the objective of your investment? Stability of principle | |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |No |121 |80. 7 |80. 7 |80. 7 | | |Yes |29 |19. 3 |19. 3 |100. 0 | | |Total |150 |100. 0 |100. 0 | | Income generation | |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |No |62 |41. 3 |41. |41. 3 | | |Yes |88 |58. 7 |58. 7 |100. 0 | | |Total |150 |100. 0 |100. 0 | | Capital appreciation | |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |No |105 |70. 0 |70. 0 |70. 0 | | |Yes |45 |30. 0 |30. 0 |100. 0 | | |Total |150 |100. 0 |100. 0 | | Growth in income |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |No |79 |52. 7 |52. 7 |52. 7 | | |Yes |71 |47. 3 |47. 3 |100. 0 | | |Total |150 |100. 0 |100. 0 | | Tax shelter | |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |No |122 |81. 3 |81. 3 |81. 3 | | |Yes |28 |18. 7 |18. 7 |100. 0 | | |Total |150 |100. |100. 0 | | ? Purpose: To analyze about theory of mental accounting and to know the objective of investor while investing ? Analysis: In our project our 59% respondent have income generation as one of their objective of investment ,48% respondent have Capital appreciation as one of their objective of investment and only 18% have tax shelter as one of their objective of investment. We can relate the theory of Mental accounting with this question that investors have decided their objective according to their convenience. 2. What is your most preferable tool of investment? Bank deposit such as saving a/c and f. d |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |No |58 |38. 7 |38. 7 |38. 7 | | |Yes |92 |61. 3 |61. 3 |100. 0 | | |Total |150 |100. 0 |100. 0 | | Post office schemes | |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |No |93 |62. 0 |62. 0 |62. 0 | | |Yes |57 |38 |38 |100. | | | | | | |100. 0 | | |Total |150 |100. 0 |100. 0 | | Government bonds | |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |No |130 |86. 7 |86. 7 |86. 7 | | |Yes |20 |13. 3 |13. 3 |100. 0 | | |Total |150 |100. 0 |100. 0 | | Corporate bonds, debentures and preference shares |Frequency |Percent |Valid Percent |Cumulative Percent | |Valid |No |143 |95. 3 |95. 3 |95. 3 | | |Yes |7 |4. 7 |4. 7 |100. 0 | | |Total |150 |1 How to cite Study Of Behavioral Finance A Project Report Batch, Essay examples

Crisis Management Plan ABC Pvt.Ltd

Question: Describe about the Crisis Management Plan of ABC Pvt.Ltd? Answer: ABC pvt.ltd, it is known as world premiere toy company. These company mainly produce a picture frames. Subsequently, the organization introduced dollhouse furniture as another product in the market. This particular product is produced using picture frame scraps. Meanwhile, after gaining knowledge about the market potentiality of this particular product, the organization decided to change dollhouse furniture to toy manufacturing (Regester Larkin 2008). After that they created a world most popular product which we known as Barbie doll. After getting inspired from paper dolls, they started making a three dimensional doll which is known as Barbie doll, which was played in a dream of a little girl. After creating a famous toy which is popular among little girl they decided to develop a famous market popular toy like hot wheels, iron man cartoon characters etc (The Harvard Business Review, 2002). Then they decided to build their company more and more and known as the world largest manufac turer toy company for that they start get merged up with a top most successful company like children program company, start producing a Disney character, famous story book character like harry potter, Alice in wonderland etc, they also merger with some more company. After that to gain trust from their customer they tried a lot. The organization tried so many things to position itself as one of the pioneer of children toys (Regester Larkin, 2008). For being into the market they started organizing some charity show, and also created a global manufacturing principle, to position itself as the world first organization to manufacture a structure on a global level. However sometimes they cant able to maintain their brand image and has numerous complaints about they have stolen idea from other company to become popular (Coombs and Halladay 2012). After that the company recalls for numerous reasons and at the end of august to September the company faced a biggest recall that was default in their products which is not good for the children. Both recall come one by one which is not good for the company and made the company to face biggest recalls. First the biggest issues was that they found a faulty magnets on their toy products and the design of the toy occurred a high range of magnet, here the magnet only used for the industry purpose which is not good for the kids, infects they have that magnet because they dont know what is magnet and can easily have it which is not good for their digestive tract (Seymour Moore 2000). The major issue was that if the numerous magnets were gulped down they will unite in the stomach as well as rip through the stomach tissue. This serious problem make the company knowing for designing a poor product and it is a serious issue for the young or small children. This problem was found in some of the famous toy like Barbie, action figure of batman etc. The other reasons were that they used lead based paint for their product which was found on the surface area of many toys. It is dangerous for the children because with this they will suffer from serious disease like hearing loss, anemia, brain dama ge, slow muscle, bone growth etc. They were recall for several magnet sets sold that cause harm for the children. In early the retailer said that it is a high lead content toys, from that the company get notification, they came for the investigation were they produce their product (Tench Yeomans, 2006). After investigation they found that there are number of products did not conform to safety standard. On the other hand they started a recall for the lead paint based products were they put this paint for many of the toys. After all investigation is done they again recalled the company of possible hazards which children can easily swallow those faulty magnets, and they were also recalled for the other reason that is lead based paint. The American safety welfare for childrens toy they said that it would consider the new legislation to keep hazardous toys always from the children (Coombs 2011). They said that many of the toys were evoked as a consequence of magnets compare with painting issue using lead and the culpabili ty of this were profoundly positioned by media. Later the company tells to media they are apologized and taking full blame for the incident. Program crisis plan: When the company realized that due to this recall they are facing many problems, they firstly connected to some of agency which is known for the toy problem and their safety. Then they come up with the plans and the facts company had a product defects (Fearn-Banks, 2010). After their investigation they made an official announcement and made first company recall, many public relation personnel called reporters, media outlets were there (Massey Larsen, 2006). The day when the recall was done by the agency and the company CEO faced many interview on television and continuously taking call from media. They come up with the different ads to tell public about the recalls they took help from the newspaper, online crusade to inform people about the recalls (Fearn-Banks, 2010). There are many Medias press was there who said the company already knew about the fault before the announcement has made to the public and the company constantly been open to media and with their customer too and they said that they have very high standard with the best quality and testing procedures were safety. The company says clearly about the situation they all are doing as much as possible. Stakeholder issues: Here the toy company put their customer before because customer are the one who have the direct effect of purchasing those product and also the customer is one who drive their business as success and failure. The company licensed and their shareholders are placed because of this problem employees are affected. Customers are the main assets of the company because the toy company is directly benefited to their customer, and the customers are the main force for their survival and their company growth. It is very difficult to built company brand names and for one crisis they turn out unfavorable. The company loses their profitable opportunities with their partners (Sez Gutirrez, 2015). Employees are also one of the valuable assets for the company and it is necessary to have a continuous support from their employees to sales, reputation etc. Due to this crisis the most effective communication with their shareholders, company convinced their shareholders that in past or in future they wil l always be transparent with their information. The company is able to make positive impacts on their shareholders, and also they explain their future and current responsibilities. The company also maintains their details about their products and about their recall in their website The company do not want to repeat their mistakes for that the supplier who supply the paint and from that each single batch were tested and they will not use if they does not reach up to the mark (Avraham, 2008). What company is currently doing? Thus the company done best, and they come out and talk to media about the recalls or the mistake which is faced by the company (Griffin, 2007). On the front page of the newspapers their company talks about the recalls. This link tell us about the company recall information and also say that how many countries are affected due to this recalls, they also tell their customers why the company are calling for recalled. Here first company talks about the lead paint, they said that manufacture will use the paint that much they are required and after using the paint they will check each and every product and if their they found the default piece and they will wont used that product. Secondly, the company constantly increases their monitoring at every stage of production so that they can implement facilities for all the venders. And lastly they say that they will test each and every product before the product reach to customers and the product meet series of severe protection prior to go to the marketplace. Many of the news articles they say about the company second recall that was lead paint rather than the toy problem, for this media is blaming the particular country that they are doing and creating this kind of issues (Stauber, Rampton, 1995). Many of them were blaming that the part of recall involves the magnet toys, but half of them are not saying that the toys recalled were the design flaw not the lead paint but many of them saying it was totally because of lead based paint. The media coverage of the particular company as vastly different and the company were suffering from many of the crisis; many Medias are also saying that the company was getting the word out quickly and efficiency. The company also says their directness with the consumers as well as with the media and the company want to talk to media about the company favorable coverage and the blamed totally shifted to the country that is producing it (Susskind, and Field, 1996). They want to build the representation of the organizations brand image and want to talk about the entire problem at the very early stage. There is one article that is in support of the country which is blaming for their products, the article printed in the country itself. They say that the toy company are fully blaming on our country which is not good here I will say how the country are put on blaming, one of our producer was damaged. One of the articles emphasized that the country product need to improve their safety level as well as gain knowledge of more eminence of goods is habitually for the unsurpassed course of action. Economic trends: 1. Due to this problem company are facing problems like buying behavior of the customers are changed because many parents dont want to buy this company product with the tag line of that particular country and their buying habits are changes (Pauly, Hutchinson, 2005). 2. Many of the companies have partner with the particular toy company have chosen to put into practice their own research work on the particular product ('Company sector', 2013). 3. Some of the emails and notice say that no one can buy and sell that company product. Evaluation: Here you can see that how company handles their reputation, they handled it exactly what corporation say them to handle it (Mitroff, Shrivastava, and Udwadia, 1987). Company handles the experience very smoothly and handles every corner of crisis management plan. Organization handle the situation very well they say the truth they accept the mistakes and they make an apology in public, and also enforce initiatives to resolve the specific issue ( Courtright, Slaughter, 2007). One of the articles says that the company handles the problem very well they come out to the public and say about their problem, they confessed then made a mistake and also offered the solutions. The other blaming country does not accept their fault for the product at the initial stage in facts the nation most of the time got into elongated way of corporation for recalls (Murphy, 1991). Accepting all the blame the toy company able to continue and focus on right thing instant of blaming each others fault, by this e ntire thing happen the consumer should see how the company is dependable and who is responsible for it. Other thing you can see that it regards to the comprehensive cost-cutting measure and it is hard to be acquainted with who manufactured the product and who is regulating them. References Avraham, E. (2008), Media Startegies for Marketing Places in Crisis: Improving the Image of Cities, Countries and Tourist Destinations, London: Butterworth-Heinemann Company sector. (2013).Economic Outlook,37(3), 51-52. doi:10.1111/1468-0319.12018 Coombs, T (2011), Ongoing Crisis communications: Planning, Managing Responding, Lose Angeles: Sage Coombs, T and Halladay, S (2012), The Handbook of Crisis Communication, West Sussex: Wiley-Blackwell Courtright, JL Slaughter, GZ (2007), remembering Disaster: Since the Media Do, So Must Public relations, Public Relations Review, 33 (2007), 313-318 Fearn-Banks, K. (2010), Crisis Communications: A Casebook Approach, London: Routledge Fearn-Banks, K. (2010), Student Workbook to Accompany Crisis Communications: A Casebook Approach, London: Routledge Griffin, A. (2007), New Strategies for Reputation Management: Gaining Control of Issues, Crises and Corporate Social Responsibility, London: Kogan Page Massey, J., Larsen, J. (2006). Crisis Management in Real Time.Journal Of Promotion Management,12(3-4), 63-97. doi:10.1300/j057v12n03_06 Mitroff, I, Shrivastava, P and Udwadia, F (1987) Effective Crisis Management, The Academy of Management Executive. Vol. 1, No. 3, pp 283-292 Murphy, P (1991), Game Theory Models for Organisational/ Public Conflict, Canadian Journal of Communication, Vol 16, nu. 2 Pauly, J Hutchinson, L (2005), Moral Fables of Public Relations Practice: The Tylenol and Exxon Valdez Cases, Journal of Mass Media Ethics, 20 (4), 231-249 Regester, M Larkin, J (2008), Risk Issues and Crisis Management, Kogan Page/ CIPR, 4th Ed Regester, M Larkin, J. (2008), Risk Issues and Crisis Management in Public Relations: A Casebook of Best Practice, Kogan Page Sez, M., Gutirrez, M. (2015). Dividend Policy with Controlling Shareholders.Theoretical Inquiries In Law,16(1). doi:10.1515/til-2015-006 Seymour, M Moore, S (2000) Effective Crisis Management: Worldwide Principles and Practice. London: Cassell Stauber, J Rampton, S (1995), Toxic Sludge is Good for You: Lies, Damn Lies and the Public Relations Industry, Monroe, M E: Common Courage Press Susskind, L and Field, P (1996) Dealing with an Angry Public: The Mutual Gains Approach to Solving Disputes. New York, The Free Press Tench, R Yeomans, L, Ed. (2006), Exploring Public Relations, Harlow: Pearson The Harvard Business Review (2002) The Harvard Business Review on Crisis Management

Human and Animal Reaction Time Essay Example

Human and Animal Reaction Time Paper Observation Human reaction times vary person to person and often increase with age. This change in reaction time can have little impact on a persons daily life, such as when answering a ringing telephone. But this change can also have a dramatic impact when driving, working in dangerous environments, and negotiating busy streets and sidewalks. Literature Search Reaction time has been used as a psychological test since the mid-19th century (Dreary, 1). Several studies have been conducted dealing with reaction time and the factors that can affect it. In their study titled Validation of reaction time as a measure of cognitive function and quality of life in healthy subjects and patients, Jacobsen, Sorensen, et al studied and reported findings regarding diminished reaction times and the effect that poor health had on those times. Findings were conclusive that the healthier the individual, the better their responses. Hypothesis Individuals reaction time with their dominant hand is faster than those with their non-dominant hand. Conversely, there may be no statistically valid difference in the reaction time from one hand to the other. Experiment To test the variance in reaction time from dominant hand to non-dominant hand we set up an experiment using a simple reaction time test found in the ere marketplace on an Android telephone. This application required the user to touch one of four colored stars that match the color of an identified star in the upper right hand corner. The subject was asked to repeat this response 20 times and the total time was scored as the reaction time. If a subject made an incorrect touch then their time would continue until the correctly touched 20 stars. The subject would then be ask to repeat this test with their non-dominant hand. We will write a custom essay sample on Human and Animal Reaction Time specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Human and Animal Reaction Time specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Human and Animal Reaction Time specifically for you FOR ONLY $16.38 $13.9/page Hire Writer To standardize the testing instructions were provided by my team mates and t was decided that the subject would place the device on a flat surface in front of them and use the index finger on first their dominant hand and then their non-dominant hand. Data was collected for 30 random subjects and analysis performed. Data Analysis Data collected from the 30 random subjects was input and the following summary statistics were produced. Dominant Hand Mean Reaction Time (D) 18. 865 sec. I Median Reaction Time (D) I | 17. 264 sec. I Variance (D) I 1 128. 235 sec. I Standard Deviation (D) I 1 5. Cease. I Non-dominant Hand Mean Reaction Time (N) I 17. Cease. Median Reaction Time (N) I | 16. 412 sec. I Variance (N) I | 16. 130 sec. Standard Deviation (N) I I | 4. 016 sec. I The graphs below illustrate the mean for each hand as well as error with in plus or minus one standard deviation. Conclusion After conducting this experiment and reviewing the data, a few things became clear. One is that age of the subject had a significant impact on results with both hands. This is presumed to be the result of the interaction with a new technology. Younger subjects seemed to grasp the concept of what they were expected to do more quickly. Second, in this case, familiarity did not breed contempt, but it did breed faster reaction times. As subjects became more comfortable with the application they were using, their response times decreased. The later of these two factors had a more global effect on our outcomes, thus disproving our hypothesis in this case. I do not believe these results to be conclusive or authoritative and simply put, more research is needed. References Dreary, I. J. , Lied, D. ; Ionians, J. (2011) A free, easy-to-use, computer-based simple and four-choice reaction time programmer: The dearly-lied reaction mime task.

CONTEMPORARY DEBATES IN BUSINESS MANAGEMENT Essays - Motivation

CONTEMPORARY DEBATES IN BUSINESS MANAGEMENT Essays - Motivation CONTEMPORARY DEBATES IN BUSINESS MANAGEMENT UGB 117 CONTEMPORARY DEBATES IN BUSINESS MANAGEMENT Money reward is superior to any other motivational incentives Motivation is a process that energizes and guides behaviour towards reaching a particular goal. (Sansone, 2000) It is one of the important factors that encourage employees to strive forward towards the goal of an organisation. Human resources are an integral part of any organisation and there are a numerous distinctive reasons why we do things.In some cases we are roused to act due to inner longings and wishes, however at different times our practices are determined by a longing for outer prizes. According to Bernstein, the motivation hypothesis is one of the real hypotheses of inspiration and proposes that conduct is roused by a longing for fortification or impetuses (Bernstein, 2011). Motivating human resources is very important to every organization to improve performance level, reduction in employee turnover, reduction in resistance to change, increase production, helps to Reduce Absenteeism in the Organisation and Helps to Change Negative or Indifferent Attitudes of Employees (S.Pujari, 2014). There are several incentives of motivating people. Some of them are positive and negative, Intrinsic and extrinsic, monetary and non-monetary etc. From above them monetary and non-monetary incentives are major ways of motivating people. Money is the monetary motivation incentive which is also known as extrinsic motivation and there are other non-monetary incentives also known as intrinsic motivations. In this report we are going to debate money reward is more superior to any other motivation incentive. We are an advocate for the topic, because those motivating forces which fulfil the subordinates by giving them remunerates regarding cash like bonus, increasing salary etc. According to the motivational theory developed by Frederick Winslow Taylor, workers are motivated chiefly by money. Taylors theory proved to be very successful as workers were more motivated to increase their efficiency of work when they were paid according to the number of items they produced in a specific interval of time. Money has been perceived as a superior wellspring of fulfilling the needs of individuals. Money is additionally useful to fulfil the social needs by having different material things. Accordingly, money fulfils psychological needs as well as the security and social needs. However, for many of the employees money is not the only supreme factor that increases their work efficiency, there are sure non-monetary motivating forces which can fulfil the personality and self- realization needs of workers. The motivating forces which can't be measured as far as cash are under the class of "Non- money related impetuses" or intrinsic factors like need for achievement; power and affiliation. Taylors theory as mentioned above was successful for a limited period of time but soon the employees were getting tired of doing the repetitive jobs every day. As a result, even though the pay was higher there was no job satisfaction among them which definitely had influence on the productivity of the organisation. These forms of non-monetary recognition can often be more effective than cash awards because since cash spent its gone whereas other incentives remain forever. According to survey by development dimensions international, UK, pay was also the 5th reason for people l eaving jobs. In view of that, in numerous production lines, different pay arrangements and extra plans are acquainted with spur and fortify the individuals to work. To sum it up, employees are not only motivated by money rewards. People who have higher salaries end up quitting their job due to lack of job satisfaction, better promotional opportunities and for exciting and varied place of work. Therefore, money can convince most of the people to retain their jobs but cannot guarantee their full commitment towards their organisation whereas employees that are motivated by other intrinsic factors are found to be more active and committed towards their job, hence, resulting in the company becoming more productive. REFERENCES Thomas, K. (2000). Intrinsic motivation at work. 1st ed. San Francisco: Berrett-Koehler Publishers. Bruce, A. (2003). How to motivate every employee. 1st ed. New York: McGraw-Hill. Riley, j. (2014). Theories of Motivation. [Online] tutor2u. Available at: http://tutor2u.net/business/gcse/people_motivation_theories.htm [Accessed 1 Oct. 2014]. Chapman, A. (2014). Frederick Herzberg motivational theory, motivators and hygienefactors, free Herzberg diagrams. [online] Businessballs.com. Available at: businessballs.com/herzberg.htm [Accessed 1 Oct. 2014]. Herzberg, F., Mausner, B. and

Equity and Trusts Essay Example | Topics and Well Written Essays - 3000 words

Equity and Trusts - Essay Example However, at times, it can be stressful and intimidating depending on the experience of the chosen executor. As such, those who are inexperience in estate distribution may inadvertently land themselves or the estates under their watch at risk. According to Beckert (2007), estate administration or settling an estate is defined as the process in which a deceased person estate and financial affairs are brought to a close. This paper focus on distribution of Adams will in line with British trust laws. Executor and executorships responsibilities The role of an executor is to implement what is stipulated in the will in accordance with laid down trust law. According to Dauncey (2005), all beneficiaries must be treated fairly and equitably. The executor should gather information about all assets, locate them and ensure their protection. In addition, liabilities, debts and any unpaid taxes must also be assessed and payments made. In Williams v Williams, the judge upheld that the executor must have the ability, knowledge and clear understanding of testators’ estate in order to properly oversee investments, business interests, and real estate holdings and manage them in an effective manner. In order to ensure distribution of the deceased person estates, the executor may engage agents such as lawyers, accountants and trust professionals to assist in interpretation of the will provisions and the law for proper administration. Laws of succession are concerned with transfer of personal and real property from the testator to the successor. In 19th century, the British enacted Married Women Property Act that gave married women the right to own and control property inherited from their husbands. According to Succession Act 1981, section 45(1), in the event that a testator is a trustee, the clause excludes the vesting powers of a personal representative to act as the trustee of the property. In Adam’s case, the testator was a trustee, but in addition, had appointed t wo other trustees, Ahmed and Jake to manage his property. Therefore, the appointed trustees assumed powers, authorities and discretions of a trustee since they had been given powers upon creation of a trust. The Wills, Estates and Succession Act, 2009, provides that only property within the deceased estate shall be allocated to the beneficiaries in line with the will, trustees deed or by following scheme of intestate succession. Section 42 through to 50 of Wills, Estates and Succession Act, 2009 provides that testators property included in the will, trustees deed is said to â€Å"pass â€Å" by the instrument in which it is bequeathed. However, any property that is subject to bequeath in respect of Family Law Act, 2009 may pass to the surviving dependants directly. Adam and with his family were involved in a plane crash and unluckily, Adam and his three children succumbed to injuries. However, the wife Alexandria who was pregnant survived though the doctors termed her condition as critical. Alexandria was pregnant and later on gave birth to twins. Luckily, Adam had written a will which was witnessed by two persons, that is personal assistant and the secretary. Additionally, the deceased had also issued some oral instructions on administration of his estate. However, Ahmed and Jake who were appointed as executors will

Reflection assignment #3 on Nature Religion in America by Catherine Essay

Reflection assignment #3 on Nature Religion in America by Catherine Albanese on Pages 153-163; 171-185; 196-198 (ALL REQUIRED READING MATERIAL IS UPLOADED) - Essay Example On the basis of the data presented by Albanese, the nature religion is a manner of practice of belief that is based on being one with nature. Starting from the earliest trace of human civilization, such beliefs had been present and regardless of the modernity of times or the consciousness of the people, the nature’s religions keep on developing and diversifying. Although the literal objective of the author is to provide data regarding the presence and essence of the nature religion, the transcending meaning to the said practice is a fundamental message of the paper. One of the points presented in the paper is the fact that the most renowned religions, which are based on the presence of a godly entity above nature and humans, are questioned on the basis of sustainability in future times (p.175). This can be attributed to the fact that religion although set on faith, is one of the basis of society, culture and way of life of communities. For that matter, a look on the present state of nature can be considered that there is a dogma in the society and in the beliefs which is amiss. Based on the idea presented by the author, the main issue is that people needs to modify the belief that nature is meant for the human beings to consume and rule over. It can be considered that by recapitulating the religion of the ancestors, e.g. the native Americans, nature can be saved and people can respect and take care of the environment. This is based on the fact that the religion founded on nature states that human is not above nature but a part of it. Thus, as a part of himself nature is needed to be taken good care of. But if the said religion which is based on nature is that of the ancestors, then the hope of saving nature can be considered hopeless. To answer this, the author presented the succession of the development of the nature religion towards the present era. For that matter, human being can still have the change to attempt and endeavor the process of

Foundations of Human Resource Management Essay Example | Topics and Well Written Essays - 1500 words

Foundations of Human Resource Management - Essay Example Moreover, the globalization in the business world diverted the attention of managers and owners of companies towards comprehending relationships and interests of customers with the company. For this reason, many times employees’ interests were ignored and the increasing pressure of competition and customer satisfaction further amplified this practice of managers (Marchington, 2008). HRM practices of many companies illustrate that, company’s success is not solely dependent on its quality of product and services but also on its workplace environment and employer-employee relationship. On this basis, it is pertinent to develop an understanding regarding the nature of employment relationship within an organization, and it effects on the perception of employees about the company (Sisson, 2010). In comparison of today’s corporate environment with that of some four decades ago, a major change in employees’ practices can be observed. Employee unions have been weak ened in the recent times and their power over company’s policies has also been reduced. Low wages and more work are consequences of the change in business environment and have changed the attitude of employees towards their company too. Moreover, the turnover ratio of employees has also increased significantly over the years, particularly in the Western countries. These factors amplify the need of understanding employment relations in the light of contemporary environment and challenges in the globalized business society (Sisson, 2010). Nature of the Employment Relationship An existing dilemma in the corporate environment today is choosing between production-oriented management and people-oriented management. For production management, the hiring and firing of personnel are on the basis of target meeting and providing benefits to the sales or reputation of the company. On the other hand, people oriented management is concern with the code of conduct and personal practices of the labor force. These management practices define the nature of the organization and its interest towards employment relationship. The problem with the nature of the employment relation is that at any time either the interest of employees or the interest of the organization are been compromised (Williams & Smith, 2010). When the company is outsourcing resources, it is paying for the quality of the product the other company is offering. However, in the case of employment, the deal is between wage and the work done by the employees. Therefore, considering this relation between the employer and employees as solely contractual is not appropriate. It is because in a commercial contract, both parties have more or less equal position in the contract and have the power of denial or asking for accountability. Contrary to this, employees working in an organization have fewer power in the contact and are oblige to perform whatever been asked for the sake of money. The commonly heard terms of work pressure, offensive work environment and negligence of employee rights are thus the consequences of an imbalance in the contractual standings of the two parties (Budd, 2004). Interests of both employer and employees also hold an important place in formulating the nature of the employment relation. Interests of the employer are to provide the company’s product to its customers at the right quality, price and time. On the other han