Effect of Human Resources on Global Expansion of MNCs

Effect of Human Resources on Global Expansion of MNCs MBA Literature review The Relevance of Innovative Human Resource Programs to Facilitate Global Expansion of Multinational Companies (MNCs) from the UK. 2. Introduction The activities of multinational companies (MNCs) are at the heart of Britains internationally open and global economy. This global economy has emerged as companies all over the world are joining forces through alliances, mergers, joint ventures, acquisitions, and the like, thus creating the need for a constant mobile workforce and the HRM strategies to support and develop it. This would therefore imply a fundamental shift in the role of human resources from transaction and administration to strategy and business transformation through innovative programmes which supports the global strategy of the company. This section gives an overview of the literature review and the theoretical basis for the forthcoming chapters. The chapter consists of journals, books and research materials which throw more light into Innovative Human Resource Programs to Facilitate Global Expansion of Multinational Companies (MNCs) from the UK. The following were the primary information sources used for the literature review; ACM Digital Library Pro-Quest Direct EBSCO Publishing Gale Group Info Track OCLC First-Search Java Sun Microsystems Library IEEE Library Emerald Database 2.1 Evolution from Personnel Management to HRM According to Guest (1987), the origins of the traditional concept of personnel management can be traced to the post World War One welfare tradition of concern for the basic needs of employees. The developing and mature phases of personnel management from the 1940s to the 1970s saw an increase in the status and professionalism accorded to the personnel function, particularly in relation to industrial relations (IR) matters (see Sparrow 2004). The concept of HRM, as a new strategic approach to the management of people, evolved in the early 1980s (Ericksen 2005). Its evolution was influenced by a range of factors, including increased competitive pressures caused by deregulation and globalisation, and the influence of notable academics in the US and the UK (Ericksen, 2005). Although it has been suggested that HRM may be no more than old style personnel management with a new name (Gunnigle and Flood, 1990), Storey (1992) identifies four features of HRM which distinguish it from traditional personnel management: it is explicitly linked with corporate strategy; it seeks to obtain the commitment of employees rather than their compliance; employee commitment is obtained through an integrated approach to human resource policies (for example, reward, appraisal, selection, training); and unlike personnel management, which is primarily the domain of specialists, HRM is owned by line managers as a means of fostering integration. 2.1.1 Approaches to Human Resource Management 2.1.1.1 Hard Approach If an organisation focuses on control of resources and achievement of strategy, it may adopt a hard approach to HRM (see Storey, 1989) in which employees are viewed as a resource to be managed like any other factor of production. In this approach, the critical task for management is to align the formal structure and HR systems of the organisation so that they drive the strategic objectives of the organisation. This approach is exemplified in the strategic model of HRM developed by Fombrun et al (1984). It has been argued however that an over-emphasis on hard HRM ignores the potential resistance of workers and trade unions, factors which cannot be ignored if business strategy is to succeed (see Hendry, 1995). 2.1.1.2 Soft Approach In contrast, an organisation may place an emphasis on a soft approach to HRM (Storey, 1992 p. 30), in which employees are viewed as a valuable asset whose commitment will assist in achieving organisational success. The objective for organisations in such an approach is to integrate HR policies with the strategic planning process, to gain the willing commitment of employees, to achieve flexibility through avoidance of rigid bureaucratic structures and to improve quality (see Guest, 1987). The most well known soft model of HRM is known as the Harvard Model of HRM (Beer et al 1984), views business strategy as just one situational factor which influences managements approach to HRM. This model identifies a range of other situational factors which influence HR policy choices, including prevailing management philosophy, laws and societal values. In the context of this study, this model is significant in that it identifies a range of stakeholder interests (including unions, government and m anagement) which influence HR policy choices. It is argued that unless HR policies are influenced by key stakeholders, the enterprise will fail to meet the needs of these stakeholders, and ultimately its own objectives (see Beer et al 1984). 2.1.1.3 Ideal Type Model: Integrated links from Personnel to HRM Storey (1992) outlines a further model which illustrates the process involved in shifting from traditional personnel management to HRM. While this is an ideal type model, it comprises features which are significant for this study. For example, it stresses the need for integrated links between beliefs, assumptions, management issues and key elements of HRM. It also identifies key levers of change in the various elements of HRM, including recruitment and selection, training and development and conditions of employment. A strategic approach to HRM can be developed by creating effective policies in these areas (Storey 1992) 2.1.2 The integrative aspects of HRM A key theme running through many of the models is integration, which according to Guest (1987) lies at the heart of HRM. He identifies integration at three levels: integration of HRM policies with business strategy; integration of a set of complementary HRM policies; integration of HRM into the line management function. 2.1.3 The Role of Management According to Storey (1992), best practice indicates that the extent to which the transition process from traditional personnel functions to strategic HRM functions can be achieved will be influenced significantly by the belief and support of senior management in the added value that HRM can contribute to the organisation. More importantly, this belief must be visibly demonstrated, for example by committing additional resources to the development of HR strategy and the building up of HR skills levels. As a first step, the head of HR should be afforded a genuine role in the formulation of key business decisions. This contribution must be an integral part of the business strategy formulation process, so that HR issues are accorded a key priority as opposed to simply being added on to, or indeed excluded from, the core business of the organisation. On an ongoing basis, heads of HR should also be enabled to have a genuine input into decisions taken at top management level which have impli cations for HR. Clearly, if the head of HR is to be enabled to play a genuine role in ensuring that HRM issues become a top management priority, it is important that the professionalism accorded to HR, for example through the development of expertise in integrating HR and business strategies, begins at this level. 2.2 Definitions: Innovative HR Programmes According to Agarwala (2003), defines innovative human resource programmes of a company can be described as: Any intentional introduction or change of HRM program, policy, practice or system designed to influence or adapt employee the skills, behaviours, and interactions of employees and have the potential to provide both the foundation for strategy formulation and the means of strategy implementation that is perceived to be new and creates current capabilities and competencies (Agarwala, 2003). 2.2.1 Innovative HR Programmes According to James (2002), innovative programmes can be grouped into a set of new initiatives which are associated with the process of developing a strategic approach to HRMenhancing its competitiveness. A few of these include: Reducing costs through shared services centres, self-service, and outsourcing. Develop uniform HR processes recognising local regulatory requirements to help foster a low-cost, administrative delivery model. Create a self-service culture for employees and managers. Establish global employee shared services centres focused on delivering HR administrative support to multiple geographic areas, thereby reducing administrative overhead. Outsource key services that can be more efficiently managed and administered externally. Streamlining technology and information management Improve information access to help companies more efficiently manage their human capital assets, provide employees and managers with enhanced access to information, improve HR reporting, and address growing compliance requirements. Reduce HR technology operating costs by consolidating multiple technologies, technical infrastructure, and IT skills. Managing people globally Help enable the company to respond to the interdependencies of global markets by managing human assets globally rather than nationally or regionally thereby improving competitiveness in the international marketplace. Enabling HR to shift its focus from administration to strategy Remove the administrative component of the work of business HR professionals, enabling them to provide more value-added services and to focus on consultative and analytical interactions with line managers. Facilitate HRs transition to a strategic partnership with the company by upgrading talent and skills within the HR function. 2.3 Background: Human Resource Evolution According to Cooke (2003), first Generation HR Transformation represented a fundamental shift in HRs role, from transactions and administration to strategy and business transformation. First Generation HR Transformation focused on changing the existing relationship between employees, managers, and HR, (Randall 2006). With technology as a key enabler and process re-engineering playing a pivotal role, this First Generation effort sought to help make employees more self-sufficient, whilst asking them to take more responsibility for their own careers (Datta et al 2005). It also sought to help remove HR from the middle of the employee/manager relationship by making managers more responsible for handling their employees HR needs. Over the past ten years, HR Transformation has led to a major restructuring of HR operations and processes transforming the way HR services are delivered Cooke (2003). 2.4 UK MNCs: Achieving Global Expansion MNCs in the United Kingdom have long been well established in manufacturing, but in recent years they have emerged as dominant players in the private service sector and have even become involved in the provision of public services (Edwards 2004). Levels of both inward and outward investment are high: foreign direct investment (FDI) into the UK by companies based overseas accounts for almost 9% of the total global stock while UK-based companies investments overseas account for over 14% of the global stock (Edwards 2004). In both instances, the UK is second only to the worlds largest economy, the United States. As a result MNCs are significant employers in Britain; for example, 18% of the workforce in the production sector are employed by overseas-owned companies with many more being employed in the domestic operations of British-owned multinationals (Edwards 2004). For multinational companies in the UK to achieve a successful transition in their drive for global expansion and competitive advantage, multinational companies would require innovative HR programmes which would enable them to anticipate critical workforce trends, shaping and executing business strategy, identifying and addressing people-related risks and regulations, enhancing workforce performance and productivity, and offering new HR services to help a company improve and grow (Edwards et al 2007). 2.5 HR Practices: Effectiveness A number of authors have explored the links between individual HR practices and corporate financial performance. For example, Lam and White (1998) reported that firms HR orientations (measured by the effective recruitment of employees, above average compensation, and extensive training and development) were related to return on assets, growth in sales, and growth in stock values. Using a sample of banks, Richard and Johnson (2001) examined the impact of strategic HRM effectiveness (ratings of how effectively a variety of HR practices were performed) on a number of performance variables. They found that strategic HRM effectiveness was directly related to employee turnover and the relationship between this measure and return on equity was stronger among banks with higher capital intensity (greater investments in branches). In this thesis, HRM would be described in the context of a number of innovative practices which have been proven to enable MNCs manage the transition process in thei r drive for global expansion, thus enabling organizational effectiveness and better performance outcomes. Wright and McMahan (1992) defined innovative human resource programmes as practices and activities employed to enable an organization achieve its goals. These practices are seen as a departure from the traditional HR activities. Delery and Doty (1996) asserts that these practices are key drivers required by MNCs to respond with the right strategy as they expand their operations in different environments (Boselie et al, 2005). 2.6 Empirical Research: Human Resource Factors MNC Global Expansion The drive for global expansion by UK MNCs has necessitated the need for a human resource strategy that would ensure that the company is able to sustain its workforce. This has therefore led to the departure from the traditional HR administrative role to a more robust global HR function which takes cognisance of employee profile, the work and environment demographics, de-skilling, re-skilling and multi-skilling and issues related to outsourcing and synergy of its processes vis-à  -vis work-force reduction Lam and White (1998). The largest survey of employment practice of multinational companies (MNCs) in the UK was carried out by Edwards et al (2007). The key findings from the first large-scale, representative survey of employment practice in MNCs which have operations in the UK. The survey is comprehensive in its coverage of all but the smallest international companies. The findings derive from interviews with senior HR executives in each of 302 multinationals operating in Britain, both overseas- and UK-owned. The findings from the research suggest a connection between human resource practices and the performance of firms, a summary include the following HR programmes stated below. 2.6.1 Innovative HR Practice: Compensation Payment 85% of the firms surveyed were found to have a robust innovative program in terms of compensation and payment. This is achieved through a performance appraisal programme such as upward/peer appraisal and forced distribution. 72% of the MNCs utilized an innovative scheme for managers, through individual ‘output criteria which were supplemented by a range of other criteria including behaviour in relation to desired competencies and to corporate values. 2.6.2 Innovative HR Practice: Training Development Programmes In respect of adoption of high potential innovative training programmes among MNCs, the organisations were asked if both their UK and overseas operations had a management development programme specifically aimed at developing its ‘high potentials or senior management and employee potential. The data show that high potential programmes are adopted by 70% of organisations; 30% of organisations are not using them. Organisations were asked whether they used a global high potential programme that was adopted elsewhere worldwide, or a local, nationally specific programme. Most organisations indicated that their programmes are global in scope. 2.6.3 Innovative HR Practice: Appraisal Activities In comparison of performance appraisal practices and management values, the formal performance appraisal schemes for all three groups are very widespread; over nine out of ten firms have them for key group and managers, and over 80% have them for large occupational groups. Only 3% of firms have no formal appraisals at all. Just over a fifth of firms use ‘forced distributions for the results of appraisal. A clear majority of firms use the results of appraisal as the basis of decisions on redundancy and redeployment. 2.6.4 Innovative HR Practice: Employee Involvement Communication UK-based multinationals most commonly cite ‘setting a broad policy HR programme as being significant or very significant (62% and 66% for training and development and for employee involvement policy respectively). HR advice and consultancy is also relatively prominent for training and development policy (53% significant or very significant), but less so for employee involvement policy (33%). For training and development, and employee involvement, policy, the respective proportions reporting the other means of influence as significant or very significant are: setting detailed HR policies (32% and 31%); monitoring HR policy implementation (39% and 34%); and HR benchmarking and information exchange (42% and 28%). 2.6.5 Innovative HR Practice: Global Knowledge Sharing Diffusion In respect of innovative HR programmes which promote employee knowledge, learning and diffusion, international employee learning mechanisms are used extensively across all MNC both within the UK and across overseas operations. The survey focused on five formal organisational learning mechanisms used by managers that are international in their scope: International projects groups or task forces, which are often used to address specific issues; International formal committees; Secondments involving the placing of MNC employees in external organisations such as suppliers, customers, universities or private RD companies; Expatriate assignments The evidence showed that the most common organisational learning mechanism adopted among the managerial community within MNCs is the informal network (used by 84% of companies). International project groups/task forces also play a prominent role (used by 73% of organisations) and to a lesser degree expatriate assignments (used by 60% of organisations) and international formal committees (53% of organisations). In contrast, secondments are only adopted by around a quarter of the organisations (26%). The majority (82%) of organisations use two or more organisational learning mechanisms, with 53% adopting between three and four of the five organisational learning mechanisms among their managerial community. Around 9% fail to use any of the mechanisms listed. MNCs requiring integration between the UK operations and other sites worldwide are significantly more likely to adopt multiple organisational learning mechanisms (Tregaskis, Glover and Ferner, 2005). However, these national variatio ns show that the form that organisational learning and diffusion take is strongly shaped by the national context of the parent firm. 2.6.6 Innovative HR Practice: UK MNCs Use of Shared Services According to Edwards et al (2007), the findings from the study found that half of the UK MNCs operate shared services centres and have international HR policy formation bodies. They are far less likely, compared to US and other European MNCs, to have a worldwide approach to workforce management. UK firms consistently aim to pay a greater proportion of employees (managers, LOG and key group) in the top or 2nd quartile. Nine in ten UK firm have performance appraisal for their managers while seven in ten have formal appraisals for their LOG (Edwards et al 2007). Use of forced distribution is uncommon as is the use of 360-degree feedback. An overwhelming majority of UK MNCs tend to recognise trade unions for collective bargaining purposes. Formally designed teams and problem-solving groups are commonly found in UK MNCs as are a large number of communication mechanisms with meetings between line managers and employees, newsletters/emails and systematic use of the management chain the most commonly found communication mechanisms. Although the majority of UK MNCs have succession planning and formal management development programmes these tend to be comparatively less than other MNCs. 2.6.7 Use of Expatriates According to Edwards et al 2007, UK MNCs make considerably greater use of parent country expatriates than third country expatriates. This may reflect the short geographical proximity and cultural similarity between the UK and Ireland. UK MNCs tend to have considerable discretion over the various HR policy areas, much more than US firms. 2.6.8 IT Based Networks Services A key development in HR service provision over the past two decades has been the increased use of information technology (IT) (Edwards et al 2007). This is all the more relevant in MNCs, where IT systems may be used to monitor policy implementation and performance, and also to facilitate communications and networking, across borders. It thus provides an insight on the extent to which corporate management has access to HR data on its international operations and can compare performance on HR metrics across sites and countries. Specifically examined was the usage of IT based HR information systems (HRIS) and ‘shared services provision on an international level. In regard to the diffusion of HRIS, respondents were asked whether the worldwide company had an â€Å"HR Information System (such as PeopleSoft or SAP HR) that holds data relating to the firms international workforce†. The responses for both foreign and UK-owned MNCs showed that just over half (54 per cent) of all MNCs in the UK reported the use of HRIS that operates on an international basis. This is a similar to a study by Collings et al (2007), that found in the parallel UK study, where some 52 per cent used such a system (Edwards et al., 2007). However, among MNCs in the UK, a greater proportion of foreign-owned MNCs (56 percent) than UK-owned MNCs (44 per cent) reported the use of HRIS on an international basis (Edwards et al 2007). There were some discernable differences in regard to ownership. As indicated from the study, American firms were the highest users of HRIS (70 per cent), while the ‘rest of the world MNCs is the least likely. This again resonates with the UK findings where US MNCs were among the greatest users of HRIS and Japanese MNCs the lowest (Edwards et al, 2007). The impact of sector on the take-up of HRIS will be fully outlined and placed in the appendix in the forthcoming chapters. Among UK MNCs, the service sector accounted for the greatest number of firms with HRIS. However, among foreign-owned MNCs multi-sector firms were by far the largest users, followed by those in the service. 2.7 Previous Research: Human Resource Factors Previous studies have been utilized in exploring the current human resource innovative programmes that UK MNCs must take into account in their drive for global expansion. One of the main limitations of this review is that it is limited within the context of UK MNCs as there was the lack of evidence to determine the effects of these practices on MNCs operating in the context of both emerging and non-emerging economies. This is in consonance with Ericksen and Dyer (2005) and Wright et als., (2005), both of who also called for further empirical research from different contexts. Gerhart (2005) substantiate the question, to what extent are these innovative HR programmes valid for other context by saying: â€Å"This is a concern because it seems unlikely that one set of HR practices will work equally well no matter what context†. To shed more light on the issue and to further examine the relevance and effects of such programmes, it is important to conduct research in non-US / UK con text, (Katou Budhwar, 2007), especially in emerging economies. 2.8 HR Factors for Global Expansion: Effectiveness Previous research has explored the links between individual HR practices and corporate overall performance. For example, Lam and White (1998) reported that firms HR innovative programmes which are largely measured by the effective recruitment of employees, compensation programme, and extensive training and development were related to return on assets, growth in sales, and growth in stock values. Using a sample of manufacturing companies, multinational servicing companies and global financial institutions, Richard and Johnson (2001) examined the impact of strategic HRM effectiveness (ratings of how effectively a variety of HR practices were performed) on a number of performance variables. The findings suggested that implementation of innovative HR programmes had an effect on employee turnover and the overall performance of the company. 2.8.1 Recruitment Selection According to Terpstra and Rozelles (1993), who compared the relationship between recruiting / selection practices among US / UK MNCs and the firms performance, it was found that there was a strong connection in the companys performance between implementation of the new HR practices and the previous traditional practices, this was focused mainly on recruiting, selection and the use of formal selection procedures and firm performance. Cascio (1991) also states that the improved performances recorded after implementation of such new HR practices are generally substantial. 2.8.2 Employment Training Programmes Russel, Terborg and Powers (1985) in a survey of 30 US MNCs establish a link between the adoption of employment training programs and financial performance. The use of performance appraisals (Borman, 1991) and linking such appraisals with compensation has strongly been connected with the performance of a firm. (Gerhart Milkovich, 1990). Koch and McGrath (1996) reported that firms using more sophisticated staffing practices (planning, recruiting, and selection) had higher labour productivity. 2.8.3 Communication Employee Involvement Huselid (1995) reported that HR practices can influence firm performance through provision of organization structures that support involvement among employees and provides flexibility for improvement of job performance. Green et al (2006) states from findings of a survey that organizations that vertically aligned and horizontally integrated core human resource functions and practices performed better and produced more committed and satisfied HR function employees who exhibited improved individual and organizational performance. 2.8.4 Other Models Most of the work on innovative human resource programmes and the companys performance has been undertaken in the context of MNCs who consider the US and the UK as their home country. The question which arises, though, is whether the UK and US-oriented models are appropriate and representative in other contexts (see debate in special issue of the International Journal of Human Resource Management, 12(7), 2001). Other studies analyzed such as Harel and Tzafrir (1999) found that in parts of Asia and the middle-east, innovative HR practices were related to perceived organizational and market performance. Bae and Lawler (2000) did find a significant relationship between HR practices and firm performance in their sample of 140 manufacturing firms in Asia, covering china, Japan and South Korea. Lee and Miller (1999) also found a strong relationship between HR practices and performance among a number of MNCs in Asia, but it is clearly stated that this relationship was most strongly pronounce d among firms using dedicated positioning (marketing differentiation or innovative differentiation) strategies. Bae et al., (2003) in their study of HR strategy in Pacific Rim countries found that the evidence of a strong relationship was however based on strict high-performance work system with a number of variable conditions. Morishima (1998) found support for the contingency perspective in a sample of Japanese companies. Firms with well-integrated high-involvement work practices and firms with well-integrated practices consistent with more traditional Japanese employment strategies both did better than firms with poorly integrated practices. Bae et al (2003) in their investigation of Hong Kong multinational companies found an increase in the firms performance due to certain core innovative HR work practices (training and compensation techniques) with high involvement characteristics. 2.9 Implementation Whilst there are currently limited researches in respect of implementation of innovative HR programs in the context of UK MNCs, however, according to Briscoe and Schuler (2004), Implementation may vary in respect of ‘what and how, thus limiting the value of comparative survey research. Chew and Horowitz (2004) states that the subject of implementation should only be considered in the context of the specific MNC or firm involved, as there are lots of contextual factors and limitations in implementation hence the need to be cautious and dissuade any hasty conclusions when taking on findings from research journals on implementation. Horowitz (2004) states that primary research on implementation would need to focus on contingency approaches and mediating variables affecting the MNC level application. A number of theoretical approaches would also add to the importance of ‘context frameworks such as integration/divergence or universalism versus local particularism, and ethnocen tric, geocentric, regiocentric and polycentric managerial strategies (Chew et al 2004). The author believes that such an extensive approach would not only examine the relationship between human resource innovative practices and relevance, but would take into account the host environment. 2.9.1 Implementation Expansion: Formation of HR Strategies According to Briscoe et al (2004), very little work has been done on the formation of methods for implementing and controlling the transition from specific administration HR services unto innovative programmes that are directly linked to strategic challenges such as increasing revenue through new market entry or mergers and acquisitions. The formation of the UK MNCs corporate strategy has to take into account the balance between those activities that need to be centralized or standardized and the degree of flexibility required by the affiliate to operate in the host country Brock (2005). The formation of HR strategies is distinguishable by variance in terms of level of abstraction and scope. The level of abstraction refers to the level at which the HR strategy is focused. According to Combs et al. (2006), there are different levels of abstraction in the design of a global HR system. Levels vary from recommendations, policy, to operational-level procedures. With a policy-level of abstraction, affiliates are given the freedom to implement their own HR strategies within the broad parameters of the standardized policies. However, with an operational level of abstraction, affiliates are expected to implement a more detailed HR management practice. Scope refers to the extent of HR management practices dealt with in the HR strategy. For example, the HR strategy may have a Effect of Human Resources on Global Expansion of MNCs Effect of Human Resources on Global Expansion of MNCs MBA Literature review The Relevance of Innovative Human Resource Programs to Facilitate Global Expansion of Multinational Companies (MNCs) from the UK. 2. Introduction The activities of multinational companies (MNCs) are at the heart of Britains internationally open and global economy. This global economy has emerged as companies all over the world are joining forces through alliances, mergers, joint ventures, acquisitions, and the like, thus creating the need for a constant mobile workforce and the HRM strategies to support and develop it. This would therefore imply a fundamental shift in the role of human resources from transaction and administration to strategy and business transformation through innovative programmes which supports the global strategy of the company. This section gives an overview of the literature review and the theoretical basis for the forthcoming chapters. The chapter consists of journals, books and research materials which throw more light into Innovative Human Resource Programs to Facilitate Global Expansion of Multinational Companies (MNCs) from the UK. The following were the primary information sources used for the literature review; ACM Digital Library Pro-Quest Direct EBSCO Publishing Gale Group Info Track OCLC First-Search Java Sun Microsystems Library IEEE Library Emerald Database 2.1 Evolution from Personnel Management to HRM According to Guest (1987), the origins of the traditional concept of personnel management can be traced to the post World War One welfare tradition of concern for the basic needs of employees. The developing and mature phases of personnel management from the 1940s to the 1970s saw an increase in the status and professionalism accorded to the personnel function, particularly in relation to industrial relations (IR) matters (see Sparrow 2004). The concept of HRM, as a new strategic approach to the management of people, evolved in the early 1980s (Ericksen 2005). Its evolution was influenced by a range of factors, including increased competitive pressures caused by deregulation and globalisation, and the influence of notable academics in the US and the UK (Ericksen, 2005). Although it has been suggested that HRM may be no more than old style personnel management with a new name (Gunnigle and Flood, 1990), Storey (1992) identifies four features of HRM which distinguish it from traditional personnel management: it is explicitly linked with corporate strategy; it seeks to obtain the commitment of employees rather than their compliance; employee commitment is obtained through an integrated approach to human resource policies (for example, reward, appraisal, selection, training); and unlike personnel management, which is primarily the domain of specialists, HRM is owned by line managers as a means of fostering integration. 2.1.1 Approaches to Human Resource Management 2.1.1.1 Hard Approach If an organisation focuses on control of resources and achievement of strategy, it may adopt a hard approach to HRM (see Storey, 1989) in which employees are viewed as a resource to be managed like any other factor of production. In this approach, the critical task for management is to align the formal structure and HR systems of the organisation so that they drive the strategic objectives of the organisation. This approach is exemplified in the strategic model of HRM developed by Fombrun et al (1984). It has been argued however that an over-emphasis on hard HRM ignores the potential resistance of workers and trade unions, factors which cannot be ignored if business strategy is to succeed (see Hendry, 1995). 2.1.1.2 Soft Approach In contrast, an organisation may place an emphasis on a soft approach to HRM (Storey, 1992 p. 30), in which employees are viewed as a valuable asset whose commitment will assist in achieving organisational success. The objective for organisations in such an approach is to integrate HR policies with the strategic planning process, to gain the willing commitment of employees, to achieve flexibility through avoidance of rigid bureaucratic structures and to improve quality (see Guest, 1987). The most well known soft model of HRM is known as the Harvard Model of HRM (Beer et al 1984), views business strategy as just one situational factor which influences managements approach to HRM. This model identifies a range of other situational factors which influence HR policy choices, including prevailing management philosophy, laws and societal values. In the context of this study, this model is significant in that it identifies a range of stakeholder interests (including unions, government and m anagement) which influence HR policy choices. It is argued that unless HR policies are influenced by key stakeholders, the enterprise will fail to meet the needs of these stakeholders, and ultimately its own objectives (see Beer et al 1984). 2.1.1.3 Ideal Type Model: Integrated links from Personnel to HRM Storey (1992) outlines a further model which illustrates the process involved in shifting from traditional personnel management to HRM. While this is an ideal type model, it comprises features which are significant for this study. For example, it stresses the need for integrated links between beliefs, assumptions, management issues and key elements of HRM. It also identifies key levers of change in the various elements of HRM, including recruitment and selection, training and development and conditions of employment. A strategic approach to HRM can be developed by creating effective policies in these areas (Storey 1992) 2.1.2 The integrative aspects of HRM A key theme running through many of the models is integration, which according to Guest (1987) lies at the heart of HRM. He identifies integration at three levels: integration of HRM policies with business strategy; integration of a set of complementary HRM policies; integration of HRM into the line management function. 2.1.3 The Role of Management According to Storey (1992), best practice indicates that the extent to which the transition process from traditional personnel functions to strategic HRM functions can be achieved will be influenced significantly by the belief and support of senior management in the added value that HRM can contribute to the organisation. More importantly, this belief must be visibly demonstrated, for example by committing additional resources to the development of HR strategy and the building up of HR skills levels. As a first step, the head of HR should be afforded a genuine role in the formulation of key business decisions. This contribution must be an integral part of the business strategy formulation process, so that HR issues are accorded a key priority as opposed to simply being added on to, or indeed excluded from, the core business of the organisation. On an ongoing basis, heads of HR should also be enabled to have a genuine input into decisions taken at top management level which have impli cations for HR. Clearly, if the head of HR is to be enabled to play a genuine role in ensuring that HRM issues become a top management priority, it is important that the professionalism accorded to HR, for example through the development of expertise in integrating HR and business strategies, begins at this level. 2.2 Definitions: Innovative HR Programmes According to Agarwala (2003), defines innovative human resource programmes of a company can be described as: Any intentional introduction or change of HRM program, policy, practice or system designed to influence or adapt employee the skills, behaviours, and interactions of employees and have the potential to provide both the foundation for strategy formulation and the means of strategy implementation that is perceived to be new and creates current capabilities and competencies (Agarwala, 2003). 2.2.1 Innovative HR Programmes According to James (2002), innovative programmes can be grouped into a set of new initiatives which are associated with the process of developing a strategic approach to HRMenhancing its competitiveness. A few of these include: Reducing costs through shared services centres, self-service, and outsourcing. Develop uniform HR processes recognising local regulatory requirements to help foster a low-cost, administrative delivery model. Create a self-service culture for employees and managers. Establish global employee shared services centres focused on delivering HR administrative support to multiple geographic areas, thereby reducing administrative overhead. Outsource key services that can be more efficiently managed and administered externally. Streamlining technology and information management Improve information access to help companies more efficiently manage their human capital assets, provide employees and managers with enhanced access to information, improve HR reporting, and address growing compliance requirements. Reduce HR technology operating costs by consolidating multiple technologies, technical infrastructure, and IT skills. Managing people globally Help enable the company to respond to the interdependencies of global markets by managing human assets globally rather than nationally or regionally thereby improving competitiveness in the international marketplace. Enabling HR to shift its focus from administration to strategy Remove the administrative component of the work of business HR professionals, enabling them to provide more value-added services and to focus on consultative and analytical interactions with line managers. Facilitate HRs transition to a strategic partnership with the company by upgrading talent and skills within the HR function. 2.3 Background: Human Resource Evolution According to Cooke (2003), first Generation HR Transformation represented a fundamental shift in HRs role, from transactions and administration to strategy and business transformation. First Generation HR Transformation focused on changing the existing relationship between employees, managers, and HR, (Randall 2006). With technology as a key enabler and process re-engineering playing a pivotal role, this First Generation effort sought to help make employees more self-sufficient, whilst asking them to take more responsibility for their own careers (Datta et al 2005). It also sought to help remove HR from the middle of the employee/manager relationship by making managers more responsible for handling their employees HR needs. Over the past ten years, HR Transformation has led to a major restructuring of HR operations and processes transforming the way HR services are delivered Cooke (2003). 2.4 UK MNCs: Achieving Global Expansion MNCs in the United Kingdom have long been well established in manufacturing, but in recent years they have emerged as dominant players in the private service sector and have even become involved in the provision of public services (Edwards 2004). Levels of both inward and outward investment are high: foreign direct investment (FDI) into the UK by companies based overseas accounts for almost 9% of the total global stock while UK-based companies investments overseas account for over 14% of the global stock (Edwards 2004). In both instances, the UK is second only to the worlds largest economy, the United States. As a result MNCs are significant employers in Britain; for example, 18% of the workforce in the production sector are employed by overseas-owned companies with many more being employed in the domestic operations of British-owned multinationals (Edwards 2004). For multinational companies in the UK to achieve a successful transition in their drive for global expansion and competitive advantage, multinational companies would require innovative HR programmes which would enable them to anticipate critical workforce trends, shaping and executing business strategy, identifying and addressing people-related risks and regulations, enhancing workforce performance and productivity, and offering new HR services to help a company improve and grow (Edwards et al 2007). 2.5 HR Practices: Effectiveness A number of authors have explored the links between individual HR practices and corporate financial performance. For example, Lam and White (1998) reported that firms HR orientations (measured by the effective recruitment of employees, above average compensation, and extensive training and development) were related to return on assets, growth in sales, and growth in stock values. Using a sample of banks, Richard and Johnson (2001) examined the impact of strategic HRM effectiveness (ratings of how effectively a variety of HR practices were performed) on a number of performance variables. They found that strategic HRM effectiveness was directly related to employee turnover and the relationship between this measure and return on equity was stronger among banks with higher capital intensity (greater investments in branches). In this thesis, HRM would be described in the context of a number of innovative practices which have been proven to enable MNCs manage the transition process in thei r drive for global expansion, thus enabling organizational effectiveness and better performance outcomes. Wright and McMahan (1992) defined innovative human resource programmes as practices and activities employed to enable an organization achieve its goals. These practices are seen as a departure from the traditional HR activities. Delery and Doty (1996) asserts that these practices are key drivers required by MNCs to respond with the right strategy as they expand their operations in different environments (Boselie et al, 2005). 2.6 Empirical Research: Human Resource Factors MNC Global Expansion The drive for global expansion by UK MNCs has necessitated the need for a human resource strategy that would ensure that the company is able to sustain its workforce. This has therefore led to the departure from the traditional HR administrative role to a more robust global HR function which takes cognisance of employee profile, the work and environment demographics, de-skilling, re-skilling and multi-skilling and issues related to outsourcing and synergy of its processes vis-à  -vis work-force reduction Lam and White (1998). The largest survey of employment practice of multinational companies (MNCs) in the UK was carried out by Edwards et al (2007). The key findings from the first large-scale, representative survey of employment practice in MNCs which have operations in the UK. The survey is comprehensive in its coverage of all but the smallest international companies. The findings derive from interviews with senior HR executives in each of 302 multinationals operating in Britain, both overseas- and UK-owned. The findings from the research suggest a connection between human resource practices and the performance of firms, a summary include the following HR programmes stated below. 2.6.1 Innovative HR Practice: Compensation Payment 85% of the firms surveyed were found to have a robust innovative program in terms of compensation and payment. This is achieved through a performance appraisal programme such as upward/peer appraisal and forced distribution. 72% of the MNCs utilized an innovative scheme for managers, through individual ‘output criteria which were supplemented by a range of other criteria including behaviour in relation to desired competencies and to corporate values. 2.6.2 Innovative HR Practice: Training Development Programmes In respect of adoption of high potential innovative training programmes among MNCs, the organisations were asked if both their UK and overseas operations had a management development programme specifically aimed at developing its ‘high potentials or senior management and employee potential. The data show that high potential programmes are adopted by 70% of organisations; 30% of organisations are not using them. Organisations were asked whether they used a global high potential programme that was adopted elsewhere worldwide, or a local, nationally specific programme. Most organisations indicated that their programmes are global in scope. 2.6.3 Innovative HR Practice: Appraisal Activities In comparison of performance appraisal practices and management values, the formal performance appraisal schemes for all three groups are very widespread; over nine out of ten firms have them for key group and managers, and over 80% have them for large occupational groups. Only 3% of firms have no formal appraisals at all. Just over a fifth of firms use ‘forced distributions for the results of appraisal. A clear majority of firms use the results of appraisal as the basis of decisions on redundancy and redeployment. 2.6.4 Innovative HR Practice: Employee Involvement Communication UK-based multinationals most commonly cite ‘setting a broad policy HR programme as being significant or very significant (62% and 66% for training and development and for employee involvement policy respectively). HR advice and consultancy is also relatively prominent for training and development policy (53% significant or very significant), but less so for employee involvement policy (33%). For training and development, and employee involvement, policy, the respective proportions reporting the other means of influence as significant or very significant are: setting detailed HR policies (32% and 31%); monitoring HR policy implementation (39% and 34%); and HR benchmarking and information exchange (42% and 28%). 2.6.5 Innovative HR Practice: Global Knowledge Sharing Diffusion In respect of innovative HR programmes which promote employee knowledge, learning and diffusion, international employee learning mechanisms are used extensively across all MNC both within the UK and across overseas operations. The survey focused on five formal organisational learning mechanisms used by managers that are international in their scope: International projects groups or task forces, which are often used to address specific issues; International formal committees; Secondments involving the placing of MNC employees in external organisations such as suppliers, customers, universities or private RD companies; Expatriate assignments The evidence showed that the most common organisational learning mechanism adopted among the managerial community within MNCs is the informal network (used by 84% of companies). International project groups/task forces also play a prominent role (used by 73% of organisations) and to a lesser degree expatriate assignments (used by 60% of organisations) and international formal committees (53% of organisations). In contrast, secondments are only adopted by around a quarter of the organisations (26%). The majority (82%) of organisations use two or more organisational learning mechanisms, with 53% adopting between three and four of the five organisational learning mechanisms among their managerial community. Around 9% fail to use any of the mechanisms listed. MNCs requiring integration between the UK operations and other sites worldwide are significantly more likely to adopt multiple organisational learning mechanisms (Tregaskis, Glover and Ferner, 2005). However, these national variatio ns show that the form that organisational learning and diffusion take is strongly shaped by the national context of the parent firm. 2.6.6 Innovative HR Practice: UK MNCs Use of Shared Services According to Edwards et al (2007), the findings from the study found that half of the UK MNCs operate shared services centres and have international HR policy formation bodies. They are far less likely, compared to US and other European MNCs, to have a worldwide approach to workforce management. UK firms consistently aim to pay a greater proportion of employees (managers, LOG and key group) in the top or 2nd quartile. Nine in ten UK firm have performance appraisal for their managers while seven in ten have formal appraisals for their LOG (Edwards et al 2007). Use of forced distribution is uncommon as is the use of 360-degree feedback. An overwhelming majority of UK MNCs tend to recognise trade unions for collective bargaining purposes. Formally designed teams and problem-solving groups are commonly found in UK MNCs as are a large number of communication mechanisms with meetings between line managers and employees, newsletters/emails and systematic use of the management chain the most commonly found communication mechanisms. Although the majority of UK MNCs have succession planning and formal management development programmes these tend to be comparatively less than other MNCs. 2.6.7 Use of Expatriates According to Edwards et al 2007, UK MNCs make considerably greater use of parent country expatriates than third country expatriates. This may reflect the short geographical proximity and cultural similarity between the UK and Ireland. UK MNCs tend to have considerable discretion over the various HR policy areas, much more than US firms. 2.6.8 IT Based Networks Services A key development in HR service provision over the past two decades has been the increased use of information technology (IT) (Edwards et al 2007). This is all the more relevant in MNCs, where IT systems may be used to monitor policy implementation and performance, and also to facilitate communications and networking, across borders. It thus provides an insight on the extent to which corporate management has access to HR data on its international operations and can compare performance on HR metrics across sites and countries. Specifically examined was the usage of IT based HR information systems (HRIS) and ‘shared services provision on an international level. In regard to the diffusion of HRIS, respondents were asked whether the worldwide company had an â€Å"HR Information System (such as PeopleSoft or SAP HR) that holds data relating to the firms international workforce†. The responses for both foreign and UK-owned MNCs showed that just over half (54 per cent) of all MNCs in the UK reported the use of HRIS that operates on an international basis. This is a similar to a study by Collings et al (2007), that found in the parallel UK study, where some 52 per cent used such a system (Edwards et al., 2007). However, among MNCs in the UK, a greater proportion of foreign-owned MNCs (56 percent) than UK-owned MNCs (44 per cent) reported the use of HRIS on an international basis (Edwards et al 2007). There were some discernable differences in regard to ownership. As indicated from the study, American firms were the highest users of HRIS (70 per cent), while the ‘rest of the world MNCs is the least likely. This again resonates with the UK findings where US MNCs were among the greatest users of HRIS and Japanese MNCs the lowest (Edwards et al, 2007). The impact of sector on the take-up of HRIS will be fully outlined and placed in the appendix in the forthcoming chapters. Among UK MNCs, the service sector accounted for the greatest number of firms with HRIS. However, among foreign-owned MNCs multi-sector firms were by far the largest users, followed by those in the service. 2.7 Previous Research: Human Resource Factors Previous studies have been utilized in exploring the current human resource innovative programmes that UK MNCs must take into account in their drive for global expansion. One of the main limitations of this review is that it is limited within the context of UK MNCs as there was the lack of evidence to determine the effects of these practices on MNCs operating in the context of both emerging and non-emerging economies. This is in consonance with Ericksen and Dyer (2005) and Wright et als., (2005), both of who also called for further empirical research from different contexts. Gerhart (2005) substantiate the question, to what extent are these innovative HR programmes valid for other context by saying: â€Å"This is a concern because it seems unlikely that one set of HR practices will work equally well no matter what context†. To shed more light on the issue and to further examine the relevance and effects of such programmes, it is important to conduct research in non-US / UK con text, (Katou Budhwar, 2007), especially in emerging economies. 2.8 HR Factors for Global Expansion: Effectiveness Previous research has explored the links between individual HR practices and corporate overall performance. For example, Lam and White (1998) reported that firms HR innovative programmes which are largely measured by the effective recruitment of employees, compensation programme, and extensive training and development were related to return on assets, growth in sales, and growth in stock values. Using a sample of manufacturing companies, multinational servicing companies and global financial institutions, Richard and Johnson (2001) examined the impact of strategic HRM effectiveness (ratings of how effectively a variety of HR practices were performed) on a number of performance variables. The findings suggested that implementation of innovative HR programmes had an effect on employee turnover and the overall performance of the company. 2.8.1 Recruitment Selection According to Terpstra and Rozelles (1993), who compared the relationship between recruiting / selection practices among US / UK MNCs and the firms performance, it was found that there was a strong connection in the companys performance between implementation of the new HR practices and the previous traditional practices, this was focused mainly on recruiting, selection and the use of formal selection procedures and firm performance. Cascio (1991) also states that the improved performances recorded after implementation of such new HR practices are generally substantial. 2.8.2 Employment Training Programmes Russel, Terborg and Powers (1985) in a survey of 30 US MNCs establish a link between the adoption of employment training programs and financial performance. The use of performance appraisals (Borman, 1991) and linking such appraisals with compensation has strongly been connected with the performance of a firm. (Gerhart Milkovich, 1990). Koch and McGrath (1996) reported that firms using more sophisticated staffing practices (planning, recruiting, and selection) had higher labour productivity. 2.8.3 Communication Employee Involvement Huselid (1995) reported that HR practices can influence firm performance through provision of organization structures that support involvement among employees and provides flexibility for improvement of job performance. Green et al (2006) states from findings of a survey that organizations that vertically aligned and horizontally integrated core human resource functions and practices performed better and produced more committed and satisfied HR function employees who exhibited improved individual and organizational performance. 2.8.4 Other Models Most of the work on innovative human resource programmes and the companys performance has been undertaken in the context of MNCs who consider the US and the UK as their home country. The question which arises, though, is whether the UK and US-oriented models are appropriate and representative in other contexts (see debate in special issue of the International Journal of Human Resource Management, 12(7), 2001). Other studies analyzed such as Harel and Tzafrir (1999) found that in parts of Asia and the middle-east, innovative HR practices were related to perceived organizational and market performance. Bae and Lawler (2000) did find a significant relationship between HR practices and firm performance in their sample of 140 manufacturing firms in Asia, covering china, Japan and South Korea. Lee and Miller (1999) also found a strong relationship between HR practices and performance among a number of MNCs in Asia, but it is clearly stated that this relationship was most strongly pronounce d among firms using dedicated positioning (marketing differentiation or innovative differentiation) strategies. Bae et al., (2003) in their study of HR strategy in Pacific Rim countries found that the evidence of a strong relationship was however based on strict high-performance work system with a number of variable conditions. Morishima (1998) found support for the contingency perspective in a sample of Japanese companies. Firms with well-integrated high-involvement work practices and firms with well-integrated practices consistent with more traditional Japanese employment strategies both did better than firms with poorly integrated practices. Bae et al (2003) in their investigation of Hong Kong multinational companies found an increase in the firms performance due to certain core innovative HR work practices (training and compensation techniques) with high involvement characteristics. 2.9 Implementation Whilst there are currently limited researches in respect of implementation of innovative HR programs in the context of UK MNCs, however, according to Briscoe and Schuler (2004), Implementation may vary in respect of ‘what and how, thus limiting the value of comparative survey research. Chew and Horowitz (2004) states that the subject of implementation should only be considered in the context of the specific MNC or firm involved, as there are lots of contextual factors and limitations in implementation hence the need to be cautious and dissuade any hasty conclusions when taking on findings from research journals on implementation. Horowitz (2004) states that primary research on implementation would need to focus on contingency approaches and mediating variables affecting the MNC level application. A number of theoretical approaches would also add to the importance of ‘context frameworks such as integration/divergence or universalism versus local particularism, and ethnocen tric, geocentric, regiocentric and polycentric managerial strategies (Chew et al 2004). The author believes that such an extensive approach would not only examine the relationship between human resource innovative practices and relevance, but would take into account the host environment. 2.9.1 Implementation Expansion: Formation of HR Strategies According to Briscoe et al (2004), very little work has been done on the formation of methods for implementing and controlling the transition from specific administration HR services unto innovative programmes that are directly linked to strategic challenges such as increasing revenue through new market entry or mergers and acquisitions. The formation of the UK MNCs corporate strategy has to take into account the balance between those activities that need to be centralized or standardized and the degree of flexibility required by the affiliate to operate in the host country Brock (2005). The formation of HR strategies is distinguishable by variance in terms of level of abstraction and scope. The level of abstraction refers to the level at which the HR strategy is focused. According to Combs et al. (2006), there are different levels of abstraction in the design of a global HR system. Levels vary from recommendations, policy, to operational-level procedures. With a policy-level of abstraction, affiliates are given the freedom to implement their own HR strategies within the broad parameters of the standardized policies. However, with an operational level of abstraction, affiliates are expected to implement a more detailed HR management practice. Scope refers to the extent of HR management practices dealt with in the HR strategy. For example, the HR strategy may have a

Assessment of Problem of Tax Administration in Nigeria Economy (a Case Sturdy of Federal Inland Revenue)

TABLE OF CONTENT Title Page – – – – – – – – – – – – – – – – – – – – – i Declaration – – – – – – – – – – – – – – – – – – – – – ii Dedication – – – – – – – – – – – – – – – – – – – – – iii Acknowledgement – – – – – – – – – – – – – – – – – – – – – iv Abstract – – – – – – – – – – – – – – – – – – – – – v Table of content – – – – – – – – – – – – – – – – – – – – – vi CHAPTER ONE: INTRODUCTION 1. 1 Background of the study 1. 2 Statement of the problem 1. 3 Objective of the study 1. 4 Research question and hypothesis 1. 5 Scope of the study 1. 6 Significance of the study 1. 7 Definition of terms 1. 8 Plan of the studyCHAPTER TWO: LITERATURE REVIEW 2. 1 Introduction 2. 2 Review of the Nigerian capital market 2. 3 Bond financing Prospect, Benefit, And Associated Risk 2. 4 The impediment and problem of Bond development in Nigeria 2. 5 Recent developments in the Nigerian Bond market 2. 6 Theoretical framework 2. 7 summary of the chapter CHAPTER THREE: RESEARCH METHODOLOGY 3. 1 Introduction 3. 2 Research Design 3. 3 Sources and Methods of Data Collection 3. 4 Methods of Data Analysis 3. 5 Justification For the Method Used 3. 6 Summary of the Chapter CHAPTER FOUR: DATA PRSENTATION AND ANALYSIS 4. 1 Introduction 4. 2 Data presentation And Analysis 4. Hypothesis And model testing 4. 4 Discussion on Research Findings 4. 5 Summary Of Findings CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION 5. 1 Summary 5. 2 Conclusion 5. 3 Limitation Of The Study 5. 4 Recommendation 5. 5 References CHAPTER ONE: INTRODUCTION 1. 1 BACKGROUND OF THE STUDY: The importance and centrality of the financial system to the growth of any economy is obvious and indisputable. It has been postulated that a well developed financial system performs several critical functions that enhanced the efficiency of their financial intermediation roles with highly reduced costs of information, transaction and monitoring.Also, it promotes investment by identifying and locating viable business opportunities; helps in mobilizing savings; monitors the performance of managers thereby enabling trading, hedging and diversification of ri sk in order to facilitate the exchange of goods and services. These functions result in efficient allocation of resources and rapid accumulation of physical and human capital with faster technological process which in turn feed economic growth. The financial market is a sub-set of the financial system where funds from surplus economic units are pooled and made available to deficit units at a cost. The financial market consists of the money and the capital markets.The money market is the market for short term funds with a maturity period of not more than a year. The Capital Market consists of institutions and procedures that provide for transactions in long term financial instruments with a maturity of more than one year. The major instruments that are used in raising funds in the Nigeria Capital Market include Debts – Government bonds (Federal, State and Local Governments), Industrial loan stocks or Debentures, Preference Stocks, and Equities – ordinary shares. Instrum ents classified as Debt securities are generally referred to as bonds because of their fixed income characteristics except for preference stock which is a hybrid instrument.Therefore investors in bonds are essentially lending money to the issuer. Some of the common bond issuers are governments (Federal, State and Local Government), government agencies and corporate institutions. There are different types of bonds with its unique features relating to the way it pays interest, the market in which the bond is issued, the currency it is payable in, protective features and the legal framework under which it operates. The bond market is the channel through which government and corporations that need to borrow money are matched with investors who have funds to lend. There are really two markets for bonds – THE PRIMARY AND THE SECONDARY MARKET.The underdeveloped nature of the Nigerian Bond market is reflected through the depth of the market, lack of investors’ confidence, infl ationary pressure coupled with continuous depreciation of the Naira, absence of major international rating organization, absence of secondary trading market, macro-economic instability and closed nature of the market to external actors. All these indices indicate the faulty fundamentals of the market and hence its inability to contribute significantly to the growth and development of the Nigerian economy as it obtains in other developed countries of the world like Europe and United States of America. The effect of reviving theNigerian Bond market on the Nigerian economy cannot be overemphasized as it will enhance the achievement of a transformed economy through provision of long term funding to government and corporate borrowers, foreign investment, participation in the global bond market and international capital flow. However, how fast the Nigeria government and financial authorities move to combat the faulty fundamentals of the market will determine its efficiency and effectivene ss as a major provider of the long term finance needed for Nigeria’s economic growth. In Nigeria, one major defect for the slow pace of development of the real sector which is necessary to bring about a sustained economic growth and development is inadequate finance.It is therefore pertinent to examine theoretically and comparatively the roles the Nigerian Bond market can play in the growth of the Nigerian economy with a view of assessing the effect of bond market development in an imperative way to achieve a transformed economy. 1. 2 STATEMENT OF THE PROBLEM The major problem that brought about slow movement of developing the real sector of Nigeria which is necessary to bring about a sustained economic growth and development is inadequate finance. This can be traced largely to the underdeveloped state of the Debt segment of the Nigerian Capital Market which is supposed to serve as the vehicle for the mobilization and provision of long-term funds needed by both government and corporate organizations to embark on developmental projects needed for economic growth and development.The underdeveloped state of the bond segment of the Nigeria capital market has in time past led to distortions in the economy as most corporate organizations sourced their long term funds from commercial banks. This in effect is a financial mismatch funding strategy where long term projects are funded with short term finance. The commercial banks are set-up to provide only short term funding due to the nature of their sources of funds; whereas the kind of finance needed for sustainable development are long term funds. Also, because there is no developed outlet for the sourcing of long term funds by corporate organizations, there is overdependence on government to dictate and direct the pace of economic development.Thus, business activities are predicated on public expenditure projections and when these projections and budgets are delayed or not forthcoming, economic activities in the whole economy is directly adversely affected. 1. 3 OBJECTIVE OF THE STUDY The major objective of this study is to assess the effective development of the Nigerian bond market and it essential effect on the growth of the economy is however the task of this study. Other objective is to, (i) Find out whether there exist an optimal economy whereas bond market can be developed. 1. 4 RESEARCH QUESTION AND HYPOTHESIS In line with the research problem, some specific questions must receive answers in the course of the study.These questions are as follow: (i) How does development of Nigerian bond market affect economic growth? (ii) Does inadequate finance result from underdevelopment state of debt segment in the Nigerian capital market? 1. 4. 1 HYPOTHESIS Ho: There is no significant relationship between effective development of the Nigerian Bond market and economic growth. H1: There is a significant relationship between effective development of the Nigerian Bond market and economic growth . 1. 5 SCOPE OF THE STUDY This research is carried out mainly on Nigerian capital market to assess the development on fund to the Nigerian economy it covers data sourced from Nigerian stock exchange, Annual report, Security and exchange commission and National News paper.It covers the period of eight years (2000- 2008) 1. 6 SIGNIFICANCE OF THE STUDY The important of this study cannot be overemphasized owing to the value of a research on this nature. To the end, this research is carried out to bring to the attention of financial managers of the firms especially financial institutions, relevant information regarding to Bond market and economy development in order to assist in making financial decision. 1. 7 DEFINITION OF TERMS (i) Bond: A bond is simply a certificate of indebtedness issued by a borrower to a lender. (ii) Capital Market: This is the market for intermediate and long term securities that have more than one year of maturity say three years. iii) Debt: This is referred to as an obligation owed by one party (the debtor) to a second party the creditor. (iv) Debenture: This is referred to as type of bond that is not secured by physical asset or collateral, it is credit worthiness and reputation of the issuer. (v) Equity: this referred to as the residual claim or interest of the junior class of investors in asset after all liabilities have been paid. (vi) Financial Market: The financial market is a sub-set of the financial system where funds from surplus economic units are pooled and made available to deficit units at a cost. (vii) Money Market: This market is the market for short term funds with a maturity period of not more than a year. (viii) Preference Stock: ix) Primary Market: This is referred to as the market where securities are newly issued. (x) Secondary Market: This is referred to as the market where existing securities are traded. 1. 9 PLAN OF THE STUDY This research project is divided into five (5) chapters for better and easy understanding, chapter two (2) is the review of related literatures; the literature is reviewed with a view to lay a foundation for the building of new research that we are currently undergoing. It gives directions and light to research work. Chapter three (3) tell us about the method(s) of research used in this project. It shows the research design, source of data, method of data collection, and techniques of data analysis among others.Chapter four (4) is mainly the presentation of data and the analysis. Here our research hypothesis will be tested in order to enable us draw a conclusion on the topic under consideration. The final chapter which is chapter five (5) will highlight on the conclusion, summary and recommendation. CHAPTER TWO: LITERATURE REVIEW 2. 1 Introduction A bond is a debt security in which the issuer owes the holder a debt and is obliged to repay the principal and interest (coupon) at a later date, termed maturity. Other stipulations may also be attached to the bond issued, such as the obligation of the issuer to provide certain information to the bondholder or limitations on the behaviour of the issuer.Bonds are generally issued for a fixed term (the maturity) longer than one year (Olashore, 2006). Umoren (2000) also defines a bond as basically IOU’S of longer duration than the average money market instrument present in a given market. According to Fahm (2006), a bond is a long term debt instrument issued by an entity, company or government as evidence of a promise to pay. The claim protects the holder in circumstances in which the issuer is unable to pay the amount due. According to Oni (2006. ), the entity borrowing money by the way of a bond is called the issuer and the person investing is the buyer. The issuer of a bond promises to pay the buyer’s interest which is called a coupon for the privilege of using the buyer’s money.The issuer also promises to return the money which is the principal to the buyer on a specified date called the maturity date. The coupon which is a predetermined interest account is paid to the buyer at periodic intervals throughout the life of the bond. It is the nature of known periodic interest amount (coupon) and known principal amount that gave rise to the nomenclature â€Å"fixed income securities† given to bonds. Corporate bonds are often called debentures, but the term debenture is usually used to refer to borrowings without specified collateral. Such borrowings are based on the general credit standing of the borrower. In Nigeria, however, some debentures are said to be mortgage debentures.In such cases, the security provided goes beyond the credit worthiness of the borrowers to include a mortgage of some specific assets and also all future assets (Odife, 1999). 2. 2 Review of the Nigerian capital market 2. 3 Bond financing: Prospect, Benefit, And Associated Risk 2. 4 The impediment and problem of Bond development in Nigeria 2. 5 Recent developments in the Nigerian Bond m arket 2. 6 Theoretical framework 2. 7 summary of the chapter CHAPTER THREE: RESEARCH METHODOLOGY 3. 1 Introduction 3. 2 Research Design 3. 3 Sources and Methods of Data Collection 3. 4 Method of Data Analysis 3. 5 Justification for the Method Used 3. 6 Summary of the Chapter

Swot Analysis Mcdonalds

Running Head: MARKETING SWOT Analysis Answer 1. The company so selected for the sake of carrying upon SWOT Analysis is McDonalds. The company is found to run its food outlets all around the globe. It basically deals in fast-foods. The customers serve to be the main aspect for the company. It used to collect feedback from the customers on a regular basis. The SWOT Analysis is the tool that is used from the point of developing pertinent knowledge about company’s position in the market. From this, it can improve the weak areas and can strengthen the strong aspects more and more. The information regarding company’s SWOT Analysis can be derived from Company’s website, annual reports, books, articles and journals. All these prove to be effective from the point of developing knowledge about its strength, weakness, threats and opportunities (McDonald’s Corporation: The Past, Present, and Future, n. d. ). The strength of the company is that it is operating in accordance with various cultures. It serves to be a socially responsible company and actively work for community’s betterment. It is also placed on a great position under Fortune ranking list. The weaknesses linked with the company are that it failed to move towards pizza market. In addition to this, it needs to capitalize on the trend towards organic foods as well. The changing preferences of the customers also pose a problem in front of the company. The company understands customer’s value in business and that is why asking them regularly for more improvements. The health of the customers is taken into account with due effect and this makes it high (McDonalds, 2011). It serves to be the opportunities for the company. The threats are that the company faces intense competition and this makes things impossible. At the same time, it is also important to see to it that all these things need to be considered from the point of indentifying company’s actual position. The SWOT Analysis related to the company can be easily found out. But it seems to be very much general in approach. The point is to derive best possible information. The data and all other relevant information are not available easily while writing up SWOT Analysis for a company (Meldrum & McDonald, 007). Answer 2. The SWOT Analysis is being conducted by taking information from books, company’s website, articles etc. All these altogether supports a lot in making things carried upon effectively. The information is being collectively taken from all these sources. The best possible information can be derived from books and articles. Actually, things are quite understandable and comprehensible. With this, it becomes quite easy to u nderstand importance of things in a far better mode. The steps that are being adopted for checking as to information are valid or reliable or not. It is important to arrive at a better conclusion with the help of accumulating information from the authentic sources. The sources so utilized need to be effective and valuable so that interpretations can also be made properly and successfully. In addition to this, SWOT Analysis can be performed and carried out effectively as well (Our Company, 2011). Answer 3. The manager of the company is required to carry upon strategic decisions on the basis of company’s position. The SWOT Analysis so carried upon leads to make things effective and successful in approach. The information so derived online seems to be somewhat ineffective in approach. It would be better to go for developing more knowledge from some better sources. With this, it is for sure that decision-making can be made effective and good in approach. The situations need to be analyzed with due effect as well. It would make manager confident as well as self-assured from the point of carrying upon business practices in a far better way. The other relevant sources that can be used for the sake of completing SWOT analysis for the company are that proper studies and company’s previous records need to be examined and investigated with due respect. It would lead to make things effective and appropriate for the company as well (McDonalds Corporation, n. d. ). References McDonald’s Corporation: The Past, Present, and Future. (n. d. ). Retrieved March 15, 2011, from http://2myprofessor. com/Common/Sample%20Projects/McDonald%27s_Corporation. PDF McDonalds. (2011). Retrieved March 15, 2011, from http://www. mcdonalds. com/us/en/home. html McDonalds Corporation. (n. d. ). Swot Analysis Mcdonalds Running Head: MARKETING SWOT Analysis Answer 1. The company so selected for the sake of carrying upon SWOT Analysis is McDonalds. The company is found to run its food outlets all around the globe. It basically deals in fast-foods. The customers serve to be the main aspect for the company. It used to collect feedback from the customers on a regular basis. The SWOT Analysis is the tool that is used from the point of developing pertinent knowledge about company’s position in the market. From this, it can improve the weak areas and can strengthen the strong aspects more and more. The information regarding company’s SWOT Analysis can be derived from Company’s website, annual reports, books, articles and journals. All these prove to be effective from the point of developing knowledge about its strength, weakness, threats and opportunities (McDonald’s Corporation: The Past, Present, and Future, n. d. ). The strength of the company is that it is operating in accordance with various cultures. It serves to be a socially responsible company and actively work for community’s betterment. It is also placed on a great position under Fortune ranking list. The weaknesses linked with the company are that it failed to move towards pizza market. In addition to this, it needs to capitalize on the trend towards organic foods as well. The changing preferences of the customers also pose a problem in front of the company. The company understands customer’s value in business and that is why asking them regularly for more improvements. The health of the customers is taken into account with due effect and this makes it high (McDonalds, 2011). It serves to be the opportunities for the company. The threats are that the company faces intense competition and this makes things impossible. At the same time, it is also important to see to it that all these things need to be considered from the point of indentifying company’s actual position. The SWOT Analysis related to the company can be easily found out. But it seems to be very much general in approach. The point is to derive best possible information. The data and all other relevant information are not available easily while writing up SWOT Analysis for a company (Meldrum & McDonald, 007). Answer 2. The SWOT Analysis is being conducted by taking information from books, company’s website, articles etc. All these altogether supports a lot in making things carried upon effectively. The information is being collectively taken from all these sources. The best possible information can be derived from books and articles. Actually, things are quite understandable and comprehensible. With this, it becomes quite easy to u nderstand importance of things in a far better mode. The steps that are being adopted for checking as to information are valid or reliable or not. It is important to arrive at a better conclusion with the help of accumulating information from the authentic sources. The sources so utilized need to be effective and valuable so that interpretations can also be made properly and successfully. In addition to this, SWOT Analysis can be performed and carried out effectively as well (Our Company, 2011). Answer 3. The manager of the company is required to carry upon strategic decisions on the basis of company’s position. The SWOT Analysis so carried upon leads to make things effective and successful in approach. The information so derived online seems to be somewhat ineffective in approach. It would be better to go for developing more knowledge from some better sources. With this, it is for sure that decision-making can be made effective and good in approach. The situations need to be analyzed with due effect as well. It would make manager confident as well as self-assured from the point of carrying upon business practices in a far better way. The other relevant sources that can be used for the sake of completing SWOT analysis for the company are that proper studies and company’s previous records need to be examined and investigated with due respect. It would lead to make things effective and appropriate for the company as well (McDonalds Corporation, n. d. ). References McDonald’s Corporation: The Past, Present, and Future. (n. d. ). Retrieved March 15, 2011, from http://2myprofessor. com/Common/Sample%20Projects/McDonald%27s_Corporation. PDF McDonalds. (2011). Retrieved March 15, 2011, from http://www. mcdonalds. com/us/en/home. html McDonalds Corporation. (n. d. ).

Factors of Career Choice - 3456 Words

career choice Contents 1. Introduction 1.1 Role 1.2 Objective and Subjective Constraints 1.3 Key Theories of Occupational Choice 1.3.1 Developmental Theory 1.3.2 Structural Theory 1.3.3 RIASEC Model 2. Factors of Occupational Choice 2.1 Family and Class 2.2 Neighbourhood and Peer Group 2.3 School and Education 2.4 Race 2.5 Gender 2.5.1 Horizontal and Vertical Segregation 2.5.2 Pay 2.5.3 Hours Worked 2.5.4 Orientations to Work 3. Solution of Constraints and Obstacles to Occupational Choices 4. Conclusion 5. References 1. Introduction â€Å"The occupational choice debate is concerned with the degree of choice individuals†¦show more content†¦1968) Fantasy choice is occurring at the age between 6-11 when the children have no ideas about the real-life situation, all things are fantastic and delivered to them by their parents. When the children grow at the age of 11-17, the knowledge of the real world increases, they aware of themselves and the outside environment, and they makes tentative choice on the basis of their own interests. 1.3.2 Structural Theory The structural theory is that the entry points of the occupational structure are impacting on ambition of people. According to Keil et al, they include family background and value, neighbourhood and peer group, school and education, gender and race. 1.3.3 RIASEC Model Holland (1973/1985) developed a psychological approach â€Å"to identify people’s occupational preferences and helps fit a person’s choices and organizational characteristics.† (module handbook) It is referred to as RIASEC. RIASEC indicates Realistic, Investigative, Artistic, Social, Enterprising, Conventional. By the research of Taiwan’s high school students, we found that â€Å"the R type is a very typical male-oriented type of career† and â€Å"girls, on the other hand, were more interested in the A-type fields and tended to choose artistic fields as their careers.† (Tien H.L., Wang Y.F. and Liu L.C. 2009) 2. 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Personality is defined as a group of emotional, cognitive, and behaviour characteristics that make an individual unique (Matsumoto, 2009). Individual Differences psychology examines how individuals vary in their behaviour and personality and the processes that cause this to occur (Eysenck, 1987). While there are many different theories and ideas as to what job satisfaction actuallyRead MoreResearch Results : Mccombs Students Knowledge And Interest On Social Enterprise As A Possible Future Career Choice926 Words   |  4 PagesPRIMARY RESEARCH RESULTS The results of this research indicate McCombs students’ knowledge and interest in social enterprise as a possible future career choice, whether or not they are aware of where or how to locate resources regarding social enterprise, and if they believe McCombs offers these types of resources. The research results presented below fall under the category of primary research. 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