Research Korner

Effective Interpersonal Communication Development

DEVELOPING EFFECTIVE INTERPERSONAL COMMUNICATION         Interpersonal Communication is the best tool that we can use to express our idea, thought and emotion to one another. It can be use anywhere and it manifest in our personality. Good interpersonal communication can be a learned behavior to develop through proper practice. Speaker should choose the word that will come out on their mouth and be able to deliver it constructively to audience so that listeners maybe willing to hear their message.       If there are objections you should learn how to handle this respectfully and while answering questions be sure to focus on solution that is fair and without bias. You can simply demonstrate such practical explanations and details to persuade people without arrogance to develop a sense of trustworthiness you can do all these if you learn how to listen. People should understand that the best speaker should also learn to listen and it should go together to be effective in interpersonal communication and that is its basic principle to make it a two way process.       There are also misconceptions in interpersonal communication that the more you speak the more you are right and that the more you speak is always better which is definitely untrue because it eventually broke the two way process. Communication do not always solve problem sometimes it worsen it when you commit mistakes  that is why you need to watch your thought and watch your words, a wrong  words stirs up anger and anger may even grow if you lie or commit unnecessary words. Great speakers are born or inherent talent and this again is a misconception because only through learning, social environment and our experiences can only be the one to teach us our ways to release our hidden potentials.       People remember about 10% of what they read, 20% of what they hear, 30% of what they see and 40% of what they hear and see. In interpersonal communication a person who never have much opportunity to communicate to other people can also be good in artistic communication such as writing poetry or literature but may not be good in their interpersonal dealings.  Language is not the only way to communicate we can express our emotion and ideas through gestures, written words and physical touch.       There are also barriers in communication that makes us weak or delimit our communication we must understand to be able to find ways to eliminate such barriers to be effective in communication. There are physical, religious and cultural barriers in communication and it’s ok to respect people in their practices and we can live a normal life knowing that someone is different from ours.       There are also emotional barriers that is highly critical, people who feel angry, feeling of hurt and emotional may find it hard to speak a word constructively and it may even provoke a fight but if a person is in love the only barrier they may feel is the outburst that becomes a barrier if not properly handled may lead to exaggeration. People may take advantage of such inviting word or people who speak with honey tongue may fool to others. A person who learned to control their emotion before they speak probably is wise this barrier can even become their source of strength or if not, the emotion will manifest in their words.         Good Interpersonal Communication developed our self- concept and self image that we are worthy and able to reflect ourselves with others through interchanging of ideas through speaking, your attitude is dignified and worthy to be heard but not to boost ones personality, we can feel that we can persuade people and we are powerful, confident enough to speak. If we feel that we are an effective communicator we will always feel good about ourselves. This doesn’t mean that we can always win in argument but we will be happy to accept things that cannot be changed after we have done our best.       To be effective in interpersonal communication requires a deeper knowledge and enrichment of one’s personality. Speak to people, listen to them, realize your worth and respect them, do not always argue if not needed but if cannot be prevented be sure to focus on the topic not on the person only then you can win in argument persuasion can be developed without argument and fight. Remember People spent 90% or their time fighting about their problems while only 10% talks about their solution.       A salesman can be persuasive and irritating at the same time that proves their inefficiency. A teacher can teach with high tolerance but precision, students listens to them and they will learn. A political personality can win in an election without corruption and fraud but through his proper way of interpersonal communication. You can easily trace the feedback of people around you if you are good in interpersonal communication because they are the reflection of your own personality the good news is there is always room to grow to develop our talent today. Communication or the human connection is the key to personal success. (P.J. Meyer)

Effective Interpersonal Communication Development

DEVELOPING EFFECTIVE INTERPERSONAL COMMUNICATION Interpersonal Communication is the best tool that we can use to express our ...

THE CHANGE PROCESS IN THE PROCTER AND GAMBLE-GILLETTE MERGER

THE CHANGE PROCESS IN THE PROCTER AND GAMBLE-GILLETTE MERGER Table of Contents   I.      Introduction.. 3 II.     Diagnosis.. 4 A.    External Change drivers. 4 1.     Threat of New Entrants. 4 2.     Intensity of the Competition. 5 3.     Pressure from Substitutes. 5 4.     Bargaining Power of the Buyers. 5 5.     Bargaining Power of the Suppliers. 6 B.    Internal change drivers. 6 1.     Existence. 7 2.     Survival 7 3.     Success. 7 4.     Take-off 8 5.     Resource maturity. 8 C.    Current State. 9 1.     Shared Values. 9 2.     Strategy. 9 3.     Structure. 10 4.     Systems. 10 5.     Staff 10 6.     Style. 11 7.     Skills. 11 D.    Sources of resistance (Transition Curve) 11 1.     Endings. 12 2.     Neutral Zone. 13 3.     New Beginnings. 13 E.    Styles of leadership/management (Leadership Theory) 13 III.        Prognosis.. 14 IV.       Conclusion.. 15 V.    References.. 15   I.                    Introduction In order of actual development to take place, one must realise that change is a necessary ingredient. However, it is important to know first what exact part of the company needs changing. Otherwise, the company runs the risk of altering what works perfectly fine for the organisation which could essentially lead to disastrous outcomes. Thus before a decision whether to induce change, organisations have to be fully aware of the change needs of the company. More specifically, they have to be fully conscious of the actual settings taking place in both internal and external environments of the organisation. The following report seeks to provide just that. Recently, Procter and Gamble have acquired Gillette as part of their company. However, there are certain problems on which the company has to deal with upon the merger. A detailed discussion of the external and internal environment of Procter and Gamble will be provided. More specifically, an account of the possible changes on the product line of the company as well as the implications on the overall organisation will be taken into account.   On the diagnosis part of this report, an environmental analysis, evaluation of the growth stages, as well as the analysis of the current state of the company will be carried out. In the same regard, issues on management as well as with the workforce will be taken into consideration to determine whether there is a fit with the possible changes in the company or not. The arguments and observations made in the diagnostic part are to be used to establish a sound prognosis on the matter.      II.                  Diagnosis A.                External Change drivers In this part of the report, Porter’s Five Forces Model will be used to provide a clear picture on the change drivers of the company. Specifically, an analysis of the environment will be made to illustrate the external environment where P&G-Gillette operates. To this end, the level of attractiveness of the global market will thus be established. (Shermann and Black 2006, 29) For the purposes of this diagnosis part, the case study of Madapati (2001) regarding P&G-Gillette will be the primary source.   1.      Threat of New Entrants Proctor and Gamble is one of the top players in the consumer product industry all over the world. Its grasp on the said industry is so vast that they could afford to create segments on their operations. These segments are divided into fabric and home care; baby, feminine, and family care; beauty care; health care; and food and beverage. (Madapati 2003) In the case of new entrants, they may not be that much of a threat for the company given that P&G’s products has a strong following thus a stable market share. In addition, new entrants are normally miniature compared to the company thus could only contend merely with certain segments of P&G and not with its entire market share.   2.      Intensity of the Competition On its own, P&G is considered a giant in the consumer product industry. Though the products are normally interchangeable, the differentiation of brands of the existing companies counts for their hold on their core consumers. (Madapati 2003) With the recent merger with Gillette, their competitors in Unilever, Kimberly-Clark and Colgate-Palmolive would be something short of flabbergasted as the company has become a monolith in the industry.   3.      Pressure from Substitutes The inclusion of Gillette on the list of brands that Procter and Gamble controls makes the largest company in the consumer product industry. In the same regard, as Gillette and the lines under P&G have their own loyal customers, they may well have the largest market share in the consumer product industry. (Madapati 2003) Thus, substitutes for their products could only be located on their direct competitors or even companies that provide alternative products similar to what they are offering. Such companies would be boutiques and other clothing lines that offer toiletries and other grooming products for their loyal customers. However, unlike those offered by the P&G and Gillette, these substitutes are rather pricey thus making their target market limited to those who could afford such luxuries. 4.      Bargaining Power of the Buyers As stated in the earlier part of this diagnosis, the products offered in the market often overlaps and interchangeable. (Madapati 2003) The buyers in this industry have some level of bargaining power over the players in the market. However, this power of the buyers are rather curtailed by the top marketing schemes of the companies like P&G, Unilever, Kimberly-Clark and Colgate-Palmolive as they are able to keep a loyal following on their respective brands. Other substitutes come from supermarkets like Tesco who are offering their own line of consumer products that could match the quality of those offered by the major players but with a distinctively competitive pricing strategy. (Child 2002, 135) 5.      Bargaining Power of the Suppliers Similar with the buyers, the suppliers in the industry has some level of power over the major players. Though they could be readily be replaced by the company with another supplier, it is important in the consumer product industry that a good relationship between the supplier and manufacturer is established. (Madapati 2003) This is done normally through correspondence so as to provide both supplier and manufacturer that capability of using the business knowledge to their advantage. (Hunton 2002, 55) B.                Internal change drivers In this part of the report, an account on the growth stages of the Procter and Gamble will be given based on the growth stages of the organisation as presented in the study of Masurel and Montfort (2006, 461). These stages include existence, survival, success, take-off, and resource maturity. 1.      Existence In the study of Masurel and Montfort (2006, 461), they characterised this stage where the company has trouble acquiring customers and delivering their merchandise to them. In the context of the global operations of Procter and Gamble, they may have encountered a slight impediment akin to this type of stage. However, since they have strong roots in the United States particularly since the early 1800s, there was no doubt that the company is on its way to lead the consumer product industry in the 21st century. (Madapati 2003) 2.      Survival The survival stage is characterised by Masurel and Montfort (2006, 461) as the period where the company is catering to enough customers and providing them with enough satisfaction to keep coming back. At this point, a balance between the company’s revenues and expenditures is required to keep the company afloat. Normally, the leadership of the company has to address this situation so as to avert any untoward event. (Bennett, Harriman, and Dunn 1999, 3) In the case of P&G, there are Jager and Lafley who have been exceptional leaders and have spearheaded the eventual road to success as seen in their project, Organization 2005. (Madapati 2003) 3.      Success Masurel and Montfort (2006, 461) indicated that this part of the growth cycle is characterised by two possibilities. They mentioned that at this stage, the organisation could encounter disengagement or growth. In the case of P&G, the organisation is obviously on the process of growth. Madapati (2003) mentioned that the implementation of Organization 2005 has been rather helpful in inducing further success in P&G. For instance, the creation of global business units of P&G is one of the clear indications that the company has been experiencing growth. In this phenomenon, one could notice that the market of the P&G has been expanding at a rather rapid rate. 4.      Take-off The fourth stage is characterised by the difficulty in monitoring and controlling the rapid growth in which the organisation is experiencing. (Masurel and Montfort 2006, 461) In the same regard, delegation appears to be a credible solution. In the case of P&G and its acquisition of Gillette, Madapati (2003) indicated that it is a significant step for the company to acquire its goal of acquiring a greater market share. In the implementation of Organization 2005, they first secured the international markets and established steady bases and consequently shifted to the acquisition of global brands like Gillette. 5.      Resource maturity Masurel and Montfort (2006, 461) characterised resource maturity as a stage where the company has a decentralised management, adequately staffed, and possess a developed and extensive system. In the case of P&G they have already established decentralised decision making processes as discussed by Gould, Lerman, and Grein (1999, 7). Basically, this is seen in the attitude of the company towards giving the European brand managers a free reign on these issues. This is the interpretation of CEO Lafley in the company’s Organization 2005 which not only made operations efficient, but also significantly empowered the workforce in the European setting.     C.                Current State In order to present the current state of the P&G and Gillette, the 7s framework of McKinsey will be used. In doing so, the independent features of the company will be established along with the possible effects they have with each other. (Elkin 1998, 108) At this point, an examination of Organization 2005 will be given as it is the framework of which resulted to the consequent acquisition of Gillette. 1.     Shared Values Organization 2005 is triggered by the realisation of P&G that their closest competitors are significantly gaining momentum and acquiring competitive advantage in the consumer product industry. (Madapati 2003) Thus, the strategic intent of the company upon implementing this programme is to gain a global market share thus beating their competitors in the international market.    2.     Strategy As implied by the case study of Madapati (2003), P&G sought to operate in the international field where a greater market share and more players in the consumer product industry are present. Moreover, their acquisition of the Gillette brand and its products has been a significant step in realising the goal of having a greater global market share. 3.     Structure As mentioned in the study of Gould, Lerman, and Grein (1999, 7), the structure in P&G is rather decentralised. It is thus expected that the company will provide Gillette an independent decision making body that will manage the operations of the brand.   4.     Systems Under the leadership of CEO Lafley, the initial intent of creating opportunities for the company was scrapped and shifted towards diversification to new brands and development of the existing lines under P&G. Madapati (2003) In looking at this scenario, it appears that the P&G has decided to make the most of the brand leadership of the company in order to trigger further developments of its core competencies. (Intagliata, Ulrich, and Smallwood 2000, 12) 5.     Staff Basically, Organization 2005 programme is an attempt to streamline the operations of the organisation. (Madapati 2003) The keyword is streamline, which also requires the company to un-bloat its workforce. Job cuts are apparently in order, especially when P&G and Gillette decided to merge. Employees from both sides of the fence are losing their jobs for the greater purpose of organisational development. However, those who are retained are given higher incentives, promised better working conditions and higher remuneration to keep them from being demoralised. (Madapati 2003) 6.     Style Based on the case study of Madapati (2003), CEO Lafley practices a participative leadership style given the complexity of the P&G organisational network. In this regard, the managers of the company experience high levels of job satisfaction, empowerment, and high quality of work life as they are regarded with high esteem by their CEO. (Kim 2002, 231)   7.     Skills Aside from brand leadership, P&G is also recognised with other types of core competencies. As indicated in the P&G website, they make sure that their customers have the best product technologies possible, from vegetable shortening to fabric refreshers. (P&G 2007) Along with this, brand equity is also one of the best suits of the company. Basically, this is the part where the company finds a way to position their brands such that the consumers find some commonplace cause to purchase it. D.                Sources of resistance (Transition Curve) In order to establish the sources of resistance to change, this diagnosis will use the transition curve. Figure 1. The Transition Curve 1.     Endings In this phase of the transition curve, denial of the change of events would be apparent. In the case of the P&G-Gillette merger, employees of Gillette would be the ones who may feel denial and could sense some loss of familiarity as they are the less dominant part of the merger and similarly more probable to encounter job cuts.   2.     Neutral Zone Uncertainty among the Gillette employees prevails at this point. In addition to that, the compounded information both old and new could trigger some breakdown on their part. It is up to the managers to maintain balance and make sure that the employees’ emotions are held at a controllable state. Otherwise, the organisation will eventually be at chaos. On the part of P&G, they should provide Gillette with the freedom to adapt at their own pace and be acquainted with the corporate culture.   3.     New Beginnings It is at this point that acceptance of the change is anticipated. Moreover, this also marks a new cycle of change for the employees. In the case of P&G and Gillette, this is the part where integration stops and where functioning at its optimal level starts. E.                 Styles of leadership/management (Leadership Theory) As indicated in the earlier part of this paper, the leadership style implemented in the organisation, specifically that presented by Lafley is participative leadership. This is especially connected to Organization 2005 programme as Lafley’s predecessor, Jager, took a different leadership style in implementing it.  Madapati (2003) mentioned in his case study that Jager’s style was rather unique but have some touches of authoritarian flair in it. With the goal of overall development, and its acquisition as soon as possible, Jager may have neglected the culture of the company as he was forced to step down with the poor performance of the firm in the early parts of the new millennium. The shift of leadership style that Lafley introduced in the company no doubt placed greater value on the overall organisation and thus reflected in its performance.      III.                Prognosis The discussions above have established certain resource capabilities, noticeable resource weaknesses, best opportunities, and external threats of P&G. As seen above, the merger between Gillette and P&G shows great promise as they have created a company that is known to be innovative with the close hold on the overall consumer producing industry. In the same account, the acquisition of Gillette basically solves P&G quandary on the shaving sector of the world, both in men and women. These, among others, has made the merger rather daunting for the rest of the players in the consumer product industry as P&G and Gillette has amassed the greatest company along with the market share of its loyal customers. This improves the economies of scale of the organisation. With P&G’s presence in both developed and developing countries, they can help Gillette in its distribution and thus anticipate higher sales. (Blair and Kuse 2004, 71) The problem that they have to contend with is the apparent overlapping of their products in the market.   In order to maintain a good standing in the market and maintain the appeal of the Gillette brand, P&G should act opportunely to keep the other players in the market to neutralize the after-effects of the merger. For instance, P&G should make it a point that Gillette stays independent so as to keep its identity in terms of its internal environment and its image in the external environment. On the other hand, a major effect of the merger is the job cuts which the Gillette and P&G should undertake. This will place some level of uncertainty among the general workforce and possibly create untoward animosity with the P&G and Gillette factions. The company have to counteract this by creating a positive atmosphere that will support a more cohesive and positive organisational culture, and eventually avoid conflict on corporate culture, in the future. IV.               Conclusion The discussions above have provided the importance of appropriate change management requirements in instances where mergers and acquisitions take place. With the numerous adjustments both in the technical and cultural aspect of the organisation, knowing what to change and how to change it serves as a potent tool for any organisation who seeks to establish an effective organisational development scheme. In the case of P&G and Gillette, their future appears to be rather pleasant. Though there are without glitches in their merger, proper management and good leadership could make the difference between succeeding and failing for this newly merged company.

THE CHANGE PROCESS IN THE PROCTER AND GAMBLE-GILLETTE MERGER

THE CHANGE PROCESS IN THE PROCTER AND GAMBLE-GILLETTE MERGER Table of Contents I. Introduction .. 3 II. Diagnos...

THE ROLE OF THE CENTRAL BANK OF NIGERIA IN THE REDUCTION OF THE UNEMPLOYMENT RATE IN NIGERIA FROM 2000 TO PRESENT

THE ROLE OF THE CENTRAL BANK OF NIGERIA IN THE REDUCTION OF THE UNEMPLOYMENT RATE IN NIGERIA FROM 2000 TO PRESENT             Unemployment is one of the major macroeconomic problems faced by Nigeria. Unemployment rate in 2000 was 18.1 percent, this was reduced to 12.2% in 2002 and 11.9% in 2005 (Akintoye, 2008). Although the figures have reduced in five years, the 11.5% is still a considerable number of the Nigerian population.             There are many definitions of unemployment one of which is the definition given by the International Labor Organization (ILO). Their definition is limited and may not at all perfectly apply to the cultural constraints in Nigeria but nevertheless it is perceived to be encompassing. The unemployed according to the definition, are the economically active population who have no work because they lost their jobs and or have left work, they are thus available to work and are looking for employment. (Akintoye, 2008)             Just very recently, the Central Bank of Nigeria (CBN) urged the state governments to partner and support the Entrepreneurship Development Center (EDC). EDC is one of CBN’s initiatives to reduce the incidence of poverty and the rate of unemployment. EDC offers entrepreneurial training in enterprise development to include basic principles in management, developing a business, growing a business, and creating employment through the business. (People’s Daily, 2011)             This recent initiative is in line with the microfinance program of the Federal Government through the CBN. The CBN Act 24 of 1991 [as amended] and the Bank and Other Financial Institutions Act [BOFIA] 25 of 1991 [as amended] confer to the CBN the key role in the microfinance program for the informal sector (CBN, n.d.).             Microfinance is the provision of access to micro-credit to the poor who do not have the means to access the same from conventional financial institutions (CBN, n.d.) because of lack of assets for collateral. The microfinancing program is aimed to reduce unemployment to the poor especially the informal sector and provide them with access of small loans or credits. The microfinancing program can reduce unemployment through the informal sector provided that it is well-managed and supported (Akintoye, 2008).             The Informal Sector includes those who create their own employment but are not accounted in the statistics of the employment (Todaro 1997 cited by Akintoye, 2008). They are engaged in the production and distribution of goods and services to generate for themselves some income inspite of the fact that they are constrained in terms of capital, technical know-how and physical and human capability (Sethuraman, 1981 in Akintoye, 2008). The economic activities of the informal sector are not included in the GDP (Farrel in Akintoye, 2008) which brings us to the legality issue, that is, if they comply with the “judicial, regulatory and institutional framework” (Feige 1990 in Akintoye, 2008).             The roles of the CBN in microfinance are multifaceted. These includes an establishment of a National Microfinance Consultative Committee (NMCC); crafting of clear microfinance policy; periodic review of the microfinance policy and guideline; mainstreaming micro financing and promoting harmony and a level playing field; interlinking micro financing programs with development banks, financial institutions and microfinance banks; channeling of microfinance funds to microfinance banks; advocating of interest rates that is determined by the market; and implementing training programs to all involved stakeholders. (Akintoye, 2008).             Microfinancing has a role in reducing unemployment and combating poverty. In the case of Nigeria microfinance is pushed as a strategy by the Federal government to reduce unemployment through the Central Bank of Nigeria however there are problems and issues that hamper the effective implementation of the project and the efficient distribution of micro credit to the unemployed.              The CBN’s microfinancing program has attracted 439,902 borrowers in 2009. (Mix Market, n.d.). This is a staggering number and is less than one million out of the 40 million that need the microfinance service. This is even worsened by the fact that micro-credit facilities are only a meager .20 percent of Nigeria’s GDP. Lending and pay rates are also a mad contradiction, with 100% interest for lending and 5% for savings. Micro-credit goes to the commercial sector (78.4%) instead of the agricultural (14.1%) and manufacturing sector (3.5%) which are more vital sectors of the economy. The problem of distribution is that microfinance is concentrated on the south and eastern part neglecting the northern part consisting of the Muslims who are the poor majority of the population. (Aliyu-Dahinu and Zubair, 2008)             If the issues above are addressed through the concerted efforts of the Federal Government and the CBN and also through a focused implementation of CBN of its mandate in microfinancing, more unemployed and the poor will have access to credit and remove them from the drudgery of unemployment and poverty. REFERENCES Akintoye, IR., 2008. Reducing Unemployment Through the Informal Sector. A Case Study of Nigeria. European Journal of Economics, Finance and Administrative Science. Issue 11 (2008). [online] Available at: < http://www.eurojournals.com/ejefas_11_10.pdf> [Accessed 6 May 2011].   Aliyu-Dahinu M., and Zubair, H., 2008. Microfinance in Nigeria and the prospects of introducing its Islamic version there in the light of selected Muslim countries’ experience. MPRA Paper No. 8127. [online] Available at: < http://mpra.ub.uni-muenchen.de/8127/1/MPRA_paper_8127.pdf> [Accessed 6 May 2011].   Central Bank of Nigeria, n.d., Microfinance. [online] Available at: <http://www.cenbank.org/devfin/microfinance.asp> [Accessed 6 May 2011]. Mix Market, n.d. Microfinance in Nigeria. [online] Available at: <http://www.mixmarket.org/mfi/country/Nigeria?gclid=CMPNheq-06gCFdMQHAodQz0DhQ> [Accessed 6 May 2011]. People’s Daily, 2011. Poverty alleviation: CBN calls for partnership with states. [online] Available at: <http://www.peoplesdaily-online.com/business/economy/8224-poverty-alleviation-cbn-calls-for-partnership-with-states-> [Accessed 6 May 2011].

THE ROLE OF THE CENTRAL BANK OF NIGERIA IN THE REDUCTION OF THE UNEMPLOYMENT RATE IN NIGERIA FROM 2000 TO PRESENT

THE ROLE OF THE CENTRAL BANK OF NIGERIA IN THE REDUCTION OF THE UNEMPLOYMENT RATE IN NIGERIA FROM 2000 TO PRESENT Unem...

The impact of e-banking in Nigeria

The impact of e-banking in Nigeria E-banking helps a Nigerian firm such as Zenth bank to make sure that it would reach to more clients and give them a faster and effective service. Nigerian entrepreneurs were benefiting from Nigerianization and regionalism with better access to banks and government contracts and loans, in addition to acting as licensed buyers of a state-controlled export marketing scheme. New industries were being established and the domestic market was witnessing an upsurge. With very limited reflection on the implications of their actions, the politicians assured all Nigerians that development and improved standards of living were just around the comer. The 1950s became the golden era of hope and optimism in the history of modern Nigeria. Nigeria's banking system consistently allocated a smaller proportion of credit to the public sector than those of Ghana, Tanzania and Malawi. In the later period, the share of the public sector declined further to 50 per cent. However, when measured in relation to GDP, banking institutions mobilized fewer financial assets and granted less credit to the private sector in the adjustment period (Aryeetey & Nissanke 1998).  Financial liberalization was incorrectly sequenced, given the unstable macroeconomic environment and weak supervisory framework. Thus it is not surprising that liberalization has not produced any significant positive trend in the aggregate financial indicators (Fischer & Papaioannou 1992).   The number of distressed financial institutions and non-performing loans has grown rapidly, and this has led to a sharp contraction of credit to the private sector, since government financing requirements have first claim on credit. The assumed function of banking institutions in savings mobilization and intermediation for productive investment was severely circumvented with the adoption of liberalization and deregulation of the financial sector in Nigeria. Competition has also been limited by a high degree of interlocking ownership among financial institutions, as in Malawi and Nigeria (Gup 2002).  The absence of healthy competition for efficiency in mobilization and intermediation functions in Nigeria, despite reduced government ownership and a large number of institutions, suggests that neither public ownership nor paucity of institutions, in terms of both structure and number, may necessarily be the main source of inefficiency in the formal sector. Electronic technology in banking has received a great deal of attention in recent years and has made major inroads in back-office and bank-to bank operations. It has probably also had significant effects on wholesale/global banking. One day, such technology could have profound effects on retail banking and on the competitive effects of bank mergers. Among these effects is that local markets might no longer be the relevant areas for analyzing competition. This would be true if it became unnecessary for banks to enter local areas with a physical presence in order to attract customers and provide them with the full range of bank services. Customers would not be significantly constrained by information and transaction costs in selecting and conducting business with distant banks (Guttmann 2002).   Home banking never had a chance to show its true potential. Its life cycle was cut short by the arrival of the internet in the mid-1990s as a better alternative for electronic banking. Even though the use of the banks' own proprietary computer networks and call-up services may have given home banking a comparative advantage in terms of greater security, online banking via the internet proved in the end the more attractive medium. One advantage concerns cost. The internet provides a ready-made infrastructure for the computerization of retail banking, pre empting the need for banks to build their own networks from scratch. And customers do not have to pay anything for online banking beyond internet-access charges, whereas home banking usually involved extra subscription fees. In addition, internet-based banking carries a major marketing advantage compared to home banking. With private networks for their own customers, the banks cannot increase their customer base at all. In contrast to the monopoly rents earned from paper-based banking, the banks have to share their income from electronic banking with nonbank firms providing high tech components that are essential for the automation of financial services (Duetsch 1998). Electronic banking is one of the first things that come to mind when one thinks about the future of banking. It is generally assumed that electronic banking is new and that it will replace or supplement many channels of delivery of retail banking services. It includes automated teller machines (ATMs), automated call centers, digital cash, Internet banking, screen telephones, and so on. These channels of delivery can be used for presenting and paying bills, buying and selling securities, transferring funds, and providing other financial products and services. Electronic banking can be used for retail banking and business-to-business (B2B) transactions, as well as for facilitating large-dollar transfers. Equally important, electronic banking is a worldwide phenomenon. As the term is used here, it involves transactions. Some institutions only offer web sites that provide information about services offered but do not allow for transactions. These would not be covered under the definition of electronic banking. However, web sites that are transactional are considered electronic banking (Stegman 1999). References Aryeetey, E & Nissanke, M 1998, Financial integration and development: Liberalization and reform in Sub-Saharan Africa, Routledge, London.   Duetsch, LL (eds.) 1998, Industry studies, M.E. Sharpe, Armonk, NY.   Fischer, KP & Papaioannou, GJ (eds.) 1992, Business finance in less developed capital markets, Greenwood Press, Westport, CT.   Gup, B (eds.) 2002, The future of banking, Quorum Books, Westport, CT.   Guttmann, R 2002, Cybercash: The coming era of electronic money, Palgrave Macmillan, New York.   Stegman, MA 1999, Savings for the poor: The hidden benefits of electronic banking, Brookings Institution, Washington, DC.

The impact of e-banking in Nigeria

The impact of e-banking in Nigeria E-banking helps a Nigerian firm such as Zenth bank to make sure that it would reach...

International Employee Relations Research Proposal Paper

The unitarist and pluralist perspectives as frames of reference in understanding employee relationships A unitarist or unitary modeling of organizations would view organizations as essentially co-operative. Within unitarist frameworks, work organizations are viewed as integrated and harmonious wholes. In the normal functioning of the organization, it is argued that there will be no conflict between members of the organization, regarding, either the overall aims of the organization or the means to achieve these aims. Within this frame of reference, then, it is assumed that all employees share a common interest, not only in the long-term survival of the organization, but also in its fortunes on a day-to-day basis. It should be of no surprise that ideas of teamwork and ideas of all within the organization 'pulling together' to achieve common ends, permeate the model (Dundon & Rollinson 2004). Those who deploy unitarist or unitary models in analyzing organizations do tend to be rather coy about outlining and explaining the nature of the theoretical model they are using to guide their analysis. According to unitarist thinkers organizations are populated by people who are basically good and are spontaneously co-operative. However, supporters of unitarism would also remind that, while people will be willing to work diligently for the common good, they are not simpletons and if they were to feel that management were cheating them or not managing appropriately, the co-operative ethos would begin to evaporate (Collins 1998).   Now, no sensible unitarist-oriented thinker would ever actually encourage a manager to cheat his/her workforce. However, advocates of unitarism do warn that managers might, quite unknowingly, give the impression of attempting to cheat or dupe their workers, where they have failed to communicate the need for, or the benefits of a particular change to the workforce. Thus a key source of conflict as far as unitarism is concerned would be caused by misunderstandings between management and the workforce. Obviously the remedy for this sort of problem lies in renewed attempts to communicate with the workforce so that misunderstandings can be cleared up. Unitarist thinking is, perhaps best thought of as a management view of the world. It is perhaps not surprising, therefore, that in dealing with conflict, unitarism seems to have a feel for certain types of conflict within management. Thus a key source of conflict in organizations, as far as unitarists are concerned would be due to power struggles between different power bases within management (Kekes 1993). A pluralist view of organizations accords a more constructive role to conflict as a means of advance and development in societies and work organizations than does unitarism. Whereas conflict within a unitary modeling of organizations is a temporary transition which must be endured, with the conflict experience adding little if anything to organizational functioning, conflict within pluralist models is looked upon as a key dynamic of social development. Pluralism as applied to organizations is really a concept borrowed from political theory. In this sense pluralism is a reaction to what might be termed the doctrine of political sovereignty. The main idea behind pluralism, therefore, is that there is no final or absolute authority in society, which can impose its will on the other members of society (Kamoche 2001).   Applied to work organizations, the central idea within pluralism is that organizations are composed of various competing interest groups, whose consent and co-operation must be secured if the organization is to function.  Unlike unitarist formulations where conflict is a simple distraction from the normal processes of management, conflict plays a key role within pluralist views of organizations and is looked upon as being unavoidable yet solvable. Indeed conflict is looked upon as the key process which facilitates change and development. Thanks to the mechanisms for expressing and solving conflict, disagreements and disputes are viewed as a motor for change and development. Thus organizations are said to be stable but not static. The idea here is that individuals and groups gain concessions through the process of bargaining which takes place to solve conflicts at work. Thus, because pluralist work organizations allow the various interested parties to come together and to have their say, the organization is regarded as being capable of incorporating the various competing interest groups to an overall consensus view (Brooks 2002). Unitarism and pluralism tend to have rather limited views of context. Indeed unitarist approaches are all but silent on the world outside work and tend to view managers as the sole architects of strategy and structure. Pluralist approaches on the other hand, do tend to acknowledge the existence of the wider society, although it is not at all clear that pluralist views of organization offer a full and dynamic account of the context of organizations (Cleckley, McClure & Welch 1997). Unitarist and Pluralist perspectives can provide a good reference in understanding employee relationships.  Unitarist and Pluralist perspectives describes the characteristic and a mindset of a person. It gives an idea of the traits liked by an employee and what might be the kind of person he/she will relate to. Unitarist and Pluralist perspectives describe what attracts and annoys personnel. Unitarist and Pluralist perspectives gives a hint of what may cause the straining of relationships in the workplace.   References Brooks, S (ed.) 2002, The challenge of cultural pluralism, Praeger, Westport, CT.   Cleckley, B, McClure, M & Welch, L (eds.) 1997, Strategies for promoting pluralism in education and the workplace, Praeger, Westport, CT.   Collins, D 1998, Organizational change: Sociological perspectives, Routledge, New York.   Dundon, T & Rollinson, D 2004, Employment relations in non-union firms, Routledge, New York.   Kamoche, KN 2001, Understanding human resource management, Open University Press, Buckingham.   Kekes, J 1993, The morality of pluralism, Princeton University Press, Princeton, NJ.

International Employee Relations Research Proposal Paper

The unitarist and pluralist perspectives as frames of reference in understanding employee relationships A unitarist or unitary modeling...

Assessment of the Suitability of the International Financial Reporting Standards in Hong Kong SME

CHAPTER 1 INTRODUCTION Background Information of IFRS             One of the most important aspects in business industries is their ability to manage their financial resources.  Having been able to realise the importance of financial reporting, different scholars have provided more efficient financial reporting standards to be followed by various organisations In 1973, the setting for international standard has begun and this has been initiated by the agreement settled by the nine professional accountancy bodies around the world. In this agreement, the International Accounting Standards Committee (IASC) has been established. Representatives from fourteen nations made up the IASC and served as the body for setting the international standards. The Financial Accounting Standards Board (FASB), the International Organisation of Securities Commissions (IOSCO) as well as the European Commission on the other hand functioned as IASC’s observer members. Since its official operation, IASC was able to issue a number of exposure drafts, policies and standards (PricewaterhouseCoopers, 2002). In 2000, amendments were done on the constitution of the IASC. A group of trustees was also appointed during this period. Later, the name of the IASC was changed to IASB or the International Accounting Standards Board. The constitutional amendments also enabled the organisation to revise its objectives. The objective of the IASB is directed towards the development and application of a common set of accounting standards for all nations worldwide. In turn, this primary goal will enable its participants to optimise worldwide capital markets by making efficient economic decisions (PricewaterhouseCoopers, 2002).             Indeed, the IASB has been in charge for setting international standards for global use. In spite of the unavailability of the international standards for financial reporting, efforts has been initiated by developing a set of IFRS for public companies in the European region, which was put into effect on January 1, 2005. This effort was pursued primarily because of the constant burden of changing accounting standards on all types of company sizes. Standard-setters, such as the IASB then took the necessary step for change (BDO, 2005). The IFRS have just been applied in Europe, making it quite too early to see its quality. However, the expected outcome is directed for the benefit of major public firms with cross boarder and capital raising transaction and listings on various exchanges (BDO, 2005). In the United States however, the changes on its accounting standards resulted to negative outcomes, specifically by augmenting the burden of private, mid-sized and small companies. Whilst the FASB has been committed in working in coordination with the International Accounting Standards Board, particularly in working out the differences between the IFRS and the U.S. GAAP (BDO, 2005). Though there were no quality standards for international financial reporting at that moment, the IASB had been doing its responsibility in developing ways for convergence among national standard setters worldwide. In the technical committee statement of the IOSCO (2005), the efforts of the IASB towards this goal have been noted. In this activity, representatives of government bodies in the European Union and accounting organisations had continuously discussed about the planned joint efforts with the national standard setting body of Japan in 2004. In addition, liaison activities with national standard setters have been an ongoing activity since the inception of the Board. In spite of the accounting differences and problems incurred by the national standard setters, the technical committees had expressed its confidence for IASB in overcoming these challenges. Creating international standards entails a number of factors for consideration. Time should be allotted for developing international standards that are of quality. Moreover, the gradual application of financial reporting standards is helpful in analysing the effect of accounting changes, so as to develop improved and internationally applicable set of standards. Following the introduction of International Financial reporting standards in 2005, managers face an importance choice they can choose to integrate external and internal reporting in ways which might fundamentally change established management accounting practices or they can continue to operate dual accounting systems so that adoption of IFRS restricted to external reporting. It can be said that IFRS revolution would definitely affect how company report their financial statements and may also affect the outcomes of valuation metrics financial analyst’s use to measure and assess company performances.   Currently, numerous countries worldwide are adopting IFRS in 2005 and it is known that Small-medium Enterprises in Hong Kong are also adhering to it In order to enhance their financial reporting approach. Primarily, the main goal of this research study is to analyse the suitability of the IFRS in Hong Kong SME.   The Significance of Hong Kong SMEs SMEs, as being one of the main forces in economic growth & job creation have a special importance, not only in developed countries but also in developing and emerging economies (Cabbar, 2000). SMEs in most countries have barriers to access to finance, difficulties in exploiting the technology, insufficient managerial capabilities, low productivity and regulatory burdens in their business environment. According to Cabbar (2000), because of the dynamic and productive characteristics of SMEs, they contribute to the growth of the country’s economy and also very effective in social life, as well. Some international researches and analyses have shown that SMEs need management skills, information access systems, technological base of production system to be upgraded, beside their financial needs to be met (Cabbar, 2000). SMEs have been playing roles such as providing job opportunities, income distribution through business opportunities, rural development, increase investments and development of entrepreneurship (Kotey and Meredith, 1997). At the same time, small firms with limited resources will be expected to perceive its business environment as being different from that of a large firm with more resources and it is also likely to face different environment pressures with regard to market competitiveness (Gyampah & Boye, 2001). Some writers believe that the performance of SMEs is contributed by many factors such as internal and external to the SMEs themselves (Kotey and Meredith, 1997; Pearce and Robinson, 2002). However, there is no comprehensive study on factors that contribute to the development and performance of the SMEs, and in this case, directly relevant to the Hong Kong SMEs. The IASB has been able to issue some proposals regarding the IFRS for SMEs. This proposal is intended to implement to general purpose of financial statements of SMES.  The authorities intended that the implementation of the IFRS by SME is presumed to lead in the financial statements which give a fair and true view of the financial position, performance, and cash flows of small-medium sized enterprises. The SME Framework and IFRS are particularly developed for Hong Kong SMEs which are eligible to prepare financial statements in line with Hong Kong Companies Ordinance and standards.   Research Objective             The main objective of this paper is to assess the suitability of the IFRS in HK SMEs. Specifically this paper attempts to achieve the following objectives: ·         To investigate the context of IFRS and its aims and objective in the enhancement of financial reporting standards in Hong Kong SMEs   ·         To analyze the advantages and disadvantages of IFRS as part of the financial reporting approach of SME. ·         To find out problems encountered by SME managers in following IFRS. ·         To examine whether IFRS has a significant effect on SMEs economic performance   Research Questions Given the aims and objective of this research, this study attempts to answer the following queries: 1.    What is the perception of the managers in using IFRS as part of their financial reporting approach? 2.    What are the perceived advantages or benefits of IFRS in terms of organisational performance in the context of SME? 3.    What are the perceived problems SME managers may face in implementing IFRS? 4.    How suitable is the application of IFRS for the financial statements and reports of Hong Kong SMEs     Significance of the Study The boom of SMEs, especially in most Asian countries, has paved the way for different nations to develop new initiatives to meet the international financial reporting standards. The Hong Kong authorities has considered this in order to cope with the growing needs of a more accurate, suitable and efficient financial reporting analysis approach all over the world.  It was noted that there are a number of literatures that discussed how IFRS has been developed to adhere to the needs of the industries, specifically the SMEs. Considering the existence of many SME industries, in the world in general, and in Hong Kong in particular, it is essential that several studies stress this context of investigating the suitability of IFRS in HK SME.   By and large, the purpose of this research study is to investigate the suitability of IFRS in HK SME. In addition, this study will also include the discussion of relevant literature. The outcome of this study will be helpful for the SME industry in various parts of the world and in Hong Kong. In addition, this research study is significant in terms of helping management and marketing students, marketing managers, and the SMEs to know the importance of the perception of the HK SME managers regarding the changes that would be initiated in Hong Kong. . The findings of the study will be able to benefit various SME industries throughout the world. This means that the results of the study will be beneficial to the business, public and private environment since the research will be able to support the previous claims that having a standard financial reporting analysis system can help industries to have a competitive position in the market place. This also suggests that the findings of the research will allow the government institutions and other authorities integrate effective diversification plan for the development of their financial reporting system.       Scope and Limitations This research will be conducted to be able to analyse and investigate the suitability of IFRS with Hong Kong SME This study will cover the topics on the advantages and disadvantages of the IFRS as a financial reporting approach. The discussion of this study will mainly focus on the analysis of the perception of the managers of SME in Hong Kong. The data that will be gathered for this research will be derived from primary and secondary resources. The primary source of information for this research includes self-administered survey questionnaires, which will be provided to the respondents of the study. The participants for this research will be selected from the chosen HK SME.  On one hand, the secondary sources of data will come from published articles from journals, theses, and related studies on financial reporting, particularly IFRS in HK SME. For this research, the researcher assumed that time will be the greatest limitation to this research, which may affect the findings of the research. As this research will be utilising a small sample of participants, the results may not effectively represent the general population. In this research study, the self-administered semi-structured questionnaires will be used to collect quantitative data and the interviews will be used to provide qualitative insights into the data collected.   Chapter 2 Review of Related Literature               The choice of literature for this study is limited only to those that have a vital contribution about the international financial reporting standards of small and medium industries in Hong Kong. This chapter reviews articles from books and journals on SMEs in Hong Kong and their financial reporting and performance. Specifically, this chapter discusses the nature of the SMEs, their performance and some issues about the topic.   Hong Kong SMEs Small and medium-sized industries in Hong Kong have been an importance economic aspect of the Country. Small and Medium Enterprises (SMEs)[1] account for over 98% of the total establishments and provide job opportunities to over 1,400,000 people, about 60% of the workforce (Corporate Information, 2001).  Amongst the business sectors, the majority of SMEs is engaged in the import and export sector, followed by the wholesale, retail, restaurants, and hotels sector (Exhibit A). These two sectors constitute about 60% of the SMEs in Hong Kong, employing more than half of the workforce engaged in SMEs. While the large majority of companies in Hong Kong are SMEs, individual businessmen have profited significantly from starting many of the larger corporations that trade today on the Hang Seng Stock Exchange.   In fact, many of the founders still own a significant portion of the companies and conglomerates that they or their families started years ago.  Of the 800 companies that are currently listed on the stock exchange, one can see from the following table that the ten largest companies have a significant portion of their shares owned by the individual family that started the company. Exhibit A Top Ten Hong Kong Companies by Market Capitalisation Source:  Corporate Information – Hong Kong,  March 16, 2001   Since the ten largest companies of Hong Kong have a significant portion owned by individual families, it can be concluded that the other companies that are traded on the exchange also have a significant portion held by individual families.     Management in SMEs             Small Medium Enterprise (SMEs) are companies that have needs in terms of operations and operations strategies have been greatly overlooked. Especially in the case of the former, clearly, many SMEs are manufacturers and/or service providers, nevertheless, we will suggest that size and structure in their case does present many unique opportunities and, indeed, hurdles. The scale of SME operations means they have a relatively low impact on their surroundings and have a limited power to influence environmental forces in their favour this will include both their suppliers and customers. However, their weakness in these areas can be countered by their ability to react quickly to environmental change. Fundamental shifts in social values, consumer tastes, technological developments, managerial techniques, financial markets and so on, have brought about more complex and dynamic commercial environments. For the SME, their less bureaucratic structural arrangements, together with concentration in the power of the owner, allows growth-orientated small ventures to capitalise on opportunities that emerge from such environmental changes.             Small organisations usually thrive in a changing environment, although it must not be unduly complex in terms of the number of variables involved or the speed of their change (Mintsberg, 1979). It is further suggested by Mintsberg (1982) that the SME nimbleness in response to change is due in part to the fact that senior managers or owners formulate strategies that are closely connected with the work of the organisation and with other workers and managers. Control and tactical decision making is not separated and distanced from ownership or senior management. In other words, such firms tend to be task continuous; there is a close link between management, planning, and the work activity. Larger firms on the other hand are task discontinuous; there tends to be a separate and discrete planning and management structure (Networking Development Resource Guide, 1976).             Given the limits imposed by small scale operations, evidence suggests that growth-orientated managers and owners pursue opportunities vigorously, flexibly and with innovation. They will pursue a number of opportunities and often refuse to be constrained by the assets currently under their control. They make tentative investigations of promising projects and frequently assume that the techniques and technologies not currently available can be developed in the near future. In this way riskier opportunities are explored, despite not immediately having sufficient resources to underwrite their opportunities. Managers and owners are prepared to pursue, evaluate and resource new opportunities in the full confidence of their ability to make things happen (Stevenson and Gumpert, 1991).             In addition, in turbulent conditions the variation in demand for final products and services will be reflected in intermittent demands by the SME for resources - the alternative being to hold high levels of inventory. Thus, difficulties in procuring resources will result from (a) changeable demand and (b) lack of power or leverage. SMEs tend to avoid permanent or binding linkages with suppliers and other network contacts. Their flexibility relies upon the transient nature of their relationships with other organisations using short-term, entrepreneurial contracts ability to utilise resources carried by others (Stevenson and Gumpert, 1991). This ability can be solved if the company would be able to adapt to various international financial standards.             In seeking new opportunities and being nimble and fast they need instrumental relationships; in managing their current business they need strong, more permanent relationships. The two are to a degree exclusive. One solution seems to be the development of new ventures alongside existing ones. The flexibility of the SME often allows this type of management operation, with resources being switched between current and new activities (Lawson, 1998). Small and medium-sized firms also suffer a power imbalance when dealing with larger suppliers and customers, with both sides regarding the relationship as somewhat temporary. This arrangement certainly offers greater degrees of flexibility, but is also highly speculative and makes operations planning very problematical.             Another fundamental element in realising the requisite levels of flexibility lies in the reduction of uncertainty. Traditional methods of operation rely heavily upon sales forecasting systems and financial reporting approach which drive all activity. This leads to large amounts of uncertainty and consequent holdings of buffer stocks in order to combat unknown demand. Fast and flexible response, however, reduces forecast reliance and removes uncertainty by applying different operational practices to individual product groups, distribution channels, retailers, etc. Hence, true demand patterns become evident and easier to satisfy. Specialisation also requires a degree of stability so that the same task can be performed repeatedly and skills can be perfected, specifically in line with doing a financial report or standards However, the strength of the SME is in seeking new opportunities, as such specialist skills can quickly become redundant and the more flexible and adaptive generalist becomes more valuable. The SME resides in a changeable environment, has a small output and is a flexible and responsive generalist organisation. These firms are ideally suited to providing a variety of customised product and service combinations in response to constantly changing customer needs (Lowson, 1998). Small firms have less sophisticated, flexible and organic structures. They tend to adopt what Piore and Sabel (1984) describe as ‘flexible specialisation’. SMEs although greatly varying in size, growth rates and activities, due to its inherent uniqueness (as they are directly reflective of the ideas and personalities of the owners and not through managers) are all united in their goal towards profitability and efficient asset management.   Small to Medium Firms necessitate mastery in accounting in order to manage and control its assets.  In this regard, it is important that SMEs must be able to adapt a new standardise approach of financial reporting and consider the use of IFRS.   The Context of IFRS As the capital markets in the global environment have become increasingly integrated, various countries are moving to IFRS. In 2000, amendments were done on the constitution of the ISAAC. A group of trustees was also appointed during this period. Later, the name of the ISAAC was changed to IAMB or the International Accounting Standards Board. The constitutional amendments also enabled the organisation to revise its objectives. The objective of the IAMB is directed towards the development and application of a common set of accounting standards for all nations worldwide. In turn, this primary goal will enable its participants to optimise worldwide capital markets by making efficient economic decisions (PricewaterhouseCoopers, 2002).             Indeed, the IAMB has been in charge for setting international standards for global use. However, the organisation has encountered criticisms from its observers. One of which was from the secretary of OSCO. The critic basically stated that at present, no high quality standards for financial reporting which can be utilised by all nations worldwide or for the purposes of cross border listing. In spite of the unavailability of the international standards for financial reporting, efforts has been initiated by developing a set of IFRS for public companies in the European region, which was put into effect on January 1, 2005. This effort was pursued primarily because of the constant burden of changing accounting standards on all types of company sizes. Standard-setters, such as the IAMB then took the necessary step for change (BDO, 2005).             Some standards that form part of the IFRS are known by the conventional name of International Accounting Standards which is issued in 1970-2001 by the IASC board. In April 2001 the IASB has adopted all IAS and continue their improvement and calls it the new standards IFRS. Financial Reporting Standards are utilised in different part of the world, which include the European Union, Pakistan, Hong Kong, India, Australia, South Africa, GCC Countries, Hong Kong, and Russia. There is an approximately 100 nations which are currently required or permitted with the use or have regulations of convergence with the IFRS (IASB, 2008).   Adoption  of IFRS in Hong Kong SME             Presently, HK has two separate sets of accounting standards HK Financial Reporting Standards (HKFRSs) and the Small and Medium-sized Entity Financial reporting Framework and FRS (SME-FRF & SME-FRS).             Generally, HKFRS are financial reporting standards which are converged with IFRS issued by the IASB. HKFRSs are established to apply to general objective financial statements and other financial reporting of the entire profit-oriented entities. The implementation of HKFRSs, with additional disclosure when essential, is presumed to result in financial statement which gives true and fair view. The SME-FRS and SME-FRF, which are efficiently for accounting periods starting on or after January 1, 2005, were enhanced locally in HK.  The measurement base under the SME-FRF is principally historical cost. The SME-FRS and SME-FRF are pertinent to companies incorporated under the HK Companies Ordinance (CO) which meet the standards set out in section 141D of the CO and other entities which have no public accountability and are noted to be SMEs in terms of their size.             Undisputed consent from shareholders is required for the SME-FRS and SME-FRF to be utilised. For industries applying section 141D of the CO, compliance with the SME-FRS and SME-FRF is essential to ensure that financial statements are true and correct in their views. For other entities which qualify for reporting under the SME-FRF the effective application of the SME-FRS, with additional disclosure when needed, would have a financial statement achieving proper presentation appropriate for SMEs.             The exposure Draft of the proposed IFRS for SMEs which is presently under consultation by the IASB is noted to implement to general objective financial statements of SMEs. Small and Medium Sized enterprises are defined within the Exposure drafts are entries which do not have public responsibility and publish general purpose financial statements for external users. Even if the definition of SME does not include quantified size measurement, the ED recognises that individual discretion, in deciding to adopt IFRS for SMEs, may select to conduct a quantified size measurement.              It is intended that the application or implementation of the IFRS in these companies, with additional disclosure when needed, is assumed to result in the financial statements which gives a fair and true view of the financial position, cash flows of the SME and the financial performances.  These tests bases under the proposed IFRS for SME are link to the mix of fair value and cost utilised in HK FRS. As compared with the international financial reporting standards, with which HKFRSs are congregated, the proposed IFRS for SME permits more selections, preferences, includes some measurement and recognition implications, and needs less disclosure. As compared with the SME-FRF & SME-FRS, which is based principally on the conventional cost, the proposed IFRS for SMEs would, universally, need or permit more use of fair value and need more disclosure.  In the light of this proposed IFRS for SMEs, the question now faced by HK is whether this proposed IFRS for HK SME, upon its implementation, should be considered to replace the proposed IFRS for SMEs and SME-FRS or whether this could be retained.             The choice of the HK will be dependent on which standard will work effectively for SMEs in HK. to be able to have fairer comparison, their choice must be made without regard to the differences in terms of the qualifying standard between those set out in the IASB proposed IFRS for SMEs and those in the SME-FRF SME-FRS.       Chapter 3   Research Design             To achieve the objective of this study, the researcher opted to use descriptive method of research was utilised. The purpose of employing the descriptive method is to describe the nature of a condition, as it takes place during the time of the study and to explore the cause or causes of a particular condition. The researcher opted to use this kind of research considering the desire to acquire first hand data from the respondents so as to formulate rational and sound conclusions and recommendations for the study.             According to Creswell (1994), the descriptive method of research is to collect information or data regarding the present existing situation or phenomenon.  Descriptive research has as its purpose developing a better understanding of a phenomenon in detail. Descriptive studies usually have as their purpose the first two aims of normal science as described by Kuhn (1970, pp. 25-26): “attempts to increase the accuracy and scope with which facts are known” or “determination of those facts that can be compared directly with the predictions from theory”. The aim of descriptive research is to clarify the nature of a phenomenon in a specified, static context while viewed from a specific, fixed perspective. Two types of data were used: the primary and the secondary data. The primary data were derived from the answers respondents gave in the self-administered questionnaire prepared by the researcher. In addition, the information obtained from the interview also provided primary research data that supported the study. The secondary data on the other hand, were derived from the findings stated in published documents and literatures related to the research problem. These were based from the recent literatures related to employee retention and motivation and the concepts cited by the respondents. In terms of approach, the study employed both qualitative and quantitative approaches. The quantitative approach focused on obtaining numerical findings was used with the survey method. The interview on the other hand, made up the qualitative approach of the study as this focused on personal accounts, observations, description and individual insights of the respondents. This study employed the combined approach so as to overcome the limitations of both approaches.     Participants The respondents have been chosen came directly from managers of SMEs in Hong Kong. All of these participants were selected through random sampling (Saunders, Thornhill and Lewis, 2003). This sampling method is conducted where each member of a population has an equal opportunity to become part of the sample. As all members of the population have an equal chance of becoming a research participant, this is said to be the most efficient sampling procedure. In order to conduct this sampling strategy, the population is defined, the members of the populations then listed down, and then members are selected to make the sample. For this purpose, a self-administered survey questionnaire in Likert format was given to the respondents to answer[2].  In this regard, the dissertation will consider 80 managers from different SMEs in HK. Managers of the SMEs have been chosen to ensure that the data and information that will be gathered is pertinent.   Research Instruments   For this study, two research instruments were used to evaluate the suitability of IFRS to Hong Kong SMEs. These research instruments included the survey questionnaire methods. A self-administered questionnaire was distributed to the selected managers of SMEs in Hong Kong. The questionnaire given to the respondents aimed to assess the suitability of the IFRS as part of the financial management of SMEs and other relevant issues. In addition, this also aims to evaluate the problems and perception of the managers regarding IFRS adoption of HK SMEs as perceived by the respondents in terms of the mentioned aspects above. This focus of the assessment was based on the principles introduced by various authors. The questionnaire was structured in such a way that respondents will be able to answer it easily. Thus, the set of questionnaire was structured using the Likert format with a five-point response scale. A Likert Scale is a rating scale that requires the subject to indicate his or her degree of agreement or disagreement to a statement. In this type of questionnaire, the respondents were given five response choices. These options served as the quantification of the participants’ agreement or disagreement on each question item. Below are the designated quantifications used in the questionnaire:   5 Strongly Agree 4 Agree 3 Uncertain 2 Disagree 1 Strongly Disagree     Statistical Treatment The following are the statistical treatment used for this research study: 1.     Percentage. Percentage is used as descriptive statistics, which is relating a part to the whole. This is used in describing some personal characteristics of the respondents of the study such as age, gender and others. The formula in computing percentage is as follows:     n   Percentage = -------- x 100  ; N n – number of responses N – total number of respondents   2.     The Likert scale was used to interpret items in the questionnaire. These responses were based on the respondents’ assessment of the current investment process model. There were instances that the respondents were asked to rate the effectiveness of implementing the phases in the investment process. The range and interpretation of the five-point scale are shown in Table 1.     Table 1: The Five-point Likert Scale Scale Range Interpretation 5 4.50 – 5.00 Strongly Agree 4 3.50 – 4.49 Agree 3 2.50 – 3.49 Uncertain 2 1.50 – 2.49 Disagree 1 0.00-1.49 Strongly Disagree   3.     Weighted mean was used to measure the general response of the survey samples, whether they agree to a given statement or not. The formula in computing weighted mean is as follows:                                     4.     T-test T-Test The t-test is the most commonly used method to evaluate the differences in means between two groups. For example, the t-test can be used to test for a difference in test scores between a group of patients who were given a drug and a control group who received a placebo. Theoretically, the t-test can be used even if the sample sizes are very small (e.g., as small as 10; some researchers claim that even smaller n's are possible), as long as the variables are normally distributed within each group and the variation of scores in the two groups is not reliably different. As mentioned before, the normality assumption can be evaluated by looking at the distribution of the data (via histograms) or by performing a normality test. The equality of variances assumption can be verified with the F test, or you can use the more robust Levene's test. If these conditions are not met, then you can evaluate the differences in means between two groups using one of the nonparametric alternatives to the t- test.             The p-level reported with a t-test represents the probability of error involved in accepting our research hypothesis about the existence of a difference. Technically speaking, this is the probability of error associated with rejecting the hypothesis of no difference between the two categories of observations (corresponding to the groups) in the population when, in fact, the hypothesis is true.             Some researchers suggest that if the difference is in the predicted direction, you can consider only one half (one "tail") of the probability distribution and thus divide the standard p-level reported with a t-test (a "two-tailed" probability) by two. Others, however, suggest that you should always report the standard, two-tailed t-test probability. When testing for a relationship between two variables, sometimes there is a 3rd variable, which we are not interested in at the moment, which influences our results. So, the null hypothesis (Ho: x and y are independent), can also be written as: Ho: mD= 0, where mD = population mean of difference scores df = N - 1, where N = the number of pairs of participants       Assumptions of the Tests     One last note: It is important to know the assumptions we make in using the 2 sample t-test. <ul type="disc" style="margin-bottom: 0in"> <li class="MsoNormal" style="color: black; text-align: justify; line-height: 200%"> Characteristics of the Dependent Variable: It is assumed that y is interval, continuous, and normally distributed. </li> </ul> <ul type="disc" style="margin-bottom: 0in"> <li class="MsoNormal" style="color: black; text-align: justify; line-height: 200%"> Homogeneity of Variance: We assume that the variances are equal for both groups in the population. If the sample estimates are vastly different, such as 9:1 or 3:1, then you probably have violated this assumption. As you can see, the two sample estimates have to be very different from each other before we worry about the assumption. </li> </ul> Results of the survey were presented in tables. Excerpts from the interview were integrated based on the analysis outline. Relevant literatures to support the findings are also included.   Chapter 4 Data Presentation and Analysis   This chapter presents the data gathered from the questionnaire, researches, and interviews conducted by the researcher from different managers of SMEs in Hong Kong. The general population for this study is composed of 80 managers from SMEs in Hong Kong which are considering the application of IFRS as part of their financial reporting approach. These managers were also interviewed.. The findings of the study are presented in different sections.  Part One presents the profile of the respondents of this study.  The object is to determine the suitability of IFRS in HK SMEs. This is the manner unto which the study accounts the factors and the perception on the criteria themselves.  The conduct of this study entails a detailed account of the demographic profile of the respondents.  It is assumed that the attributes of the respondents influence their behavior and answers on the survey questions. For a clearer presentation, the findings of the survey are presented in graphs and tables. To give an appropriate flow of discussion, findings are also divided into sections. Section one gives a summary of the demographic profile of the participants used in the study. This profile was categorised according to the respondents’ age, gender, educational background, and length of stay in the company. The discussion of the perception of managers who took part in the study about determining the suitability of IFRS in SMEs in HK will be discussed in the next section. The third section will discuss the view of the managers about IFRS and other relevant issues.   Demographic Profiles             This part will discuss the demographic profile of 80 individuals who answered the survey questionnaire sent by the research. The description of the respondents includes their gender, age, educational background, length of stay in the company Gender of the Respondents   Figure 1         Figure 1 show the distribution of the employees who participated in the study in terms of gender. Out of 80 respondents, it shows that 43 (54%) were female and 37 (46%) were male. This may indicate that female employees of Hong Kong SMEs are more interested to participate in surveys than male employees.   Figure 2 The figure above presents the statistics regarding the age of the respondents or managers who took part in the study. Herein, it shows that the age of 40% of the respondents was ranging from 23--30 years old. Other respondents compromised the following division, 25 (31%) belongs to 18-22 years old, 15 (19%) are 31-40 years old. this indicates that SMEs gives opportunity for retaining good employees.   Educational Background   Figure 3   The figure above displays the educational background of the respondents. It shows that 49 or 61% of the respondents has been graduated with a Bachelors Degree and 39% have attained post-graduated degree.  These further indicate that most of the managers of SMEs have been hiring knowledgeable assets in the company. Length of Stay in SME   Figure 4               The figure above shows the distribution of the respondents in terms of their length of stay in the company. Herein, it shows that 51% of the respondents are staying in the company from 6-12 years and 35% are staying in the company for 13-19 years and 14% are servicing the company below 5 years. The result indicate that majority of the respondents are knowledgeable enough to the system of SME, specifically in terms of its financial reporting and accounting department.     Part 2: Perceptions of Respondents This part of the paper will provide the discussion and analysis of the perception of respondents based on the likert scale (Chapter 3). It should be noted that the participants of this research were presented a set of attitude statements in order for them to express their agreement or disagreement with the use of five-point likert scale, wherein 5 connotes to a strong agreement and 1 for strong disagreement. This will provide a greater understanding about the observations of the following respondents towards their working force. Perception about the Application of IFRS In their Respective SMEs Figure 5   The figure above presents the respondents’ perception on the initiation of IFRS in their respective SMEs as part of financial reporting approach. Herein, 25 (31%) have said that they strongly agreed on applying IFRS in their respective SMEs, 24 (30%) have said that they agreed on the consideration of IFRS in HK SMEs. 15 (19%) are uncertain on whether they will consider IFRS and 16 (20%) shows their disagreement and strong disagreement upon of using IFRS  in the  SMEs of Hong Kong. Perceived Advantages and Benefits of IFRS in SMEs Table 2 Statements 5 4 2 2 1 Weighted Mean Interpretation 1. The application of IFRS by SMEs will significantly improve the comparability of entities within an industry and across different industries, regardless of where the reporting entity is domiciled.   52   28   0   0   0       4.65       Strongly Agree 2. Adopting IFRS can make it easier for SMEs to implement planned cross-border acquisitions and to initiate proposed partnerships or cooperation agreements with foreign entities.   51   29   0   0   0       4.64       Strongly Agree 3. IFRS can simplify the sale of the reporting entity itself, either as a whole or on a piecemeal basis.   62   18   0   0   0   4.78   Strongly Agree 4. IFRS information can help SMEs involved in buying / selling goods or services across national borders to initiate new relationships with customers and suppliers.   48   31   0   1   0   4.58     Strongly Agree 5. IFRS can strengthen SMEs’ position in negotiations with credit institutions and reduce the costs of borrowing because of the positive effect it can have on credit ratings. 56 24 0 0 0   4.70   Strongly Agree 6. Internationally-active SMEs can profit from group-wide application of IFRS: it can facilitate faster and more cost-effective preparation of financial information. If both parent and subsidiaries (i.e. all individual companies in the group) apply IFRS, it means there is no need for a second set of financial statements for group accounting.   62   18   0   0   0         4.78         Strongly Agree 7. It also reduces the risk of misunderstanding and facilitates the more efficient collation of comparable, decision relevant information from all group companies.   48   31   0   1   0     4.58     Strongly Agree   The table above presents the distribution of the respondents on their perception with regards to the possible benefits and advantages of IFRS in SMEs. Herein, it shows that majority of the respondents strongly agreed on the given statements. The managers of the SMEs have strongly agreed the application of initiation of IFRS by SMEs will have a significant effect on the improvement of the comparability of entities within the company and also across various industries, regardless of where the financial reporting entity is located. This means that the manger of the SMEs realise the importance of having various information that they can use to compare their financial reporting and statements. It can be perceived that the managers can enhance their financial reporting through the information provided by other industries. In addition, they also strongly agreed that the adoption of IFRS can make it easier for their respective SMEs to initiate planned cross-border acquisitions and to implement proposed partnerships or coordinated agreements with foreign companies. One of the perceived benefits of IFRS is its ability to enable companies to collaborate with other companies in international level. With this, SMEs are able to expand their business both in local and international level. The SME managers in this research also strongly agreed that IFRS will enable them to simplify the sale of the reporting industry itself, either as a piecemeal basis or as a whole. For the managers, having a simpler financial reporting approach easily enables them to determine the aspects of the financial report than needs improvement. In addition, they are also able to know which information is sufficient or not. Furthermore, they also strongly agreed that IFRS information and data which can help them in terms of involvement in buying and selling products or services in international market to implement new relationships with buyers and suppliers. The realisation of creating a market niche outside Hong Kong is one of the goals of the SMEs. In this regard, through the help of IFRS, the managers are able to have enough information for considering partnerships and collaboration with international buyers and suppliers. The strongly agreed that IFRS can strengthen the position of SMEs in negotiations with credit industries and reduce the costs of loans due to the positive effect it can have on credit ratings. Having an intensive financial reporting, the manager believed that considering or using IFRS will enable them to minimise credits and loans from other industries, which in return, creates a strong financial performance for the company. Through IFRS, the managers strongly believed that their company will be able ot profit more since it can facilitate rapid and more cost-effective preparation of financial statements and lastly, they believed that IFRS may also reduced the risk of misunderstanding and facilitated the more effective gathering of comparable and decision related data from all group entities. The strong agreement of the respondents with the given statements shows that they are able to realize how important the application of IFRS with their respective SMEs is. Problems facing managers in implementing IFRS Table 3 Statements 5 4 2 2 1 Weighted Mean Interpretation 1. Issues over the high costs of complying with full International Financial Reporting Standards have prompted many Countries.   52   28   0   0   0       4.65       Strongly Agree 2. IFRS adoption  may negatively affect the SME performance and operations during the transition period.   51   29   0   0   0       4.64       Strongly Agree 3. The inherent complexity of the IFRS standards also faces users of financial statements with problems of comprehension which are complicated, given the historically different cultural approaches to accounting from one country to another, by the need for translation from the English.   62   18   0   0   0   4.78   Strongly Agree   In terms of the problems faced by the managers in applying IFRS, it can be said that most of the managers strongly agreed on the given statements. For them, one of the problems that they will face is the issues of over the high costs of complying or adhering with full IFRS, specifically for industries which are lacking of financial resources. It is noted that SMEs only constitute smaller financial assets as compared with other corporations. In this regard, the integration of IFRS with their financial reporting approach may be costly for the managers. Furthermore, they also strongly agreed that IFRS initiation may negatively affect the operations and performance of SME during the transition period and the inherent complexity of IFRS also challenge managers to the financial statements problems of, specifically in terms of comprehension which are complicated, given the historically various cultural approaches to accounting from different countries by the need for translation from the English. IFRS initiatives aims on having an effective and efficient financial approach that meets the accounting standards set in international level. The managers believed that integration of the IFRS will have negative effect on their performance since not all SMEs have the capability on easily adapting to IFRS, specifically during the transition period. In addition, cultural differences may also affect SMEs implementation to IFRS for the perception that some of the provided standards may not be applicable for the SMEs in Hong Kong   Applicability/Suitability of the IFRS in SMEs in HK Figure 6   The figure above presents the perception of the respondents regarding the suitability or applicability of IFRS with their respective SMEs. Herein, it shows that 35 (44%) out of 80 respondents perceived that IFRS is suitable for their respective SMEs. On one hand 24 (30%) perceived that IFRS will be suitable for their financial reporting approach in their SMEs. Out of 80 respondents 13 (16%) are still uncertain on whether they would implement IFRS as part of their financial reporting or not while 5 (6%) and 3 (4%) perceived that IFRS is not applicable and strongly not applicable with their SMEs. This result indicates that although SME management are aware of the possible benefits of IFRS within their company, some are still hesitant on applying IFRS as part of their financial reporting system.   Chapter 5 Summary, Conclusions and Recommendations   Summary   In this chapter, the data gathered from the SME managers are presented and analysed. This chapter discusses the results of the structured survey questionnaires given to the 80 chosen respondents. Prior to the initiation of the survey and the interview process, the purpose, the importance, and objectives of the study were relayed to the chosen respondents. They were also assured that all the information they had provided are solely for the purpose of the study while their identities would remain confidential. All questions asked in the survey questionnaire and interview process pertain only to the respondents’ insights regarding the assessment of the suitability of IFRS in Hong Kong SMEs. Primary data and secondary data have been used in this study, wherein the primary data came from the 80 respondents from Hong Kong SMEs who has been randomly selected and 3 managers for the interview. Secondary data were gathered using journals, internet articles, and books regarding international financial reporting standards, accounting standards and Hong Kong SMEs. In order to analyse the gathered data from the Likert questionnaire, the weighted mean of each survey item was computed. The result is then compared to the developed scale to interpret the obtained value. Based on the analysis, it can be said that IFRS is suitable to the SMEs in Hong Kong.  Herein, it can be noted that the IFRS should be followed strictly by Hong Kong SMEs and new SME standards should be considered.   Conclusion It can be said that the emergence of standard financial reporting of different business aspects has paved the way for adapting IFRS in different companies.  It has been found that the number of competitive moves increased as IFRS usage increased for different companies in the world. It becomes more important to manage relationships as competition increases through the use of this accounting system. It can be stated that the most effective financial reporting approach for SMEs is a collaborative one with their business strategy and their organisational objectives and corporate responsibility.  On one hand, IFRS has been considered an important aspect of most business operations, particularly those who deal with directly with international investments and acquisitions. This type of business setting is very much evident in different industries and now being considered in SMEs . As mentioned, the goal of this paper is to determine the suitability of IFRS with Hong Kong SMEs in terms of financial reporting aspect and to examine the benefits and problems that can be encountered by the managers upon adapting IFRS. .   In order to analyse the gathered survey results, the weighted mean for each survey item was computed and compared to a Likert scale for interpretation. The results were then subdivided into categories for clearer presentation and comprehension. The results of the interview were incorporated to the values acquired from the survey. Relevant literatures were also integrated to support the gathered findings.        Based from the data gathered, a number of important conclusions can be drawn out:   1. The selected respondents are familiar with IFRS as part of their business strategy. These techniques include the use of standard financial statements that enables the company and external environment to easily understand the current economic and financial conditions of the industry.   2. In terms of benefits, the participants of this study strongly agreed in most of the Statements. The majority of the respondents strongly agreed that investment and enhanced relationship in overseas or international partners benefits are considered as one of the most significant advantages gained from using IFRS. This is then followed by the improvement of the relations among the target market and suppliers of the company and the enhancement of the different business abilities of the company. In turn, these significant developments benefited the companies as sales improved and competitive advantages and relationship increased.   3. In spite of the beneficial effects of IFRS application, certain difficulties have been perceived by the managers Among several problems; the companies appear to be most affected by the high cost factors. With limited resources, the SME managers were unable to adapt fully the IFRS within their industry. This in turn, has affected their opportunity to acquire greater market shares and quality financial reporting system. The managers are also having problems when it comes to the transition period since IFRS tends to be complex for some managers.                 This research study was conducted in order to determine the suitability of IFRS with SMEs in HK. Based on the collated and analysed data the IFRS has evolved to encourage direct interaction between service provider and users in financial information in market environment since accountants have more complete information about financial information of specific entities. To make it clear, HK has been able to adapt IFRS through their HKFRS and the country has supported the adoption of international standards as part of their adherence to improve financial reporting among small and medium sized entities. Although, national standards-setting served well in Hong Kong when it was a reasonably self-contained economic entity and the profession could adapt to the cultural homogeneity of the profession and of its constituents. With the movement to an international economy and more vibrant international trade and commerce, it is imperative that Hong Kong capitalised on its capacity to combine itself within that global landscape. Given Hong Kong’s modest capital market delegation on the global market, a recognition that international standards-setters can be receptive to divergent needs, and that HK SMEs re able to re-define the breadth and depth of economic aspects– one that is less highlighted on supposed uniqueness and distinctiveness, there is growing consensus on the weakening of the support and justification of the national standards of Hong Kong. Hence, with this result, Hong Kong decided to adapt IFRS to adhere to the battle cry of SMEs in a standardised financial reporting to help them improve their financial statement. While there will be increasing atrocities for the accounting profession, it can be viewed that the profession will be well served by the movement of HK to follow IFRS. It will be great for mobility and will bolster consumer confidence in the products and services that the SMEs will provide. In addition, the SMEs in Hong Kong has also adhered to the growing demand for a common financial reporting language and the push towards globalising of financial markets and foreign trade, national standards-setting would also tends to competitive disadvantage relative to international market.   Recommendation Every business endeavor or venture is constantly faced with financial management problems to which the owner or manager should be able to attend to in order to take the business to success. Key financial decisions normally confronts the managers in issues and problems that concerns financial investments they usually provide answer to the problems regarding the assets on which the company of firm needs to put money and how a chosen investment should be financed.  All the plans of the company will be put to waste if the organisation has no effective system of financial control that will monitor the investment that it ventures on. If outputs are expected, there should be immediate application of the advantages that the organisation gained. This will provide the black and white transparency which the company can study to serve as guide in the future investment as well as the management plans and strategies that it will employ. As the nature of financial management becomes more and more complex in this information and efficient communication era of international business, finance managers face a wide array of challenges, opportunities and options to enhance the investing and financing activities of the organisation as well as to minimise the inherent risks and circumstances of the financial decisions that will be made. The challenge now for the financial managers is to explore the options and take advantage of the opportunities while taking caution in managing the financial information given through the use of standardised systems like IFRS.   In order for Hong Kong to ensure the effectiveness of the initiation of their IFRS to adhere on the growing trends in the capital and international market, it is recommended that the management of SMEs of Hong Kong focus on the following issues in their effort to follow and apply IFRS and integrate it as part of their business financial reporting approach. ü  Improve the quality of financial reporting system by adhering or cloying to the IFRS ü  Increase management awareness of IFRS to ensure that the adoption will be successful.       Reference   BDO (2008). "Financial Reporting by Private, Small and Mid-Size Companies" Available at: http://www.bdo.com Accessed: April 3, 2008   Cabbar, Y. 2000. Black-Sea Economic Cooperation Workshop on    Internet, E-commerce and SMEs. Speech delivered at the      Heaquarters of the BSEC Permanent International     Secretariat. Available at [www.unce.org]. Accessed: April 3, 2008   Creswell, J.W. (1994). Research design: Qualitative and quantitative approaches. Thousand Oaks, California: Sage.   Facing the Challenge of IFRS adoption (2008). http://www.ey.com/global/content.nsf/South_Africa/27_Jul_06_Facing_the_challenge_of_IFRS_adoption. Accessed: April 3, 2008   Gyampah KA and SS Boye, 2001. “Operations Strategy in an Emerging Economy: The case of the Ghanaian Manufacturing Industry”, Journal of Operations Management, Vol 19, pp 59-79.   IASB: IFRS around the world, http://www.iasb.org/About+Us/About+IASB/IFRS+Around+the+World.htm, Retrieved on April 3, 2008   Implementing International Financial reporting Standards (IFRS) in Russia (2008). http://www.oecd.org/dataoecd/16/26/35118918.pdf. Accessed: April 3, 2008   Kotey, B and Meredith, G.G, 1997. “Relationship Among        Owner/Manager Personal Values, Business Strategies,     and Enterprise Performance”, Journal of Small Business       Management, Vol 37, pp 37-62.   Lowson R.H. 1998. Quick Response for SMEs: A Feasibility Study, United Kingdom: The Textile Institute.   OICV-IOSCO (2008). "Statement on the Development and Use of International Financial Reporting Standards in 2005". Available at: http://www.iosco.org/pubdocs/pdf/IOSCOPD182.pdf Accessed: April 3, 2008   Pearce II, J.A and Robinson Jr, R.B, 2000. “Strategic Management: Formulation, Implementation and Control”, Richard D Irwin Inc., USA.   Piore M.E. and Sabel C. 1984. The Second Industrial Divide: Possibilities for Prosperity. New York: Basic Books.   Price Water House Coopers (2008). Online available at https://www.pwc.com/gx/eng/about/svcs/corporatereporting/IFRSforSMEs.pdf Retrieve April 21, 2008 .     Appendix Appendix 1 Research Questionnaire Assessment of the Suitability of the International Financial Reporting Standards in Hong Kong SME   The researcher is conducting a study on analysing suitability of the IFRS in HK SMEs and the relevant issues.  To enable the researcher to make the necessary conclusions and recommendations for this study, it would be very much appreciated if you answer all the items in the questionnaire. Information given will be treated in strictest confidence.                                                                                                       Thank you.                                                                                                                                                                                                                                                                                                                                                       Part I.  Demographic Profile   Directions: Please fill up in all the necessary information about yourself.  Don’t leave any item unanswered. a.    Age  ________ b.    Gender Male ( )                 Female ( ) c.    Marital Status Single ( )              Married ( ) d.    Educational Attainment   Part 2: Perception of the Respondents Direction:       Check the number corresponding to your answer                           5          -           Strongly Agree                         4          -           Agree                         3          -           Uncertain                         2          -           Disagree                         1          -           Strongly Disagree     1.    What is your perception about the initiation of integrated resort in Hong Kong? Give your reasons.  (  )  Strongly Agree (  ) Agree (  ) Uncertain (  ) Disagree (  ) Strongly Disagree 2.    What are the perceived advantages or benefits of IFRS in terms of organisational performance of HK SME? Statements 5 4 2 2 1 1. The application of IFRS by SMEs will significantly improve the comparability of entities within an industry and across different industries, regardless of where the reporting entity is domiciled.           2. Adopting IFRS can make it easier for SMEs to implement planned cross-border acquisitions and to initiate proposed partnerships or cooperation agreements with foreign entities.           3. IFRS can simplify the sale of the reporting entity itself, either as a whole or on a piecemeal basis.           4. IFRS information can help SMEs involved in buying / selling goods or services across national borders to initiate new relationships with customers and suppliers.           5. IFRS can strengthen SMEs’ position in negotiations with credit institutions and reduce the costs of borrowing because of the positive effect it can have on credit ratings.           6. Internationally-active SMEs can profit from group-wide application of IFRS: it can facilitate faster and more cost-effective preparation of financial information. If both parent and subsidiaries (i.e. all individual companies in the group) apply IFRS, it means there is no need for a second set of financial statements for group accounting.           7. It also reduces the risk of misunderstanding and facilitates the more efficient collation of comparable, decision relevant information from all group companies.               3.    What are the perceived problems facing managers in implementing IFRS? Statements 5 4 2 2 1 1. Issues over the high costs of complying with full International Financial Reporting Standards have prompted many Countries.           2. IFRS adoption  may negatively affect the SME during the transition period.           3. The e inherent complexity of the IFRS standards also faces users of financial statements with problems of comprehension which are complicated, given the historically different cultural approaches to accounting from one country to another, by the need for translation from the English.             4.    How applicable/suitable IFRS to SMEs in HK? (  )  Very Applicable (  ) Applicable (  ) Uncertain (  ) Not applicable (  ) Strongly Not Applicable     [1] Manufacturing enterprises with fewer than 100 employees and non-manufacturing enterprises with fewer than 50 employees are regarded as SMEs in Hong Kong. [2] Liker technique is an instrument used to know the agreement or disagreement of the respondents to the given statements.

Assessment of the Suitability of the International Financial Reporting Standards in Hong Kong SME

CHAPTER 1 INTRODUCTION Background Information of IFRS One of the most important aspects in business industries is their...