Financial Management Quiz

Financial Management Quiz
Financial Management Quiz

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Financial Management Quiz

ABC Corporation currently has an inventory turnover of 15.7, a payables turnover of 9.6, and a
receivables turnover of 8.4.
a. How many days are in the cash cycle?
b. How many days are in the operating cycle?

Compute the Accounts Payable Period based on the following information:
ABC Products provides the following information.
Average Accounts Payable Balance is as follows: $800,000
Annual Cost of Goods sold is as follows: $9,000,000
Assume 365 days.
Compute the Accounts Payable period.

Compute the Operating Cycle based on the following information:
ABC Products provides the following information.
Average Collection Period 45 days
Accounts Payable Period 45 days
Average age of inventory 60 days
Compute operating cycle

Consider the following financial statement information for ABC Corporation.
Assume all sales are on credit.
a. How long is the cash cycle?
b. How long is the operating cycle?

Financial Management Quiz

The ABC Corporation has the following estimated quarterly sales for next year.
The average collection period is 30 days. Purchases are equal to 64 percent of the following
quarter’s sales. Suppliers are normally paid in 60 days. Determine the
a. Cash received from customers in Quarter 2
b. Ending Accounts Receivables Balance in Quarter 2
c. Cash paid to suppliers in Quarter 2
d. Ending Accounts Payable Balance in Quarter 2
e. Cash received from customers in Quarter 3
f. Ending Accounts Receivables Balance in Quarter 3
g. Cash paid to suppliers in Quarter 3
h. Ending Accounts Payable Balance in Quarter 3

Solve next four questions based on the following information:
Month Sales Month Sales
Jan $15,306 July $21,083
Feb $15222 Aug $25,000
Mar $20,121 Sept $25,400
Apr $22,400 Oct $18,950
May $19,220 Nov $19,220
June $20,212 Dec $19,088
The company has estimated expenses as follows:
General and Administrative Expenses per month: $5,500
Material Purchases (are paid in the month following the purchase): 11% of sales
Interest Expense per month: $250
Rent expenses per quarter starting March: $950
Sales are collected as follows:
In the month of sales: 20%
In the next month: 5%
After 2 months: 30%
After 3 months: Remaining Balance

Find the cash outflows for February

Calculate the cash outflows for June

Calculate the collection from sales for December

Calculate the collection from sales for June

Financial Management Quiz

The actual sales and purchases for White Inc. for September and October 2006, along
with its forecast sales and purchases for the November 2006 through April 2007, follow.
Year Month Sales Purchases
2006 September $310,000 $220,000
2006 October 350,000 250,000
2006 November 270,000 240,000
2006 December 260,000 200,000
2007 January 240,000 180,000
2007 February 280,000 210,000
2007 March 300,000 200,000
2007 April 350,000 190,000

The firm makes 30 percent of all sales for cash and collects 35 percent of its sales in each of the two months following the sale. Other cash inflows are expected to be $22,000 in September and April, $25,000 in January and March, and $37,000 in February. The firm pays cash for 20 percent of its purchases. It pays for 40 percent of its purchases in the following month and for 40 percent of its purchases two months later.

Wages and salaries amount to 15 percent of the preceding month’s sales. Lease expenses of $30,000 per month must be paid. Interest payments of $20,000 are due in
January and April. A principal payment of $50,000 is also due in April. The firm pays cash dividend of $30,000 in January and April. Taxes of $120,000 are due in April. The firm also intends to make a $55,000 cash purchase of fixed assets in December.

Assuming that the firm has a cash balance of $25,000 at the beginning of November and its desired minimum cash balance is $25,000, prepare a cash budget for November through April and determine the cash surplus/deficit for each month.

Financial Management Quiz

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Quality Management: Session Long Project

Quality Management
Quality Management

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Quality Management

Session Long Project

Using the fictitious company from the previous SLPs, continue to develop the company profile and operating information. This is a very open-ended SLP, and it will give you an opportunity to expand your knowledge and use creativity in providing the solution to the challenges.

Identify how your company uses quality management.

Categorize the quality problems in your company, and identify different areas for quality measurement and management.

What types of quality tools and techniques are the best to be employed, process control, quality tools, employee involvement?

Consider quality management programs such as TQM, Six Sigma, ISO9000, etc.

How might these be employed, and which of these do you think are best for your company?

• First discuss a recap of your company and provide any additional information about it that will be necessary and/or an interesting background to a discussion of quality and quality management.

• Identify at least three areas of types of quality focus (e.g., product quality, etc.). Discuss these areas and explain why quality is important.

• What are some quality tools and techniques that can be used to chart, diagnose, and improve quality in these three areas?

• Discuss the types of quality programs and recommend what you think is the best program or programs for your company to use and explain why.

Quality Management (TQM) is the organization-wide management of quality that includes facilities, equipment, labor, suppliers, customers, policies, and procedures. TQM promotes the view that quality improvement never ends, quality provides a strategic advantage to the organization, and zero defects is the quality goal that will minimize total quality costs. While this special topic on TQM is not a comprehensive discussion of all aspects of TQM, several key concepts will be discussed.An important basis for justifying TQM practice is understanding its impact on total quality costs.

TQM is rooted in the belief that preventing defects is cheaper than dealing with the costs of quality failures. In other words, total quality costs are minimized when managers strive to reach zero defects in the organization. The four major types of quality costs are prevention, appraisal, internal failure, and external failure.

Prevention costs are the costs created from the effort to reduce poor quality. Examples are designing the products so that they will be durable, training employees so they do a good job, certifying suppliers to ensure that suppliers provide quality in products and services, conducting preventive maintenance on equipment, and documenting quality procedures and improvements.

In a traditional organization that does not practice TQM, prevention costs typically comprise the smallest percentage of total quality costs.A good example of good product design occurs in all Honda products. Honda produces a wide variety of items, including automobiles, ATVs, engines, generators, motorcycles, outboard motors, snow blowers, lawn and garden equipment, etc. To say the least, Honda engines last a long time. For example, Honda Accords typically run for well over 200,000 miles.

Employee training is also a very important prevention cost. For instance, employees in a vegetable/fruit packaging warehouse need to know what a bad vegetable/fruit looks like, since customers will not want to find spoiled produce in the store. Lifeguards at a swimming pool must know proper procedures for keeping swimmers safe. In many circumstances in both manufacturing and service businesses, the training of employees can make an enormous difference in preventing defects.

Supplier selection and certification are critical prevention activities. A product or service is only as good as the suppliers who partner with an organization to provide the raw materials, parts and components, and supporting services that make up the final products and services that the end customers receive. For example, a home furnishings store might use an outside subcontractor to install carpeting, but if the subcontractor fails to show up on time, tracks mud into the customer’s home, or behaves in a rude manner, the store’s reputation will suffer. Similarly, a car manufacturer who purchases defective tires from a supplier risks incurring high costs of recalls and lawsuits when the defects are discovered.

Preventive maintenance is necessary for preventing equipment breakdowns. Many manufacturing companies use sophisticated software to track machine usage, and determine optimal schedules for regular machine maintenance, overhauls, and replacement.

Documenting quality is a necessary prevention cost because it helps the organization track quality performance, identify quality problems, collect data, and specify procedures that contribute to the pursuit of zero defects. Documentation is important to communicating good quality practice to all employees and suppliers.

Appraisal costs are a second major type of quality cost. Appraisal costs include the inspection and testing of raw materials, work-in-process, and finished goods. In addition, quality audits, sampling, and statistical process control also fall under the umbrella of appraisal costs.Inspection and testing of raw materials is very important, since substandard raw materials lead to substandard products. Raw materials used for a bridge determine the strength of the bridge. For example, soft steel will erode away faster than hardened steel. Moreover, the concrete bridge decking needs to be solid, as concrete with air pockets will erode and crumble faster, creating an unsafe bridge.

Finished goods and work-in-process inventory also need inspecting and testing. For example, worker error is quite common in the home construction industry, and this is why inspections occur frequently on newly constructed homes during and after the construction process is complete. Building inspectors ensure that the house has the proper framing, electrical, plumbing, heating, and so forth.

Quality audits and sampling are also important appraisal costs. Quality audits are checks of quality procedures to ensure that employees and suppliers are following proper quality practices. With sampling, a company can ensure with confidence that a batch of products is fit for use. For example, a wooden baseball bat manufacturer may test 10 out of every 100 bats to check that they meet strength standards. One weak bat can signal that quality problems are present.

Statistical process control (SPC) is the final type of appraisal cost. SPC tracks on-going processes in manufacturing or service environments to make sure that they are producing the desired performance. For example, a restaurant might statistically track customer survey results to make sure that customer satisfaction is maintained over time. In manufacturing windshields for automobiles, SPC might be used to track the number of microscopic air bubbles in the glass to make sure the process is performing to standard.

Internal failure costs are the third category of quality costs. This cost occurs when quality defects are discovered before they reach the customer. Examples of internal failure costs include scrapping a product, reworking the product, and lost productivity due to machine breakdowns or labor errors. Internal failure costs are typically more expensive than both prevention and appraisal costs because a great deal of material and labor often has been invested prior to the discovery of the defect. If a book publisher prints 10,000 books, then discovers that one of the chapters is missing from every copy, the cost of reworking or scrapping the books represents a major loss to the company. It would have been much cheaper to have procedures in place to prevent such a mistake from happening in the first place.

In the case of internal failure cost due to machine failures, FedEx and other courier services cannot keep up with demand when a conveyor belt breaks down in the package distribution center. Major delays and costs occur when such incidents occur. Other examples include a road construction company having a road grader break down, a tool and die shop having a CNC machine break down, and a farmer having a combine break down during harvest time.

External failure costs are the fourth major cost of quality. External failure costs occurs when the defect is discovered after it has reached the customer. This is the most expensive category of quality costs. Examples include product returns, repairs, warranty claims, lost reputation, and lost business. One spectacular example of external failure cost was when the Hubbell telescope was launched into space with mirrors that were ground improperly. When the telescope was turned on, instead of a magnificent view of stars, planets, and galaxies, the scientists could see only blurred images. The price of correcting the problem was over USD 1 billion.

External failure costs also occur when the wrong meal is delivered to a restaurant customer, when a computer breaks down shortly after it was purchased, when the wrong kidney is removed from a patient, and when a poorly designed automobile causes the death of drivers and passengers. Because of the enormous costs of internal and external failures, all companies should strive for zero defects. Successful TQM practice dictates that pursuing zero defects will result in the minimization of total quality costs by spending more on prevention and appraisal activities in order to reduce the much higher costs of internal and external failure.


Required Reading

Optional Reading

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Quality Management

The management of quality in an organization is becoming increasingly important. In order to assess this importance, this project determines an organization whose quality management, control, planning, and analysis will be assessed. This paper looks into the areas of quality focus, various tools and techniques used, and a number of program recommendations for the chosen organization.

Recap of the chosen company

The choice company is Better Medical Hospital, a health care facility with a bed capacity of 200 and approximately 2500 employees. The firm offers a number of services to local, state, and out of state patients. These include diagnosis, treatment, palliative care, medication, and end of life care services. The organization’s key operational processes are diagnosis, medication, documentation, and patient flow processes. The use of various approaches in the field of quality management could help to improve the operational processes within the organization. This would help in the increase of efficiency and productivity for Better Medical Hospital.

Areas and types of quality focus

A focus on quality by a company is important, as it is one of the key cornerstones of a business. The main importance of quality is the loyalty it creates in the fan base of the business (Loureiro & González, 2008). There exists a number of areas and types of quality where an organization should focus. Bearing in mind the chosen firm, some of these are outlined below.

Product quality

A key focus area for any business should be the quality of the products and services offered to the consumer. Several definitions exist for product quality. Given the nature of services provided by Better Medical Hospital, the preferred definition is the user-based approach, where the quality of the product is judged based on its ability to satisfy the varying needs of the various consumers (Garvin, What Does “Product Quality” Really Mean?, 1984).

Customer focus

The second area of quality focus is the focus on the customer. In order to determine the best forms of managerial, operational and production practices, a firm should base such decisions on the experience of their customers. In using this focus area type, the views of the consumers are held in high regard in terms of what the company does. An institution such as Better Medical Hospital should have a customer-centric approach to its operations as this will lead to better performance metrics for management (Garvin, 1987).

Employee engagement

A firm that seeks to deliver on its mission and vision should focus on the quality of personnel at its disposal. Such a company seeks to optimize the skills and interactions of its members of staff. Once the employees of the organization are empowered, they provide the needed services which lead to satisfied customers. In the case of the healthcare facility, the availability of engaged employees makes a big difference in the attitude of the customers. This is because the employees have a direct engagement with the customers that are usually at a personal level….

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Responsible Management Challenge at Arcadia Group

Responsible Management Challenge at Arcadia Group
Responsible Management Challenge at Arcadia Group

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Responsible Management Challenge at Arcadia Group

Order Instructions

Identify one major responsible management challenge your case company (Arcadia Group) faces and then choose which one of the following corporate functions studied on the course you consider most relevant to addressing the challenge and why:- marketing,- HRM,- accounting/controlling, or- business information systems.

Analyse this one major responsible management challenge (in light of the company’s strategic business context) and make recommendations for how the company should address the responsible management challenge through the corporate function you have chosen.

Your recommendations should explicitly take into account the company’s strategic aspirations and the resource constraints it faces. You should clearly indicate and justify how these recommendations are practicable and realistic in the context of the company’s existing systems for addressing social, environmental and/or ethical issues, and how these systems could be further developed and changed to fully implement your recommendations.
*The case company is Arcadia Group.*

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Responsible Management Challenge at Arcadia Group


Responsible management is imperative for organizations that seek to enhance sustainability and maintain a positive brand image. Challenges however exist in organizational settings, which make it difficult for companies to maintain the required level of management efficiency. Responsible management challenges could be detrimental to an organization’s performance and hence the need to address them through the use of corporate functions available to the organization. These may include marketing, Human Resource Management, accounting and control, and business information among others.

Arcadia Group faces the responsible management challenge of effectively managing the pension scheme of the organization, thus compromising the welfare of its employees. The company is currently dealing with a pension deficit that has been growing steadily over the years, thus impacting its performance and reputation (Tugby, 2017). It is also a threat for the employees at Arcadia, who are uncertain about the payment of their pension dues, such that it could influence its staff retention capability and diminish its corporate image.

The pension deficit is not only an ethical issue but it could easily escalate into legal battles for the organisation (The Guardian, 2017). This is an indication of poor management of the company’s pension scheme, which needs to be addressed urgently to promote a positive company image and avoid such a scenario in the future.  In this regard, the corporate function that can effectively address the challenge is ‘business information systems.’ A well-designed business information system can effectively manage the company’s pension scheme data and thus ensure that the fund is well utilised to avoid deficits. This paper discusses how business information systems can be influential in dealing with Arcadia’s responsible management challenge.


In a business world that is highly competitive and where stakeholder expectations on businesses have grown considerably, maintaining responsible management is a paramount issue for organizations. According to Grant (2016) companies are more vigilant than ever when it comes to management practices, in order to ensure that they maintain high levels of professionalism and promote satisfaction of their key stakeholders. This means that when management practices are deemed irresponsible, a business risks losing both its reputation and trust from stakeholders. Arcadia Group is in such a situation, having been faced by a challenge in managing their pension. This has led to panic among employees and created legal issues for which the company is being investigated.

Arcadia Group’s Responsible Management Challenge

Arcadia Group has successfully grown to become one of the most influential companies in the fashion sector in the United Kingdom. Such a strong brand image calls for increased responsible management in a bid to enhance a company’s reputation. Arcadia Group however faces a major responsible management challenge emanating from the pension deficit that it is currently servicing. The pension deficit rose by £108m from 2013 to 2016 nearing £1 billion in 2017 (Pension Right, 2017; Tugby, 2017).

The Group has been making contributions into the fund in a bid to pay up the deficit. In March 2017, the Group doubled its contribution to £50 million per year so as to cover the deficit by 2026 (Bury, 2017). The pension deficit is an indication of irresponsible management of funds that resulted in the pension fund being utilised for other operational or personal expenses (Saville, 2016). It is a challenge which, if not addressed would lead to management problems in the future as the company fails to effectively pay up its employees’ pension when it falls due.

The company could either be forced to pay pension from its operational kitty or employees may not be adequately compensated. Sir Phillip Green who owns the largest stake at Arcadia faced a pension deficit case when his BHS chain collapsed, with retirement benefits among workers being slashed significantly in the midst of the crisis. Such scandals portray Arcadia in a negative perspective and could easily ruin the market influence that the company has built over the years.

Arcadia Group strives to maintain high level professional standards by engaging in activities that are in compliance with social, environmental and ethical issues. The Company also portrays its commitment towards employee welfare, ethical and legal responsibility through its Transparency Statement (Arcadia Group, 2017). The Statement which is based on the Modern Slavery Act provides that the company is highly committed towards maintaining high legal and ethical standards pertaining the production process, suppliers and employees.

However, based on this management challenge, the Group faces an ethical issue because it appears that they are not managing the fund effectively, which could be detrimental for the employees. As noted by Chance (2013), responsible organizations are expected to be highly concerned about the welfare of their employees and ensure that their needs are protected. Therefore, the pension deficit portrays the organisation negatively and could cost the company its reputation.

To address this responsible management challenge, Arcadia Group must develop a strategy to avoid such an occurrence in the future. More efficient management of the fund can be achieved through the use of business information systems as discussed in the next section.

Recommendations on Corporate Function to Address the Challenge

The challenge at Arcadia can be identified as a systems issue, where the company did not effectively manage the funds as expected. This resulted in a deficit as funds which should have been dedicated to pension ended up being utilised for other company functions. Accordingly, there is need for a system that monitors the pension fund to ensure that it is utilised for the intended purpose and that funds dedicated to pension are deposited into the relevant account (Davidson, 2017).

There is also need for additional control in the management of the pension fund, such that guidelines are provided on how the fund should be accessed, when and by who (RSM, 2015). The guidelines should then be followed strictly to ensure that future cases of fund misappropriation are avoided. The use of business information systems (BIS) is considered an effective remedy for the challenge facing Arcadia as this will ensure that the fund is managed more effectively. Through the use of BIS, the organisation can track the status of the pension fund at any time and thus ensure that it is being managed based on the set guidelines and controls…..

Responsible Management Challenge at Arcadia Group

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Strategic Financial Management

Strategic Financial Management
Strategic Financial Management

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Strategic Financial Management

Learning Outcomes

  1. Assess and evaluate the theoretical basis of financial strategic decision making

2. Analyse and interpret data, and by the integration of theory and practice, investigate and apply relevant tools to the assessment of a variety of business problems

3. Evaluate and synthesise the problem solving mechanisms from strategic financial decision making and assess the value to enhanced decision making of the application of relevant tools & techniques.

Assessment Task

Company A has the following budgeted income and expenditure for two potential  projects : Alpha and Beta

Year 1Year 2Year 3Year 4
Project Alpha
Expenditure – plant and equipment (purchase)1,500,000   
Other expenses1,000,0001,100,0001,250,0001,500,000
Year 1Year 2Year 3Year 4
Project Beta
Expenditure – plant and equipment hire375,000375,000375,000375,000
Other expenses900,000990,0001,000,0001,100,000

Strategic Financial Management

Additional information:

If the additional information does not indicate that it is project specific you are to assume that it is relevant to both potential projects;

  • Taxation is charged at 20% a year in arrears;
  • Extracts from the company financial statements are as follows: – Benchmarked gearing of 0.40:1; – Cash position:  cash at bank of £1 million;
  • The company are wishing to reduce their carbon footprint in line with their core strategic values of sustainable production.  They have determined that renting the equipment for Project Beta  would reduce their carbon emissions by 70% but Project Alpha’s would have a nil effect on their carbon footprint.
  • Project Alpha would require other projects to be put back by one year due to the initial capital investment required in Year 1.  It would not prevent these other projects from going ahead, but would delay their completion by one year – there is no quantitative financial data available for these other projects.
  • Usual margin that the company achieves on its products is between 15-25% on a cost plus basis.
  • The product that they are looking to introduce in both cases (A or B) is a product that already has an established market with both well established brand competitors and some substitutes.
  • The market is reasonable mature having been in existence for about 5 years, there are no patents or other protection rights for the existing competitors but competition is fierce.
  • This is a new product for Company A and would be entry into a new market of which they have no experience or established reputation.  However, they do sell a complementary product for which they are the brand leader both on cost and perceived quality.
  • They usually price on a cost plus basis but this is based upon the appropriateness of the method for the product being priced.
  • PROJECT ALPHA ONLY– the plant and equipment has no scrap value.


(a) Calculate the CASH net present value of the two projects (including the taxation charge)  The discount factor is 10% and you should round your answer to the nearest full pound (not pence) . (10 marks)

(b) Critically evaluate the usefulness of net present value and two other methods as  project appraisal tools using academic references to support your answer. ( 15 marks – 600 WORDS)

(c) Having decided to use a traditional absorption costing method, the directors now need to decide on a pricing methodology.  You are required to evaluate the different ways in which a company can determine an appropriate price for its product and advise the directors, based upon the information within this assignment what pricing method would seem most appropriate for the company. (15 MARKS – 600 WORDS)            


Strategic Financial Management

Key Resources/Reading

  • Arnold, G. Corporate Financial Management (2012)  5th edition chaps 14/15
  • Collier, P.M. Accounting for Managers 4th edition (2012) Wiley chaps 1/2/3/4/6/7
  • Grundy, T. Exploring Strategic Financial Management  (1998) FT Prentice Hall Chap 2 and 4
  • Johnson, G & Scholes, K. Exploring Corporate Strategy 9th edition (2010) 
  • Mills, R & Robertson, J Fundamentals of managerial accounting and finance (1999) chap 11
  • Proctor, R (2006) Managerial Accounting  for decision making  FT Prentice Hall Chaps 3-4

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Strategic Financial Management

  1. Net Present Values of project Alpha and Beta
 Project AlphaYear 1Year 2Year 3Year 4Year 5
Other expenses(1,000,000)(1,100,000)(1,250,000)(1,500,000) 
Net Profit1,250,0001,400,0001,750,0001,750,000 
Taxation (20%) (250,000)(280,000)(350,000)(350,000)
Expenditure – plant and equipment (purchase)(1,500,000)    
Net cash flow(250,000)1,150,0001,470,0001,400,000(350,000)
Discount factor (10%)0.909  0.826  0.751  0.683  0,621
Net cash flow(227,250)949,9001,103,970956,200(217,350)

NPV = (-227,250) +949,900+1,103,970+956,200+ (-217,350)


Project BetaYear 1Year 2Year 3Year 4Year 5
Expenditure – plant and equipment hire(375,000)(375,000)(375,000)(375,000) 
Other expenses(900,000)(990,000)(1,000,000)(1,100,000) 
Net Profit925,000835,000825,000725,000 
Taxation (20%) (185,000)(167,000)(165,000)(145,000)
Net cash flow925,000650,000658,000560,000(145,000)
Discount factor (10%)0.909  0.826  0.751  0.683  0,621
Net cash flow840,825536,900494,158382,480(90,045)

NPV =840,825+536,900+494,158+382,480+ (-90,045)


Strategic Financial Management

  • Usefulness of net present value and two other methods as  project appraisal tools

Net Present Value

The net present value is considered one of the most valuable project appraisal tools due to its ability to determine the net cash flow at any particular present time (Collier, 2015). However, there are other useful factors in the application of net present value as discussed below.

The net present value is useful as a project appraisal tool because it helps investors to determine the viability of projects before they can invest in them (Collier, 2015). Through calculating the net present value of a project’s future cash flows, a company can determine whether the project is worth investing in. A negative net present value would indicate that the project is not viable while a positive net present value is an indication that the investor can go ahead to invest in the project (Arnold, 2013).

The net present value is useful because it recognizes the differences in money value and is hence useful in ensuring accurate projection of cash flow. In this relation, every period’s cash flows are discounted in order to provide for the fact that the future value of currency is worth less in terms of the present value (Erickson, 2013). This ensures that any income and expenditure is accurately measured to determine the present value of the project.

The net present value allows companies to make investment decisions regarding long-term projects whose cash flow projection is less certain than short-term projects. This is because the net present value recognizes the inherent uncertainty of long-term projects. To achieve this, net present value ensures that cash flows projected further into the project period have less impact on the present value than those which happen earlier in the project (Arnold, 2013). Through the use of net present value, firms put the cost of capital and inherent risk into consideration when making future predictions…..

Strategic Financial Management

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International Joint Ventures

International Joint Ventures
International Joint Ventures

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International Joint Ventures

Order Instructions

The Board of Directions of an International Joint Venture Company must take important strategic decisions about the direction of the collaboration. Therefore, in setting up a new JVC, it is essential to consider how such decisions would be made. taking into consideration the desire of partners to expert an “appropriate” level of control over their JVC:
(a) Critically compare the relative merits and limitations of making decisions by vote or by consensus (through power of veto)
(b) if consensus is needed but then cannot be reached on a vote concerning a significant issue for the business, what options do the partners have to move forward? 

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International Joint Ventures


            The concept of joint venture companies has been instrumental in the success of various firms across the world. The most common of these being strategic and international joint ventures, where two or more independent firms come together in a bid to conquer a market that neither of them would have achieved as individual entities (London Business School Review , 2013; Anderson, 1991, pp. 19 – 20). Prior to the success from the establishment of international joint ventures, a lot of work in terms of planning goes into the formation of the joint venture.

Among the critical points of the planning process involves the definition of terms of the joint venture agreement. Key among the terms in the agreement is the structure, control, and voting procedures of the board of directors of the joint venture company (Gutterman, 2017; Yan & Luo, 2016, pp. 87 – 89). Such terms in the preliminary stages of the formation of the joint venture outline, among others, the use and direction of decision-making tools.

Such tools include the use of veto power and the sharing, or lack thereof, of voting rights between the partners who make up the joint venture. This paper looks to expound on the use of voting as a tool to reaching a consensus within the board of directors of a joint venture company and the options available to them if there is no consensus on a vote.

Decisions by vote or consensus

            During the course of operations, the board of directors in the strategic international joint venture will have to make many decisions regarding an array of issues. In spite of the issue at hand, there will be a need for consensus among the board members. Various decision tools are useful during such times, including authoritarian decisions, brainstorming, and voting. Of these examples, most international strategic joint ventures opt for the use of voting, since it provides a conclusive decision based on majority (Demirbag, 1997, pp. 143 – 146).

Other closely related options include the use of veto power and reaching a consensus through discussions before putting the issue at hand to a vote. The section below looks into the use of voting in an international joint venture by enumerating the various merits and limitations of using voting as a decision-making tool within the organization.

Merits of making decisions in a joint venture by vote

            The use of the voting method as a decision-making method in a joint venture entails the casting of ballots to decide on an issue at hand. All the members of the board of directors will have a reasonable if not total understanding of options prior to casting of the votes. A key advantage of using this method is the ability to combine individual skills, strengths, and knowledge into a formidable block to push for decisions and relevant changes. Members with similar ideology will unite and provide a united front to discuss the ideas from a varied viewpoint in terms of skills and contributions toward the needed changes.

            The use of the voting method for decision making in a joint venture company helps provide a unified front for the board of management. In this case, once the board completes the voting process, they come together and discuss the next steps. This allows for the enhanced understanding of the criterion of the decision, as well as the presentation of a collective effort to engage and act on the decision made. This is imperative to the continued operations of the joint venture organization and allows for fluid operation of the company through a united front from the directors.

            By using the voting method, there is a sense of an enhanced commitment from the entire board of directors. The engagement of all the members of the board in the process instils a sense of belonging and camaraderie. In addition, in spite of their leaning on the decisions, the participation in the voting process and the implementation ensures a greater commitment from the entire team. This sense of commitment and belonging spurred by the voting method is vital to the effectiveness of the board in carrying out their mandate within the organization.

            The method of voting as a decision making instrument in a joint venture will serve to inspire a sense of team spirit among the directors. The choice of voting helps bring together individuals with different points of view to collaborate on implementing a given task. In addition, the process serves as a team building activity through constant interaction with other board members who may not meet too often. This enhancement of team spirit allows the board to operate better together in times of unity and disagreement.

            The use of voting in a joint venture is useful when the board of directors is pressed for time. When the directors need to make a quick decision on the direction that the firm should take on a given matter, a vote helps since it may be conducted in a single sitting from the individual views of the members. Such a scenario does not require prior engagement and the decision is made in a matter of a few hours. This allows for the quick turnaround on time-bound decisions that could be potentially beneficial to the organization.

            In the same light of the ability to use the voting as a fast-paced method of decision-making in a joint venture company, the board of directors may use the method to eliminate non-critical decisions. At some point in the operation of the organization, the board will be faced with the challenge of making a number of simultaneous decisions that are time bound. In such a scenario, the use of voting could help the directors to eliminate the non-critical decisions quickly, thereby leaving room and time for discussions on the more demanding issues.

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Company Performance Analysis

Company Performance Analysis
Company Performance Analysis

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Company Performance Analysis


Please read the cases 10 and 12 and answer the following questions

Assignment of case 10

1)  Review the two exhibits for Lowe’s & Home Depot (Exhibit 7 and 8). Examine ratios. See the excel file of case 10.

Prepare ratios for Lowe’s, using data from exhibit #5, which should be identical to those in exhibit 7 modeled by Home Depot. See below:

Fiscal year
Working capital (CA-NIBCL*)
Fixed assets
 Total capital
Tax rate
 NOPAT (EBIT*(1-t))
Return on capital (NOPAT/Total capital)
Return on equity (Net earnings/S. Equity)
Gross margin (Gross profit/Sales)
Cash operating expenses/Sales
Operating margin (EBIT/Sales)
NOPAT margin (NOPAT/Sales)
Total capital turnover (Sales/Total capital)
P&E turnover (Sales/P&E)
Working capital turnover (Sales/WC)
Receivable turnover (Sales/AR)
Inventory turnover (COGS/M. inventory)
Sales per store ($ millions)
Sales per sq foot ($)
Sales per transaction ($)
Total sales growth
Sales growth for existing stores
Growth in new stores
Growth in sq footage per store
 Total Capital/Equity

Which firm is the better performing one? On what basis do you conclude the better performance?

2) Who deserves the “Management of the Year” award in the retail building-supply industry? Compare based on 2001 firm performance.

  • Conduct DuPont analysis for both two firms and analyze their return sources?ROE=(NI/sale)*(sale/total capital)*(total capital/total equity)

*Prepare a DuPont analysis to evaluate the differences in performance?

  • Why the two firms have the same beta (exhibit 3), but the WACC are different?
    • Compare the two firms return on capital in 2011.
      • According to ROC, which one is better?
      •  Consider their WACC.
    • Which firms stock performs better during 2001? Why?
    • What is the bottom line to measure manager performance? Future or history?

3) How does the Home Depot forecasting model work? Why do we use ratios to forecast financial statements?  Hint: walk through the mechanics of the model, focusing on the 2002 forecast (exhibit 8)?

Company Performance Analysis

Assignment of case 12

  1. What is the current situation?
  2. Why did the company run out of cash? Think of the source and use of cash.
  3. What are the consequences for the company?
  4. what is the effect of running out of cash to the company?
  5. What are Kumar’s alternatives for action? And the effect and feasibility of each possible action:

1: Slower growth:

2: Improving profitability

3: Cutting dividends

4: reduce investment

  • What impact might the below two proposals have on the financial needs of the firm?

a): Proposal from the transportation manager to reduce raw material inventory.

b): Proposal from the operations manager to level production.

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Company Performance Analysis Essay

Ratio analysis for Lowe’s

Ratio Analysis for Lowes
Fiscal year
Working capital (CA-NIBCL*)7721,0121,4601,5392,063
Fixed assets3,1103,7595,3197,2018,816
 Total capital3,8814,7716,7798,73910,879
Tax rate38.9%39.2%39.0%38.8%38.6%
 NOPAT (EBIT*(1-t))3815077158581,104
Return on capital (NOPAT/Total capital)9.8%10.6%10.5%9.8%10.1%
Return on equity (Net earnings/S. Equity)13.7%15.4%14.3%14.7%15.3%
Gross margin (Gross profit/Sales)26.5%26.9%27.5%28.2%28.8%
Cash operating expenses/Sales18.0%17.9%18.0%18.5%18.3%
Operating margin (EBIT/Sales)6.2%6.8%7.4%7.5%8.1%
NOPAT margin (NOPAT/Sales)3.8%4.1%4.5%4.6%5.0%
Total capital turnover (Sales/Total capital)
P&E turnover (Sales/P&E)
Working capital turnover (Sales/WC)
Receivable turnover (Sales/AR)85.685.1107.5116.6133.5
Inventory turnover (COGS/M. inventory)
Sales per store ($ millions)21.323.527.628.929.7
Sales per sq. foot ($)254.3256.2279.1277.1274.0
Sales per transaction ($)43.945.753.254.956.0
Total sales growth20.8%29.9%18.1%17.7%
Sales growth for existing stores10.8%17.3%4.6%2.9%
Growth in new stores9.0%10.8%12.8%14.5%
Growth in sq. footage per store10.0%7.6%5.4%4.0%
 Total Capital/Equity1.491.521.441.591.63
*Non-interest-bearing current liabilities

Company Performance Analysis

Which firm is the better performing one? On what basis do you conclude the better performance?

The analysis indicates that Home Depot is performing better than Lowe’s. The basis of this conclusion is a number of performance metrics and ratios from the analysis above. For example, in terms of profitability, Home Depot has a consistently higher return on capital and as well as a return on equity compared to Lowe’s. In terms of margins, Home Depot also had a consistently higher gross margin, operating margin, and NOPAT margin during the period.

In terms of the turnover, Home Depot has a higher turnover result from their capital allocation, P&E, working capital, and inventory. In addition, average of the sales per store, sales per square foot, and sales per transaction is higher for Home Depot than Lowe’s.

In terms of growth, the average is higher in each metric for Home Depot than that of Lowe’s. In each case, the average of the period is higher for Home Depot than Lowe’s. This implies that the growth in total sales, the growth of sales in the existing stores, the growth in new stores, is higher for Home Depot than it is for Lowes during the same period. As such, the various metrics and financial ratios in the analysis above point towards better performance for Home Depot compared to Lowes.

Who deserves the “Management of the Year” award in the retail building-supply industry based on 2001 firm performance?

The DuPont analysis conducted below indicates the return sources for both Home Depot and Lowe’s. The analysis also indicates various differences in the performance between the two companies.

DuPont analysis for Lowe’s
NP Margin4%4%4%4%5% 
DuPont analysis for Home Depot
NP Margin4.8%5.3%6.0%5.6%5.7%

Beta is a financial ratio that measures the level of risk the company has in relation to the market (Bodie, Kane, & Marcus, 2013, pp. 171 – 172). The reason behind the firms’ similar level of risk exposure as indicated by the same measure of beta is due to the fact that both Lowe’s and Home Depot operate in the same segment of the same industry.

As such, they are exposed to the same market forces which direct the same level of market risk in the way of the retail stores in the building-supply industry. In addition, the WACC is different for the firms because they have different levels of leverage, with Lowe’s being higher as shown by the higher FLM ratio as indicated in the analysis above…..

Company Performance Analysis

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Management and leadership for Healthcare and social services UK

Management and leadership
Management and leadership

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NVQ level 5 for Management and leadership for Healthcare and social services UK

Order Instructions:

Essay Number 1:

4.1 The student should write an essay in which they describe ethical dilemmas that may arise in their own area of responsibility when balancing individual rights and duty of care.

Word count: 300 minimum

Essay number 2:

4.2 Explain the principle of informed choice

4.3 Explain how issues of individual capacity may affect informed choice

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4.2 – 4.3 The student should write an essay in which they explain the principle of informed choice and how issues of individual capacity may affect informed choice.

Word count: 300 minimum

Essay number 3:

4.4 Propose a strategy to manage risks when balancing individual rights and duty of care in own area of responsibility

4.4 The student should write a reflective piece in which they propose a strategy to manage risks when balancing individual rights and duty of care in their own area of responsibility.

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ABC Corporation Case Study

ABC Corporation Case Study
ABC Corporation Case Study

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ABC Corporation Case Study

Complete a case study of ABC Corporation (your instructor will assign the specific company for the case study at the beginning of Module/Week 3) in the case section of the text (e.g., Case Number 1).

A formal, in-depth case study analysis requires you to utilize the entire strategic management process. Assume your group is a consulting team asked by the ABC Corporation to analyze its external/internal environment and make strategic recommendations. You must include exhibits to support your analysis and recommendations.

The case study must include these components:

  • A total of 10–12 pages of text plus the exhibits
  • Cover page (must include the company name, your group name, a list of the active team members, the date of submission, and a references page; the document must follow current APA guidelines.)
  • Matrices, which must be exhibits/attachments in the appendix and not part of the body of the analysis (The Strategy Club has excellent templates/examples for exhibits and matrices:

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Case study deliverables (text must follow this order with current APA-level headings for each component):

  1. Executive Summary
  2. Existing mission, objectives, and strategies
  3. A new mission statement (include the number of the component in parenthesis before addressing that component)
    Great mission statements address these 9 components:
  4. Customers: Who are the firm’s customers?
  5. Products or services: What are the firm’s major products or services?
  6. Markets: Geographically, where does the firm compete?
  7. Technology: Is the firm technologically current?
  8. Concern for survival, growth, and profitability: Is the firm committed to growth and financial soundness?
  9. Philosophy: What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
  10. Self-concept: What is the firm’s distinctive competence or major competitive advantage?
  11. Concern for public image: Is the firm responsive to social, community, and environmental concerns?
  12. Concern for employees: Are employees a valuable asset of the firm?
  13. Analysis of the firm’s existing business model

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  • SWOT Analysis (comes from researching the firm, industry, and competitors)
    It is important to know the difference between causes and effects in the SWOT analysis. Causes are important, not effects. Once the SWOT Analysis is created, each group needs to construct the SWOT Bivariate Strategy Matrix.
    Deliverables for this section include:
    • SWOT Analysis
    • Internal Factor Evaluation (IFE) Matrix
    • External Factor Evaluation (EFE) Matrix
    • SWOT Bivariate Strategy Matrix
  • BCG Matrix (follow the Strategy Club’s template, not the textbook’s format)
  • Competitive forces, Competitive Profile Matrix (CPM), and competitor’s ratios
    Deliverables for this section include:
    • CPM and analysis
    • Competitor’s ratios and analyis
  • Current and historical Financial Statements (Income Statement (I/S), Balance Sheet (B/S) and Statement of Cash Flows) from the 3 most current years for the firm
    The financial statements must include changes (deltas) between years.

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  • Ratios from the most current and available 3 years with deltas and analysis
  • Alternative strategies (giving advantages and alternatives for each)
  • Pro-Forma Financial Statements (I/S, B/S and Statement of Cash Flows) with deltas out 3 years and analysis
    Each year must have 2 columns: 1 with your strategy and 1 without your strategy.
    • Include Pro-Forma ratios for the first year out with deltas contrasting from the most current year’s ratios.
  • Net Present Value analysis of proposed strategy’s new cash flow and EPS/EBIT analysis
    NOTE: To construct the first cash flow (cf1) at the very minimum, the new revenue from your strategy(s) must be discounted back to the present value by calculating EBIT and that figure will be your cfn for each year. cf0 (initial cost of your strategy), cf1 (discounted cash flow first year), r (opportunity cost of capital, the rate of the next best alternative use of cash/debt/equity resources).
  • Specific recommended strategy and long term objectives
    Explain why you chose the strategy, and discuss how much the strategy will cost to implement and how much new revenue your strategy will create. Include your action timetable agenda for accomplishing your strategy.
  • Proposed new business model

Have your group leader place the results of the case study analysis in a single document and post it to the Group Case Study 1 forum on your Group Discussion Board Forum.

Submit this assignment by 11:59 pm (ET) on Friday of Module/Week 4.

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Understanding and Managing People

Understanding and Managing People
Understanding and Managing People

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Understanding and Managing People

Understanding and managing people can be a daunting task. The process involves numerous concerns brought about by the complexity of handling multiple individuals with the balance of following strict regulations. This paper breaks down a section of such complexity by addressing a number of contemporary issues facing organisational behaviour. In addition, the paper seeks to point out the impact of such issues on the human resource practices within the company.

Contemporary issues facing the field of organisational behaviour

Given the breadth of content and research in the field of organisational behaviour, many of the issues and topics are widely researched. However, the field is rather flex, with issues changing every now and then. As such despite the numerous research in the field, there are always new and incoming issues that require attention and research. This section discusses a number of contemporary issues facing the field of organisational behaviour as outlined below.

Diversity in the workplace

For the longest time, workplace diversity has been an issue under the radar of a lot of companies and their management. Over the years, the management and definition of diversity in the workplace have titled and shifted with changing global concerns. Workplace diversity refers to the inclusion of the various characteristics, similarities, and differences between the members of staff in a given organisation. Such differences include race, age, cultural background, handicaps, education levels, religion, and sexual orientation among others (Saxena, 2014, pp. 77 – 78).

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While the issue of diversity has its impact on organisational behaviour, it is not among the most crucial. However, mismanagement of diversity can have potentially disastrous outcomes (Davidson & Burke, 2016, pp. 254 – 257). To counter such, modern management practice calls for inclusion to cater for such differences. While the concept is theoretically simple, the implementation calls for much more focus and can be quite resource-incentive as discussed in the next section.

A recent contentious issue in organizational behaviour tied to diversity and inclusion is the inclusion of women in management. In the recent years, research has indicated that firms have had a direct increase in various metrics of business success from improved gender equality, inclusion, and diversity within the company (Davidson & Burke, 2016, pp. 29 – 30). Such inclusion fosters better relationships and promotion of women as integral parts of the organization rather than unwelcome players.


Positivity as an independent field of psychological knowledge has widespread research and coverage. However, the case is not the same for its impact in the workplace, and on the organisational behaviour. New studies indicate the impact of positivity in an individual to an increase in their work effort and ethic (Warr, Bindl, Parker, & Inceoglu, 2013). In addition, such positivity has a high potential to spread across the firm and create a phenomenon known as positive organisational behaviour.

With an increase in positive organisational behaviour, there is an increase in firm qualities such as hope, optimism, resilience, the development of psychological capital, and self-efficiency (Luthans & Youssef, 2007, pp. 327- 336). Luthans and Youssef (2007, pp. 339 – 340) also indicate the presence of strong links between the positivity of the individual, better firm performance, and positive organisational behaviour.

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Reciprocity and Social Exchange Theory

As with the other terms, the history of reciprocity and theories of social exchange has been an issue under research for a long time. However, only recently did scholars gain interest in its relationship with organisational behaviour. The concept of reciprocity at the workplace may result either from transactional needs, folk belief or as a moral and cultural norm. In an organisational setting, transactional reciprocity is most common.

In such a setting, most of the interactions are interdependent on the exchange of various resources. Such engagements form the basis of social exchange relationships in the workplace. Here, reciprocity begins upon signing a work contract, and negotiations kick in almost immediately, where the exchange is between the hours of work and a form of agreed compensation, that is usually monetary (Cropanzano & Mitchell, 2015).

The concepts of reciprocity and social exchange influence organisational behaviour in a number of ways. Among the most common is the fostering of cordial interactions between employees (Cropanzano & Mitchell, 2015). A second is the enhancement of personal, behavioural and team commitment to various tasks and the company as a whole (Shiu, Jiang, & Zaefarian, 2014), and a third is the increase of equity and inclusion of historically marginalized groups within the organisation (Singh & Vinnicombe, 2004).

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Trade Unions

The impact of trade unions and their influence on work productivity is not as widespread a topic as their relationship with worker remuneration. However, trade unions have an impact on employment, career growth and the behaviour of firms, employees, and employers (Blanchflower, Millward, & Oswald, 1991; Bryson, 2005). Unionisation has a largely positive effect on the work relationships between employees, and between employees and the employer. The change in behaviour emanates from the changes in pay levels, employment levels, and security of tenure (Millward, Forth, & Bryson, 2001).

The influence of these issues on Human Resource practices

Diversity in the workplace

Inclusion and improving on increased diversity in the workplace is a key goal for the human resources department in a firm. Therefore, the increase in scholarly discourse and willingness of firms to increase inclusion and foster equality is a big boost to HR practices, especially the inclusion of women in managerial and decision-making positions. 


The concept of individualistic positivity, as well as positive organisational behaviour, increase the wellness of the individual as well as overall increase in work output and efficiency of the firm. According to the CIPD, this increases the ability to meet work targets and set quotas of work (CIPD, 2015). Therefore, the issue of positivity helps further human resource practices within the organisation.

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Reciprocity and Social Exchange Theory

Successful implementation of reciprocity and SET within the workplace is vital towards better overall relations. SET calls for better relationships between colleagues, and between workers and employers. This is in line with the goals of HRM practices. Therefore, reciprocity and social exchange within the organisation help to improve HR practices.

Trade Unions

In spite of the common goals of both human resource practice and trade unions at improving welfare and providing better working conditions, the two sometimes find fault with each other. For example, while unionisation uses a collectivist approach, HRM prefers an individualistic approach to managing situations. In addition, human resource models are based on high trust levels, while adversarial relations pushed by unionisation call for decreased trust.


Improving diversity in the workplace, enhancing a sense of positivity, implementing the concept of reciprocity and social exchange theory, and unionisation stand out as examples of contemporary issues facing the organisation and with an impact on the organisational behaviour. Each has its distinctive influence on organisational behaviour, as well as its effect on the human resource practices, where some foster such operations, and others provide challenges to the HR department. However, they all serve to increase the understanding and management of people within an organisation.


Blanchflower, D. G., Millward, N., & Oswald, A. J. (1991). Unionism and employee behaviour. The Economic Journal, 815 – 834.

Bryson, A. (2005, September 1). Union effects on employee relations in Britain. Journal of Human Relations, 58(9), 1111 – 1139. doi:10.1177/0018726705058912

CIPD. (2015). Quotas and targets: How do they affect diversity progress? London: CIPD.

Cropanzano, R., & Mitchell, M. S. (2015). Social Exchange Theory: An Interdisciplinary Review. Journal of Management, 31(6), 874 – 900. doi:10.1177/0149206305279602

Davidson, M. J., & Burke, R. J. (2016). Women in Management Worldwide: Progress and Prospects (2nd ed.). New York: Routledge Publishing.

Luthans, F., & Youssef, C. M. (2007). Emerging Positive Organizational Behavior. Journal of Management, 33(3), 321 – 349. doi:10.1177/0149206307300814

Millward, N., Forth, J., & Bryson, A. (2001). Who calls the tune at work? The impact of trade unions on jobs and pay. Layerthorpe: Joseph Rowntree Foundation.

Saxena, A. (2014). Workforce Diversity: A Key to Improve Productivity. Procedia Economics and Finance, 11(1), 76 – 85. doi:10.1016/S2212-5671(14)00178-6

Shiu, E., Jiang, Z., & Zaefarian, G. (2014). Antecedents of behavioural commitment in inter-organizational relationships: a field study of the UK construction industry. Journal of Construction Management and Economics, 32(9), 888 – 903. doi:10.1080/01446193.2014.915335

Singh, V., & Vinnicombe, S. (2004). Why So Few Women Directors in Top UK Boardrooms? Evidence and Theoretical Explanations. Corporate Governance: An international review (pp. 479 – 488). Blackwell Publishers.

Warr, P., Bindl, U. K., Parker, S. K., & Inceoglu, I. (2013). Four-Quadrant Investigation of Job-related Affects and Behaviours. European Journal of Work and Organizational Psychology, 23(3), 342 – 363. doi:10.1080/1359432X.2012.744449

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