Tuesday, March 31, 2020
The Process of Forming a Team
A team is a group of individuals that has come together for a common purpose. A team is the basis of any institution. One organization may have several teams drawn from its departments. There are several phases that a team goes through on its way to success. They include formation, storming, conflict resolution, performing and transforming.Advertising We will write a custom essay sample on The Process of Forming a Team specifically for you for only $16.05 $11/page Learn More Before a team is formed the team members should first seek to familiarize themselves with the objective of their organization. At this level members rely on their leader on what to do and what not to. The leader should be prepared to answer questions concerning the team’s objective. This is important because an organization has several departments and the team members have specific duties assigned to them. Regardless of their duties, members must put their differences aside an d focus on achieving organizational goals. Team members should take some time to learn how to cope with their fellow members without interfering with the processes of their organization. This will help to avoid cases of sabotage from within the organization hence bring positive results. Teams are termed as X-teams if they are externally oriented and thus flexible in formation (Ancona Bresman, 2007). The next thing is to select a leader of the team. The team leader should ensure his or her team members are devoted to meet the organizational goals. The leader should find out whether the members of his team value what they do for the organization and whether they are willing to go an extra mile for the purpose of achieving organization’s mission. There exists conflict of interest after the team has been formed. This could be due to the differences with regard to recognition and pay. Divisions may arise due to struggle for leadership. Some team members may not be comfortable wit h their leader due to their individual differences with him. Members need to focus on the goals of their team instead of arguing over small issues because when members are in conflict they can never speak in one voice. For instance, in politics, there are normally several political parties contesting for the same position.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Success here will favor the party with limited struggle for power. Failure may arise where each member feels he or she is capable of becoming a leader and this will shift the focus of that political party. Teams need to be explore their needs, exploit the organization’s requirements, and export ideas to other teams. Successful teams ensure flexibility in exploration, exploitation, and exportation Thus, team members should agree on a common ground and accept their leader for what he is supposed to be doing rather than what he fails to do. Team members should respect him and usually consult him before making major decisions. Minor decisions should made by individuals even in the absence of the leader. The team should meet regularly to discuss the strategies that they can use to achieve organizational goals. The divisions are merged for the purpose of success (Ancona Bresman, 2007). After realizing the team’s potential, members should engage in performing their required task. Performing is referred by many as the beginning of the end. Here, the team’s bond is very strong and each team member knows what to do. If there are any changes to be made, the team sits down together and makes amendments appropriately. The desire for top results is very high and team members are quick to solve any differences that arise. Owing to their common goal, they feel like they are one family and each member is keen to observe what is happening to his fellow team mate. The leader of the team is required to provide guidance where necessary. Interacting with the environment enables an X-team to respond to the changing environment thus innovation. In other cases, when the team achieves its objectives, it is dissolved. This is common in project teams. At this stage, team members are very happy for their contributions towards the team’s success. This is because they know the success of the organization will bring about a positive impact to their lives and career. The team is there fore dismantled and members go back to their respective duties. Initially they fear to do things alone but as time moves they catch up with their former dutiesAdvertising We will write a custom essay sample on The Process of Forming a Team specifically for you for only $16.05 $11/page Learn More There are times when organizations have been failed by their teams. This is verified by the decline in an organization’s productivity. The leaders in this case are perceived to be incompetent. To such cases, team leaders should inform team members at the initial stage why they are in the team. This will help team members draw a line between team building actions and holidays. This is because most team building activities takes place in a different environment away from work. Therefore, Team members should wipe out their personal differences because divisions in a team are the major causes of failure. The team leader should explain to team members how crucial their unity is to the success of their mission and failure of the team means failure by all. Team leaders should set adaptive strategies with extreme execution and flexible phases, thus X-teams (Ancona Bresman, 2007). Reference Ancona, D. Bresman, H. (2007). X-teams: How to build teams that lead, innovate, and succeed. USA: Harvard Business School Publishing Corporation. This essay on The Process of Forming a Team was written and submitted by user Iman1 to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.
Saturday, March 7, 2020
Financial report on luton brickworks Plc. The WritePass Journal
Financial report on luton brickworks Plc. Introduction Financial report on luton brickworks Plc. IntroductionWhat is Dividend?Types of Dividends:CASH DIVIDEND:STOCK DIVIDEND:STOCK SPLITS DIVIDEND:SHAREHOLDERS WEALTH MAXIMIZATION:ARGUMENTSDIRECTOR A:Formula for Walter’s model:Arguments in favour of statement:Arguments against the statement:DIRECTOR BAssumptions of MM modelArguments in favour of statement: (MR.B)Arguments against the statement: (MR.B)DIRECTOR CArguments in favour of the statementArgument against the StatementFACTORS DETERMINE DIVIDEND PAYMENT:FACTORS AFFECTING DIVIDEND POLICY:NATURE OF BUSINESS:COMPOSITION OF SHAREHOLDING:RESTRICTIONS BY CONCERNED BODIES:INFLATION:FIRM ORIENTED CONSIDERATION:LIQUIDITY:OWNERSHIP CONSIDERATIONS:CONCLUSION/RECOMMENDATIONSREFERENCESRelated Introduction Luton Brickworks plc is newly formed company which aims to maximise the wealth of its shareholders. The board of directors of the company is currently trying to decide on the most appropriate dividend policy to adopt for the company’s shareholders. However, there is a strong disagreement between three of the directors concerning the benefits of declaring cash dividends. Director A argues that cash dividends would be welcome by investors and that a high dividend payout ratio as possible would reflect positively on the market value of the shares. Director B argues that whether a cash dividend is paid or not is irrelevant in the context of shareholder maximisation. Director C takes an opposite view and argues that dividend payments should be avoided, as they would lead to a decrease in shareholder wealth. Required: Present the theory of organisational dividend policies and integrate the assignment into your discussion. a) Discuss the arguments for and against the position taken by each of the three directors b) Assuming the board of directors decides to pay a dividend to Shareholders what factors should be taken into account when determining the level of dividend payment. What is Dividend? The term dividend refers to the part of divisible profits among its shareholders. In other words, dividend is that portion of company’s profit which is distributed among its shareholders as a percentage of par values of share at a fixed rate per share according to the decision of its board of directors. The main purpose of any business is to create profits for its owners. When any company earns profit from its business, they can reinvest that money in their business, but some companies pay profits to its share holders. However when a company decides to pay dividend to shareholders, the cash available for business will reduce. Dividend inukare paid on a semi annual basis, net of deduction of tax at the standard personal income tax rate, these are called interim dividends. These interim dividends tend to be smaller than final dividends due to cash flow, taxation financial planning considerations (Sangray, 2010). Types of Dividends: 1)     Cash Dividend 2)     Stock Dividend 3)     Stock Splits Dividend CASH DIVIDEND: Cash dividend plays a dominant role in sharing company’s profit; shareholders are being paid in part of company’s profit. However in US they double the taxation of cash dividend at a maximum rate of 15% and dividends are distributed to shareholders only after company pays income tax. STOCK DIVIDEND: Stock dividend is paid to shareholders only if the companies not having healthy cash position, by combining the profits of both current previous year. Such shares are also called as ‘bonus shares’ instead of paying dividend as cash. There is no great change in equity of shareholders, as stock dividend is paid until actual stock sold in order to avoid paying taxes. In general share holders have more scope to receive additional shares from the company, where it depends on the amount already owned by shareholders. STOCK SPLITS DIVIDEND: Stock split dividend is performed in a company, if there is increase in share price, obviously investors shares become too expensive to buy. Whereas liabilities, assets, equity remains same. InUKstock split is referred as â€Å"scrip issue†, â€Å"bonus issue†, â€Å"capitalization†or â€Å"free issue†. This stock split dividend resembles stock dividend. Source: investopedia.com/terms/s/stocksplit.asp SHAREHOLDERS WEALTH MAXIMIZATION: Shareholders profit maximization consolidates the volume of risk time. The goal of SWM states that the present value of the expected future cash flow of the firm should be maximized to shareholders. ARGUMENTS DIRECTOR A: He argues that cash dividends would be welcome by investors that a high dividend payout ratio as possible would reflect positively on the market value of the shares. This argument deals with RELEVANCE THEORY, where the supporting model for this argument is WALTER’S MODEL James E. Walter (1999):  dividends are relevant. The investment policy of a company dividend policy both are inter-related as they cannot be separated by their own. The value of an enterprise will be affected by dividend policy. Formula for Walter’s model: P= D/Ke-g Where P= PRICE OF EQUITY SHARES D= INITIAL DIVIDEND Ke= COST OF EQUITY CAPITAL G= GROWTH RATE EXPECTED ANOTHER MODEL WHICH SUPPORTS THIS ARGUMENT IS GORDON LINTNER MODEL Dividend relevance, as argued by â€Å"Linter and Gordon†, suggested that investors preferred dividends to capital gains due to their certainty w       The Gordon model can be used to find the theoretical value of a share by summing the shares discounted future dividend payments to infinity: P0        = Do (1+g)/(y-g) Where: P0 =    current ex-dividend market price of the share r  =     shareholders required rate of return g  =    expected future growth rate of dividends D0 =    declared dividend at time t0 Dividend relevance was further supported by the argument that dividends were seen by investors as signals of a company’s future profitability. Arguments in favour of statement: 1)     The company should pay dividend to shareholders if they have sufficient liquidity to satisfy their requirements. 2)     The dividend acts as a signal to investors about the profits of the company is higher or not. 3)     The company’s market value confidence in society increase only if the dividends are paid to investors. 4)     If company pays regular cash payments to customers the firm will be recognised in the market to get financial support from other institutions with reasonable interest rates. Arguments against the statement: 1)     If the company pays dividend to investors in initial stage, it may lead to failure in important opportunities. 2)     The share value of the company decreases if the company pays more dividends to shareholders. This leads to negative impact in the market. 3)     According to nature of the business the company may suffer loss, as dividend may adversely affect the company. 4)      The regular payout of dividends will also be taxed on regular intervals, as they are corporation profits. If this profits are transferred to reserves,(capital gains) in long run, the total impact of tax would be less than the tax paid on regular dividend payments. DIRECTOR B Argues that whether a cash dividend is paid or not is irrelevant in the context of shareholders maximisation. This argument deals with IRRELEVANCE THEORY, the supporting models for this theory could be MILLER MODIGLIANI MODEL According to â€Å"Miller and Modigliani†(2010 Sudesh Sangray) the dividend payments were irrelevant should only be offered as a residual the value of a firm is unaffected by the distribution of dividends and is determined solely by the earning power and risk of its assets. The dividend policy may have no influence on the market price of the shares. Assumptions of MM model Surveillance of perfect capital markets and investors in it are rational. Securities are infinitely divisible, as there is no transactions cost, investor cannot influence the market price of securities and there are no floatation costs.  There are no differences in tax rates which are applicable to capital gains and dividends. The investment policy of a firm does not change. It implies the financial status of the company which gives an opportunity to invest in new projects. As retain earnings will not change the business risk of the firm. Arguments in favour of statement: (MR.B) 1)     Investors will not get affected if dividend is paid but investment policy will have impact on shareholders wealth maximization. 2)     The investors are less concern about dividend payment as they always want to maximise their wealth. 3)     The home made dividend pays to shareholders who expect regular income selling particular shares instead of anticipating dividend. 4)     If a company tries to get income from external source, by supplying sufficient funds, then retain earnings come completely irrelevant. Where shareholders wealth can be maximised by getting income from external source. Arguments against the statement: (MR.B) The perfect capital market is unrealistic. Practically, there are taxes, floatation costs and transaction costs. Paying present cash dividend is far better than capital gains, where whose appearance is definite more accepted by the shareholders. If a company paying dividend from external source of income is not a good idea, as it leads to increase in interest rate gearing ratio, which will effect shareholders wealth. DIRECTOR C This argument deals with which is similar to relevance theory, there is no specific model that supports this argument, but Argument for and against that Dividend payment should be avoided since it reduces Shareholders Wealth Arguments in favour of the statement Net income of the share holders decreases, as they pay taxes on dividend received. This result to decrease of wealth. The profitable opportunities for firm reduce, when there is regular payment of dividend to shareholders. So, the firm should try to avoid the dividend payment to its shareholders and try to concentrate on its investment opportunities. Argument against the Statement As mentioned by â€Å"Watson Head†(2004) in the article â€Å"DIVIDEND POLICY†cash dividend plays an important role to provide reliable information to the investors. That financial condition of company is strong. The uncertainty of shareholders income reduces when payment of cash dividend is high. The management tries to reduce conflict ensure their personal benefits are mention, as there is a scope of agency problems because of owner’s interest. There is decrease in interest rates when dividend payment is high which indicates the shareholders wellbeing is doing well by management are not. FACTORS DETERMINE DIVIDEND PAYMENT: The decision of dividend is difficult because of conflicting objectives lack of decision making techniques, maximizing shareholders wealth is not easy in the long run. FACTORS AFFECTING DIVIDEND POLICY: NATURE OF BUSINESS: Mostly dividend policy is adopted by companies which earn unstable profits; where it is different from company earn stable profits. COMPOSITION OF SHAREHOLDING: If the company have cumulative preference shares, they have to be paid the present year dividend in the next year along with next year dividend and if it has equity share they need not be paid even the company has profits. Example: Microsoft etc. RESTRICTIONS BY CONCERNED BODIES: In long-term some financial companies restrict the company on paying dividend to shareholders, they pronounced a clause that no payment to be made till the loan amount is repaid back to financial institutions. INFLATION: During inflation it is not much important to pay dividend. As there is no chance of replacing the equipment as funds are generated from depreciation. FIRM ORIENTED CONSIDERATION: The dividend policy is not determined by ownership interest rates. As firm’s needs are considered as important, this includes the following. Business cycles Risk of losing control on organization Post dividend policies and stockholders relationships. Relative cost of external funds Contractual legal restrictions Availability of external capital LIQUIDITY: As explained in Investopedia Dictionary. â€Å"The degree to which an asset or security can be bought or sold in the market without affecting the assets price. Liquidity is characterized by a high level of trading activity†. To increase the sales profits earned by company should reinvest in fixed assets working capital. There are some companies which cannot generate sufficient cash even if they get profitable income. OWNERSHIP CONSIDERATIONS: The identification of owner’s interest becomes difficult if it is decentralized on wide spectrum. As every shareholder have their own objectives different opinions. Investor companies are which combines the mix of both growth desired dividends. CONCLUSION/RECOMMENDATIONS Concluding that, this report explains the financial status of the company and their decision regarding shareholders wealth maximization. 1)     Dividend is paid to shareholders dividend policy is taken to distribute dividend to shareholders. 2)     There are 3 types of dividends cash, stock, stock splits dividend, which plays a key role in paying dividends. 3)     Paying dividend to shareholders is an added advantage, which increase the company’s reputation in the market. 4)     There is a possible adverse effect to the company depending on the nature of the business. 5)     As investors always look forward to maximise their wealth. 6)      It is not a good idea to pay dividend to shareholders now, as investors may think that the company is not having any future projects to enhance their business. 7)     Recommending that the company should wait for some time to gain good reputation in market and investors as well to get more profits, which help to increase in market share, and overall profits of the company. 8)     Concluding that as Luton Bricks Plc is new to company in market, there will have less scope for earning profits. REFERENCES DR.R.SRINIVASAN. (2009). Important theories of dividend policy an appraisal. Available: articlesbase.com/finance-articles/important-theories-of-dividend-policyan-appraisal-1353119.html. Last accessed 2nd Aug 2010. Linter. John. (1956). Distribution of income corporation among. The American Economic. 46 (2), 2-15. American psychological association. Www.dictionary.com. dividend, Collins English dictionary, 10th edition. May 22, 2011. Pike Richard. (1996). Decisions and Strategies. In: Richard Pike and Bill Neale Corporate finance and investment. 2nd Ed.New York: Prentice Hall,. 196-216. Watson, Denzil. And Head Antony(2007). Corporate finance: principles and practices. 4th ed.Harlow: ft/prentice hall. pg.no:286. Sangray, S. (2011) Week-10. Advanced Corporate Finance, Dividend Policy. (Online). Available at www.breo.beds.ac.uk.(accessed on December 10, 2010). Gitman, L., J. (2009) the principles of managerial finance. 12th ed.London: Pearson Prentice Hall. Agrawalsumeets. (2010). Theories-of-Dividend-Policy. Available: scribd.com/doc/28162428/Theories-of-Dividend-Policy. Last accessed 27 July 2011. Dictionary. (2007). Dividend. Available: investopedia.com/terms/d/dividend.asp. Last accessed 02 august 2011.
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