What Is The Point Of Studying International Relations Theoretically

Many tertiary education level institutions having international relations as part of their syllabuses for business students; some institutions have the unit as a whole study subject.Advertising We will write a custom essay sample on What Is The Point Of Studying International Relations Theoretically? specifically for you for only $16.05 $11/page Learn More The reason what the subject has improved in relevance is after considering the prevailing business environment; contemporary business environment is dominated by international trade, globalisation, and international corporations. To produce competitive graduated, tertiary institutions has adopted the topic in their syllabuses. An international society can be explained to mean a group of autonomous states that have not only formed a system that ensures that the behaviour of each state is considered by others, but have also established a common dialogical agreement that ensures that the conduct of the me mbers is governed by common rules and institutions. The states also acknowledge their common roles in sustaining these arrangements. The concept of international society has four views of departure. First, the international society cannot be comprehended as anarchy. Secondly, international relations should not be conceptualized as simply a direct swapping of domestic phenomena regarding the government and order, instead, the main concern of the scholarly research should be on the idea of a society comprising independent states and the observation of order within it, based on unique instruments rather than domestic ones. This non-consideration of the domestic perspective enables one to appreciate a broader view of governance systems than those related to authority and enforcement that is based at one point. The third fundamental point is that looking at it in terms of the society does not mean that associations among the states are necessarily peaceful, and stable. The question is wh ether and to what limits the conflicts take place against the framework of common institutions.Advertising Looking for essay on international relations? Let's see if we can help you! Get your first paper with 15% OFF Learn More Whether agreement on vital issues exists or not, it does not depend on the number or degree of these conflicts, but rather on what is fuelling these conflicts, and if they are occurring within the context of agreed regulations. Therefore, to concur with the aspect of a common structure of rules and social practices does not mean that conflicts and power do not play a major role in relations among many nations. Social practices are vital in the understanding of how the balance of power operates, and the dynamic nature of war. It is in this same vein that they help in understanding the morality or law that governs relationships among nations. Therefore, international society does not result, as is normally misconceived to a simple liberal aspect t hat is concerned with the enforcement of law and morality. The last view of departure was that a plausibly harmonious international society had historically originated from the classical European state system. The basic duty was therefore to comprehend the past aspects upon which the theory and practice of international order was based. The uniqueness of the contemporary international society is historically exceptional and can only be conceptualized through a collection of experience right from the Renaissance times. Getting these historical basics required that theorists of international society get to comprehend both order and cooperation, with respect to how legal and moral norms function. The international society rests on three components: power, common interests, and common values. Power is imperative in the institutions of the international society. These institutions entail the equilibrium of power, the duty of great powers, and the way in which this should be managed, as w ell as the organization of power. Actually, there is a crucial way in which the balance of power remains the most critical basis. Without it and without firm understanding between the great powers and on how they should conduct relations affecting them all, then the crucial components of international relations such as law, organizations and shared values will not be attainable. One of the most essential propositions about our contemporary experience of international relations is that, the ability of independent states to exist together implies the existence of a balanced aspect of power in the sense of the way power is spread so that no single state is more powerful than others are. Therefore, international order is a reflection of common interestsAdvertising We will write a custom essay sample on What Is The Point Of Studying International Relations Theoretically? specifically for you for only $16.05 $11/page Learn More States show cooperation due to the fact that, despite differences in their values and controversies in their power relations, they are able to see the possibility of benefiting from forming a framework that enables them have a common ground in numerous aspects. The international society is defined by its shared regulations, norms, and institutions. In the contemporary international society, the aspect that sticks states together is the Westphalian ideology of independence, territorial integrity and the principle of non-intervention. In the international society, states acknowledge the common need to maintain these social arrangements. Moreover, the structure of an international society is of a hierarchical order, founded on western supremacy. For example, the unchanging position of Africa in the global division of labour since independence shows that the international society is of a hierarchical makeup What Do Neo-Realist Explanations Of International Politics Emphasise? From the standpoint of Neo-Realist, state s are the sole barriers of rights and responsibilities within a law that is governing many nations; however, states consent only on some low principles like common recognition of independence and non-intervention. They have different perspectives of justice, their cumulative desire for order results to the creation of some fundamental rules. The solidarity’s standpoint places a major emphasis on the implementation of international law. Since the international society ultimately comprises of individuals, a right and obligation to charitable involvement exists, that the pluralists will not be ready to admit. Engaged in the concept of international society, we find the appreciation that states have legal duties that are implementable. However, the use of force is justifiable by the international society, even though the connection has been in a frequent changing association to the moral and lawful order. The international society concept therefore unfolds an apprehension on this question. This, nevertheless, could be perceived as a fruitful system for dealing with interesting issues like humanitarian intervention.Advertising Looking for essay on international relations? Let's see if we can help you! Get your first paper with 15% OFF Learn More Bull criticizes solitaries and defends pluralism for two reasons. He claims solitaries create a sense of false solidarity that may undermine the international society instead of strengthening it. Second, is moral skepticism due to multiplicity of moral perspectives by various nations thus hard to find a common morality between nations as implied by the solidarism perspective. Later, Bull grew disillusioned with the pluralism because it failed to provide or bring order among nations hence could not provide order in the international or wider society. In purposive associations, states work together to enhance joint relations such as commerce and shared security while in practical associations, states are defined by shared rules. Whereas the latter is argued to carry obligations, the former has the authority and rules pegged on the resulting benefits; and the connection represented by norms can place a set of laws and obligations as binding as such. The practical association is in some way compatible with pluralism, but the purposive association requires the uniformity of its members that cannot be achieved or pleasant. Those who criticize this line of thought normally emphasize on the impartiality and totality that has to be attributed to the basic traditions of international society such as independence, non-interference and the European form of state. This perspective can further be demarcated in two different ways. First, being the connection between states and the actions they engage in together with persons who attempt to engage in politics with one another. Even though the state as a system can be conceptualized in its own terms, it is often intertwined with politics at some other points. Therefore, politics and morality that is people oriented create unique dynamics compared to politics that are within the state system. The politics within the state system does not only pose a threat to the organization international society, but also promises to provide a stronger political and social structure to the international society. What Does Marxism Say About The Consequences Of Globalisation Internationally According to Marxism a key element in globalization is growth and strengthening of international trade also referred to as world trade. This is facilitated by the elimination of barriers to trade such as tariffs. International trade is the exchange of goods, services or/and capital between different countries. It has been in existence many years ago although much of its significance has been recognized recently. It has continually strengthened economically, politically and socially with many countries participation. International trade plays a very important role in ensuring continuity of globalization. It has benefited nations with variety of options to choose from which they would not have accessed without it. Barriers exist which put restriction to international trade. These trade barriers are governmental policies, fiscal and physi cal barrier. The government may impose restrictions which burrs the importation or exportation of goods or services from certain countries. On the other hand there are trade regulations defined in different nations which restrict trade with specific goods and services. It may also open its borders to facilitate trade. A recent case is East Africa Community (E.A.C.) which started operation on July 1st 2010. It has five members, Kenya, Rwanda, Burundi, Tanzania and Uganda. Trade barriers take many forms including but not limited to import licenses, quotas, subsidies, tariffs and non tariffs barriers, and embargoes. Most of the trade barriers use the same principle; they impose some cost on trade so as to raise the prices of the goods in question. Why Is One Theory Of International Relations Insufficient First, a vivid comprehension of the contemporary international society requires a clear departure from some of the old concepts that blur its meaning. Secondly, in a situation where mo dern states find it difficult to coexist, they should learn to embrace common interests, power and shared values that should govern them. Thirdly, international conflict does not originate from international society if the latter has reciprocities mechanisms among its members, which glues them together. The international society should be strengthened to increase international cooperation which will help to protect the global environment and lead to increased security via alliances. The cooperation will also help to bring about international financial security and stability. More importantly, the international society should try and bring more states on board so that some states do not feel as the ‘other’ in the international arena. This can be done through tolerance and understanding of the different cultures because each state has its own unique culture and then the countries can cooperate on a larger scale. What Does The English School Believe Is Missing From Realist Accounts Of International Politics The English School Believe does not necessarily refer to chaos in this context, but rather, to the absence of world government or generally political authority above or amid nation states. Anarchy therefore simply connotes absence of a world government. Structural realists view anarchy in this vein as the core aspect of the international system; it is what differentiates local from international politics. Without the existence of a global government to implement international tranquillity, states dwell in a state of anxiety without there being dependence on each other for defence. They will tend to overestimate the security machinery of others and will tend to take initiatives to beef up their own security systems such as investing more in their military expenses. An example is the recent strain on U.S – Iran ties concerning the latter’s development of nuclear weaponry. This leads to a security dilemma where states attempts to buttre ss their security systems, raising tension among their counterparts who see their own defence thwarted by those attempts. They then respond by improving their own defense mechanisms. The outcome in accordance to the supporters of offensive realism is unavoidable conflict. Other theorists tend to dispute this by asserting that, a security dilemma is avoidable and that in the absence of a world government, states may deem it fit to embrace the advantages of mutual aid as much of as of conflict. Anarchy, explained in the context of lack of government may not mean total disorder. It is not very different from the existence of an international society that are autonomous and yet governed by shared regulations and institutions. Their existence is possible without there being any government to ensure that law and order has been adhered to. The existence of an international society with its own values and institutions influences the behaviour of states in the same way that the absence of a global government does. This raises doubt as to whether anarchy should be accorded the significance granted it by the realist theories. It is just among many other factors that affect behaviour of states. The international law operates within the anarchical order through a non-coercive order. Hedley Bull says that the function of the international law is to identify as the highest principle in the mankind political organization where the idea of sovereign state operates. It therefore means that the state is the main player in international law and consent is established via sources of law in accordance to the states responsibility towards the international society. The second function is stating the rules of coexistence which prescribe the treaty rules, when to use force and defines rules that relate to independence and sovereignty of states. Third, the international law helps to mobilize the states to compliance with the rules. This essay on What Is The Point Of Studying International Relations Theoretically? was written and submitted by user Sage Rose 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.

How to Write a Research Essay in Health Care #038; Demonstrate a Clear Academic Understanding of the Subject

How to Write a Research Essay in Health Care #038; Demonstrate a Clear Academic Understanding of the Subject The health care field is an extremely dynamic and complex area, and the healthcare parameters that are constantly changing make it too hard to write a winning research essay. By the time you are done with the essay in health care, some new unexpected study has already emerged and somehow changed everything in the subject you thought you were sure about. But the great news is that there is hope! While the literature in health care area may be in flux all the time, there are some recommendations that can help you create a powerful research essay on any health care topic within a minimum hassle and worries. Even though research essay writing in health care area may seem like a task that is impossible to cope with, it’s important that you’re able to show a strong understanding of academic healthcare theory and practice in writing. Let’s take a look at the advice below on how to go about a strong health care research essay. How to Choose a Health Research Essay Topic? Of course, if you were provided with a clear task to write text in a certain topic you won’t have to spend countless days trying to search for something crucial and interesting to research. You don’t need to decide on which health phenomenon or problem is more important today or what needs to be discussed at least in your project. If that’s the case, you have an opportunity to relax, and do research on the web or in a local library, and then have a rest. However, if you find yourself in the situation that is absolutely contrary, you will have to hunt for research essay ideas and browse through loads of essays’ samples. It is important to bring together all of your forces, turn on your inspiration, and start looking for the best ideas for writing. What do you think, what are the most popular health care topics at the moment? What is it that you see on TV or hear on the radio? Maybe you have already seen some interesting issues on the web sites like Healthcare Global or KidsHealth and have something in your mind. Whatever it is, the following recommendations will help you to focus on a particular thought or maybe change your mind completely. Now, let’s take a look at some of the research essay topics in the field of health care one by one. 1. Anorexia and Overweight When you write about health care, it’s impossible to forget about such devastating thing as overweight and anorexia. These are two highly debatable topics nowadays that have a lot to talk about: How to Manage Bulimia and Anorexia Nervosa; Key Variables in the Development of Eating Disorders During the Adolescence; The Thinness Cult in the US Culture Today; The Feminism Effect on the Phenomenon of Anorexia; New Findings on Neuropsychology of Bulimia Nervosa. 2. Insomnia Today, insomnia is a burning issue since a lot of people suffer from it. The following research essay topics will cover various aspects that are related to insomnia somehow: Sleeping Pills: Harm, Placebo or Treatment? Effects of Speed Life Style on Healthy Sleep; Insomnia: The Key Causes and Effects; Insomnia and Circadian Rhythm Disorder; Alternative Insomnia Treatments. 3. Euthanasia The question of euthanasia has been always a hot topic all over the globe. While some countries find nothing wrong in this kind of merciful deal, the rest of the world is against it. If you have your research essay in health care due soon, consider working on this topic and develop it the best way possible: Euthanasia Its Moral Issues; Euthanasia: The Attitude to â€Å"Merciful Death† in Different Countries; Do People Have a Natural Right to Die? Can Death Be a Relief for a Human Being? Legalization of Euthanasia in the Third World Countries. Research for Health Care Research Essays Research essays that usually deserve the highest marks include information taken from trusted research articles, books and journals. This ensures that the topic of yours is deeply researched and supported by the reliable materials. This is especially important to the writers who work on the topics that have been previously discussed on various internet sources and published resources. Furthermore, disseminating research findings from scientific articles is highly crucial if you want to demonstrate strong understanding in your project. Search for additional information in the field of health care on electronic databases such as Medline and Pubmed. Structural Specifications for Research Essays in Health Care Although every other research essay will be different throughout your college education experience, successful essays will follow the same structure requirements all the time. Writing a successful research essay in health care depends on understanding the basic structure rules. The essay should start with an introduction that summarizes the way you plan to discuss the question and what course exactly your arguments are going to follow. The research essay on â€Å"Mental Disorders in Children and Adolescents† will include the introduction that might sound, â€Å"This paper reviews child and adolescent mental disorders and associated long-term health risks. The first section argues that there is much overlap between the symptoms of metals disorders and the challenging emotions and behaviors of normal kids. Limitations of the possible measures are presented. The second section sums up the evidence on the relationship between adolescent (child) and adult adiposity†. Following on from this the body of the research essay will be presented according to the plan you set up in the introduction so that your arguments flow naturally from one to the next. Right after the presentation of your body, the concluding parts of the research essay in health care will summarize what you have said in your essay, and will include the message that you would like the readers to take away from your research. However, you have to make sure that the conclusions that you write don’t go far beyond the research you have done in your paper. Refine Your Arguments Once you have completed your first draft, you now have an opportunity to refine each argument, fact, idea, data or result in order to ensure they all address the essay research question. Besides, this stage is needed to see if the argument flows in a coherent manner. Among the useful methods that are popular among college students, you may choose the following: Leaving two or three days between accomplishing the first draft and writing the second draft; Reading the research essay out loud in order to ensure the paragraphs fit together; Comparing your research question to the arguments in your text to ensure you have achieved a logical progression. Stay away from Common Pitfalls When college professors are asked to mention some of the most common errors that students make in their research essays in health care, they usually mention the same weaknesses. To create a wonderful research essay in this area, the author should do his or her best to stay away from the following: Writing not in an academic but a journalistic style; Not appreciating theoretical controversies; Failing to answer the research question; Providing unsubstantiated claims; Lacking critical evaluation and analysis. Consult a Health Expert Writing a research essay in health care differs from the other types of academic assignments because in this case the writer is not allowed to make up stories or give his or her points of view. Only true life and scientifically supported research facts should be included on your pages. To get the grade that you like, there is no better way than to go and see a health care expert in the subject that you chose to research. Ask all the questions that you have during the next appointment with your doctor. If you have doctors or medical students among your friends, do not hesitate to interview them. Go to the sources like AXA PPP Healthcare for more answers. Plagiarism, Referencing and Demonstrating Originality Whenever you write a research essay in health care, it’s always important that you refer to each of the sources that you used to communicate your arguments, facts, data, and ideas. The writer has to do this both in the essay text and the reference part at the end. If you refer to the general theory that exists in health care literature, you can make the textual reference in the following ways: ‘Psychological safety (Amy Edmondson, 1999) and learning behavior in work teams must be strictly monitored’. ‘Amy Edmondson’s (1999) theory states that psychological safety and learning behavior in work teams must be strictly monitored’. All of the direct references to the text should be frames in special quotation marks. Besides, you have to provide the page numbers. For example: ‘Academic evidence shows there is a strong connection between ‘psychological safety’ and a culture of learning within an organization’. (Amy Edmondson, 1999, pp. S123). Provide every citation in the research essay text with a corresponding entry in the sections ‘References’ that should be placed at the end of the paper. In order to reference an article in a health care journal: Kuh, D., Ben-Shlomo, Y., Lynch, J., Hallqvist, J. and Power, C. (2003) Life course epidemi-ology, Journal of Epidemiology and Community Health, 57: 778–83. To reference an article from an online journal: Division of Tuberculosis Elimination [Internet]. Atlanta: CDC; [updated 1999 Oct; cited 2006 Sep 19]. Self-study modules on Tuberculosis, Module 7: Confidentiality in Tuberculosis Control: Background. Available from: cdc.gov/nchstp/tb/pubs/ssmodules/module7/ss7background.htm. In order to reference a book: Bhopal, R.S. (2002). Concepts of Epidemiology: An Integrated Introduction to the Ideas, Theories, Principles and Methods of Epidemiology. Oxford: Oxford University Press. Use Health Care Vocabulary Properly Just like in case with any other field of study, health care has its own vocabulary that the writer has to use widely. A good vocabulary will allow you to express what you mean exactly, in a concise and clear manner. What is more, economy with words is one of the basic characteristics of a research essay that deserves the best marks because the readers don’t like to waste their time on long and hard-to-understand sentences. So, your task is to express your points briefly and never include anything that could have been written in half the number of words. One of the best ways to make certain that the writer can communicate clearly and to the point is when he or she effectively and accurately uses the advanced vocabulary. If you are a good research essay writer, you should never rest on your laurels when the question is about the vocabulary. The thing here is that your vocabulary is something that you have to improve here and there since there are always new and unknown terms that help to communicate your points in a more effective manner. What is more, using a rich health care vocabulary proves the writer is intelligent and helps him or her remain persuasive no matter what. Read Other Writers’ Essays Just like the books and journals that you read subconsciously help you to work out your own special writing style, reading the essays written by the other students will help you develop your style in writing. Choose some of the best research essay in health care, including both the ones written by the academic and your peers. Read papers on a wide range of topics in your area of study, not necessarily just the ones that are related to your topic. The thing here is that different topics in health care might apply different types of styles and arguments. In other words, the more you read, the more possible techniques and methods there are for you to take and use in your own writing. We hope that you have found these simple recommendations and techniques useful and that each of them will help you to know more about the field of health care.

Agrarian Domains Essay Example | Topics and Well Written Essays - 250 words

Agrarian Domains - Essay Example The legal system and police encouraged segregation. However, beyond the legal system, there was often a potential risk by the terrorist aggression. The Ku Klux Klan, Knights of White Camellia, and other fanatics assassinated thousands of blacks and several whites to stop them from voting and taking part in public life (Stonaker & Shepard, 12). Execution was one of the major ways of violence. Between the year 1884 and 1900, white gangs assassinated approximately 2,000 blacks in the south. The gangs also burned them alive, shot them or even beat them to death. The perpetrators also executed blacks for any defilement of the southern rules and regulations (16). The southern states approved laws in the middle of 1800’s that obliged different accommodations for blacks and whites in schools. They also approved laws for different public transportation systems, courts, libraries, and cemeteries. Additionally, they also approved that no black man would be put in a similar insane shelter with the white man in every southern state. Popularly, all the above laws were collectively referred to as Jim Crow laws (Schultz & Tishler, 5). The first step towards the fight for elimination of legal segregation occurred when colored people, factions of African Americans and some European activists collaborated to fight segregation of trains in New Orleans. In 1905, W.E.B. Dubois led a number of Black activists at a meeting convened in Niagara Falls, Ontario, Canada to plan tactics for elimination racial segregation and advocate for racial equality. In the year 1909, this meeting by black activists became the Niagara Movement, which led to the formation of National Association of the Advancement of Colored People (NAACP). This association concerted its efforts to fight for the rights of colored people and challenging racial segregation in courts (Stonaker & Shepard,

Gear box Managment Essay Example | Topics and Well Written Essays - 4500 words

Gear box Managment - Essay Example Cars and tractors – in fact, almost every vehicle – have a gear box or transmission which allows the driver to shift from slow to fast or maintain speed. Management is very important in the life of the vehicle, so do with the proper handling of the gearbox. The life of the driver or owner also depends partly in its proper management. Accidents can be avoided with proper management, not to mention the financial savings accumulated. A power train is where the power from the engine goes to and maybe said to be synonymous to the power of the vehicle itself. The driver train is also everything after the power train, i.e. on a rear wheel drive, clutch, transmission, driveshaft, differential, and axle, on a front wheel drive. Another definition of power train is: it is a train of gears and shafting transmitting power from an engine, motor, etc., to a mechanism being driven.1 There are a lot of concepts on the words power train (in some sites in the internet these two words are written as one word). Some experienced drivers and mechanics state that on front wheel driver cars, the power train consist of the engine, transmission, rear end, which are made (read: assembled) together †¦ and on rear wheel driver, the engine, transmission, drive shaft and rear end †¦ if the car has a standard transmission, the power train would include the clutch.2 In other words the power train runs the vehicle – in this case, the car or the tractor – for purposes of our discussion. And when we speak of maintenance, this may involve a wide array of expertise and the mechanic/driver can not just focus on the gearbox but the entire connections relative to the power train, the different shafts, up to the differential. Maintenance here is overloaded and, to be precise, sensitive; meaning go to details, a simple crack, slight noise, anything you notice peculiar that may lead your car to be left

Finance in Hospitality Industry Assignment Example | Topics and Well Written Essays - 2500 words

Finance in Hospitality Industry - Assignment Example The businessperson can apart with money to put into the business. This could include savings or start up capital. This method of approach ensures that the person has complete ownership of the business. External sources are another option to funding. There is several of this kind of funding. Bank loan is one example. Banks can offer one capital to fund a business. The loan repayment is spread over a long period of time and one has to pay interest. One can have additional partners when starting a business. An individual may decide to team up with another person in the business venture. The new partner usually pays more capital than the individual. I would go for owner’s capital Friends and family may also be a source of external funding. Family can invest in a business with little or no interest. They can support an individual in the business venture without making demand for shareholding .Small Business Administration (SBA) can generate funds for business setup. In this method the individual access loans that are provided for by the federal government The amount of interest is minimal in SBA’s. The best sourcing for me could be family and friends. Interests, security and shareholding are not demanded for with the approach. To add on, the family can offer counsel and support during the business initiation. Generating income in hotel Business. Venturing in business is usually for the purposes of income generation. Various businesses employ a variety of methods to realize the optimal profits. The enterprises engage in various forms of generation .Fee for service, selling of products, membership dues, tangible and untangible assets are ways that money is earned in an institution. The hospitality industry also can employ these strategies to make economic gain. Services can be sold as a way of making money. Catering services can be provided for by hotels in different contexts .Eatery services can be offered within the organization. Customers visit the ho tel and get food and drinks for which they are charged .Hotels can cater for wedding sand parties in the neighborhood and make profits. Catering services can be taken to institutions of learning by the hotels and the administration reciprocates the service by paying up. Tangible assets can also be used to gain profits. Leasing and renting out of assets such as space, equipment and land. The hotel can hire out rooms for conferences and workshops to other organizations. This ensures that they make for the leasing and the assets remain their own. Space for hosting events such as parties and weddings can also make up for income generation. The grounds can be well lawn and presentable. Consumers can therefore rent the place and pay up for the amount of time they use the place. Furthermore, boarding services can be provided for. The consumers are offered spaces to sleep for a levy .Investment and dividends can offer funds for an organization. The hotel can enroll in the stock exchange and gain accrued interests with time. This is the passive way of income generation as the stakeholders are not directly involved in money making. TASK 2 Costs, gross profit percentages and selling prices fort products and services are important in mapping out a company’s progress. Cost can have various elements to it that need to be considered. These elements include; revenue, Cost of goods sold, formula as well as management. Revenue refers to as ‘sales ‘in companies. This is the receipts and debits over a certain

Importance of Intellectual Capital in the Modern Economy

Importance of Intellectual Capital in the Modern Economy Executive Summary The report discusses the relative importance of the Intellectual Capital in the present economy due to the revolution that fosters the propagation of the value creation. The Intellectual Assets of an organisation play a vital role in improving its value and maintaining the competitive advantage. However, these intellectual assets are not capitalised in the financial statements as they are unable to determine their historic costs and their future benefits are sometimes uncertain. Despite of this a lot of companies have discovered ways that facilitate the valuation , measurement and reporting of their intellectual assets i.e companies like Coca Cola , Marks Spencer and Kingston Hull Plc have reflected their intangible assets such as brands separately from the goodwill on their company balance sheets as some guidance is provided by the International Accounting Standard in the disclosure of the intangible assets. The report also presents some theories that are aimed at eliminating the confusions created about the Accounting Profession. As the Accounting Profession and the Accountants cannot be blamed as conservatives in not providing space for the Intellectual Assets in the financial statements because in doing so , the financial statements will loose their relevance , reliability and neutrality. The report further throws some light on the issues that are related to the field of Intellectual Capital that include that there is no uniformity in the relative theory as there is no such definition and the Intellectual Capital model that is accepted generally. In the end the report concludes by suggesting that the under the supervision of the International Accounting Standard researchers, consultants, scholars and the accountants have to find a common way such that the value relevance of the Intellectual Capital and the principles of accounting are preserved. Aims and Objectives The aim of this study is to discuss that whether the exclusion of the Intellectual Assets of an organisation in the balance is realistic and pragmatic. As the Intellectual Capital is considered a value driver for the modern economy and a lot of organisations are focusing on their intellectual assets as compared to the intangible assets. Objectives The objectives of this study include: To assess the importance of the Intangible assets as compared to the tangible assets of an organisation. To provide some evidences about the organisations attitudes and the awareness about their intellectual assets. Finally, to conclude that whether the eviction of the Intellectual assets is pragmatic or not. Rationale The Current Gobal economies are now facing a new revolution that brings them to a new form of business environment. This major change in the world economies is due to the fact that there has been a disproportion observed between the Book Value and the Market Value of a firm. Because , in the past the Balance Sheet and the Income statement were the only tools used by the Shareholders ,managers and the executives to make strategic decisions and monitoring the performance of the company. However, it can be argued that things have changed now. As one of the important concern for the companies is the Value Creation. The expansion of the markets in the product or a service sector has been possible with the aid of the internet , high- technology and the innovation ,information , market chains and globalisation. This in turn has created a global competition among the firms that are now striving to acquire knowledge. Furthermore, the acquisition of the knowledge brings some vital concerns of its use, management and the improvement. This has changed the operations of the the organizations that used to emphasize on the production capability ,now focus on the creative operational structure. The organisations are now using the special tools for acquisition, management and the protection of knowledge such as Research Development , Patents , trademarks , copyrights , databases , customer and supplier relationships and Human Resources are known as the intellectual assets of the organization and constitute the Intellectual Capital. The relative importance and the expected returns of the Intellectual Capital has convinced the organisations to think and work in a new innovative way to achieve dominance over the competitors in the market. However , inspite of this the Intellectual Capital has not been considered in the performance appraisals and not included in the financial statements under the heading of assets. The organisations are spending a lot on the Intellectual Capital as compared to their tangible assets so therefore it is not wise to go against the flow of current market trends by focusing more on the tangible assets. This would lead to the creation of inaccurate procedures, policies and the decisions. Hence reducing the value in front of the investors and the customers. Cowey (1999), approves the conception of a â€Å"New Economy â€Å" and the â€Å" Knowledge Company † and insists that this concept accepted world-wide. He demonstrates that the opinions of â€Å" what we own † to â€Å" what we Know † have changed and know it depends upon the companies to apprehend the value creation by putting stakes in the training technology , staff retention and knowledge otherwise the efforts will not be productive. The Organisation for Economic Co-operation and development (OECD , 2005) reports that the investments in the Intellectual Capital has grown faster than the investments on machinery and equipment few years back. It is further revealed that the spending on the Research Development , software and the higher education was higher than the spending on the Machinery and the equipment in USA and Finland notebaly in 2002 and increased in greater proportions between 1994 2002 among the OECD countries as well. Arora(2000) purports that the the edge on the competitors in the challenging business environment can only be achieved by the proper administration of the Intellectual Capital which is another name of the Knowledge management. Kaplan Norton(2001) suggest that the company’s market value includes only 10-15% of the company’s book value of the assets. Furthermore, the possibilities of producing a value are risen through the the activities whose foundation is the knowledge that is enforced on the intangible assets of an organisation as compared to tangible assets. A Convention held under the OECD(1999) , concludes that a prominent set of information is required on the Intellectual Capital in its association with the tangible assets in the determination of value. Traditional Financial Reporting does not provide the necessary information to pursue the value creation process. Due to the availability of the information via internet technologies there is a need of a new reporting model that accommodates the information pertaining the Intellectual Capital that creates the value for customers and suppliers. Bradley(1997) discovered that the predicaments that were involved in the traditional financial accounting were due to the emergence of value. He explained the problem by arguing that the balance sheets and the income statements were the benchmarks in delivering the financial information to the shareholders. However, the significance of these financial statements in propagating the value has decreased due to the emerging trend of investments in the intangible assets. It is stated that the value of the brands was not reflected in the financial statements and in the equity values .This has led to the reconsideration of the intangible assets and the brands specifically. This fostered the proposition of of including such assets in the financial statements. However , the accounting profession does not fully supports the the idea that the intangible assets are the main factors in creating the value. On the contrary the investors and the trade leaders have acknowledged this truth. Furthermore, it is also quoted that 72% of the value was not reflected in the balance sheets of the companies surveyed in United Kingdom. Brands form the major part of the unexplained value that is not part of the balance sheet (Brand Finance plc , 2000). The Figure 1 shows the Gap between the market capitalisation and the net asset value. Why Intellectual Capital Upton(2001) reports that the companies under the scrutiny of the FASB Business Reporting Research Project provide considerable non- monetary information. Therefore it can be argued that the AICPA and FASB have been analysing the Intellectual Capital since 1991.The Intellectual Capital is considered endangered when the information of a company becomes obsolete when the competitor increases its information. Therefore the preservation of the Intellectual Capital is crucial for maintaining the competitive edge. However,the companies that are knowledge intensive are prone to risks of losing their market shares(MacDougall Hurst,2005).Guthrie(2000) suggests that â€Å"Accountants must find a to incorporate measures of Intellectual Capital or they will become irrelevant â€Å". Statement of Methodology The method used in the report is the study of the literature that is already present in the field of Intellectual Capital and the Accounting to support the arguments.After, the study necessary facts and evidences are combined to form the Literature Review of this report. This report does includes the collection of the primary data and its analysis. A case study is added to further enhance the understanding of the applications of IC in firms. Research Question The research question is â€Å" Is the exclusion of Intellectual Assets from accounting statements realistics?† The research question of this report is basically a debate that is going on in the academic, industrial and the business sector. This topic demands study to be commenced taking in account both the views of the implications of including or excluding the intellectual assets in the financial statements. Literature Review Definition of the Intellectual Capital The Organisation for Economic Co-operation and development (OECD , 1999) illustrated that the Intellectual Capital was the composition of the financial value of two classes of the intangible assets i.e Structural Capital Human Capital The structural Capital includes the organisational resources like the softwares, databases etc. The Human Capital however, contains the human resources employees (internally) , customers and suppliers(externally). The term Intellectual Capital is presumed as having the same meaning as the Intangible Asset. In contrast , the definition that is provided by the OECD(1999) puts the Intellect Capital as a subset of the intangible assets of an organisation. Because there are certain intangible assets that do not fall under the category of the Intellectual Capital. The repute of a firm is not considered as a part of the Intellectual Capital(Guthrie Petty , 2000). Stewart(1997) defines the Intellectual Capital as a â€Å" Intellectual Material â€Å" that Includes the knowledge , information , intellectual property , experience that can be used to generate wealth. Furthermore , Stewart (1997) categorises the intellectual capital in to structural , customer and the human capital. He argues that the human capital is the generator of the innovation and the improvement. The structural capital includes the tools and the facilities that are used the human capital to form value. Customer Capital includes the value that is produced as a consequence of the organisations relations with which performs the business transactions(Stewart , 1997). Intellectual Capital can also be defined as the combination of the human capital and the structural capital. The human capital includes the knowledge , skills and the experience of the employees. It is further argued that the human capital is not in the possession of the organisation as compared to the structural capital (Edvinsson Malone , 1997). Elements of the Intellectual Structural Capital Structural Capital is what is left behind in the organisation when the employees go home. The Structural Capital arises from the those organisational processes that are focusing on the improvement and the establishment of the organisation. (Roos et al , 1997). Bontis et al (1999) suggests that the structural capital includes the organisational resources that encompass the knowledge that is not actually stored in the human brains and whose value is greater than its physical value.These assets include databases , softwares , manuals , trademarks , leaseholds , franchises , patents , licenses , employee training , employee contracts etc. The structural capital plays an important role in the creation of the value. As it helps the human capital to explore new ideas , learn from the past experience and protects the knowledge and the new inventions by providing the technology and the legal aid. Customer Capital Kohli jaworski(2000) defined the customer capital as the organisations ability to evolve the knowledge about market that is focusing on the cutomer desires and perceptions. This acquired knowledge is used by the organisations in response to the changing attitudes of the customers and the market. Organisations use this knowledge to have a contingency plan to tackle the threats produced from changing market trends. The definition provided by Bontis(1999) suggests the customer capital should be iterated as the relational capital that includes the relationships with the suppliers, partners and the investors in addition to the relationship with the customers. Human Capital Hudson(1993) defined the human capital as the composition of the inheritance, qualifications , experience with the opinions about life and business. It is further argued that the organisational employees are the key architects of the Intellectual Capital through their proficiency , opinions and expertise. The competence of the employees includes skills and qualifications and their opinions come under their behaviour and perceptions about work. The expertise is important in devising the innovative solutions to the problems. Furthermore, employees are an important asset for an organisation but they are not owned assets(Roos et al , 1997). Exploitation Of Intellectual Capital (Economical Perspective) It is suggested that the critical factor in the improvement of the economy is the proper utilization of the Intellectual capital .It is further noted that by increasing the tricks of Intellectual Capital will provide a competitive edge and the value of the firm will be augmented and specifically business will bring financial benefits. It is not a new thing that the intangible assets like brands, intellectual property , relationships are considered as a unprocessed input for the organization that increases the worth by the application of intelligence in possession of the organization. (Watters et al 2006 , Intellectual Assets Center , Glasgow, Uk). The research on the recognition and reporting of the intangible assets and the intellectual capital has brought them to the acute attention.The research believes that the intangible assets play a significant role in the creation of endurable competitive advantage with in the advanced organsations.Due to the expansion of the modern knowledge based economy it has become transparent that the intangible assets and the Intellectual Capital of an organization have become a platform in accomplishing the competitive advantage as compared to the hi-tech tangible assets(Drew , 1999). Tayles et al (2005) have described two doctrines in the realization of the intangible assets that provide the assistance in the achievement of the competitive superiorty. The research is continuously striving to find the authentic procedures to measure the intangible assets and the indices that provide a forecast of the future economical benefits based upon the doctrines that are prescribed by Tayles et al (2005).Firstly , the expanding financial statements of the companies is the idiosyncracy of its Intellectual Capital that give the edge on the market competitors. Secondly, is the inefficient justification of the Intellectual Capital in the expansion of the economy(Tayles et al , 2005). Skinner (1986) purported that with the utilization of the technology, manufacturing productivity can be achieved by the intangible assets of the company which are the authentic reagents of the prosperity and that justify the monetary investment. How the Companies Exploit the Intellectual Capital Case Study Kingston Communications(Hull) Plc is group of companies based in Hull,United Kingdom. The groups is presently offering the services related to information, communication technology and the telecommunications to the consumer markets in UK. The groups Brands include Affiniti,Smart 421,Jam IP(Integration and management services),Karoo, Eclipse, Mistral (Internet and Telecommunication services) and Hull Color pages and Know( Information Services). The group is Ammortising the its Intangible Assets that aquired in the Acquisitions.In 2007,the ammortisation on intangibles was à ¢Ã¢â‚¬Å¡Ã‚ ¤8 million(from Total depreciation and ammortisation).The group also has purchased the tangible and the Intangible assets worth à ¢Ã¢â‚¬Å¡Ã‚ ¤30.2 million.The Groups Controlled measures include, measuring the learning and development(p9),Customer Satisfaction. KM also believes that Human Resources when managed through and effective Policy can bring the Tangible effect on the companys performance. KM is running a development program to enhance the Knowledge and Intelligence of the employees.The company also manages the Relational (Custmer) Capital by arranging the meetings of the Directors on the Investor relations and the shareholders concerns specifically. The Company’s publishes its Financial Reports complying with the IFRS,however, the company also provides additional disclosures if compliance with the IFRS does not fullfil the requirements of the users(i.e External Stakeholders,External investors,Suppliers and the Customers) to understand the impact of certain transactions that have an effect on the financial performance of the company. Relational Capital Management and Policies Arranaging meetings with the shareholders time to time to discuss the company’s strategies and performance.Maintaining a investors relations function to encourage and improve the communication with the investors. The Goodwill of the Company in 2007 was worth à ¢Ã¢â‚¬Å¡Ã‚ ¤192.754 million(2006:à ¢Ã¢â‚¬Å¡Ã‚ ¤155.551 million) and the Intangible Assets had the value of à ¢Ã¢â‚¬Å¡Ã‚ ¤48.511 million (2006 : à ¢Ã¢â‚¬Å¡Ã‚ ¤39.450) according to the Balance Sheet on 31st march,2007. The Cash Flow Statement of the Company for the year ended 31st march,2007 also explicitly show the Amounts of the Ammortisation of Intangibles as compared to the tangible fixed assets.The Cash Flow statement also show the companys procurement of the Intangible assets à ¢Ã¢â‚¬Å¡Ã‚ ¤6.495 illion in 2007. The financial statements of the Company are prepared according to the principles prescribed by IFRS and IFRIC.These financial statements are based on the concept of historical Cost accounting.However, the statements are modified due to the revaluation of the financial assets to a fair value by using the income statement. Intangible Assets Identified by Kingston Communications The Intangible Assets of the Kingston Communication include: 1.) Goodwill 2.) Customer and Supplier Relationships 3.) Technology and Brands 4.) Software 5.) Development Goodwill The Groups Goodwill is reported in the acquisitions of the subsidiaries and it is the difference between the Cost of Acquisition and the Net Assets. The Goodwill is tested for impairment annually. Development The company’s intangibe asset that is developed through the research and development activities only when it fulfils the criteria of Intangible Asset Recognition prescribed by IAS 38 i.e the asset is identifiable,impact on future cash flows and the developmental costs of the assets are measured reliably.The estimated life of the internally developed intangible asset is 1 year and is also ammortised on a straight line basis. Valuation of the Intangible Assets in Kingston Commnuications The intangible assets that are acquired through the acquisitions are valued on the basis of their time value and the future impact of on the performance of the companies. Appraisal of Intellectual Capital in Kingston Communications The Kingston Communication is exploiting,managing and reporting its Intellectual Capital as tool necessary for the competitive advantage and for improving the future performance of the company. According to the companies policy the Intangibles Assets are included in the Balance Sheets in order to satisfy its investors and guarantee the future investments in the company. However, there are no benchmarks for the management and the evaluation of the these Intangible assets.Also, the company is not using the models for the Classification of these Intangible assets as suggested by (Kingston Hull plc , 2008) Measuring the IC (Performance)through strategies(Management Accounting) Simons(1999) suggests that the by measuring the performance of a company is basically the comparison of the outcomes of the business activities with the critical business targets. The traditional financial accounting utilizes two techniques to measure the Performance .These are Return on Capital Employed(ROCE) and Return on Assets (ROA). However , these techniques are condemned due to the fact that they are old fashioned , unable measure the intangible assets and are unable to appraise the stakes in the technology which is essential for the firm to compete in the global market(Bourne et al , 2000; Amir Lev , 1996). Valuation Methodologies(Performance Measures as well) The economic measure of the Profit yields the same result as the traditional accounting during the matching phase of costs and revenues by preserving the value significance. This is done by improving the financial reports with the disclosure of the concealed assets like the intangible assets and the investments in the long run(Simons , 1990). (It includes the tools and various methodologies ) Watters et al(2006) have discussed the application of a Scorecard assessment tool in the Scottish SME that provides a review that how efficiently companies are exploiting their Intellectual assets.The tool helps the SMEs to manage three areas of operations i.e Sales and Marketing , Research and Development and Human Resources. It assign the scores to activities that come under the three operational areas according to their effectiveness and links them to the strategic objectives of the firms. (Appendix 1) Brand Finance plc(2000) suggests that there are a lot of methods present for the valuation of the Brands, however there is a need to find an optimal one. Cost based methods of brand valuations show a disparity from its market valuation. The Market Comparison method is not efficient as it is difficult to obtain the comparison data. Royalty Relief method determines the royalty rate on the estimates of the income generated from brands. However , this method does not clearly states that how a brand is going to create value. The Economic Use method combines the consumer and the competitor to entitle the value to the brand.The last method is the most optimal method which is the Brand Finance that uses the Discounted Cash Flow (DCF) analysis in concluding the value for a brand.As the Discounted Cash Flow method valuation complies with the valuations performed by the financial analysts , accountants to check for the impairment of the intangible assets. Measurement of Intellectual Capital Why there is a need for the companies to measure the intellectual capital This is a very long debate that why companies need to measure the intellectual capital.There are several advantages of doing that. The term intellectual capital can be said to be â€Å"expandable† in terms of the Value and rewards. The greater the effort of a company the greater is a competitive advantage and greater is sustainability of the company. Nowadays companies and the firms have become Knowledge aware i.e they have now recognized the importance of the of the knowledge that creates value and sustainability. The Companies working in the Telecommunication, Pharmaceutical and the research technology sector specifically have to invest a lot in the Research and Development to compete and develop the innovative solutions to avail the opportunities in the market.Therefore, there is a strong need for these companies to devote themselves to measure and manage their intellectual capital effectively. However, it is very difficult to justify the investments in digging out the knowledge that creates value .These investments are rather very complex and unpredictable even if they are tested and analysed by the efficient tools for their proficiency. Some Organisations that are knowledge based are sometimes not sure about the amount of the Knowledge they have and the amount of knowledge they need tocarry out their functions internally and externally. That is the reason, these organizations loose the interest of the investors and therefore the investment. Balanced Scorecard (An Alternative to Balance Sheets) Kaplan Norton(1992) , presented the theory of the Balanced Scorecard for improving and tracking down the performance of an organisation. The authors suggest four dimensions such as Financial , Customer , internal business process and learning and growth. These dimensions are believed to provide a insight in to the current performance and identify the factors that can improve the future performance. A combination of the non-financial and financial measures are insufficient in determining the performance of an organisation. The main problem is that its just like a Wild Goose Chase as this amalgam of the performance indicators are not pursuing a specific business objective. Kaplan Norton(1996) believe that the both the financial and the non- financial measures must have a focus on a goal that has to be achieved in maintaining the sustainability. The authors further argue that the various measures provided by the balanced scorecard can help the organisation to plan a particular strategy and then can implement it across its subsidiaries, departments to share a common motive with trasnparency. A well planned BSC can hep the organisation to learn from the short-term reports that are generated and scrutinized through various perspectives. Andriessen(2004) suggests that the predicament of measuring the Intellectual Capital can be resolved by applying the balanced scorecard. It has been advised that the specified strategy plans can be created that guide the organisations to confidently invest in the human resources, technology and the structural capital. It is further revealed that by measuring and administering the intellectual capital can also help the organisation to convert its non-monetary achievements in to monetary achievements(Kaplan Norton , 2004). A study conducted by Hagood Friedman(2002) devised a way for the implementation of the balanced scorecard to measure the accomplishments of the human resource information system of a company. They have developed a system that uses the balanced scorecard as its foundation to improve the human resource information system in association with highlighting the goals and objectives of the organisation. Despite of its usefulness the Balanced Scorecard has some limitations. In this context Voelpel et al (2006) has identified five limitations of the balanced scorecard in its application in the modern economy. First being its inflexibility that is, it measures the performance of a company only in four perspectives by leaving behind some other perspectives out of attention. Voelpel et al(2006 ) explain the second limitation which is that the BSC is less efficient in accommodating the changes in the changing economy. The BSC a defines a strategy for a company and its subsidiaries to achieve a goal by neglecting the individual goals of a subsidiary as a consequence a company is unable to use its potential properly. The third one is that BSC focuses more on improving the internal performance of an organisation therefore by losing a link with the external world to exploit the innovation.The forth limitation of a BSC is that it focuses on the organisation in itself and provides no information about the actions of competitors. The fifth problem with the balance scorecard is that it goes straight in measuring the performance in a rational way .As a consequence the more complex predicaments are difficult to apprehend(Voelpel et al , 2006). A Comparison between the benefits that arise from intangible and tangible assets There are risks involved with the investment in the intangible assets like RD. Kothari et al(1998) have conducted a research by comparing the uncertainty of benefits associated with the tangibles and the intangibles assets. The methodology used for this research was the regression analysis of the future earnings variability involved with the expenditure in Research and Development and the tangible assets .Furthermore , the variables like firm size and the leverage are also used to define the boundary of a research.It has been illustrated by Kothari et al (1998) that the future benefits of RD investment are more uncertain than the tangible assets. Shi(2003) has analysed and studied the relationship of bond prices and the measures of RD expenditures and suggest that there is a fair risk involved with the spending of the RD projects that increases risk factor with the bondholders claims and hence are more riskier than the other projects. Issues in Intellectual Capital(Flaws in the IC Concepts) Bontis (2001) discovered a predicament with the intangibles assets is that there is no unique conception that is accepted by everyone. Every investigator or a consultant who contributes to the debate expects the approval and recommends his own jargon. Various other researchers have pointed out flaws in the definitions of the Intellectual Capital. According to Edvinsson and Malone(1997) the intellectual capital was the difference of Market value and the Book value. In contrast Upton(2001) recommends that the intellectual capital cannot be absolutely characterized by simply calculating the difference of market and book value. Following that Habersam and Piber(2003) advocate that the term intellectual capital cannot be determined by the difference of market value and the book value. Pragmatically, the difference can be influenced by some other elements that are not associated with the intangibles.Further research enumerates five components that can realize a change in the the stock prices which incorporates the recognised assets , company liabilities , legal events , shareholders equity and the timing issues(Garcia-Ayuso 2003). The benefits received by a firm cannot be attributed to the individual intangible Assets as such benefits are a result from the inter-cooperation of more than one Intangible asset. Therefore, it could be wise to value the intangible assets all together. It is further argued that the market value of a firm cannot be ascribed to the intangible asset Importance of Intellectual Capital in the Modern Economy Importance of Intellectual Capital in the Modern Economy Executive Summary The report discusses the relative importance of the Intellectual Capital in the present economy due to the revolution that fosters the propagation of the value creation. The Intellectual Assets of an organisation play a vital role in improving its value and maintaining the competitive advantage. However, these intellectual assets are not capitalised in the financial statements as they are unable to determine their historic costs and their future benefits are sometimes uncertain. Despite of this a lot of companies have discovered ways that facilitate the valuation , measurement and reporting of their intellectual assets i.e companies like Coca Cola , Marks Spencer and Kingston Hull Plc have reflected their intangible assets such as brands separately from the goodwill on their company balance sheets as some guidance is provided by the International Accounting Standard in the disclosure of the intangible assets. The report also presents some theories that are aimed at eliminating the confusions created about the Accounting Profession. As the Accounting Profession and the Accountants cannot be blamed as conservatives in not providing space for the Intellectual Assets in the financial statements because in doing so , the financial statements will loose their relevance , reliability and neutrality. The report further throws some light on the issues that are related to the field of Intellectual Capital that include that there is no uniformity in the relative theory as there is no such definition and the Intellectual Capital model that is accepted generally. In the end the report concludes by suggesting that the under the supervision of the International Accounting Standard researchers, consultants, scholars and the accountants have to find a common way such that the value relevance of the Intellectual Capital and the principles of accounting are preserved. Aims and Objectives The aim of this study is to discuss that whether the exclusion of the Intellectual Assets of an organisation in the balance is realistic and pragmatic. As the Intellectual Capital is considered a value driver for the modern economy and a lot of organisations are focusing on their intellectual assets as compared to the intangible assets. Objectives The objectives of this study include: To assess the importance of the Intangible assets as compared to the tangible assets of an organisation. To provide some evidences about the organisations attitudes and the awareness about their intellectual assets. Finally, to conclude that whether the eviction of the Intellectual assets is pragmatic or not. Rationale The Current Gobal economies are now facing a new revolution that brings them to a new form of business environment. This major change in the world economies is due to the fact that there has been a disproportion observed between the Book Value and the Market Value of a firm. Because , in the past the Balance Sheet and the Income statement were the only tools used by the Shareholders ,managers and the executives to make strategic decisions and monitoring the performance of the company. However, it can be argued that things have changed now. As one of the important concern for the companies is the Value Creation. The expansion of the markets in the product or a service sector has been possible with the aid of the internet , high- technology and the innovation ,information , market chains and globalisation. This in turn has created a global competition among the firms that are now striving to acquire knowledge. Furthermore, the acquisition of the knowledge brings some vital concerns of its use, management and the improvement. This has changed the operations of the the organizations that used to emphasize on the production capability ,now focus on the creative operational structure. The organisations are now using the special tools for acquisition, management and the protection of knowledge such as Research Development , Patents , trademarks , copyrights , databases , customer and supplier relationships and Human Resources are known as the intellectual assets of the organization and constitute the Intellectual Capital. The relative importance and the expected returns of the Intellectual Capital has convinced the organisations to think and work in a new innovative way to achieve dominance over the competitors in the market. However , inspite of this the Intellectual Capital has not been considered in the performance appraisals and not included in the financial statements under the heading of assets. The organisations are spending a lot on the Intellectual Capital as compared to their tangible assets so therefore it is not wise to go against the flow of current market trends by focusing more on the tangible assets. This would lead to the creation of inaccurate procedures, policies and the decisions. Hence reducing the value in front of the investors and the customers. Cowey (1999), approves the conception of a â€Å"New Economy â€Å" and the â€Å" Knowledge Company † and insists that this concept accepted world-wide. He demonstrates that the opinions of â€Å" what we own † to â€Å" what we Know † have changed and know it depends upon the companies to apprehend the value creation by putting stakes in the training technology , staff retention and knowledge otherwise the efforts will not be productive. The Organisation for Economic Co-operation and development (OECD , 2005) reports that the investments in the Intellectual Capital has grown faster than the investments on machinery and equipment few years back. It is further revealed that the spending on the Research Development , software and the higher education was higher than the spending on the Machinery and the equipment in USA and Finland notebaly in 2002 and increased in greater proportions between 1994 2002 among the OECD countries as well. Arora(2000) purports that the the edge on the competitors in the challenging business environment can only be achieved by the proper administration of the Intellectual Capital which is another name of the Knowledge management. Kaplan Norton(2001) suggest that the company’s market value includes only 10-15% of the company’s book value of the assets. Furthermore, the possibilities of producing a value are risen through the the activities whose foundation is the knowledge that is enforced on the intangible assets of an organisation as compared to tangible assets. A Convention held under the OECD(1999) , concludes that a prominent set of information is required on the Intellectual Capital in its association with the tangible assets in the determination of value. Traditional Financial Reporting does not provide the necessary information to pursue the value creation process. Due to the availability of the information via internet technologies there is a need of a new reporting model that accommodates the information pertaining the Intellectual Capital that creates the value for customers and suppliers. Bradley(1997) discovered that the predicaments that were involved in the traditional financial accounting were due to the emergence of value. He explained the problem by arguing that the balance sheets and the income statements were the benchmarks in delivering the financial information to the shareholders. However, the significance of these financial statements in propagating the value has decreased due to the emerging trend of investments in the intangible assets. It is stated that the value of the brands was not reflected in the financial statements and in the equity values .This has led to the reconsideration of the intangible assets and the brands specifically. This fostered the proposition of of including such assets in the financial statements. However , the accounting profession does not fully supports the the idea that the intangible assets are the main factors in creating the value. On the contrary the investors and the trade leaders have acknowledged this truth. Furthermore, it is also quoted that 72% of the value was not reflected in the balance sheets of the companies surveyed in United Kingdom. Brands form the major part of the unexplained value that is not part of the balance sheet (Brand Finance plc , 2000). The Figure 1 shows the Gap between the market capitalisation and the net asset value. Why Intellectual Capital Upton(2001) reports that the companies under the scrutiny of the FASB Business Reporting Research Project provide considerable non- monetary information. Therefore it can be argued that the AICPA and FASB have been analysing the Intellectual Capital since 1991.The Intellectual Capital is considered endangered when the information of a company becomes obsolete when the competitor increases its information. Therefore the preservation of the Intellectual Capital is crucial for maintaining the competitive edge. However,the companies that are knowledge intensive are prone to risks of losing their market shares(MacDougall Hurst,2005).Guthrie(2000) suggests that â€Å"Accountants must find a to incorporate measures of Intellectual Capital or they will become irrelevant â€Å". Statement of Methodology The method used in the report is the study of the literature that is already present in the field of Intellectual Capital and the Accounting to support the arguments.After, the study necessary facts and evidences are combined to form the Literature Review of this report. This report does includes the collection of the primary data and its analysis. A case study is added to further enhance the understanding of the applications of IC in firms. Research Question The research question is â€Å" Is the exclusion of Intellectual Assets from accounting statements realistics?† The research question of this report is basically a debate that is going on in the academic, industrial and the business sector. This topic demands study to be commenced taking in account both the views of the implications of including or excluding the intellectual assets in the financial statements. Literature Review Definition of the Intellectual Capital The Organisation for Economic Co-operation and development (OECD , 1999) illustrated that the Intellectual Capital was the composition of the financial value of two classes of the intangible assets i.e Structural Capital Human Capital The structural Capital includes the organisational resources like the softwares, databases etc. The Human Capital however, contains the human resources employees (internally) , customers and suppliers(externally). The term Intellectual Capital is presumed as having the same meaning as the Intangible Asset. In contrast , the definition that is provided by the OECD(1999) puts the Intellect Capital as a subset of the intangible assets of an organisation. Because there are certain intangible assets that do not fall under the category of the Intellectual Capital. The repute of a firm is not considered as a part of the Intellectual Capital(Guthrie Petty , 2000). Stewart(1997) defines the Intellectual Capital as a â€Å" Intellectual Material â€Å" that Includes the knowledge , information , intellectual property , experience that can be used to generate wealth. Furthermore , Stewart (1997) categorises the intellectual capital in to structural , customer and the human capital. He argues that the human capital is the generator of the innovation and the improvement. The structural capital includes the tools and the facilities that are used the human capital to form value. Customer Capital includes the value that is produced as a consequence of the organisations relations with which performs the business transactions(Stewart , 1997). Intellectual Capital can also be defined as the combination of the human capital and the structural capital. The human capital includes the knowledge , skills and the experience of the employees. It is further argued that the human capital is not in the possession of the organisation as compared to the structural capital (Edvinsson Malone , 1997). Elements of the Intellectual Structural Capital Structural Capital is what is left behind in the organisation when the employees go home. The Structural Capital arises from the those organisational processes that are focusing on the improvement and the establishment of the organisation. (Roos et al , 1997). Bontis et al (1999) suggests that the structural capital includes the organisational resources that encompass the knowledge that is not actually stored in the human brains and whose value is greater than its physical value.These assets include databases , softwares , manuals , trademarks , leaseholds , franchises , patents , licenses , employee training , employee contracts etc. The structural capital plays an important role in the creation of the value. As it helps the human capital to explore new ideas , learn from the past experience and protects the knowledge and the new inventions by providing the technology and the legal aid. Customer Capital Kohli jaworski(2000) defined the customer capital as the organisations ability to evolve the knowledge about market that is focusing on the cutomer desires and perceptions. This acquired knowledge is used by the organisations in response to the changing attitudes of the customers and the market. Organisations use this knowledge to have a contingency plan to tackle the threats produced from changing market trends. The definition provided by Bontis(1999) suggests the customer capital should be iterated as the relational capital that includes the relationships with the suppliers, partners and the investors in addition to the relationship with the customers. Human Capital Hudson(1993) defined the human capital as the composition of the inheritance, qualifications , experience with the opinions about life and business. It is further argued that the organisational employees are the key architects of the Intellectual Capital through their proficiency , opinions and expertise. The competence of the employees includes skills and qualifications and their opinions come under their behaviour and perceptions about work. The expertise is important in devising the innovative solutions to the problems. Furthermore, employees are an important asset for an organisation but they are not owned assets(Roos et al , 1997). Exploitation Of Intellectual Capital (Economical Perspective) It is suggested that the critical factor in the improvement of the economy is the proper utilization of the Intellectual capital .It is further noted that by increasing the tricks of Intellectual Capital will provide a competitive edge and the value of the firm will be augmented and specifically business will bring financial benefits. It is not a new thing that the intangible assets like brands, intellectual property , relationships are considered as a unprocessed input for the organization that increases the worth by the application of intelligence in possession of the organization. (Watters et al 2006 , Intellectual Assets Center , Glasgow, Uk). The research on the recognition and reporting of the intangible assets and the intellectual capital has brought them to the acute attention.The research believes that the intangible assets play a significant role in the creation of endurable competitive advantage with in the advanced organsations.Due to the expansion of the modern knowledge based economy it has become transparent that the intangible assets and the Intellectual Capital of an organization have become a platform in accomplishing the competitive advantage as compared to the hi-tech tangible assets(Drew , 1999). Tayles et al (2005) have described two doctrines in the realization of the intangible assets that provide the assistance in the achievement of the competitive superiorty. The research is continuously striving to find the authentic procedures to measure the intangible assets and the indices that provide a forecast of the future economical benefits based upon the doctrines that are prescribed by Tayles et al (2005).Firstly , the expanding financial statements of the companies is the idiosyncracy of its Intellectual Capital that give the edge on the market competitors. Secondly, is the inefficient justification of the Intellectual Capital in the expansion of the economy(Tayles et al , 2005). Skinner (1986) purported that with the utilization of the technology, manufacturing productivity can be achieved by the intangible assets of the company which are the authentic reagents of the prosperity and that justify the monetary investment. How the Companies Exploit the Intellectual Capital Case Study Kingston Communications(Hull) Plc is group of companies based in Hull,United Kingdom. The groups is presently offering the services related to information, communication technology and the telecommunications to the consumer markets in UK. The groups Brands include Affiniti,Smart 421,Jam IP(Integration and management services),Karoo, Eclipse, Mistral (Internet and Telecommunication services) and Hull Color pages and Know( Information Services). The group is Ammortising the its Intangible Assets that aquired in the Acquisitions.In 2007,the ammortisation on intangibles was à ¢Ã¢â‚¬Å¡Ã‚ ¤8 million(from Total depreciation and ammortisation).The group also has purchased the tangible and the Intangible assets worth à ¢Ã¢â‚¬Å¡Ã‚ ¤30.2 million.The Groups Controlled measures include, measuring the learning and development(p9),Customer Satisfaction. KM also believes that Human Resources when managed through and effective Policy can bring the Tangible effect on the companys performance. KM is running a development program to enhance the Knowledge and Intelligence of the employees.The company also manages the Relational (Custmer) Capital by arranging the meetings of the Directors on the Investor relations and the shareholders concerns specifically. The Company’s publishes its Financial Reports complying with the IFRS,however, the company also provides additional disclosures if compliance with the IFRS does not fullfil the requirements of the users(i.e External Stakeholders,External investors,Suppliers and the Customers) to understand the impact of certain transactions that have an effect on the financial performance of the company. Relational Capital Management and Policies Arranaging meetings with the shareholders time to time to discuss the company’s strategies and performance.Maintaining a investors relations function to encourage and improve the communication with the investors. The Goodwill of the Company in 2007 was worth à ¢Ã¢â‚¬Å¡Ã‚ ¤192.754 million(2006:à ¢Ã¢â‚¬Å¡Ã‚ ¤155.551 million) and the Intangible Assets had the value of à ¢Ã¢â‚¬Å¡Ã‚ ¤48.511 million (2006 : à ¢Ã¢â‚¬Å¡Ã‚ ¤39.450) according to the Balance Sheet on 31st march,2007. The Cash Flow Statement of the Company for the year ended 31st march,2007 also explicitly show the Amounts of the Ammortisation of Intangibles as compared to the tangible fixed assets.The Cash Flow statement also show the companys procurement of the Intangible assets à ¢Ã¢â‚¬Å¡Ã‚ ¤6.495 illion in 2007. The financial statements of the Company are prepared according to the principles prescribed by IFRS and IFRIC.These financial statements are based on the concept of historical Cost accounting.However, the statements are modified due to the revaluation of the financial assets to a fair value by using the income statement. Intangible Assets Identified by Kingston Communications The Intangible Assets of the Kingston Communication include: 1.) Goodwill 2.) Customer and Supplier Relationships 3.) Technology and Brands 4.) Software 5.) Development Goodwill The Groups Goodwill is reported in the acquisitions of the subsidiaries and it is the difference between the Cost of Acquisition and the Net Assets. The Goodwill is tested for impairment annually. Development The company’s intangibe asset that is developed through the research and development activities only when it fulfils the criteria of Intangible Asset Recognition prescribed by IAS 38 i.e the asset is identifiable,impact on future cash flows and the developmental costs of the assets are measured reliably.The estimated life of the internally developed intangible asset is 1 year and is also ammortised on a straight line basis. Valuation of the Intangible Assets in Kingston Commnuications The intangible assets that are acquired through the acquisitions are valued on the basis of their time value and the future impact of on the performance of the companies. Appraisal of Intellectual Capital in Kingston Communications The Kingston Communication is exploiting,managing and reporting its Intellectual Capital as tool necessary for the competitive advantage and for improving the future performance of the company. According to the companies policy the Intangibles Assets are included in the Balance Sheets in order to satisfy its investors and guarantee the future investments in the company. However, there are no benchmarks for the management and the evaluation of the these Intangible assets.Also, the company is not using the models for the Classification of these Intangible assets as suggested by (Kingston Hull plc , 2008) Measuring the IC (Performance)through strategies(Management Accounting) Simons(1999) suggests that the by measuring the performance of a company is basically the comparison of the outcomes of the business activities with the critical business targets. The traditional financial accounting utilizes two techniques to measure the Performance .These are Return on Capital Employed(ROCE) and Return on Assets (ROA). However , these techniques are condemned due to the fact that they are old fashioned , unable measure the intangible assets and are unable to appraise the stakes in the technology which is essential for the firm to compete in the global market(Bourne et al , 2000; Amir Lev , 1996). Valuation Methodologies(Performance Measures as well) The economic measure of the Profit yields the same result as the traditional accounting during the matching phase of costs and revenues by preserving the value significance. This is done by improving the financial reports with the disclosure of the concealed assets like the intangible assets and the investments in the long run(Simons , 1990). (It includes the tools and various methodologies ) Watters et al(2006) have discussed the application of a Scorecard assessment tool in the Scottish SME that provides a review that how efficiently companies are exploiting their Intellectual assets.The tool helps the SMEs to manage three areas of operations i.e Sales and Marketing , Research and Development and Human Resources. It assign the scores to activities that come under the three operational areas according to their effectiveness and links them to the strategic objectives of the firms. (Appendix 1) Brand Finance plc(2000) suggests that there are a lot of methods present for the valuation of the Brands, however there is a need to find an optimal one. Cost based methods of brand valuations show a disparity from its market valuation. The Market Comparison method is not efficient as it is difficult to obtain the comparison data. Royalty Relief method determines the royalty rate on the estimates of the income generated from brands. However , this method does not clearly states that how a brand is going to create value. The Economic Use method combines the consumer and the competitor to entitle the value to the brand.The last method is the most optimal method which is the Brand Finance that uses the Discounted Cash Flow (DCF) analysis in concluding the value for a brand.As the Discounted Cash Flow method valuation complies with the valuations performed by the financial analysts , accountants to check for the impairment of the intangible assets. Measurement of Intellectual Capital Why there is a need for the companies to measure the intellectual capital This is a very long debate that why companies need to measure the intellectual capital.There are several advantages of doing that. The term intellectual capital can be said to be â€Å"expandable† in terms of the Value and rewards. The greater the effort of a company the greater is a competitive advantage and greater is sustainability of the company. Nowadays companies and the firms have become Knowledge aware i.e they have now recognized the importance of the of the knowledge that creates value and sustainability. The Companies working in the Telecommunication, Pharmaceutical and the research technology sector specifically have to invest a lot in the Research and Development to compete and develop the innovative solutions to avail the opportunities in the market.Therefore, there is a strong need for these companies to devote themselves to measure and manage their intellectual capital effectively. However, it is very difficult to justify the investments in digging out the knowledge that creates value .These investments are rather very complex and unpredictable even if they are tested and analysed by the efficient tools for their proficiency. Some Organisations that are knowledge based are sometimes not sure about the amount of the Knowledge they have and the amount of knowledge they need tocarry out their functions internally and externally. That is the reason, these organizations loose the interest of the investors and therefore the investment. Balanced Scorecard (An Alternative to Balance Sheets) Kaplan Norton(1992) , presented the theory of the Balanced Scorecard for improving and tracking down the performance of an organisation. The authors suggest four dimensions such as Financial , Customer , internal business process and learning and growth. These dimensions are believed to provide a insight in to the current performance and identify the factors that can improve the future performance. A combination of the non-financial and financial measures are insufficient in determining the performance of an organisation. The main problem is that its just like a Wild Goose Chase as this amalgam of the performance indicators are not pursuing a specific business objective. Kaplan Norton(1996) believe that the both the financial and the non- financial measures must have a focus on a goal that has to be achieved in maintaining the sustainability. The authors further argue that the various measures provided by the balanced scorecard can help the organisation to plan a particular strategy and then can implement it across its subsidiaries, departments to share a common motive with trasnparency. A well planned BSC can hep the organisation to learn from the short-term reports that are generated and scrutinized through various perspectives. Andriessen(2004) suggests that the predicament of measuring the Intellectual Capital can be resolved by applying the balanced scorecard. It has been advised that the specified strategy plans can be created that guide the organisations to confidently invest in the human resources, technology and the structural capital. It is further revealed that by measuring and administering the intellectual capital can also help the organisation to convert its non-monetary achievements in to monetary achievements(Kaplan Norton , 2004). A study conducted by Hagood Friedman(2002) devised a way for the implementation of the balanced scorecard to measure the accomplishments of the human resource information system of a company. They have developed a system that uses the balanced scorecard as its foundation to improve the human resource information system in association with highlighting the goals and objectives of the organisation. Despite of its usefulness the Balanced Scorecard has some limitations. In this context Voelpel et al (2006) has identified five limitations of the balanced scorecard in its application in the modern economy. First being its inflexibility that is, it measures the performance of a company only in four perspectives by leaving behind some other perspectives out of attention. Voelpel et al(2006 ) explain the second limitation which is that the BSC is less efficient in accommodating the changes in the changing economy. The BSC a defines a strategy for a company and its subsidiaries to achieve a goal by neglecting the individual goals of a subsidiary as a consequence a company is unable to use its potential properly. The third one is that BSC focuses more on improving the internal performance of an organisation therefore by losing a link with the external world to exploit the innovation.The forth limitation of a BSC is that it focuses on the organisation in itself and provides no information about the actions of competitors. The fifth problem with the balance scorecard is that it goes straight in measuring the performance in a rational way .As a consequence the more complex predicaments are difficult to apprehend(Voelpel et al , 2006). A Comparison between the benefits that arise from intangible and tangible assets There are risks involved with the investment in the intangible assets like RD. Kothari et al(1998) have conducted a research by comparing the uncertainty of benefits associated with the tangibles and the intangibles assets. The methodology used for this research was the regression analysis of the future earnings variability involved with the expenditure in Research and Development and the tangible assets .Furthermore , the variables like firm size and the leverage are also used to define the boundary of a research.It has been illustrated by Kothari et al (1998) that the future benefits of RD investment are more uncertain than the tangible assets. Shi(2003) has analysed and studied the relationship of bond prices and the measures of RD expenditures and suggest that there is a fair risk involved with the spending of the RD projects that increases risk factor with the bondholders claims and hence are more riskier than the other projects. Issues in Intellectual Capital(Flaws in the IC Concepts) Bontis (2001) discovered a predicament with the intangibles assets is that there is no unique conception that is accepted by everyone. Every investigator or a consultant who contributes to the debate expects the approval and recommends his own jargon. Various other researchers have pointed out flaws in the definitions of the Intellectual Capital. According to Edvinsson and Malone(1997) the intellectual capital was the difference of Market value and the Book value. In contrast Upton(2001) recommends that the intellectual capital cannot be absolutely characterized by simply calculating the difference of market and book value. Following that Habersam and Piber(2003) advocate that the term intellectual capital cannot be determined by the difference of market value and the book value. Pragmatically, the difference can be influenced by some other elements that are not associated with the intangibles.Further research enumerates five components that can realize a change in the the stock prices which incorporates the recognised assets , company liabilities , legal events , shareholders equity and the timing issues(Garcia-Ayuso 2003). The benefits received by a firm cannot be attributed to the individual intangible Assets as such benefits are a result from the inter-cooperation of more than one Intangible asset. Therefore, it could be wise to value the intangible assets all together. It is further argued that the market value of a firm cannot be ascribed to the intangible asset

Effects Of Divorce On Children :: essays research papers

Since there is a lot discussion of the effects of divorce on children, I choose this to be my topic. In 1991 Amato and Keith (researchers) examined the results of 92 studies using 13,000 children ranging from preschool to young adults to determine what the overall results indicated. The overall result of this study was that children from divorced families are on "average" somewhat worse off than children who have lived in nuclear families. These children have more trouble in school, more behavior problems, more negative self-concepts, more problems with peers, and more trouble getting along with their parents. Overall, the children are more alike than different. Amato tells us that average differences do not mean that all children in divorced families are worse off than all children in intact families. One way to examine this issue is illustrated by findings of Mavis Hetherington. Hetherington, like many others, finds these average differences, but she also looked at some of her measures and examined the degree to which children in divorced and intact families were more severely impaired. Here we find some important differences. On a measure of behavioral problems, Hetherington reports that 90% of adolescent boys and girls in intact families were within the normal range on problems and 10% had serious problems that we would generally require some type of help. The percentages for divorced families were 74% of the boys and 66% of the girls in the normal range and 26% of the boys and 34% of the girls were in the negative scale. The differences between children in different kinds of families are parental Loss, economic loss, more stress, poor parental adjustment, and exposure to interparental conflict. All experts will agree that any life altering change is effective on a child's life.