Technology Acceptance Model

The Adoption Rate of E-Mobile Banking is an Impact of Customers’ Acceptance of Information Technology in the Banking Sector

The information and telecommunications industry had been a key enabler of productivity across the societies and economies. The IT innovation is not only a significant contributor to the economies of a state, but also towards the growth of the industries. In the present days, banking industries have felt the influence of the telecommunications by a margin among other industries. The emerging information technology trends in across states had been a concern of the researchers. Precisely, m-banking services have had an uptake as the banking industry have enhanced access of service with convenience and ease to use cell phones. This thesis study is aimed to an extensive provide research on the most influencing factors affecting adoption of the technology in banking industry. In this case therefore, the research will place focus on the m-banking services in Australian banking sector (Drennan et al., 2009). The study incorporates Technology Acceptance Model to derive a conceptual framework in order to address its objective and research questions. In this study, data will be gathered from literature reviews and analysts, questionnaires, and interviews. The collected information from interviewing 40 respondents through a survey questionnaire will be used to compare and provide discussion on the factors influencing m-banking adoption rate. Data analysis methods will include weighted mean calculation, for analyzing the questionnaire data, and regression method to test the correlations and significance of factors influencing adoption rate of m-banking.

Chapter One: Background Of The Study

Banking industry in the contemporary world has been intensive users of technologies. Since its emergence, technologies have rendered essential roles to industries to deliver quality products and services. Particularly, their essence had risen from financial technologies such as information and telecommunications across nations. In comparison of the recent IT and telecommunications services with those provided in early 1970s, it is clear that, there had been a complete transformation of technology acceptance and adoption rate in banking industries. This way, there had been numerous researches as an area of interest to scholars, managers, and scientist to explore as the apparent world has taken a new face of technology (Drennan et al., 2009).

This research paper, therefore, places attempt to further past research basing on the past theoretical views of technology acceptance model.

Research topic

The adoption rate of e-mobile banking is an impact of customers’ acceptance of information technology and telecommunications innovation in the banking sector.

Statement of the problem

The adoption rate of any advancement of technology is not guaranteed that it will translate into consumer adoption. However, consumers’ acceptance and their willingness to adopt new technology have been evidence to be a crucial aspect to the banking industry. This is especially in implementation of new product development and marketing. In which technology diffusion is partially determined whether potential users accept and adopt the technology employed.

Significance of the study

Not only scarce research on the technology acceptance and adoption had been a hindrance to the banking sector, but also a limit to managers to understand the priorities of the formation of intentions to accept and adopt mobile e-services. Precisely, this research study focus on the factors affecting technology acceptance model as proposed by Fred Davis. It seeks to expand research on the significance of the factors affecting TAM. This knowledge helps stakeholders in realizing the prevailing environment and its trends in the subject sector.

Objectives of the study

Primary objective

To determine the significance of the factors affecting adoption of m-banking industry.
To determine the significance of the factors influencing technology acceptance model.
To understand consumer behaviors influence on the product development and marketing.
To understand better on how adoption of m-banking has impacted financial services in the banking industry.
To offer recommendation towards designing of effective m-banking marketing strategies.
Do the potential customers perceive the relevance of the e-mobile banking?
Do the potential customers perceive mobile e-service easy to use?
Does the cell phone banking influence users attitude towards adoption.
Does the intention to adopt the e-mobile banking influence consumer behavior.

Chapter Two: Literature Review

Internet mobile banking

Internet banking and mobile banking are both essential subsets of e-banking services. According to Lassar (2005, p. 177), internet banking can be defined as an electronic system that allows potential customers to perform various banking services electronically through bank’s website. It is an internet features which in the present day; mobile phones have been provided web surfing capabilities. It is an apparent trend of adoption of new mobile phones technologies that can enable users to access internet through their hand-held devices. The mobiles phones capabilities are enhanced by the wireless application protocol (WAP) cell phone banking with a similar inter-face to internet banking. Only that, the hand-held device is supported by the GPRS, WAP, EDGE, or 3G.

Internet mobile banking had been a fundamental change in the banking sector in the recent years. It is evidenced by the consumer movement from the conventional branch banking into more stand-alone banking services via electronic delivery channels than office branch. However, following the acceptance and intention to adopt new technology Chan (2001, p.10); modified the initial definition of mobile banking. His argument posits that mobile internet banking is an electronic transaction service via bank’s website by using a computer a computer and a modem to access internet. It is a field of study that researchers have considered the influence and the adoption of e-mobile banking. according to Suoranta & Mattila (2004, p. 364).typical e-mobile banking users will continue to use the wired channel while the current users of the automated bill payment and the branch offices will be shifted to mobile phone banking.

This way, cell phone banking users, cannot be drawn from the heavy internet banking users probably, because, they will continue using internet banking. Besides, he posit rationality for banks not to invest convincing its regular internet users to adopt a new electronic, but they should or rather attempt to enable potential customers outside this segment to be interested with the advantages of mobile phone banking. Precisely, the relevant performance of the new technology should be inessential issue of concern to the banking industry influence a change in accordance to customers on taste and preference.

Technology acceptance model

The initials steps required for adoption of the emerging information technology had been a hindrance of banking performance. It involves establishing which purpose the intended new system will address and what functionality the bank requires. This way, for any e-portfolio system the bank need to establish which one size fits all; corresponding to a series of standard functionalities (Zhang, et al., 2007).

Technology acceptance and its usage had been a focal point in a wide range of research studies. In this case, TAM application enabled understanding of conceptual issues related to the e-portfolio use. In which several theoretical models have been applied to provide sufficient study on user acceptance and usage behavior of emerging information technology trends. Several studies, including Roger’s diffusion theory, Theory of Planned Behavior, and Theory of Reason Action (TRA) gave inception of the Technology Acceptance Model. TAM has emerged to be preferable model that represents the preceding theories of technology usage through the profound beliefs related to the perceived usefulness and its ease of a technology. The previous researches have shown the powerfulness of TAM over other theories of the as a basis to explain the variance in systems use (Davis, 1989).

(Pearlson& Saunders, 2006) argues that, the use of TAM is predicted on the decision on or rather attention of individuals having control whether or not they accept the use of the system. The factors in the model are perceived usefulness, perceived ease of use and the attitude towards the usage of the system and adoption. The behavioral intention to use by the potential customers is the essentials factor that draws whether the users will actually utilize the information technology introduced. This way, the firm may draw critical decisions-making to enhance its performance especially in the banking sector (Ajzen& Fishbein, 2000).This theoretical view, therefore, derives the of propositions below;

Technology Acceptance Model and study of e-mobile banking

The mobile services convenience and promptness to customers had been growing concerns to academic researchers. Accordingly, a past growing body of academic research has examined the determinants of the cell phone banking acceptance and its utilization (Arora et al., 2011),.

Dillon and Morris (1998, p.5) portrays the technology acceptance as the demonstrable willingness of individuals within a group to employ IT for the designed task as intended to support. Basically, the research investigated the instrumental influences involving beliefs on how to utilize technology. This way, it results in the objectives hence improvements in the performance. (Thompson, et al., 2006) argue that non-instrumental factors may be limiting factors on the acceptance of the technology. However, the TAM posits that, perceived usefulness and perceived ease of utility are the fundamental detriment that influences an individual behavioral intention (Hu et al. 1999).

According to Laurin and Lin (2005, p. 878) research; it extended the technology acceptance model. Their perspective towards understanding of the behavioral intention to the utility of the mobile banking survey was conducted in Taiwan included the perceived credibility, perceived self-efficacy and the perceived financial costs in m-banking context (see figure 1).In their research, they revealed that, all stated factors have effects on the behavioral, and the perceived credibility is evidenced to be the most contributing factor to intention. However, on later study to generalize their earlier m-banking acceptance model, Wang, Lin and Laurn (2006) adopted an extended constructs. That is perceived usefulness had a significant contribution followed by the perceived ease of usage contributed behavior attention.

Another study by Cheong and Park (2008) carried out research on reluctance factors of the Korean’s to adopt m-banking services. In addition to the conventional TAM factors included additional constructs; facilitating conditions and the switching barriers. The findings in the research show that facilitating conditions affluence the positively the intention to use m-payment, whilst switching barriers negatively affected the behavioral intentions. Besides, Gu et al., (2009) research in Korea examined the determinants of the mobile banking. The authors introduced another factor; it considered trust as an additional key construct of the behavioral intention to utilize an introduced technology. In addition to self-efficacy, social influence, facilitating conditions, system quality, structural assurance, familiarity with the bank, and calculated-based on trusts were indicated as the key constructs of behavioral intentions. However, perceived usefulness and ease to use were the most contributing factors on behavioral intentions.

Another stream of research in developing countries was carried out to understand the socio-economic and technological impacts of m-banking adoption. Research placed study that m-banking in developing countries is considered as a complimentary service offered by the banking industry. It is considered an alternative of ATMs and internet banking. However, important criteria such as convenience and ease to use seemed to be important when they consider adopting m-banking. The appeal for the cell phone banking in developing countries revealed that influence on the convenience may be less than accessibility and affordability due to the network quality connection, coverage, and costs (Donner and Tellez, 2008). However, Laforet and Li (2005) investigation in developed countries; examined consumer behavior, motivation, attitude, and cultural influence on the m-banking in China. In the findings, customers in China do not attach much importance on m-banking convenience but perceived risks and technological skills are the most influential factors.

Lastly, Sripalawat et al. (2011) carried out to examine positive and negative factors influencing m-banking acceptance in Thailand. The research considered subjective norms, self-efficacy, perceived usefulness, and perceived ease to use as the positive factors. Contrary, the study considered device barrier, lack of information, perceived risk, and financial costs as the negative factors. Their findings not only revealed that positive factors are the most influential than negative factors, but also subjective norms to be the most influential amongst positive factors.

Conceptual framework

The conceptual framework deduces its constructs from the past literature reviews as from chapter two. The study basis is from the extended Technology Acceptance Model by of Luarn and Lin (2005). Its shows the factors which influence the adoption of cell phone banking. The constructs suggests that the technology user adoption of a new information system fundamentally determined by two factors; perceived usefulness and the perceived ease of use of the system. In addition, perceived credibility, efficacy and financial cost also affects the behavioral intentions of users to adopt m-banking. The model in this case, therefore, states the gaps between the past literatures reviews and the current study.

Conclusion

The successful marketing of the new technology remains one of the crucial aspects of banking industry that employs technology to satisfy customers across border. However, it places challenges when addressing the factors that influence potential customer’s decision to adopt the newly introduced technology. It requires better understanding on behavioral intentions to accept new technology. Specifically, the influence of beliefs of the existing technology moderates its adoption necessary another technology. This way, the study will gain better understanding through the past tentative literature reviews and followed by empirical research amongst customers. Besides, the study will provide extensive information to the field of marketing with possible strategies to m-banking.

Chapter Three: Methodology

This chapter provides discussion on the methodologies and various data collection techniques. These techniques will be employed as demanded by objectives of the study. The research methods were designed owing to the objectives of the study. For this reason, therefore, the strategies which the paper will use are to determine the major significance of the factors affecting adoption rate of mobile banking (Bryman, 2012).

Research approach

Philosophical approaches enable planning of the research design and the choice of methodology. It provides guide in choosing appropriate research methods regarding to the research objectives and research questions. In accordance, they follow research design choice, performance, assessment of design and the research quality. Besides, they are approaches which provides guide of the choices available from epistemology and ethnology as well (Johnson, 2000). Regarding ethnology, the paper will use realism paradigm to address the hypothesis of the study. This way the paper will adopt realism of factors affecting significantly the behavioral intentions to adopt mobile banking in Australia. On the other hand, the paper will use objectivity as its epistemology approach to base on the assumptions to deduce results without biasness. The researcher, therefore, will carry out the study in a neutral state to address the objectives successfully (Bryman, 2012).

The overview of the research methodology which the study will employ involves three-layer approach (see figure 2). It provides aims of developing an experimental framework to study the empirical findings. It incorporates a combination of both the primary and secondary data necessary to validate the study accordingly. This way, the paper will be able to test null hypothesis about a specific factor influence on the m-banking adoption (Saunders et al., 2012). The hypotheses derive form from the TAM literature review and interview data collected are as below.

H 1: perceived usefulness has a significant influence on the m-banking adoption rate
H 2: Perceived ease of use has a significant influence on the m-banking adoption rate
H 3: Perceived credibility has a significant influence on the m-banking adoption rate
H 4: Perceived self-efficacy has a significant influence on the m-banking adoption rate
H 5: Perceived financial cost has a significant influence on the m-banking adoption rate

Justification of the research methods

Basing the research actual need, qualitative and quantitative analysis will be used. The study sought to choose both techniques because it will employ to determine the significance of the specific factor on m-banking. It will therefore include the weighted mean average and regression analysis of the primary data. Amongst the techniques which will be used, the study will prefer interviews to be most appropriate to facilitate survey questionnaires effectively.

Questionnaire design

Technology Acceptance Model accommodated the banking industry analysis. Accordingly, it make it best-suited theoretical framework to study the factors affecting cell phone banking. The model will refer to the significance of the factors to determine behavioral intentions of the potential customer to adopt it. This way in provided a conceptual framework to address the hypothesis as it involves lots of internet participant of varied dimensions such as the customers, suppliers and other stakeholders. To improve on the validity and credibility, the study will paper will use both closed and open-ended questionnaires: in which questionnaire form will contain demographic questions, ratings for the constructs influencing m-banking adoptions, and throws open questions to try cover in summary any factor beyond the listed ones (Oppenheim, 2000).

Data collection

Primary data collection

In order to identify the significance of the key factors affecting the adoption of m-banking in Australia banking industry, respondents from top three bank’s respondents will be selected. This will be the primary source to form the null hypothesis to be tested in the study. The selection is based on the assumption that these respondents understand the nature of the industry banking services especially m-banking. This way, will ensure the result will fit into the context of the study. Besides, the data collection method will follow the questionnaire design mentioned above (see section 3.3).

Secondary data collection

Apart from the past literature reviews, the study will also use secondary method to source information from the bank managers. It will obtain answers regarding significances of factors affecting m-banking by processing questionnaires avenues such as the number subscribers, m-banking frequencies and customers’ satisfaction feedback messages. Similarly, it will access data from the bank’s customer care desks data concerning the subject matter of the study covering the limited range of two years; the past year of 2013 and to the current records of 2014 (Matthews et al., 2010).

Face-to-face interviews Justifications

Face-to-face interview technique had been most preferable over the past years to date. Researchers, analysts and journals had found it effective for empirical studies. Since it develops life participation in which the informant feels he or she is involved. Hence, attains a sense of ownership of the study too. Put simpler, it is an in-depth direct and a repeated face-to-face interaction between the researcher and the informant. This way, it enables the respondent to share freely and openly their opinion about the subject of the study regarding their experience, attitudes and lifestyles. Therefore the research will be in a position to uncover the respondent’s situations, attitudes and experience effectively (Oppenheim, 2000).

Besides, interviews will be used to draw opinions of the respondents. The interview methods will include Face-to-face interviews which is the preferable over email, and in-world interviews.

In-world interview justifications

In-word environment is a recent times innovations which enables internet users to engage in a virtual environment through avatars. It is more like face-to-face social interaction but it is computer mediated communications feature which participant may as well interact through live chats. This is a marketing platform which banking industry places their products advertisement in an immersive environment such as online gaming, videos and so forth. Perhaps it is adopted for some reasons to embraces the Second Life way of doing things in 21^st century. In this case, therefore, the study will engage respondents online through in-world interviews at ease. It is a technique which is essential especially respondents are unavailable to participate in face-to-face interviews.

Email interviews justifications

These are research interviews essentially conducted in rare occasions. Mostly, it is applied in case where the respondent is unavailable at the time of or uncomfortable in having face-to-face interviews. It is a rare instance that considers time constrains in which respondents will participate via email. The researcher will forward mail with semi-structured questions expected to be replied within a period of one week. All the respondents will be assumed that they are computer literate and had access of internet. This is because they on the expectations of the study that if they are using m-baking therefore are computer literate. However, email-based might raise confidentiality, deception and consent, otherwise, resolved to provide confidentially and identity protection (Bryman, 2012).

Sample and sampling size

In order to achieve the desired objectives, sampling strategy is important to be used especially, where qualitative approach is intended to be used. According to this study, the target population will be Australian top three bank’s customers. It will consider thirty respondents between the age of eighteen and seventy five. The study target pre-assumes that the population is the actual customers of the bank with access to the internet, computer literate, bank account and the uses m-banking services (Davies, 2007).

Random sampling method will be employed for the sample selection from the identified banks. This will be a necessary method for the study in order to avoid selection bias. It will create an opportunity in conducting the survey at neutral state for the sample population. The pilot-testing of the model will be conducted prior the study in order to ascertain the strategy performance, reliability and validity.

Methods of data analysis

Data analysis is a logic way of understanding and interpretation of the collected data. It includes two processes; analytical process where the data will be collected, categorized, compared, and integrated. Whilst interpretation process of analyzed employed circularly while making out sense out of the analyzed data (Hassan, et al. 2013). Since the study seeks determine the significances of the factors affecting adoption of m-banking in Australia, it triggers the need to employ statistical method of analysis. Therefore, it will incorporate two methods of data collection;

Weighted mean for the questionnaires

The results of the closed-ended questions will be assessed using TAM constructs significance. They will be scale from 1 to 5; strongly disagreed scores 1, disagree scores 2, neutral scores 3, agree scores 4 and strongly agree will equate 5 scores. To analyze the results obtained from the informants, the weighted mean score will be calculated accordingly. Similarly, open-ended questions will be analyzed at a personal interpretation, but at a neutral state rating the significance of the defined factors of adoption in ranks.

Least square method regression analysis

A least square multiple linear regression will be used to assess the correlation between the predators among the five independent variables and the m-banking adoption intention. This way, their variance will be used to in behavioral intentions to adopt m-banking will be therefore used to analyze the factor’s significance will be ranked accordingly (Smith, 2011).

Validity, Reliability and Ethics

Qualitative research is considered to execute reliability and the credibility of the study. Ethnology choice of realism will enable the stability of the study in conjunction with epistemology positivism approach. Positivism will be essential to deliver a neutral interpretation or measures without bias of the open-ended questionnaires. Use of repeatedly random sampling method and in-depth interview reviews also contributes the reliability of the research study.

While the reliability concerns the consistency of the scores results validity concerns, how the results will be interpreted. Validity will concern how well the study results place support of the theory or the constructs of the research paper. Accordingly, the collection data and analysis techniques will be pilot-tested prior the actual research. Besides, the constructs validity will be assessed by means of convergent and discriminant validity as well. That is, comparison of the similarity of results from different instrument of data analysis methods used.

Considering ethics, the paper will ensure the study will not cause any harm to the respondents by ensuring; their consensus to be part of the study contributors via interviews prior commencement of the study. Secondly, explaining the benefits of the study and guaranteed confidentiality in the procedures. This way, the research will provide their protection rights to respondents accordingly (Walliman, 2010).

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Tax Fairness and Tax Efficiency

A tax is a financial charge or a levy that is imposed to a taxpayer by an organization or state. Tax can be levied directly or indirectly, and can be paid in the form of money or its labor equivalent. The paper is going to focus on methods of levying a tax to students from their final examination. The tax paid should be in the form of points from the student’s average score. The purpose of this study is to find the fairest way of collecting tax from the class. therefore, focusing on tax fairness and tax efficiency.

Tax Base, Rate and Structure

Tax base is the assessed value of a set of assets, income streams or investments, which are subject to taxation. Therefore, tax must be imposed on things which have a tax base. The property tax base of the students score is the scores value. An efficient tax system should have a tax rate. This describes the burden ratio which is expressed as a percentage which a student is taxed. This study is focused to incorporate a fair tax rate to the scores of the students which will enhance equity in the tax system. The structure of this tax system is on the basis of points from the average score of each student. This structure is suitable since the students do not have a source of income. This will help the students work hard to reach their targets after tax hence increase competition. For healthy competition to be effective, a fair method of collecting taxes should be imposed. The study is going to focus on the three methods of levying taxes in order to come up with the efficient method that should be applicable in the class.

Progressive Tax

This is a tax that is imposed as a percentage of the student’s final examination grade. This means that amount of tax increases as the taxable base amount increases. A progressive tax increases the tax burden of the individuals who have the highest scores. This tax system is not suitable in the class since it would decrease the morale of the students to work hard. Students will high scores are deducted many points relative to students will low scores. This method is not fair to the hardworking students, hence should not be applicable in class.

Proportional Tax

This is a method of taxation imposed with a fixed tax rate. In other words, it is a flat tax system. The percentage of tax does not vary with the decrease or increase of the student’s score. This means that every student has to pay an equal percentage. Therefore, students with high grades on their final examination pay a higher percentage of tax relative to students with low grades. This method of taxation is not suitable since equity does not prevail. Students would be discouraged to work hard in avoidance to pay a high tax. The method favors the students with low scores because they will be deducted few points for their tax. Therefore, progressive tax system should not be applied in class since it is unfair to the hardworking students hence decreases their morale to work hard.

Regressive Tax

This method of taxation takes a larger percentage from students with low scores than students with high scores. In general, a progressive tax is applied uniformly. This means that it hits the students with low scores harder. This method of taxation is suitable in class since it challenges the lazy students to work harder in order to avoid the high burden of taxation. Therefore, every student in class will be striving to get a high score, and this increases the competition. Continuous levy of this tax will improve the overall performance of the students in the class.

This method of taxation is fairer relative to others since its increases competition in class. The purpose of levying a tax on points is to improve the overall performance of the students and create healthy competition. Every student will work hard to get a high grade so that they do not suffer from a high tax burden. Therefore, the employment of this method of taxation is suitable and would be more effective compared to other methods of taxation.

Tax Equity

Equity is the concept of fairness in the collection of taxes. More specifically, it refers to equal chances in life regardless of identity to provide all students in class with basic and equal minimum services to increase their commitment. Horizontal equity in class means the students who are not hardworking should pay more. This method treats differently those who have differences in levels of aspects. Equity is related to the concept of tax neutrality or the idea that an effective tax system should not discriminate against students or distort their behavior unduly. Every student is entitled to pay tax, what varies is the amount of tax paid. Therefore, this paper recommends regressive method of taxation in the class since it is efficient and would improve the overall performance of the students.

Did you find any useful knowledge relating to tax fairness and tax efficiency in this post? What are the key facts that grabbed your attention? Let us know in the comments. Thank you.

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Stewardship Financial Reporting

To What Extent And How The Stewardship Aspect Helps The Decision Usefulness Aspect In Financial Reporting

Financial reporting is a formal process by which a company communicates with its stakeholders through disclosing its financial figures. According to the recent conceptual framework of IASB about financial reporting, there are two aspects of objectives of financial reporting. One is stewardship, which deals with management responsibility towards the company, and another one is decision-usefulness, which mainly deals with the decision-making users of the financial statement.

Stewardship is an ethical term in accounting that imposes a responsibility to the management of an organization to take care of business carefully and provide reliable information the stakeholders about the resources of business by financial reporting (Williamson, 2002). On the other hand, decision usefulness is a concept related to the preparation of financial statement in which a company try to provide better information by considering the relevant decision makers.

There was a debate among the experts whether the stewardship should consider as an objective of financial reporting or not and whether the decision usefulness provide same concept like stewardship. However, later the IASB and FASB resolve this debate by introducing an exposure draft. In the exposure draft, it told that stewardship should consider as a separate objective of financial reporting (Kothari, 2008).

Some experts believe that the stewardship has relationship decision usefulness. They also believe that the stewardship aspect of objective helps the decision usefulness to an extent. On the other hand, some experts believe that there is no relationship between these two. Let us see how and to what extent stewardship helps the decision usefulness.

Stewardship helps to increase the decision usefulness to the relevant decision maker by imposing responsibility to the management to take care of business professionally. When the management take cares the business resources in an efficient way, the output of financial report will automatically be reliable (Young, 1998).
Stewardship influences the organization to conduct audit of their financial statements by an independent auditor. The decision usefulness will rise when an independent auditor review the financial statement (Latham, 2005).
Stewardship helps in accurate valuation of a company by recording and providing accurate information to the decision makers. This accurate valuation information increases the reliability as well as decision usefulness among the stakeholders.
It protects the interest of all related parties to the business by disclosing right information to the right parties. When the flow of information is in a perfect condition, the related parties of business will not lose their interest to the business and can make their decision in an efficient way.
Stewardship helps to satisfy the regulator body’s of an organization by managing the organization carefully, ethical financial disclosure and giving proper payment such as tax to the tax authorities. When the users of financial statement see that the regulator body’s are satisfied with this origination, they will also satisfied and the decision usefulness of financial statement will ultimately rise (Latham, 2005) .
It highlights the responsibility not only the management but also the regulators, investors and credit providers etc. This helps to increase the financial accuracy of the company. For an example, stewardship imposes the government to seek accurate documentation of financial statement of a company to project future growth in the stock exchange. When the company provide actual documents, the relevant decision makers of financial statement can take proper decision by using accurate information.
Stewardship helps to reduce agency problem in an This attracts more potential investors to the organization. When the agency problem reduces, the decision maker can make better financial decision about business and the concept decision usefulness will increase (Gjesdal, 1981).

Advantages of Stewardship

The extent to which the stewardship helps the decision usefulness is a relative concept rather than absolute. This means the decision usefulness may vary upon the degree of stewardship of the management or agent of a company. According to the Joachim Gassen (2007), the usefulness of financial statement in decision-making is much depends on the information available to the market participant. The information availability directly related to stewardship of the management. If the management discloses fair information to the users, the decision usefulness of financial reporting will increase. Let us see a table about the extent to which stewardship helps decision usefulness.

Stewardship Influence	Degree	Decision usefulness	Decision output
Management integrity to business	Good	High	Positive
Management integrity to business	Bad	Low	Negative
*Recording financial information accurately*	Yes	High	Positive
*Recording financial information accurately*	No	Low	Negative
*Conduct audit by independent auditor*	Yes	High	Positive
*Conduct audit by independent auditor*	No	Low	Negative
*Accurate financial disclosure*	Yes	High	Positive
*Accurate financial disclosure*	No	High	Negative

However, there are some arguments against the relationship between stewardship and decision usefulness according to some expert’s opinion. This means the stewardship and decision usefulness are two separate objectives without any influence to each other.

Stewardship and decision usefulness should define as completely separate objectives because of their parallel relation (Ernst and Young, 2008).
Stewardship mainly deals with past performance of organization to asses’ future performance. On the other hand, decision usefulness provides better information by considering present situation of the company. Therefore, the relations between these two are different (Hand, Isaaks and Sanderson, 2005).

Though there are some negative views about the relationship between stewardship and decision usefulness, there are some strong positive points also. Stewardship directly or indirectly influences the decision usefulness of a financial statement. It helps to increase management integrity, accurate financial recording, increase the reliability of information to the decision makers by conducting regular audit and disclosing accurate information. These points ultimately increase the decision usefulness of financial reporting to the related decision makers. The extent to which stewardship helps decision usefulness may vary according to the degree of stewardship of management to the information in financial reporting.

References

Duncanwil.co.uk (2002) Duncan Williamson: Concepts and Conventions of Accounting

Ernst & Young (2008) International GAAP 2008: Generally Accepted Accounting Practice under International Financial Reporting Standards. International: Wiley (April 14, 2008), p.146 page, stewardship.

Gassen, J. (2007) Are stewardship and decision usefulness complementary of conflicting objectives of financial accounting?

Gjesdal, F. (1981) Accounting for Stewardship. Journal of Accounting Research, 19 (1), p.208-231.

Hand, L., Isaaks, C., & Sanderson, P. (2005). Introduction to accounting for non-specialists. London, Thomson Learning.

Kothari, S. (2008) conceptual framework of financial reporting. International: Pearson, p.38-40.

Latham, A. (2005) The Stewardship Function in Accounting

Ventureline, D. (n.d.) Accounting Theory Definition

What is Financial Reporting? (n.d.) What is Financial Reporting?

Young, R. (1998) The stewardship role in accounting

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Social Media and Consumer Decision Making

Social Media Influence In Consumer Decision Making

Abstract

The impact reference groups or social connections have in an online marketing environment, on the product purchase decisions of consumers is analyzed in this article. The influence of social media in the decision making process of consumers is investigated, and the influence of the strength of social ties on the final decision are discussed. The article discusses theories and concepts related to social relations, social media, and consumer purchase decision making process. To understand the impact social media has on consumer purchase decision, interview is conducted with micro and macro business owners using Facebook business pages, and having over 50 fans for their fan page. To analyze the data statistical analysis, and descriptive analysis methods are used. The research concludes that a strong tie in social relations serves to influence the purchase decision making process of consumers positively. To create a successful business by adopting an online marketing strategy, building strong social relations is important.

Research Overview

Social scientists have for a long duration highlighted the importance of group membership when it comes to determining individual or group behavior. The fact that individuals act according to a reference frame produced by groups to which they have widely been accepted has been perceived as a sound premise for some time. Marketers have widely accepted the construct of a reference group as critical in at least some forms of consumer decision-making. With the growth of the internet, and online marketing, social media is becoming an indispensable part in everyday lives of people. People are social beings, and at present, consumers are participating in activities like sharing experiences, knowledge, and opinions online. They also take part in online discussions to share their experiences with a product or a service.

The speed with which information transfers has increased with the electronic word of mouth growing more rapidly. Positive recommendations and discussions online have the potential to bring in increased business volume for firms in a short time. There is also the probability of a negative complaint online that can cause mistrust in a service or a product. A new form of social communication has been made possible by online media. Groups or individuals who might never meet in person are able to influence consumer behavior and their purchase decisions. The increasing use of social media is evident from the growth in online population using social network sites. Facebook the leading social media website has observed 23% growth in its user population during 2013, with 1.1 billion users making use of the site each month.

This study investigates the influence of reference groups online brand and product purchase decisions by looking at the interrelations between forms of product use conspicuousness and forms of influence from reference groups in social media. Consumers have a wide access to different types of social media, tools, and platforms. Social media significantly impacts the process of information sharing amongst individuals in the online shopping environment. Through this research, the role played by social media reference groups in forming strong or weak relationships with consumers that can influence the consumer decision making process are investigated.

Problem Statement

The study proposes to investigate the relationship between the social media influence of online users, the behavior intentions of consumers, and the role of social media influence in consumer decision making process. The strategy of information search online is adopted by consumers to reduce the risks involved in a purchase decision. Increasing technological advancements lead to ease of information access. Consumers can easily obtain information about services or products through social media before making a purchase. This research is focused on making both practical and academic contributions. Academically, it serves to bridge the gap between consumer decision making and the influence of social media reference groups in forming weak or strong relationship with consumers. Practically, social media marketers benefit from the research results. They can gain a deeper understanding of an online shopping consumer’s decision making process.

Research Questions

Research questions to be explored to investigate the social media phenomenon in online shopping are;

What are the characteristics of social and online influence groups and references?
Personal and demographic factors like gender, age, education, and profession have an influence on information shared through social media. Their experience and prior knowledge influences their level of social influence.
What are the ways through which information and ideas travel through such a reference group or an online community?
The credibility of the source depends on the reference group and the way in which information is conveyed. An understanding of how information or ideas travel through the reference community helps in identifying factors that have a high level of influence on consumer decision making.
What are some forms of ties or connections do consumers have to other consumers in the communities?
Consumers form ties in the online community, resulting in the establishment of a reference group or community. By investigating in what ways and how such communities are formed, social media marketers can leverage their online advertising campaigns.
How is consumer decision making influenced by social media reference groups and communities.
Social media reference groups, and communities alike, are proposed hypothesized to play a major role in the purchase decision of consumers.

Research Aims and Objectives

The research aims to investigate the ways in which social media influences consumer decision making during an online purchase. The various ways in which a social media group or community is used as a reference, the ways through which such groups or communities are accessed, and ways in which information is accessed from these groups by consumers are investigated. Main objectives of research are;

To identify the ways in which social media has established a source of power and leveled the playing field for consumers?
To investigate in what ways leaders of these reference groups or opinion leaders develop in online communities or any other reference group.
To analyze what some of the roles of social capital play when it comes to value of the social communities created on social media?
To offer recommendations to social media marketers on how reference groups and communities can be leveraged to their firm’s advantage.

Rationale for Research

The results obtained from this research could offer considerable evidence on the influence social media has on online marketing. The overall process of consumer decision making while making an online purchase decision, combined with the influence of social media helps managers reduce risks involved in social media marketing, at the same time offering recommendations on the ways in which they can increase their online credibility. Research on social media marketing is relatively new in marketing research. Negligible research exists on interrelating social media marketing and its influence in the consumer decision making process. This research focuses mainly on online shopping, social media, and reference group influence on consumer decision making. So, the theoretical contribution of this research helps fill in the gap in previous literature.

Research Methodology

Business pages created on Facebook are the central tool and the key research methodology is action research. Action research involves making systematic observations, and collection of data, that can be used to solve problems, and improve professional business practices. Micro and small businesses are focused. Data is gathered through interview and by using questionnaire. Facebook pages created by small entrepreneurs are used to create a fan base for their small enterprises. As the page continuous to grow and increase in size when it comes to the fan base of about 50 to 60 users data is to be conducted, mainly by carrying out semi- structured interviews.

The research design is action, qualitative research oriented with the conviction that reality is virtual created by factors of socio- economy. Primary data is gathered through semi- structured and open interviews. Data regarding the experiences of the entrepreneur while using and adopting social media like Facebook is focused upon. Secondary data is generated by the recording transcripts from the weekly training and interaction with the participants to understand their requirements and experiences. Tertiary collection of data is carried out through virtual ethnography by carrying out internet-based interviews through Google talk, chat, Skype and blogs.

Structure of Article

To ensure research meets its aims and objectives, clear research questions and research focus are developed first. Analysis of theories and concepts is done in the literature review part. Here theories and concepts relevant to social media as a marketing tool, and consumer decision making process are explored. Research methodology is developed based on literature review, and research aims. This gives a detailed outline of the research methodology to be employed for data collection. The research approach, philosophy, choices, ethical issues and methodologies are explained. Analyzed data gathered from semi – structured interview, and research findings are presented in based on which, conclusion discusses the research concisely, using which suitable recommendations are offered.

Conclusion

The way in which consumers make purchase decision has changed with the advent of social media. Rather than waiting for messages or advertisements giving information about a service or a product from companies, consumers are now seeking information on social media directly. Online community has the greatest amount of influence, especially on online shoppers. Research proposes to investigate the characteristics of online communities and reference groups involved in social media. The ways in which such groups influence the consumer decision making process is explored. For data collection, semi – structured interviews are conducted with online micro and small business entrepreneurs making use of social media tools like Facebook and blogs.

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Risk Management Alstom

Risk Management – A Case Study of Alstom

Risk Management at ALSTOM. The advantages of rail projects involve cheap shipment transport costs, increased in the mobility of passengers, greater economic addition and the environmental advantages from condensed road traffic or develop and improved urban transportation. But for the railways projects financiers needs to consider and keep in mind the risks factors that they can face throughout their projects and on the basis of that knowledge they should take some steps and start an awareness programs for those who relate to this project. Risks awareness programs should include the awareness about the hazards and controlled risks along with the steps that can reduce and almost decrease the risks which can be beneficial for the workers and for the rail projects as well.

Why the risk management department / function is an important function for a company

In the newly established private sector of railway, requests for contracts to offer railway services and rolling stick entirely relies on rewards and risk. Though ALSTOM has a massive share of market and substantial experience in the in business, each contract it creates divergence according to the specification of train, provisions of financing and spares, maintenance of various agreements (Quinn, & Strategy, 2013).

This consequently puts more stress on managers to obtain carefully whether every tender is value the risk and what the linked incentives are probably to be. From the suppliers of about two years British Rail will go to identify a short period of warranty after taking the train delivery. It will then renovate and maintain the trains, in addition to offer transport and rail services, like ticketing for passengers, facilities for station and maintenance of railway infrastructure. Financers are avoiding the risks of UK extreme environment and not having the feeling of urgency of Risk Management (Adger, 2010). And there is a lack of importance among firms that are being affected by the extreme weather.

And there is a lack of importance among firms that are being affected by the extreme weather. First of all we need to find out those steps that can reduce above discussed risks so that the railways project can be completed (Quinn, & Strategy, 2013). Investor should realize the risks of extreme environment that can affect the project.

ALSTOM refused the opportunity of business development in the secondary market. As an outcome, manufacturers of train like ALSTOM depend entirely on big contracts for manufacturing trains and experience from either scarcity or gorge that is they were either snowed under with commands and instructions or had to deny as commands rejects. Train manufacturing was a start or stop business and therefore each command was dissimilar, there were no retained technology and high capital cost.

To manage risk, ALSOTM was really concerned about it risk management department. And in order to manage the risk ALSTOM found a serious and vital change in focus for manufacturing through moving from being merely a train manufacturer to a service provider. Late 1980s passenger transport were becoming more complicated system, integrating an increasing amount of equipment which are high value from suppliers which are specialist.

It was observed at ALSTOM that though these more complicated and sophisticated trains were a chance to increase and improve the product quality , the risk of late delivery and non-performance had raised. The main point was to incorporate the tasks of specialist suppliers so that those kind of risks can be easily managed (Reuter, Foerstl, Hartmann, & Blome, 2010).

Long Term cost risk for ALSTOM can be the major risk for the company. Now for a period of 20 years ALSTOM has a contract to supply their trains for the Northern Lines, it can no longer considers only of the manufacturing trains’ cost. As the company is not considering the long term cost of the company’s assets. So in ALSTOM ’s main interest is to maintain trains in immaculate circumstance and enhance and develop them throughout the lifetime of the company, if they continue this kind of attitude and apply risk management function this will lessen the cost of maintenance and generate more profits.

The project of Northern Line offered ALSTOM with major experience , not just in developing projects but also in capitalizing them. By taking the risk of asset for the scheme, ALSTOM unmitigated its rile as a train producer to act as a systematic stock firm. ALSTOM then went to the pecuniary markets to offer the capital for manufacturing the trains with capitalists who took the monetary risk for the project.

Assess how different departments/functions of a company such as ALSTOM can help the company manage its risks

The business strategy and the human resource management should be entirely incorporated so that they can effectively and efficiently play an active role within the risk management and its assessment. Whenever there is amalgamation activity, the Human Resource Department frequently has a huge responsibility to ensure that business operation transition go easily and smoothly. When firms amalgamate, some of the most important modification happens in treatment and in number of its workers. If in ALSTOM human resource department can successfully tackle with these significant matters, they can have massive effects on the success of the firm (Reuter, Foerstl, Hartmann, & Blome, 2010).

Major goal and role of ALSTOM is to establish and sustain trains until the end of era of franchise of Virgin. But the company is experiencing problem in maintain trains. The company is facing legal issues like accidents or suicides relating impostor, defect, and fire, electrical or mechanical failure caused by ALSTOM’s train or the company and especially workers’ strike which is due to the mismanagement of human resource, and it can cost a lot to ALSTOM.

The company hoped that they can carry on sustaining trains and can be able to manage their human resource after the franchise. Northern Line scheme’s financiers did not abridge risk whether it’s related to technicality or human resource mismanagement. Though the investors and the sponsors for the West Coast Main Line WCML project were signifying banks and other institutions of finance, are taking releasing risk, further than the date of primary franchise (Dimant, Lindner, Liu, Ruiz, & Tejpal, 2011). Till 2012, investors and sponsors have assured income flow from this project. But the risk comes after the year 2012, and the question raised that will the revenue generated for rest of the life of the advantages is enough to fund the financial make-up and produce a profit on the speculation of latest trains?

It is the sponsors and investors who having created the train manufacturing possible, who take the acclaim risk of supplying trains for the Virgin franchise (Narasimhan, & Talluri, 2009). Due to systematic finance management of ALSTOM the company was able to generate profit on the speculation of latest trains. But the major types of risks that must be consider by ALSTOM are strategic risk, for instance a competitor will going to pose serious threat on the business, compliance risk for instance the introduction of new safety and health rules and regulations, financial risk for instance increased interest rates or non-payment by customers charges on business credit, last is operational risks for instance theft or breakdown of main instrument.

How risks for a business such as Alstom are assessed

Assessment of risk is not about developing a massive amount of paperwork, but rather about recognizing appropriate measures to manage and control risks in the organization. Organizations like ALSTOM is already taking serious steps to guard its business operations and employees, but the company cannot deny the importance of risk management because it will aid ALSTOM to determine whether the company have covered all it requires to (Burstein, Sohal, Zyngier, & Sohal, 2010).

Think about how ill health and accidents could occur and focus on the actual risks, those that are most probably and will cause the most damage. For several risks, other rules need specific control actions. The risk assessment can facilitate ALSTOM to recognize where they require at assured and definite risk and these specific control measures in more specification. These control actions do not have to be examining separately but can be measured as an expansion of overall risk assessment.

Analysis of railway safety is very complex topic in ALSTOM where safety is indomitable by various elements including error of human. Many assessment of railway safety method currently employed are relatively mature instruments. In many situations the executions of those tools might not give suitable and adequate results because of the lack of safety risk information or the high level of vagueness and ambiguity present in the available safety risk data.

For many businesses, particularly ALSTOM, simple five step approach including all elements of risk would work efficiently (Narasimhan, & Talluri, 2009).

Identifying Risk

At ALSTOM looking for those factors at workplace that have the possibility to cause any kind of harm, and identifying employees who may be exposed to the dangers.

Evaluating and Prioritizing Risks

Evaluating the probability and the severity of the potential harm and the existing risks and prioritize them according to their classification of significance (Van Detta, 2013).

Deciding on Preventive Action

Identifying the suitable actions to control or eliminate the risks.

Taking Action

With the help of prioritization plan implementation of protective and preventive measures to eliminate the risk factors

Monitoring and Evaluation

The evaluation should be monitored at regular gaps to make sure that it stays up to date.

Evaluate approaches to managing risk

In business Enterprise risk management contains the procedures and the methods employed by the organization to manage and control risk and confiscate opportunities regarding to the attainment of their goals and objectives. It provides a framework for risk management, which naturally engross recognizing specific conditions or events related to the opportunities and risks of the organization, evaluating them in terms of magnitude and likelihood of impact, considering a strategy of response and progress observation (Wallin, Larsson, Isaksson, & Larsson, 2011).

COSO considers this ERM, incorporated framework fill up this requirement, and suppose it will become broadly adapted by the firms and other companies and meant all interested parties and stake holders. ERM’s incorporated framework extends on inner control, giving a more serious and widespread focus on the broader focus o ERM.

As it is not meant to and does not restore the inner control framework, but rather integrate the inner control framework within it, organizations might determine to look to this ERM framework both to satisfy their inner control requires and to move toward a risk management procedure.

Advantage

It is meant to aid promote new dialogue between senior executives and boards as they associate to more fully extend their resiliency of organization to risk and abilities of management to recognize opportunities to take appropriate risks for strategic and competitive benefits (Wallin, Larsson, Isaksson, & Larsson, 2011).

Disadvantages

As organization struggle to establish ERM procedure into models of more mature business operation, management and will require being tolerant. ERM should be observed as a long-term cultural modification as immediate achievement is exceptional. Unfortunately, no off the shelf explanations for firms looking to commence an effective and efficient enterprise, broad approach to risk management and lapse.

Analyze what causes various risks for Alstom transport

The P&O Nedlloyd Southampton encountered very rough climate in the Western advances to the English Channel. There was no proof that the transformer moved in stow on both ship but on entrance at the construction site of the power station at purpose, the transformer was found harmed to the degree of over 2 pound per meter (Reuter, Foerstl, Hartmann, & Blome, 2010). It had to be revisit to works of ASTLOM for repairs. ASTLOM was agreed that the harm to the transformer had been due to some strange and extraordinary event in the transit’s course and made a declaration under their insurance doctrine, which was entirely on the terms of all risks.

The insurers then believed that the harm to transformer resulted from the intrinsic incapability of the transformer to endure and survive and the common incidents of carriage by sea from United Kingdom to Malaysia throughout the cold seasons. They hence rejected the claim on the basis that the harm was caused by the intrinsic vice and then carried these proceedings looking for a statement that they were not accountable to cover ALSTOM under the doctrine.

The judge identifies that it was the general basis among the parties that directs the reasons for the harm to the transformer was the aggressive movement of the craft, specifically the Eliane Trader, due to the wind and sea actions. The action of wind and wavers obviously were a predictable incident of any journey and is therefore a danger to which all goods passed through sea are significantly exposed (Reuter, Foerstl, Hartmann, & Blome, 2010). Goods caring for shipment should therefore be able of enduring the forces that they can normally be normal to meet in the course of the journey and these might differ highly relying on the time and route.

According to the ASTLOM the employment of non-ASTLOM parts and sections without thorough design of industry and standards of safety, had caused in the sequence of failures in paths exchange machines, an unusual kind of structure and had resulted in the operational issues, together with a derailment of freight cars. ALSTOM warned against the integrated elements across all control system of trains.

Changes in government policies are also effecting the operations of the company. Increase in tax rates, duties on custom, import exports pricing policies are posing threats on the speed of business operations.

Risk Assessment Template

Risk Area	Risk Identified	3- S	4- P	Risk Impact	Risk Severity
Non-ALSTOM Tools	The particular risks linked with employing non-ALSTOM instrument are that it would need increasing the power level of device	8	9	This is the high risk that can increase the probability for a single breakdown that could not save the system from noticing the trains on the track, which can cause accidents.	The risk is high because it is harmful for the system, and it can cause severe accidents in present and future as well.
Safety of Railways	In ALSTOM safety is indomitable by various elements including error of human.	10	8	In many situations the executions of these tools might not give suitable and adequate results because of the lack of safety risk information or the high level of vagueness and ambiguity present in the available safety risk data.	Again the severity is high because of human error and this can cost to the company a lot in future.

Identification and Assessment of the impact of risks: At ALSTOM looking for those factors at workplace that have the possibility to cause any kind of harm, and identifying employees who may be exposed to the dangers. It is very necessary to assess the impact of risk through evaluating the probability and the severity of the potential harm and the existing risks and prioritize them according to their classification of significance.

The Seriousness or Severity of the Risks: In October 2006 ALSTOM employee gave a verbal warning to another engineer of metro regarding the risks of combining instruments from various producers during a discussion. Illenberg said the particular risks linked with employing non-ALSTOM instrument are that it would need increasing the power level of device(Zavadskas, Turskis, & Tamošaitiene, 2010). This is the high risk that can increase the probability for a single breakdown that could not save the system from noticing the trains on the track, which can cause accidents.

Analyse the actions or strategies that Alstom can implement to manage the risks you have identified

All of the above risks can be controlled and managed. Well if talk about technical risks ALSTOM requires to consider few points that can develop the standards of technicality that can be very beneficial for the projects of railways, first of all the company should consider the importance of training its employees technically and conduct some sessions related to training sessions so that they can be able to technically equipped and skilled, and can be able to operate and construct the functions of the railway with the advanced and latest technologies (Zavadskas, Turskis, & Tamošaitiene, 2010). And for managing the economical and financial issues they require to have appropriate departments that can control, manage and reduce the economic and financial risks elements.

Analyse to what extent Alstom Transport, and other business, are vulnerable to major crisis

Due to extreme weather of UK, the temperatures become intolerable particularly in winters. But financiers are avoiding the risks of UK’s extreme environment and not having the feeling of urgency of Risk Management. And there is a lack of importance among firms that are being affected by the extreme weather. In the storm the winds most usually are strongest; even though they can arise at any time of year it can effects the projects which are underdeveloped and undersized. Other modes of transport are poorly effected by the UK’s extreme weather, it’s possibly the weather will be estimated extremely severe (Arena, Arnaboldi, & Azzone, 2010). The severe situations also stated that firms are going to consider extra claims in extraordinary situations.

Last but not the least heavy rain risks may affect the project. In winter there is a heavy rain in UK it all rely on the extent of rain that may be fail. Heavy rain can be the bigger hindrance in the completion of these rail projects. It becomes important for the financiers to take serious measures to handle these kinds of situations as all these factors are uncontrollable but we need to take those steps that can reduce the risks.

Control Risks involves technical, economic and financial, accidents, political and legal risks. All these factors can affect the railways project. While running the railway system technical standard are continuously coming across some problems. This might affect the railways projects. The distance need for the bridges cause more conflicts (Arena, Arnaboldi, & Azzone, 2010). Train accidents are increasing day by day due to miscommunication. The economic case for the ALSTOM railway comes out to be found on a supposition that there will be free movement of goods and people throughout the council area. The economic underpinnings for the line depend on continued economic growth and more trade between ALSTOM member states.

Critically evaluate in detail the approaches that Alstom Transport can use for crisis management and business continuity planning

First of all we need to find out those steps that can reduce above discussed risks so that the railways project can be completed. Investor should realize the risks of extreme environment that can affect the project. They should keep the gap between the railway tracks because in summers the tracks expand if there will be no proper gap between the tracks the train will be damage. Storms can increase the risks accidents (Renn, Klinke, & van Asselt, 2011). Because of storm and heavy snow fall the snow will cover the railway tracks and it will become difficult to drive over those tracks to avoid this kind of situation it is necessary to have air pumps in front of the train to blow the snow. Due to heavy rain in UK especially in winter season the aim to complete the project can be delayed. To handle this kind of situation there should have proper drainage system and canal system so that heavy rain cannot affect the ALSTOM railway project.

Control risks can be handling easily with having any kind of problem. Well if we will talk about technical risk we need to consider few steps that can increase the technical standards that can be beneficial for the railways project, first we should consider the urgency of training the workers technically and arrange some training sessions so that they can be technically skilled and equipped, and can be able to construct and operate the railway function with advance technologies. There are many rail projects which are on the ongoing stage and needs more financial investments to run the project smoothly. And for managing the financial and economical problems they need to have proper departments that can manage, reduces and control the financial and economic risks factors (Renn, Klinke, & van Asselt, 2011). Due to miscommunication lot of rail accidents have been occur to avoid this kind of problem they need to proper guide and train their workers how to communicate so that in future the risks of accidents can be reduce and almost vanished. Last is political and legal risk, for moving goods and passengers from railway is considering being free in future all over the council area but this needs a joint practices system for all states members to allow agree on a solitary point of entrance into the UK and have a similar tariff for the imported products.

Importance of Risk Management

Poor or lack of appropriate risk management strategies greatly affects the viability of any investment undertaken by anyone be it the government, a company or an individual business entity. In every investment that anyone undertakes, he or she must consider the issue of risk. Starting a business investment is taking a risk in itself. Time is what will tell if an investment will be successful or not. The future is uncertain and difficult to predict, due to this unavoidable fact, anyone starting a business venture has to come up with ways to mitigate risks involved in the business venture at hand.

Risk management can be defined as the process of identifying, analyzing and mitigating the uncertain state of any investment during the process of making decisions. Risk management comes to play whenever an investor tries to quantify the possibility or the potential for losses in an investment and then takes the necessary actions depending on his/her objectives in the investment and the nature of their investment’s risk tolerance potential (Satyajit, 36).

Poor risk management practices can cause severe consequences to any business entity be it a company or an individual business. A good example is the recession that began in 2008 which was caused by financial firms adopting loose credit risk management strategies. An investment without the consideration of risk management is like a vehicle travelling to no destination.

Research Findings

In my research of business risks and how to manage them, I came up with the different sources of business risks. A company cannot eliminate risk completely, but it can manage risk successfully. When it comes to financial issues, the management of a company has to make difficult decisions and choices pertaining the acceptable risk levels. If the risks are not acceptable and may yield losses then the management rules out the venture, but if the risk is acceptable and may yield high returns afterwards, they choose to undertake the venture at hand.

Successful risk management practice is based on the maintenance of a good balance between risks and rewards and ascertaining potential profits against potential threats in the operational stability of a business. Every company that operates any business venture must inevitably assume a certain level of risk so as to generate profits that will satisfy its stakeholders. Any business undertaking comes with some risks, the risks are diverse ranging from financial risks, risks from the market place and employee related risks (Satyajit, 56).

Risk management involves being aware of the potential risk and having an alternative plan to help deal with any problem that may arise in the course of an investment. A fitting illustration of this is when the management of a company realizes that the funds allocated to the company for a certain project will not be enough to complete the project. An appropriate risk management for the company will be having a backup financial plan that would fund the project and see its completion if the primary source of funding for the company is not willing to offer it additional credit.

The primary source of risk for a company is the market place that it operates in. It is very difficult to control the risks involved in the market and the best way to manage them is to directly deal with them in the best way possible. Among the major risks in the market is that the demand or preference of consumers may change over time, which would mean that the demand for a company’s product may decrease. Another risk can emerge when a competitor introduces a new product in the market that may be more desirable to the consumers than that of the company, or it may offer a competing product at a relatively low price and lure all the customers to consume its product. This poses to be a real danger to a company’s sales and it may adversely affect the operating profit of a company in a negative way.

Most risks in businesses emanate from financing and cash flow sectors. A company may fall short of finances when operating an expansion project or its customers may delay in paying their invoices in time creating delays which may disrupt the cash flow of a company. Also, the suppliers of a company may fail to supply or they may raise their prices all of a sudden with no prior notice creating cash flow problems to a company (Satyajit, 69).

Another major source of business risk is employee relations. Problems associated with labor pose a great impact to the production capabilities of a company. There are some personnel in the company that it cannot afford to lose and so it may incur increased wage costs so as to retain them. A company’s performance and profitability can dwindle due to the loss of important and essential personnel. This may happen when, for example, a key product designer moves to another competitive firm for a better pay.

A company may also have expanded its operations geographically to other countries; this means that it does business at international levels. Due to this, the company faces a variety of risks which include the risks of political problems. If a foreign country is politically unstable, it may bring a company’s operations to a standstill. Also, there may be changes in tariffs and the import/export laws may change thus affecting the company’s sales. The fluctuation of currency exchange rates may also pose a great risk to a company’s operations internationally.

The above mentioned risk sources affect every business entity and any investment that does not take into account the possibility of risk is suicidal. Poor risk management strategies have seen to the closure and collapse of many investments in the world. Just but to mention a few, about everyone knows about Hurricane Katrina and the destruction it brought to America. The government invests in protecting its citizens but in the case of the hurricane, poor risk management had been undertaken beforehand. Due to that, the hurricane caused unfathomable damage of property and loss of lives than anyone could comprehend. This were the results of poor risk management (Crouhy, 41). This is a catastrophic example of what poor risk management can cause.

Another good example of poor risk management strategy can be explained by Yahoo. It was the first company to offer mailing services to people using the internet in the world, due to this; it was charging people for the services it offered but not until the emergence of Google its greatest competitor. Google offered similar services but for free and so it attracted more customers than Yahoo. Yahoo did not see the risk of a competitor emerging and taking over its market share. Google is now the most used search engine in the world.

Knight Capital is another good example of a company that failed in its execution of a systematic risk management strategy in its undertaking. The company switched to a new software that it had not fully tested and entrusted all its undertaking to it without ascertaining the risks that may be involved. Upon putting its new software to the job, the company had recorded numerous erroneous trades in the New York Stock Exchange (NYSE). Even though the company immediately ceased its business transactions after realizing the problem, it had already committed itself to transactions worth billions of dollars. This resulted to an immediate pre-tax loss of more than 440 million US dollars. This financial company rushed for profits at the expense of risk management. If a financial company is pushing up technology and keeping its workforce on toes to extract the smallest value that is on offer in the ever competitive market, it should also make sure that its risk management systems keeps up with the same pace.

All companies in one way or another have faced risks and it all depends on how good their risk management skills are so as to pull trough. The following are the most common examples of risk management techniques that businesses employ so as to maneuver their way through risks.

Avoidance of risk- the easiest way that a business can manage risk is by avoiding it. This simply takes place when a business refuses to engage in any activity that it may perceive to carry any kind of risk. A good example of this is when a hospital avoids carrying out a procedure that involves a high degree of risk to the patient’s life. This method is simple in managing threats to a business entity but it also lowers the revenue potential of the business (Crouhy, 50).

Risk mitigation- some risks that businesses face is unavoidable and the only way to manage them is by trying to reduce their impact to the business. Risk mitigation is meant to lessen the negative consequence of a known risk to a business.

Transfer of risk- sometimes a business may choose to transfer risk away from itself. It does so by paying premiums to an insurance company in exchange for protection against any substantial loss. For example, a business may insure itself against fire so that in the event of any accidental fire that may cause financial loss, the insurance company will compensate it.

Risk acceptance- this is another way of managing risk in a business entity. A company may choose to accept a certain level of risk that may be brought about by a specific project if the expected profit is far much greater than the risk involved (Hopkin, 73).

Conclusion

I believe that risk management will become part of the management process of organizations in future. If the process of risk management had been put in place over the past two decades, a number of risks could not have taken place and more others could have been mitigated.

In the modern world, companies are beginning to see the advantages of protecting themselves against all types of potential risk exposures. By understanding risks, how severe and frequent they are; a company can now turn to viable solutions (Hopkin, 63).

From the research findings, it can be proven that poor or lack of appropriate risk management strategies greatly affects the viability of any kind of investment undertaken by anyone, be it the government, a company or an individual business entity. It is clearly evident that starting an investment without a clear plan on how to manage the risks involved will guarantee a very high chance of failure for the investment in question.

References

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Crouhy, Michel, Dan Galai, and Robert Mark. Risk Management. New York: McGraw-Hill, 2001. Print.

Das, Satyajit, and Satyajit Das. Risk Management. Singapore: John Wiley & Sons, 2006. Print.

Dimant, E., Lindner, S., Liu, J., Ruiz, T., & Tejpal, V. (2011). Bombardier Inc.-Case Study of a brand in an Emerging Country.

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Van Detta, J. A. (2013). Politics And Legal Regulation In The International Business Environment: An FDI Case Study Of Alstom, SA, In Israel. U. Miami Bus. L. Rev., 21, 1.

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Zavadskas, E. K., Turskis, Z., & Tamošaitiene, J. (2010). Risk assessment of construction projects. Journal of civil engineering and risk management, 16(1), 33-46.

The Adoption Rate of E-Mobile Banking is an Impact of Customers’ Acceptance of Information Technology in the Banking Sector

Chapter One: Background Of The Study

Research topic

Statement of the problem

Significance of the study

Objectives of the study

Primary objective

Chapter Two: Literature Review

Internet mobile banking

Technology acceptance model

Technology Acceptance Model and study of e-mobile banking

Conceptual framework

Conclusion

Chapter Three: Methodology

Research approach

Justification of the research methods

Questionnaire design

Data collection

Primary data collection

Secondary data collection

Face-to-face interviews Justifications

In-world interview justifications

Email interviews justifications

Sample and sampling size

Methods of data analysis

Weighted mean for the questionnaires

Least square method regression analysis

Validity, Reliability and Ethics

References

Tax Fairness and Tax Efficiency

Tax Base, Rate and Structure

Progressive Tax

Proportional Tax

Regressive Tax

Tax Equity

To What Extent And How The Stewardship Aspect Helps The Decision Usefulness Aspect In Financial Reporting

Advantages of Stewardship

References

Social Media Influence In Consumer Decision Making

Abstract

Research Overview

Problem Statement

Research Questions

Research Aims and Objectives

Rationale for Research

Research Methodology

Structure of Article

Conclusion

Risk Management – A Case Study of Alstom

Why the risk management department / function is an important function for a company

Assess how different departments/functions of a company such as ALSTOM can help the company manage its risks

How risks for a business such as Alstom are assessed

Identifying Risk

Evaluating and Prioritizing Risks

Deciding on Preventive Action

Taking Action

Monitoring and Evaluation

Evaluate approaches to managing risk

Advantage

Disadvantages

Analyze what causes various risks for Alstom transport

Risk Assessment Template

Analyse the actions or strategies that Alstom can implement to manage the risks you have identified

Analyse to what extent Alstom Transport, and other business, are vulnerable to major crisis

Critically evaluate in detail the approaches that Alstom Transport can use for crisis management and business continuity planning

Importance of Risk Management

Research Findings

Conclusion

References

Other Relevant Links