Merger Acquisitions and Value Creation

nuclear fusion Acquisitions and appreciate CreationLITERATURE REVIEW umteen slosheds utilise bodily nuclear fusions or encyclopaedisms as business strategy to accomplish variant objectives. For instance, businesses apply learnings to enter into sensitive considers and regions, bothocate capital or agnize technical expertise and knowledge. Therefore, compositions often utilize strategical coalitions and accomplishments in aim to bewilder or survive. However most of the poorly fenced acquisitions or nuclear fusion reaction resulted in disappointing public presentation and up to 50 pct are considered un prospered (see Louis, 1982). Further to a greater extent than, fit in to metalworker and Hershman (1997), it was held by Mercer Management Consulting that in eighties, 57 per centum of acquisitions were failed and the favored integrated acquisitions in 1990s were hardly 50 percent (p.39, cited in Smith and Hershman, 1997).To date, optical fusion or acqui sition is one of the most widely used instruments to enhance the growth of organizations. Systematic and sophisticated merged look helps companies to chthonicstand the pre and post-acquisitions consummation and achieving early(a) business objectives (as discussed in Singh Zollo, 2000). However, according to Sirower (1997), empirical academic belles-lettres does not provide any clear understanding, which facilitates the managers to maximise the success of acquisitions or spinal fusion programs. Therefore, understanding the source of set origination is critical to determine the causes of hardship or success in corporate conjugation or acquisitions.The writings examine presented in this section critically evaluates and analyze the earlier studies in order to solve the paradigm of uniting Acquisitions and Value Creation.Corporate Acquisitions and Their Re await ParadigmsDatta et al. (1992) suggested two discrete frameworks for acquisitions programmes to identify sources of shareholders wealth i.e. strategic charge and fiscal economics literature and both approaches follow different seek directions.The strategic management approach focussed on incidentors that fuddle been bidled by management. For instance, Datta et al (1992) suggested that in order to evaluate the post-acquisition surgical operation, this approach attempts to differentiate mingled with various variegation strategies and types of acquisitions or types of payment in acquisitions (i.e. stock vs. cash). In differentiate, fiscal economic question attempted to seek the unique hypothesis of market place for corporate control. This approach views the acquisition activities as a contest among different management teams in a competition to control corporate unattack fitteds as argued by Datta et al (1992). Therefore, this view suggests that the value creation through and through amalgamation or acquisitions is decided by capital market and its characteristics including its conf lict such(prenominal)(prenominal) as regulatory modification affecting a particular market (see Datta et al, 1992).However, these two methodologies are unable to explain the factors resulting in un prosperous corporate acquisitions. Thus, many an new(prenominal)(prenominal) academics such as Chatterjee (1992), attempted to identify critical variables of ineffective performance in acquisitions or merger activities by studying the relationship amongst post-acquisition performance and integration. While the initial imagination by Kitching (1967) that the key factor for a successful corporate acquisition is the post-acquisition integration issueress, it was recognised that acquisition or merger activities frame value not only from strategic factors complete through synergies (see Chatterjee, 1992), moreover in addition from the process itself, which leads to anticipated syner foreshortenic factors, as resound in capital market expectations (see Jemison and Sitkin, 1986). There fore, it is very central to understand the processes and factors resulting in corporate merger and acquisitions value creation before we critically evaluate the seek paradigm of value creation. Evolution of AcquisitionsIn order to improve the understanding of the research hypothesis, firstly this paper attempts to polish up trends of acquisitions and mergers followed by comments on value creation during these decimal points. For illustration purposes, I lead focus my attention to the US economy considering the fact that corporate sector is enriched with these activities and capital markets of united States are much piddle comparative to rest of the world. Following section presents the analysis of corporate mergers and acquisitions programmes dated jeopardize to1897.The First Wave, 1897-1904According to Gaughan (1999), this particular outcome is dominated by crosswise acquisitions resulting surge in stock markets and in conclusion creation of monopolies. Some of the to days giant conglomerates weed in first sway include General Electric, American Tobacco, Du Pont, Kodak and Standard cover (see Gaughan, 1999).First Merger Wave 1897 1904 category Number of Mergers1897 69 1898 303 1899 1208 1900 340 1901 423 1902 379 1903 142 1904 79 tabularise 3.1 First Merger Wave 1897 1904 Source Gaughan (1999), p.24Figure 3.1 First Merger Wave 1897 -1904 information Source Gaughan (1999), p.24The Second Wave, 1916-1929In business to first swing which is termed as merging for monopoly, the second wave is termed as merging for oligopoly. Gaughan (1999) pointed extract up that the reason of this terminology is the predominance of upright or horizontal integration of companies during the period of 1925 to end of the decennary. Moreover, Jemison and Stikin (1986) argued that the abundant capital availability stimulated by fortunate economic conditions resulted in prominent corporate mergers and integration. Further according to Gaughan (1999), the antitrust rightfulness force during this era was stricter comparative to the first merger wave, which bring into beingd more oligopolies and vertical integration and fewer monopolies in strain to earlier wave.The Third Wave, 1965-1969According to Gaughan (1986), the decade of 1960s discover controversial of the merger and acquisitions activities and termed as conglomerates. The companies such as ITT (International Telephone and Telegraph Corporation, USA) and Textron acquired numerous un colligate businesses to diversify and to reduce cyclic risks. Furthermore, during this period the conglomerates not only grew rapidly and profitably exactly the management were comprehend to be skilful as well, which facilitated the diversity in acquisitions and operations of the companies (see Judelson, 1969). For instance, Geneen (1984) documented that during this wave ITT built itself into a gamyly diversified conglomerate by getting various businesses such as insurance, food and car ren tals. Moreover, he found that executives of the go with used the advanced financial tools want detailed budgeting and tight financial controls to make these acquisitions successful and well-functioning. Following figure presents the overview of the activities during the periodScholars like Goold and Luchs (1993) argued that general management skills were one of the vital factors in successful acquisitions and mergers during this era, which in any case helped corporations to diversify in different businesses. Moreover, engaging in unrelated business by many companies was establish on the assumptions that different businesses would not require dis interchangeable managerial skills (see Goold and Luchs, 1993).However, in late 1960s companies start facing performance hassles and the share price of these conglomerates such as Textron fell almost 50% comparative to 9% hold in Dow Jones Industrial average (see Bonge and Coleman, 1972). Furthermore, in early 1970s companies began to s crew ineffectual growth like General Electric sales increased by 40% from 1965 to 1970 simply its profit actually dropped (see Goold and Quinn, 1990).According to Gaughan (1999), the era has been ended when ITT torture off in three different companies. It is perceived that most of the mergers during the period failed and companies jettisoned their under-performing and unrelated business to face the agonistic environment (see Sikora, 1995). In addition, Sadlter et al (1997) observed that the combined value of businesses separated from their parent firms momentously increased to more than $100 cardinal in 1996 comparative to 1993 figure of $17.5 billion.Acquisitions in the 1970sThe merger and acquisition activities reducingd significantly in 1970s, which can be seen in the hobby figure.Figure 3.3 Merger Acquisitions in 1970 -1980 Source Gaughan (1999), p.36As a impression of problem in merger and acquisitions activities experienced by conglomerates, the senior executives rea lised that only general management skills are not sufficient for a successful proceedings (see Chandler, 1962). Therefore, they focused their attentions toward the yen term political partys objectives instead of operate of strategic business units (see Christensen, 1965).Andrews (1971) highlighted that this change introduced the apprehension of corporate strategy for firms and most CEOs of the organizations started accepting that strategy is their unique and primary parturiency. However, corporate strategy poses some practical problem and did not help executives in deciding well-nigh allocation of resources among businesses especially when each(prenominal) investment proposal has a different strategy (see Goold and Luchs, 1993). Moreover, Bower (1970) argued that investment decision should be part of overall business strategy rather than misinform on project to project basis.In 1970s these revolutions in corporate pay lead to the raisement of portfolio plan by Boston Co nsulting Group (1970). Soon, portfolio planning became famous in corporate sectors and according to the survey of Haspeslagh (1982) by 1979, 45 percent of the Fortune 500 companies were using portfolio planning in some form.However, with the passing play of time problems related to portfolio planning emerged. As Goolds and Luchs (1993), argued that the corporate manager with long experience of particular sector of the industry found extremely difficult to manage their new-fashionedly acquired businesses in vibrant and unfamiliar sectors. Consequently, this affected the performance of new acquisitions or mergers of the firms. In search of solution to this problem Hamermesh and gaberdine (1984) found that politics was a vital factor in explain business performance of mergers or acquisitions but many organizations incorrectly addressed the approach.The Fourth Wave, 1981-1989The decade of 1980s seen another merger wave in business world. In this period, merger deals were frequent an d larger and total value of mergers were approximately $.13 trillion in US (see Sikora, 1995).This was influenced by service sector and significant support from investors lenders and globalisation facilitated companies to finance the buyout deals (see Sikora, 1995). Moreover, the reasons of the fourth merger wave were excess capacity (see Jensen, 1993), agency problems (see Jensen, 1988), market harm (see Shleifer Vishny, 1997), and tax and antitrust law changes (see Bhagat et al, 1990).It seems that during 80s, diversified firms do not arouse capacity to take values therefore companies start re-thinking about role of corporate management as well as appropriate strategies for diversified firms. As highlighted by Goold and Luchs (1993) highlighted that in order to survive firms cut back hails and exceed d induce their staffs but these were not adequate to create value. Furthermore, they argued that diversification strategies failed to create value for many businesses. Neverth eless, these failures compelled senior managers to transform their primary goals to creating shareholders values instead of twist huge businesses (see Porter, 1987).Moreover, management of the companies started evaluating corporate performance like stock market by using economic indicator instead of accounting measures and take whatsoever steps were inborn to enhance the value of their firms stock (see Goold and Luchs, 1993). However, value ground planning establish on financial tools of Return on Equity (ROE), intimate rate of return and discounted cash feed in provided different views to managers about competitive emoluments and stock prices (see Rappaport, 1986). Further, Goold and Luchs (1993) pointed out that a high stock price could be a reward for creating value.However, during the era of 80s firms that did not diversify into unrelated businesses and specialize into their aggregate industry were able to create value and turn out to be successful companies (see Peter and Waterman 1982). Mintzberg and Lampel (1999) also support this notion by present that focused corporations which know their customers, have deep knowledge and understand their missions were better able to create value in contrast to companies that applied the diversification concept of value creation.In summary of the merger and acquisitions activities in 1960s and 1980s, it can be assert that conglomeration and diversification were the dominant allele trends in 1960s contrast to specialization and consolidations phenomena of 1980s. However, empirical cause on value creation tends to suggest that significant merger and acquisitions of 60s reversed subsequently and did not lead to profitability. According to Shleifer and Vishny (1994) many of the conglomerates created in 1960s were destroyed in 1980s, which provides the assure of failure in notion of merger acquisitions and value creation that was not expected in 1960s. The authorized Wave, 1990-PresentAccording to Gaughan (1 999), in contrast to 1960s decade of conglomerates and 1980s period of Leveraged Buyouts (LBO), the dominant deals of 90s were designed with a view to fit strategically among merging firms. Moreover, the forces so-and-so the merger and acquisitions activities were different than earlier periods and corporate sector seen some of mega-deals during that period. For instance in 1996, the top 100 deals of merger and acquisitions were worth more than $1 billion or approximately 53.5% of total transactions (see Sikora, 1997).Merger Acquisitions in 1990sYear Number of Deals Value ($ Billions) 1980 1558 34.8 1981 2328 69.5 1982 2299 60.7 1983 2395 52.7 1984 3176 126.1 1985 3490 146.1 1986 2523 220.8 1987 2517 196.5 1988 3011 291.3 1989 3825 325.1 1990 4312 206.8 1991 3580 143.1 1992 3752 125.3 1993 4148 177.3 1994 4962 276.5 1995 6209 375.0 1996 6828 550.7 Table 3.2 Merger and Acquisitions in 1990s Data Source (www.mergerstat.com)The era of 90s was said to the decade of C onsolidation which means combination of operating and management resources amongst two companies as well as their stocks, assets and liabilities (see Lipin, 1997).Furthermore, in 1990s, stable economic environment, relax antitrust laws, stock markets favourable conditions and low cost of capital were the catalyst of merger and acquisition trends. However, still many firms failed to create shareholder value and according to study by Mercer Management Consulting Inc. (1997) 48 percent of mergers failed to generate shareholder value in 90s comparative to 57 percent failure of 1980s (p.39, cited in Smith and Hershman, 1997). Nonetheless, the firms in 90s believed that larger pools of assets are essential either to survive or to grow but the question clay that how to discover ways to create value for portfolio of firms businesses? (see Goold and Luchas, 1993). To resolve this anomaly, three possible explanations have been identifiedFirstly, as placen by Porter (1985) that diversificat ion should be contain to companies which have synergy potential and without synergy a diversified business is null more than mutual fund. He also suggested that synergies can be succeed when the portfolio of businesses create values more than sum of its individual components. Besides, the notion of synergy should be ground on economies of scale and cost saving strategies (see Porter, 1985).However, in dress it has been found by studies such as Chatterjee (1992) that gaining synergy is not an easy task and most acquisitions and merger gains arise from either disposals of assets or from restructuring rather than synergistic benefits. It seems that synergy was a primary rationale for merger and acquisitions in the era but remains anomaly from value creation prospective as discussed by Goold and Luchs (1993).Secondly, the corporate strategy of the firms should focus on exploiting core competencies. For instance, Prahalad and Hamel (1989) suggested that the corporate portfolio shoul d be based on technological competencies instead of portfolio of businesses. Similarly, Itami (1989) argued that invisible assets like reputation, brand call or customers list are the most valuable source for sustaining competitive advantage and could be used to create value by exploiting competitive opportunities. Furthermore, other competencies such as technology or managerial expertise can also be used to enhance the performance of business portfolio (see Haspeslagh and Jemison, 1991).However, this approach also has some drawbacks for example, Goold and Luchs, pointed out that it can be difficult to assess the contribution of investment in building the competencies of a business especially when the investment is in new business area.Thirdly, the best way to create value via successful diversification is to build a portfolio of businesses, which fits with the managers logic and their management style (see Parahalad and Bettis, 1986). If conglomerates diversification is based on b usiness with quasi(prenominal) strategic logic then its possible to add value to business by adopting a common approach crossways all the business units. For instance Goold and Luchs (1993) exposed that sharing the skills or activities across organization can help corporate management to realize synergies. Moreover, Goold and Campbell (1987) found the evidence that top executives also find it difficult to deal with a wide set about of styles and approaches.Review of Major Areas in MAThis section presents the literature review of major areas focused by academics in merger and acquisition surface area. Consequently following five sub-sections have been established to review the academic literature surgical process Success in Merger and Acquisitions race in Merger and Acquisitions International Prospects of Merger and Acquisitions Best Practices in Merger and Acquisitions Valuation Issues in Merger and AcquisitionsThe meter of success in merger and acquisition activities is main ly through quantitative research and is subject to various studies such as Gosh (2001) Healy et al (1992), in the theatre of finance or economics and also other directly related fields.People are normally unobserved in merger and acquisitions, however blanket(a) studies like Bliss and Rosen (2001), addressed issues from ethical and organizational learning to more in depth personal perspective.Similarly, increasing trend of international trade and globalization attracted the attention of many researchers, for instance Rossi and Volpin (2004).The valuation of the companies is often overlooking in the field of merger and acquisitions. However, it is a very critical part of acquisition process and could be very helpful not only in the pre-acquisition stage but also during the acquisition process as well as at post-acquisition stage (see Becher, 2001).Finally, the best practices research in the field of merger and acquisition is ordinarily done in the form of case studies but the qual ity and vividness of these studies vary widely (see label and Mirvis, 2001).Performance and Success in MAAs body politicd before companies often engaged in the series of acquisitions and merger activities and early studies such as Barney (1988), tend to show that related acquisitions performed better than other acquisition transactions. However, relatedness itself does not create value for acquiring companies but synergy is the vital factor that helps companies to generate abnormal returns from acquisition programs. For example, Barney (1988) showed that synergistic cash flow stemming from relatedness, which is unique and private creates abnormal returns for shareholders of acquiring firm.However, later studies such as Hayward (2002), suggested that different level of relatedness results in various degree of success and moderately similar companies tend to be more successful than the companies that are highly similar or dissimilar in business or size to one another. He further re ason that if a firm experienced small losses in past acquisition in contrast to high losses or high gains then it has better chances of success in prospective acquisition. In addition, the timing of acquisition plays a vital role in success of the transaction and should not be too close or far-away from central acquisition (see Hayward, 2002). Similarly, Brown and Eisenhard (1997) argued that companies benefit differently depending upon their experimenting and timing of the merger and acquisition activities.Moreover, when the acquiring company has some inimitable resources then it can create value by utilizing these resources in intentions company as suggested by Capron and Pistre (2000). However, they also added that if the source of synergies is recognized in target firm than market associate expected gains to target firm due to the competition among potential bidders. Consequently, this competition raises the price of target firm and would create value for shareholders of the t arget firm but also lead to under performance of acquirer. Nevertheless, performance success through merger and acquisitions is still controversial among academics as pointed out by Cording et al (2002).To resolve the issue Chatterjee (1992) measured the cumulative average of abnormal returns (CAAR) during the period of 11 months before the tender offer until 60 months after the tender offer. After studying the sample of 577 tender offers between the periods of 1963 to 1986 he suggested that net gain arises for the economy from these transactions but it does not inevitably create gains for everyone involved in merger and acquisition. More specifically, CAAR after 60 months were observed to be negative for unsuccessful bidders, zero for successful bidder and positive for target company. Furthermore, Chatterjee (1992) found much higher positive CAAR for re social organizationd target companies in contrast to non-restructured targets.Certain studies view the merger and acquisition tr ansactions from a different prospective. For example, Golbe and White (1993) proved in their study that macroeconomic environments influence the merger activities and the publication of merger transactions increases in time of economic expansion comparative to decrease in programme at the time of economic down turn.Similarly, Amburgey and miner (1992) studied the effects of companies momentum on merger activities and suggested that managers follow the past patterns.The academics such as Capron (1999), also attempted to assess the performance of the merger and acquisition activities by conducting the survey of prime stakeholders in merger activities. He further concluded that the available financial data is too gross to allow the legal separation between the types of pure value-creating mechanism. Moreover, he also argued that more often the objective of the companies is to withstand the top management team of the targets firm, whether its a conglomerate or related merger.Intern ational Prospects of MAThe emergence of globalisation and increasing trends in international trade fasten the flesh of local as well as cross-border acquisitions and merger activities. For instance, the cross-border acquisition activities in United States increased to 19% in 1999 from 6% in 1985 (see Seth et al, 2001).According to the study of Seth et al (2001), the evidence suggests that there are three motives for cross-border acquisitions such as synergy seeking, managerilism and managerial hubris. Moreover, the research tends to show that there is a positive relationship between the level of value creation and reverse intragroupization, asset sharing, financial sharing and market seeking ( as discussed by Seth et al, 2001).In addition, there seems to be association between value creation and authorities system of bidders country. For instance, Seth et al (2001) argued that statement companies from group-oriented governance system like Japan and Germany appear to be engaged i n acquisitions and merger activities with higher level of value creation in contrast to bidding firms from market oriented governance system such as United Kingdom.Further enhancement of research in the area of cross-border merger and acquisition suggests that experience in merger and acquisition activities can be utilized to create value in another country. For example, Gugler et al (2003) compared the data of 15 years and proved that post merger patterns are similar across different countries. Moreover, their evidence also signifies that there are no major differences between domestic and cross-border mergers as well as manufacturing and service sectors around the world.With the passage of time and in the era of globalization the merger and acquisitions activities are increasing especially in emerging economies. The multinational companies often use the tools of acquisition and mergers to penetrate in new markets and economies particularly in emerging countries such as Central an d Eastern atomic number 63 (see Milman, 1999).However, in many countries MNC mergers and acquisitions are seen as threats by government agencies, privatized companies and state enterprises. Therefore, in order to develop a successful alliance the acquisition or merger program should be designed in such as way that creates value for companies as well as the host-country governments (see Rondinelli and Black, 2000).Lastly, yet the number of merger and acquisitions across border appears to be increasing but it seems difficult to desegregate and manage the successful processes. Hence, Inkpen et al (2000) suggested that the companies should critically evaluate the areas of decision making, communication, networking and socialisation, communication and the structure of authority and responsibility before involving in the process of MA. People in MAOnly looking to financial aspects might limit the understanding about the question why MA activities are so widely used by companies as a tool to grow. Hence, another area focused by academics, such as Karitzki and Brink (2003), is related to merger and acquisitions and large number.Generally, one of the motives for merger activities is to follow the cost-cutting strategies including synergy and targets customers. Often, the employees are laid off in the process of merger and acquisitions and consequently this creates new but conflicting networks of relationships in new companies as suggested by Vermeulen and Barkema (2001). Thus, it affects the success and results in under-performance of merger and acquisition programmes. Therefore, considering the affects of MA on employee or managers of the potential target firms are of similar importance as financial issues.Similarly, the research in the area of executive compensation pointed out that prior to acquisition or merger, management of acquiring company receive significant higher packages comparative to the executives of target firms (see Lynch and Perry, 2002). Hence, thes e issues can lead to turnover and morale issues that ultimately affect the success of anticipated integration from MA. Furthermore, in extreme circumstances, issues like these emerging from dissimilarities create hurdles to achieve the objective of the original merger and acquisitions. Thus, harmonize the differences is one of the major issues faced by the combined company to create value (as discussed in Lynch and Perry, 2002).Moreover, successful merger or acquisition depends upon the flock in both target and acquiring firms. The attitude and opinion of the employees regarding acquisition or merger can change over the time. Schweiger and DeNisi (1991) conducted the survey of employees and compared the attitudes in pre-acquisition and post-acquisition period. Their results show that attitudes of the employees three months after the announcement of merger changed significantly and turn towards persistent negative consequences (see Schweiger and DeNisi, 1991).Likewise, Covin et al (1996) studied the attitude of 2845 employees from a large manufacturing concern in post merger period. The results show significant differences between the target firm and acquiring companys employees in satisfaction with merger. The employees of acquired company faced high level of dissatisfaction and ultimately felt more latent hostility due to changes introduced after merger. In addition, this stress is aggravated due to the direct competition between target firm and acquiring company. Furthermore, Covin et al (1996) pointed out that factors such as loss of power and status, changes in salary or benefits and lack of managerial direction result in high level of stress and dissatisfaction from merger activities.Hence, it has been suggested that in addition to financial aspects these types of issues should not be overlooked in order to create value and to develop a successful merger and acquisition programme (see Karitzki and Brink, 2003).Best Practices in MAIt is often suggested that acquisitions are predominantly unsuccessful and numerous studies like Aiello and Watkins (2000), confirmed this fact. However, more often than not the conditions and environment is relevant before judging the results. Furthermore, there is lack of research in answering the question what would happen if both the companies continued in their own separate way. Therefore, estimating the successfulness of merger or acquisition is a catchy anomaly (as discussed in Chaudhuri and Tabrizi, 1999).Moreover, the unsuccessful MA activities are more highlighted in contrast to successful programmes. Ed Libby, the chairman and CEO of AllState stated that when MAs fails they draw more notice despite the fact that lot of other projects fails in business but no one can see them because they remain within internal walls of the companies (cited in Cary, 2000).As stated earlier, there is no one strategy that fits all kinds of merger and acquisition activities, however systematic approaches such a s suggested by Jan Leschly, can help companies to develop a successful plan. Jan Leschly, retired CEO of SmithKline Beecham suggested that they put their people on the boards of different companies by investing small amounts. Once the companies get going then they decide whether to buy it completely or not (cited in Cary, 2000).Likewise, understanding the various components of merger process is very vital to develop a successful merger or acquisition deal. However, it is very hard to itemise the components especially when these are integrated with each other. According to Marks and Mirvis (2001), the successfulness of merger and acquisition is highly depended on following factorsAcquisition Plan capital punishment of this plan Post-acquisition cooperation between firms after acquisitionMoreover, they collected a number of factors that were mentioned in previous research such as strategic objective, clear selection, search and selection process etc. They also argued that pre-acqui sition planning is very important for successful merger and acquisition plan and more prepared the people will more synergies in a combination will result (see Marks and Mirvis, 2001).Similarly, Aiello and Watkins (2000) suggested that every MA deal pass through following five stages concealment potential deal Reaching initial agreement ConduMerger Acquisitions and Value CreationMerger Acquisitions and Value CreationLITERATURE REVIEWMany firms used corporate mergers or acquisitions as business strategy to accomplish various objectives. For instance, businesses used acquisitions to enter into new markets and regions, allocate capital or gain technical expertise and knowledge. Therefore, organizations often utilize strategic mergers and acquisitions in order to grow or survive. However most of the poorly managed acquisitions or merger resulted in disappointing performance and up to 50 percent are considered unsuccessful (see Louis, 1982). Furthermore, according to Smith and Hershma n (1997), it was held by Mercer Management Consulting that in 1980s, 57 percent of acquisitions were failed and the successful corporate acquisitions in 1990s were hardly 50 percent (p.39, cited in Smith and Hershman, 1997).To date, merger or acquisition is one of the most widely used instruments to enhance the growth of organizations. Systematic and sophisticated corporate research helps companies to understand the pre and post-acquisitions performance and achieving other business objectives (as discussed in Singh Zollo, 2000). However, according to Sirower (1997), empirical academic literature does not provide any clear understanding, which facilitates the managers to maximise the success of acquisitions or merger programs. Therefore, understanding the source of value creation is critical to determine the causes of failure or success in corporate merger or acquisitions.The literature review presented in this section critically evaluates and analyze the earlier studies in order to solve the paradigm of Merger Acquisitions and Value Creation.Corporate Acquisitions and Their Research ParadigmsDatta et al. (1992) suggested two distinct frameworks for acquisitions programmes to identify sources of shareholders wealth i.e. strategic management and financial economics literature and both approaches follow different research directions.The strategic management approach focused on factors that have been controlled by management. For instance, Datta et al (1992) suggested that in order to assess the post-acquisition performance, this approach attempts to differentiate between various diversification strategies and types of acquisitions or types of payment in acquisitions (i.e. stock vs. cash). In contrast, financial economic research attempted to prove the unique hypothesis of market for corporate control. This approach views the acquisition activities as a contest among different management teams in a competition to control corporate firms as argued by Datta et al (1992). Therefore, this view suggests that the value creation through merger or acquisitions is decided by capital market and its characteristics including its competitiveness such as regulatory modification affecting a particular market (see Datta et al, 1992).However, these two methodologies are unable to explain the factors resulting in unsuccessful corporate acquisitions. Thus, many academics such as Chatterjee (1992), attempted to identify critical variables of ineffective performance in acquisitions or merger activities by studying the relationship between post-acquisition performance and integration. While the initial notion by Kitching (1967) that the key factor for a successful corporate acquisition is the post-acquisition integration process, it was recognised that acquisition or merger activities create value not only from strategic factors realised through synergies (see Chatterjee, 1992), but also from the process itself, which leads to anticipated synergistic factors, as reflect in capital market expectations (see Jemison and Sitkin, 1986). Therefore, it is very important to understand the processes and factors resulting in corporate merger and acquisitions value creation before we critically evaluate the research paradigm of value creation. Evolution of AcquisitionsIn order to improve the understanding of the research hypothesis, firstly this paper attempts to review trends of acquisitions and mergers followed by comments on value creation during these periods. For illustration purposes, I will focus my attention to the US economy considering the fact that corporate sector is enriched with these activities and capital markets of United States are much developed comparative to rest of the world. Following section presents the analysis of corporate mergers and acquisitions programmes dated back to1897.The First Wave, 1897-1904According to Gaughan (1999), this particular period is dominated by horizontal acquisitions resulting surge in stock market s and ultimately creation of monopolies. Some of the todays giant conglomerates created in first wave include General Electric, American Tobacco, Du Pont, Kodak and Standard Oil (see Gaughan, 1999).First Merger Wave 1897 1904Year Number of Mergers1897 69 1898 303 1899 1208 1900 340 1901 423 1902 379 1903 142 1904 79 Table 3.1 First Merger Wave 1897 1904 Source Gaughan (1999), p.24Figure 3.1 First Merger Wave 1897 -1904 Data Source Gaughan (1999), p.24The Second Wave, 1916-1929In contrast to first wave which is termed as merging for monopoly, the second wave is termed as merging for oligopoly. Gaughan (1999) pointed out that the reason of this terminology is the predominance of vertical or horizontal integration of companies during the period of 1925 to end of the decade. Moreover, Jemison and Stikin (1986) argued that the abundant capital availability stimulated by favourable economic conditions resulted in prominent corporate mergers and integration. Further according to Gaughan (1999), the antitrust law force during this era was stricter comparative to the first merger wave, which created more oligopolies and vertical integration and fewer monopolies in contrast to earlier wave.The Third Wave, 1965-1969According to Gaughan (1986), the decade of 1960s observed controversial of the merger and acquisitions activities and termed as conglomerates. The companies such as ITT (International Telephone and Telegraph Corporation, USA) and Textron acquired numerous unrelated businesses to diversify and to reduce cyclic risks. Furthermore, during this period the conglomerates not only grew rapidly and profitably but the management were perceived to be skilful as well, which facilitated the diversity in acquisitions and operations of the companies (see Judelson, 1969). For instance, Geneen (1984) documented that during this wave ITT built itself into a highly diversified conglomerate by acquiring various businesses such as insurance, food and car rentals. Moreov er, he found that executives of the company used the advanced financial tools like detailed budgeting and tight financial controls to make these acquisitions successful and well-functioning. Following figure presents the overview of the activities during the periodScholars like Goold and Luchs (1993) argued that general management skills were one of the vital factors in successful acquisitions and mergers during this era, which also helped corporations to diversify in different businesses. Moreover, engaging in unrelated business by many companies was based on the assumptions that different businesses would not require dissimilar managerial skills (see Goold and Luchs, 1993).However, in late 1960s companies start facing performance problems and the share price of these conglomerates such as Textron fell almost 50% comparative to 9% drop in Dow Jones Industrial average (see Bonge and Coleman, 1972). Furthermore, in early 1970s companies began to experience profitless growth like Gene ral Electric sales increased by 40% from 1965 to 1970 but its profit actually dropped (see Goold and Quinn, 1990).According to Gaughan (1999), the era has been ended when ITT spin off in three different companies. It is perceived that most of the mergers during the period failed and companies jettisoned their under-performing and unrelated business to face the competitive environment (see Sikora, 1995). In addition, Sadlter et al (1997) observed that the combined value of businesses separated from their parent firms significantly increased to more than $100 billion in 1996 comparative to 1993 figure of $17.5 billion.Acquisitions in the 1970sThe merger and acquisition activities decreased significantly in 1970s, which can be seen in the following figure.Figure 3.3 Merger Acquisitions in 1970 -1980 Source Gaughan (1999), p.36As a consequence of problem in merger and acquisitions activities experienced by conglomerates, the senior executives realised that only general management skill s are not sufficient for a successful transactions (see Chandler, 1962). Therefore, they focused their attentions toward the long term companys objectives instead of operating of strategic business units (see Christensen, 1965).Andrews (1971) highlighted that this change introduced the concept of corporate strategy for firms and most CEOs of the organizations started accepting that strategy is their unique and primary task. However, corporate strategy poses some practical problem and did not help executives in deciding about allocation of resources among businesses especially when each investment proposal has a different strategy (see Goold and Luchs, 1993). Moreover, Bower (1970) argued that investment decision should be part of overall business strategy rather than prevaricate on project to project basis.In 1970s these revolutions in corporate finance lead to the development of portfolio planning by Boston Consulting Group (1970). Soon, portfolio planning became famous in corporat e sectors and according to the survey of Haspeslagh (1982) by 1979, 45 percent of the Fortune 500 companies were using portfolio planning in some form.However, with the passage of time problems related to portfolio planning emerged. As Goolds and Luchs (1993), argued that the corporate manager with long experience of particular sector of the industry found extremely difficult to manage their newly acquired businesses in vibrant and unfamiliar sectors. Consequently, this affected the performance of new acquisitions or mergers of the firms. In search of solution to this problem Hamermesh and White (1984) found that administration was a vital factor in explain business performance of mergers or acquisitions but many organizations incorrectly addressed the approach.The Fourth Wave, 1981-1989The decade of 1980s seen another merger wave in business world. In this period, merger deals were frequent and larger and total value of mergers were approximately $.13 trillion in US (see Sikora, 19 95).This was influenced by service sector and significant support from investors lenders and globalization facilitated companies to finance the buyout deals (see Sikora, 1995). Moreover, the reasons of the fourth merger wave were excess capacity (see Jensen, 1993), agency problems (see Jensen, 1988), market failure (see Shleifer Vishny, 1997), and tax and antitrust law changes (see Bhagat et al, 1990).It seems that during 80s, diversified firms do not have capacity to create values therefore companies start re-thinking about role of corporate management as well as appropriate strategies for diversified firms. As highlighted by Goold and Luchs (1993) highlighted that in order to survive firms cut back costs and scale down their staffs but these were not adequate to create value. Furthermore, they argued that diversification strategies failed to create value for many businesses. Nevertheless, these failures compelled senior managers to transform their primary goals to creating shareh olders values instead of building huge businesses (see Porter, 1987).Moreover, management of the companies started evaluating corporate performance like stock market by using economic indicator instead of accounting measures and take whatever steps were essential to enhance the value of their firms stock (see Goold and Luchs, 1993). However, value based planning based on financial tools of Return on Equity (ROE), internal rate of return and discounted cash flow provided different views to managers about competitive advantages and stock prices (see Rappaport, 1986). Further, Goold and Luchs (1993) pointed out that a higher stock price could be a reward for creating value.However, during the era of 80s firms that did not diversify into unrelated businesses and specialize into their core industry were able to create value and turn out to be successful companies (see Peter and Waterman 1982). Mintzberg and Lampel (1999) also support this notion by arguing that focused corporations which know their customers, have deep knowledge and understand their missions were better able to create value in contrast to companies that applied the diversification concept of value creation.In summary of the merger and acquisitions activities in 1960s and 1980s, it can be assert that conglomeration and diversification were the dominant trends in 1960s contrast to specialization and consolidations phenomena of 1980s. However, empirical evidence on value creation tends to suggest that significant merger and acquisitions of 60s reversed subsequently and did not lead to profitability. According to Shleifer and Vishny (1994) many of the conglomerates created in 1960s were destroyed in 1980s, which provides the evidence of failure in notion of merger acquisitions and value creation that was not expected in 1960s. The Current Wave, 1990-PresentAccording to Gaughan (1999), in contrast to 1960s decade of conglomerates and 1980s period of Leveraged Buyouts (LBO), the dominant deals of 90s we re designed with a view to fit strategically among merging firms. Moreover, the forces behind the merger and acquisitions activities were different than earlier periods and corporate sector seen some of mega-deals during that period. For instance in 1996, the top 100 deals of merger and acquisitions were worth more than $1 billion or approximately 53.5% of total transactions (see Sikora, 1997).Merger Acquisitions in 1990sYear Number of Deals Value ($ Billions) 1980 1558 34.8 1981 2328 69.5 1982 2299 60.7 1983 2395 52.7 1984 3176 126.1 1985 3490 146.1 1986 2523 220.8 1987 2517 196.5 1988 3011 291.3 1989 3825 325.1 1990 4312 206.8 1991 3580 143.1 1992 3752 125.3 1993 4148 177.3 1994 4962 276.5 1995 6209 375.0 1996 6828 550.7 Table 3.2 Merger and Acquisitions in 1990s Data Source (www.mergerstat.com)The era of 90s was said to the decade of Consolidation which means combination of operating and management resources between two companies as well as their stocks, assets and liabilities (see Lipin, 1997).Furthermore, in 1990s, stable economic environment, relax antitrust laws, stock markets favourable conditions and low cost of capital were the catalyst of merger and acquisition trends. However, still many firms failed to create shareholder value and according to study by Mercer Management Consulting Inc. (1997) 48 percent of mergers failed to generate shareholder value in 90s comparative to 57 percent failure of 1980s (p.39, cited in Smith and Hershman, 1997). Nonetheless, the firms in 90s believed that larger pools of assets are essential either to survive or to grow but the question remains that how to discover ways to create value for portfolio of firms businesses? (see Goold and Luchas, 1993). To resolve this anomaly, three possible explanations have been identifiedFirstly, as shown by Porter (1985) that diversification should be limited to companies which have synergy potential and without synergy a diversified business is nothing more than m utual fund. He also suggested that synergies can be attained when the portfolio of businesses create values more than sum of its individual components. Besides, the notion of synergy should be based on economies of scale and cost saving strategies (see Porter, 1985).However, in practice it has been found by studies such as Chatterjee (1992) that gaining synergy is not an easy task and most acquisitions and merger gains arise from either disposals of assets or from restructuring rather than synergistic benefits. It seems that synergy was a primary rationale for merger and acquisitions in the era but remains anomaly from value creation prospective as discussed by Goold and Luchs (1993).Secondly, the corporate strategy of the firms should focus on exploiting core competencies. For instance, Prahalad and Hamel (1989) suggested that the corporate portfolio should be based on technological competencies instead of portfolio of businesses. Similarly, Itami (1989) argued that invisible asset s like reputation, brand names or customers list are the most valuable source for sustaining competitive advantage and could be used to create value by exploiting competitive opportunities. Furthermore, other competencies such as technology or managerial expertise can also be used to enhance the performance of business portfolio (see Haspeslagh and Jemison, 1991).However, this approach also has some drawbacks for example, Goold and Luchs, pointed out that it can be difficult to assess the contribution of investment in building the competencies of a business especially when the investment is in new business area.Thirdly, the best way to create value via successful diversification is to build a portfolio of businesses, which fits with the managers logic and their management style (see Parahalad and Bettis, 1986). If conglomerates diversification is based on business with similar strategic logic then its possible to add value to business by adopting a common approach across all the bus iness units. For instance Goold and Luchs (1993) exposed that sharing the skills or activities across organization can help corporate management to realize synergies. Moreover, Goold and Campbell (1987) found the evidence that top executives also find it difficult to deal with a wide range of styles and approaches.Review of Major Areas in MAThis section presents the literature review of major areas focused by academics in merger and acquisition field. Consequently following five sub-sections have been established to review the academic literaturePerformance Success in Merger and Acquisitions People in Merger and Acquisitions International Prospects of Merger and Acquisitions Best Practices in Merger and Acquisitions Valuation Issues in Merger and AcquisitionsThe measurement of success in merger and acquisition activities is mainly through quantitative research and is subject to various studies such as Gosh (2001) Healy et al (1992), in the field of finance or economics and also oth er directly related fields.People are normally unobserved in merger and acquisitions, however extensive studies like Bliss and Rosen (2001), addressed issues from ethical and organizational learning to more in depth personal perspective.Similarly, increasing trend of international trade and globalization attracted the attention of many researchers, for instance Rossi and Volpin (2004).The valuation of the companies is often overlooking in the field of merger and acquisitions. However, it is a very critical part of acquisition process and could be very helpful not only in the pre-acquisition stage but also during the acquisition process as well as at post-acquisition stage (see Becher, 2001).Finally, the best practices research in the field of merger and acquisition is usually done in the form of case studies but the quality and intensity of these studies vary widely (see Marks and Mirvis, 2001).Performance and Success in MAAs stated before companies often engaged in the series of ac quisitions and merger activities and early studies such as Barney (1988), tend to show that related acquisitions performed better than other acquisition transactions. However, relatedness itself does not create value for acquiring companies but synergy is the vital factor that helps companies to generate abnormal returns from acquisition programs. For example, Barney (1988) showed that synergistic cash flow stemming from relatedness, which is unique and private creates abnormal returns for shareholders of acquiring firm.However, later studies such as Hayward (2002), suggested that different level of relatedness results in various degree of success and moderately similar companies tend to be more successful than the companies that are highly similar or dissimilar in business or size to one another. He further concluded that if a firm experienced small losses in past acquisition in contrast to high losses or high gains then it has better chances of success in prospective acquisition. In addition, the timing of acquisition plays a vital role in success of the transaction and should not be too close or far-away from central acquisition (see Hayward, 2002). Similarly, Brown and Eisenhard (1997) argued that companies benefit differently depending upon their experimenting and timing of the merger and acquisition activities.Moreover, when the acquiring company has some inimitable resources then it can create value by utilizing these resources in targets company as suggested by Capron and Pistre (2000). However, they also added that if the source of synergies is recognized in target firm than market associate expected gains to target firm due to the competition among potential bidders. Consequently, this competition raises the price of target firm and would create value for shareholders of the target firm but also lead to under performance of acquirer. Nevertheless, performance success through merger and acquisitions is still controversial among academics as pointed ou t by Cording et al (2002).To resolve the issue Chatterjee (1992) measured the cumulative average of abnormal returns (CAAR) during the period of 11 months before the tender offer until 60 months after the tender offer. After studying the sample of 577 tender offers between the periods of 1963 to 1986 he suggested that net gain arises for the economy from these transactions but it does not necessarily create gains for everyone involved in merger and acquisition. More specifically, CAAR after 60 months were observed to be negative for unsuccessful bidders, zero for successful bidder and positive for target company. Furthermore, Chatterjee (1992) found much higher positive CAAR for restructured target companies in contrast to non-restructured targets.Certain studies view the merger and acquisition transactions from a different prospective. For example, Golbe and White (1993) proved in their study that macroeconomic environments influence the merger activities and the number of merger t ransactions increases in time of economic expansion comparative to decrease in programme at the time of economic down turn.Similarly, Amburgey and Miner (1992) studied the effects of companies momentum on merger activities and suggested that managers follow the past patterns.The academics such as Capron (1999), also attempted to assess the performance of the merger and acquisition activities by conducting the survey of prime stakeholders in merger activities. He further concluded that the available financial data is too gross to allow the separation between the types of pure value-creating mechanism. Moreover, he also argued that more often the objective of the companies is to retain the top management team of the targets firm, whether its a conglomerate or related merger.International Prospects of MAThe emergence of globalisation and increasing trends in international trade fasten the number of local as well as cross-border acquisitions and merger activities. For instance, the cros s-border acquisition activities in United States increased to 19% in 1999 from 6% in 1985 (see Seth et al, 2001).According to the study of Seth et al (2001), the evidence suggests that there are three motives for cross-border acquisitions such as synergy seeking, managerilism and managerial hubris. Moreover, the research tends to show that there is a positive relationship between the level of value creation and reverse internalization, asset sharing, financial sharing and market seeking ( as discussed by Seth et al, 2001).In addition, there seems to be association between value creation and governance system of bidders country. For instance, Seth et al (2001) argued that bidding companies from group-oriented governance system like Japan and Germany appear to be engaged in acquisitions and merger activities with higher level of value creation in contrast to bidding firms from market oriented governance system such as United Kingdom.Further enhancement of research in the area of cross -border merger and acquisition suggests that experience in merger and acquisition activities can be utilized to create value in another country. For example, Gugler et al (2003) compared the data of 15 years and proved that post merger patterns are similar across different countries. Moreover, their evidence also signifies that there are no major differences between domestic and cross-border mergers as well as manufacturing and service sectors around the world.With the passage of time and in the era of globalization the merger and acquisitions activities are increasing especially in emerging economies. The multinational companies often use the tools of acquisition and mergers to penetrate in new markets and economies particularly in emerging countries such as Central and Eastern Europe (see Milman, 1999).However, in many countries MNC mergers and acquisitions are seen as threats by government agencies, privatized companies and state enterprises. Therefore, in order to develop a succ essful alliance the acquisition or merger program should be designed in such as way that creates value for companies as well as the host-country governments (see Rondinelli and Black, 2000).Lastly, yet the number of merger and acquisitions across border appears to be increasing but it seems difficult to integrate and manage the successful processes. Hence, Inkpen et al (2000) suggested that the companies should critically evaluate the areas of decision making, communication, networking and socialisation, communication and the structure of authority and responsibility before involving in the process of MA. People in MAOnly looking to financial aspects might limit the understanding about the question why MA activities are so widely used by companies as a tool to grow. Hence, another area focused by academics, such as Karitzki and Brink (2003), is related to merger and acquisitions and people.Generally, one of the motives for merger activities is to follow the cost-cutting strategies i ncluding synergy and targets customers. Often, the employees are laid off in the process of merger and acquisitions and consequently this creates new but conflicting networks of relationships in new companies as suggested by Vermeulen and Barkema (2001). Thus, it affects the success and results in under-performance of merger and acquisition programmes. Therefore, considering the affects of MA on employee or managers of the potential target firms are of similar importance as financial issues.Similarly, the research in the area of executive compensation pointed out that prior to acquisition or merger, management of acquiring company receive significant higher packages comparative to the executives of target firms (see Lynch and Perry, 2002). Hence, these issues can lead to turnover and morale issues that ultimately affect the success of anticipated integration from MA. Furthermore, in extreme circumstances, issues like these emerging from dissimilarities create hurdles to achieve the objective of the original merger and acquisitions. Thus, reconciling the differences is one of the major issues faced by the combined company to create value (as discussed in Lynch and Perry, 2002).Moreover, successful merger or acquisition depends upon the people in both target and acquiring firms. The attitude and opinion of the employees regarding acquisition or merger can change over the time. Schweiger and DeNisi (1991) conducted the survey of employees and compared the attitudes in pre-acquisition and post-acquisition period. Their results show that attitudes of the employees three months after the announcement of merger changed significantly and turn towards continual negative consequences (see Schweiger and DeNisi, 1991).Likewise, Covin et al (1996) studied the attitude of 2845 employees from a large manufacturing concern in post merger period. The results show significant differences between the target firm and acquiring companys employees in satisfaction with merger. The e mployees of acquired company faced high level of dissatisfaction and ultimately felt more stress due to changes introduced after merger. In addition, this stress is aggravated due to the direct competition between target firm and acquiring company. Furthermore, Covin et al (1996) pointed out that factors such as loss of power and status, changes in salary or benefits and lack of managerial direction result in high level of stress and dissatisfaction from merger activities.Hence, it has been suggested that in addition to financial aspects these types of issues should not be overlooked in order to create value and to develop a successful merger and acquisition programme (see Karitzki and Brink, 2003).Best Practices in MAIt is often suggested that acquisitions are predominantly unsuccessful and numerous studies like Aiello and Watkins (2000), confirmed this fact. However, generally the conditions and environment is relevant before judging the results. Furthermore, there is lack of rese arch in answering the question what would happen if both the companies continued in their own separate way. Therefore, estimating the successfulness of merger or acquisition is a tricky anomaly (as discussed in Chaudhuri and Tabrizi, 1999).Moreover, the unsuccessful MA activities are more highlighted in contrast to successful programmes. Ed Libby, the chairman and CEO of AllState stated that when MAs fails they draw more notice despite the fact that lot of other projects fails in business but no one can see them because they remain within internal walls of the companies (cited in Cary, 2000).As stated earlier, there is no one strategy that fits all kinds of merger and acquisition activities, however systematic approaches such as suggested by Jan Leschly, can help companies to develop a successful plan. Jan Leschly, retired CEO of SmithKline Beecham suggested that they put their people on the boards of different companies by investing small amounts. Once the companies get going then they decide whether to buy it completely or not (cited in Cary, 2000).Likewise, understanding the various components of merger process is very vital to develop a successful merger or acquisition deal. However, it is very hard to enumerate the components especially when these are integrated with each other. According to Marks and Mirvis (2001), the successfulness of merger and acquisition is highly depended on following factorsAcquisition Plan Implementation of this plan Post-acquisition cooperation between firms after acquisitionMoreover, they collected a number of factors that were mentioned in previous research such as strategic objective, clear selection, search and selection process etc. They also argued that pre-acquisition planning is very important for successful merger and acquisition plan and more prepared the people will more synergies in a combination will result (see Marks and Mirvis, 2001).Similarly, Aiello and Watkins (2000) suggested that every MA deal pass through f ollowing five stages Screening potential deal Reaching initial agreement Condu

How Can You Reduce Fresh Water Scarcity in a Country?

How Can You Reduce Fresh Water Scarcity in a Country?Student Name HarryAbstractThis scientific report introduced a new method of water supply conservation after several(prenominal) reoceanrch conducted on water problems in Dubai. The information was sourced from several educational and governmental websites which described water woes. The finding was that current solutions of water scarcity were irrigation and desalination. However, burgeoning of civilisation and increasing supply stir the limit of availability of those methods. Newly introduced method such as afforestation would be effective because it paves the way for everlasting water recycling. The vector sum substantiate the hypothesis though there are some questions about practicability. Further investigation is required to test the feasibility of afforestation and advocate innovations in water conserving technology.1.0 IntroductionThis research aims to announce new effective scheme for the water scarcity in order to fo rk over edible water for the people in the countries which having water woes. Dubai is a country which located in Middle East with strong water crisis. Most area of Dubai is covered by deserts without any(prenominal) water resources on the ground which means that there are no aquatic ecosystems inside the country. Although there are few subterranean water resources, it is non enough for the whole countrys supply. Because edible water resources are insufficient in Dubai, Dubai government is highly attached on water recycling. They produce the water in expensive ways and often use waste water to irrigate the agriculture. Those poor environmental conditions and urgent issues drove the country to the cliff. The hypothesis is that paying more attention on afforesting the desert and promoting the irrigation would be the most efficient strategy because it can make gigantic-term contri furtherion to the country.2.0 MethodologyIn order to reach the objective of this research, the plan w as to conduct several reliable websites which are governmental or peer-reviewed paper to get information about water scarcity in Dubai. Simultaneously, beneathstanding of local environment was another(prenominal) significant point to analyze a new strategy. after finding the sources, I spend a long time to carefully organizing currently capitalized methods and concentrated on selecting expensive simply the best solution appropriate to Dubai. This was because Dubai is rich enough to pay for all told the requirements, and semipermanent effect is the most significant point in order to avoid even worse water crisis in the future.3.0 FindingsDubai is a large prosperous country built on desert. Undoubtedly, the main element which caused water scarcity is arid locale and climate. In 2013, the World Bank reported that climate change in this region will slowly increase the temperature with other destructive circumstances. (Dewa, 2016 This means that the country is facing not only water s carcity but similarly decline of tourism. This problem is associated with water issue because break of economy slows down the development of technology and it may reduce the efficiency of water producing.Figure 1 Desalination not only produce water but overly affect watersource construction week online,2009To go further, transferring of water resources is another important issue. As it is mentioned before, the country is providing potable and fresh water to the industries and households by desalination. However, it is founded that the country is still using old and rusted pipes and water tanks which may vitiate the water while transferring them (Dakkak,2015). The table below showed more specific data to present the current situation. The unit did not influence the results though it was in Arab. evade 1 The total water produced and demand of the country (Unit unknown, it is in Arab)Year200820092015Produced8719689452102301Demand8840590823113786 (source Dewa annual Report)As we ca n see in this table, produced water is under the demand in 2008, 2009 and 2015, the years between 2009 to 2015 are not listed because the website does not provide information of water supply in those years, but still, it is easy to augur that the demand is a few larger than the supply every year. Another thing is that although water is produced from desalination, the process of desalination utilizes water a lot itself.mesa 2 Water exercise (unit percen pronouncee)Year200920122015Commercial24.9228.1727.02Industrial3.683.093.09Residential60.6157.8259.92Others10.7910.929.97(source Dewa Annual Report)This table shows that residential water consumption is the most, and unexpectedly, the industrial water consumption is the least. Agricultural consumption may include in residential column because it is complained that agriculture is the major user of water resources (Hussein, 2011)4.0 DiscussionThe result almost confirmed the hypothesis mentioned at the beginning except some points and q uestions. After recapping those findings that appeared before, most of current solutions are related to agricultural and technological development, but it seems insufficient for all countrys supply and it would not last for long term. As the oil exhaust or the rising temperature causes decline in tourism, the country will face recession one day. It is found that residents utilize most water (Dewa, 2016), and the increasing in water demand reflected increasing in demographics. These issues implied that country needs solution which provide long-term effect. To my solution, the country should replace these old and rusted pipelines for irrigation, and build new pipes for more various functions such as for afforestation, recycling and waste water. Additionally, artificial rivers, lakes, and forests are required due to increasing population and rise in tourism. However, some aspects of my solution did not confirm the hypothesis. People are constructing man-made lands on the sea coast in o rder to provide lands for citizens but pollute the water at the same time (Horner, 2010). This means that both urbanization and afforestation is important but the question is which one to concentrate more. Another point is that there are few questions about the practicability because it is hard for plants to survive at such climate and adding pipelines would potentially causes water pollution. However, inland afforestation is still the best way of solving water scarcity because it not only heals the water shortage but also hold the natural disasters such as sandstorms from coming.5.0 ConclusionIn conclusion, the new solution would be difficult to achieve but it contains long term benefits to the country. After the work is done, not only water crisis would be solved but also takes huge progress in air quality which can prevent sand storms from coming. This paper has some limitations because it is done based on internet research without any practical investigation. There are still ma ny doubtful elements related to this solution, so investigations of inland environment or examine the reliability and feasibility would promote further research of this paper.ReferencesHorner K., (2010). Parched for Peace The UAE has Oil and Money, but No Water (2010), State of the Planet online, Available fromhttp//blogs.ei.columbia.edu/2010/11/22/parched-for-peace-the-uae-has-oil-and-money-but-no-water/ Accessed 17 October 2016Annual Statistics (2009), Government of Dubai online, Available fromhttps//www.dewa.gov.ae/en/about-dewa/about-us/dewa-publications/annual-statistics Accessed 27 December 2016Annual Statistics (2013), Government of Dubai online, Available fromhttps//www.dewa.gov.ae/en/about-dewa/about-us/dewa-publications/annual-statistics Accessed 27 December 2016Annual Statistics (2015), Government of Dubai online, Available fromhttps//www.dewa.gov.ae/en/about-dewa/about-us/dewa-publications/annual-statistics Accessed 27 December 2016Dakkak A., (2016). Irrigation Syst ems in the United Arab Emirates (2016), EcoMENA online, Available fromhttp//www.ecomena.org/tag/water-scarcity-in-uae/ Accessed 7 October 2016Hussein M. A., (2011). Impacts of Water Scarcity on the Social Welfare of Citizens in the Middle East (2010), Middle East Institute online, Available from http//www.mei.edu/ bailiwick/impacts-water-scarcity-social-welfare-citizens-middle-east Accessed 8 October 2016UAE Water Aid UAE will continue to support poor and affected communities (2016), Government of Dubai online, Available fromhttps//www.dewa.gov.ae/en/about-dewa/news-and-media/press-and-news/latest-news/2016/06/uae-water-aid-uae-will-continue-to-support-poor-and-affected-communities Accessed 8 October 2016

Automation Technology for Food Processing and Manufacture :: Industrial Manufacturing Technological Essays

Automation Technology for Food Processing and Manufacture Industrial manufacturing technology is constantly ever-changing. In the 1700s, we first really saw the imagination of specialization of labor in which an individual specialized in one aspect of an items achievement. With the Industrial Revolution the 1800s, people began using machines to do their work for them. by means of the 1900s to today, we are seeing electronics induct even more sophisticated machines possible. It seems with each new step of technology, industry is becoming more and more automated, completely changing the role people play in production. The average worker is nearly extinct, having been replaced by engineers, technicians, and the machines originally created to make their jobs easier. Automation technology is used in either large scale production industry. I chose to learn about automation technology with regards to food processing in particular because it is a field I am familiar wit h, and it ordain continue to exist and evolve as long as people and animals need to eat. Overview Large scale food production is more involved than one may think. The following are illustrations of a generalized food processing plant, such as one used to make cereal Food Process Packaging Process These processes are automated using technology created by companies such as Rockwell, Siemens, and Texas Instruments. For the sake of example, I will talk about Rockwell, because it tends to be the leader in the industry. The Technology PLCs (Programmable Logic Controls)- actual sensor inputs are called tags . speed sensors . counters . thermocouples . photo sensors . scales . density sensors . on/ move out switches . anything that can measure the change of the state of something - each sensor is connected by hardwire to the PLC - PLCs are connected by Ethernet to a central hub, making selective information available to all stations on the network - form elaborate logic trees - offers near infinite flexibility

Americas Oil Problem Essay -- American Economy, Oil Industry

The United States is in a recession and depends on foreigners to burn down our country. inunct companies are taking advantage of the power they develop over gas prices and the economy is at one of the lowest points in all of our history. It dirty dog be seen that the way things are going now that change penurys to occur for the States to get back on its feet. Drastic changes will need to happen if we are going to stick to enjoy living in a very advanced and prominent country. By developing proper shoreward drilling techniques, and alternate energy, America could eliminate debt and lessen dependence on foreign oil.As it stands, oil companies prevail a firm grasp of the American economy. As the price of oil increases, the price of living also increases. Not only that, tho they are getting away with paying dues they owe. Oil companies have escaped more than 60 billion dollars in royalties because of a loophole to get access to more leases. The United States is the third larges t producer of oil in the world, and 31 percent of that production comes from land owned by the federal government (Offshore Drilling Will Enrich Big Oil Companies 2). America maintains this title sluice though Americas crude oil productivity has decreased since 1985 (Crude Oil Production 1). Currently, oil is becoming more expensive and damaging the economy while America is becoming more dependent on foreign oil decreasing productivity and narrowing offshore drilling. The oil industry is making an immense wampum. Oil companies that secured leases in 1998 and 1999 havent been paying royalties, even though a bill signed in November of 1995 required royalties to be paid in proportion to the oil profit made. An example of a company profiting because of this is West Texas Inte... ...ational security. As voters, and future voters, we need to vote for candidates that understand the colossal importance of using renewable energy and offshore drilling to start a recovery of the economy an d keep America as a power figure. It will cost billions of dollars for research and perfecting offshore drilling, but it is a long-term investment that will have an enormous payout. If America was to fail in alternative energy research and offshore drilling have multiple spills the worse that could happen is we go farther into debt. The country is already trillions deep into debt. Taking a risk and finding other ways to go profit is how we will stimulate growth. The future is here. Fossil fuels will not last forever. If America leads the charge into the renewable energy field we can continue to be a very powerful nation and get the economy back on track.

Physics of Soccer :: physics sport sports soccer football

Physics of the Ball How and where you kick the thump is the most authorized aspect within the game of soccer. Lets advance you kick the ball perfectly giving it no rotation (or spin), this means that you have given the ball a velocity (v) and an initial angular belt along of zero. When the ball comes into contact with the ground it pull up stakes begin to spin because the ground is not attritionless. The soccer ball impart eventually begin to hair curler without slipping, which is when the balls substance of mass is equal to its angular speed. Now assume that you want to strike the ball so that it immediately begins to throw off without slipping. The diagram above shows us how we rear end accomplish this and the equaltion of s=R(theta) will give us the distance from the center of the ball that you need to kick. The answer to this line of work turns out to be s=0.4R, so you would strike the ball a little less than half of the radius above the center line. Fric tion is a huge factor when considering the game of soccer. When a soccer ball is moving along the field there is constantly a frictional force working(a) in the opposite direction of the balls movement. in that location is an equation that can be used to find the friction force working against the ball and it is f=mN. This is where f is the frictional force, m is the coefficient of friction, and N is the traffic pattern force pointing upward. The coefficient of friction is dependant upon the surface type and ball being used, it is not a constant. This tells us that the coefficient of friction will cause the ball to roll slower when it is large and not as slow when it is small. This also shows that the more friction there is between the ball and the field the slower the ball will roll.How physics students cheatWhen dealing with projectile motion physics students are normally allowed the assumption of two things1) The free-fall quickening g is constant over the clutch of mo tion and is unendingly directed downward.2) The effect of air metro is negligible, meaning there is no air resistance on the projectile.With these assumptions we find that the projectiles path is always a parabola.How this cheating pans outPhysics of Soccer physics sport sports soccer football Physics of the Ball How and where you kick the ball is the most important aspect within the game of soccer. Lets say you kick the ball perfectly giving it no rotation (or spin), this means that you have given the ball a velocity (v) and an initial angular speed of zero. When the ball comes into contact with the ground it will begin to spin because the ground is not frictionless. The soccer ball will eventually begin to roll without slipping, which is when the balls center of mass is equal to its angular speed. Now assume that you want to strike the ball so that it immediately begins to roll without slipping. The diagram above shows us how we can accomplish this and the equaltio n of s=R(theta) will give us the distance from the center of the ball that you need to kick. The answer to this problem turns out to be s=0.4R, so you would strike the ball a little less than half of the radius above the center line. Friction is a huge factor when considering the game of soccer. When a soccer ball is moving along the field there is constantly a frictional force working in the opposite direction of the balls movement. There is an equation that can be used to find the friction force working against the ball and it is f=mN. This is where f is the frictional force, m is the coefficient of friction, and N is the normal force pointing upward. The coefficient of friction is dependant upon the surface type and ball being used, it is not a constant. This tells us that the coefficient of friction will cause the ball to roll slower when it is large and not as slow when it is small. This also shows that the more friction there is between the ball and the field the slower the ball will roll.How physics students cheatWhen dealing with projectile motion physics students are normally allowed the assumption of two things1) The free-fall acceleration g is constant over the range of motion and is always directed downward.2) The effect of air resistance is negligible, meaning there is no air resistance on the projectile.With these assumptions we find that the projectiles path is always a parabola.How this cheating pans out

Porter Analysis of the Zara Fashion Chain Essay -- Business Analysis R

Porter Analysis of the Zara Fashion ChainThe Zara fashion chain, with 546 stores in 30 countries today ?from which 340 are outside Spain- and ?2914,3 millions of total sales in 2002, is doubtless the group?s locomotive (Inditex, 2003). In 2002 it represented 33% of the group?s total stores, accounted for 72% of the group?s total sales and contributed to the retentiveness?s total profits for ?540.4 millions (Inditex FY2002 Results Presentation, 2003). Moreover, Zara with 75-90 new stores within 2003 takes the lion?s share in group?s current year store openings (total openings for 2003 260-315). The heading of the Porter analysis is to analyse the competitiveness of the market.Threat of entryThreat of entry to the apparel industry is medium. Economies of scale play the tally role (as state in the case study), capital requirements for entry vary, distribution channels are available, threat of retaliation is medium and government legislations play only a moderate role. On the separ ate hand market experience and differentiation play the vital role.Threat of substitutesThreat of product-for-product substitution on this market is very high. It comes from other apparel retailers, designer clothes and tailor houses. Substitution by need is unlikely. Generic substitution can take place as well as ?doing without?.Power of buyersPower of buyers on the market is moderate because there are many small buyers, retailers differentiate and are of big size, alternative sou...

The Fool in William Shakespeares As You Like It Essay -- William Shak

The Fool in William Shakespeares As You Like ItThe waste angiotensin-converting enzymes time is one of the first character archetypes that either student of literature learns how to analyze. Despite his attendingly light or even pointless chatter, the fool usually manages to say some fairly important things. Upon advertise study, the student may perceive that it is because of his penchant for silliness that the fool is given leave to express even offensive truths about the other characters. What happens, though, when one fool encounters another? Fools are not used to being subject to one anothers wit this experience of being held up to a relegate of mirror is generally reserved for the characters who must undergo some change to further the plot. cadence and Jaques manage to break that rule, and merely by coexisting seem to compete. Both live up to some part of our expectation of the fool, but neither manages to fill the role entirely. Which one comes closer is a matter creditable of some debate. In her book The Fool His Social and Literary History, Enid Welsford devotes a chapter to The Court-Fool in Elizabethan Drama and briefly discusses As You Like It specifically. She at one point describes fools as being partly within and partly outside the action of the drama. (244). This idea is applicable to Touchstone and Jaques, but in a moderately different way than she intended it. She was describing characters placed by circumstance in that liminal state--characters with no desire to move to either side of their middle ground. Also, she describes the differences between Touchstone and Jaques, both in appearance and attitude. Most importantly, she mentions that Touchstone exposes affectation but he is capable ofcriticism, and his judgments are r... ... encroaching on his territory. Jaques is a sort-of fool in a sort-of court, but Touchstones presence brings in a glimmer of the rest of the worlda authentic fool from a real courtthat shat ters Jaques before he ever has a chance to throw a single stone at Touchstone. Jaques attempts to find a place for himself, then, scarce read as a strange, lost man making faces in a glass. There is no way that Jaques can surpass Touchstones inherent liminalitywhere Touchstone slips seamlessly from one world to the next, in and out of the action, Jaques just hops jerkily back and forth like someone walking on hot coals. He never lands in any one place long enough to really establish himself. It is for this reason that Touchstone fills every scene of the fools role more ably than Jaques, up until the bitter end when Jaques takes the traditional fools ending and stands alone.