Saturday, January 25, 2020

Drivers of Customer Loyalty and Firm Profitability Research

Drivers of Customer Loyalty and Firm Profitability Research Financial institutions perform a vital role in facilitating the aggregation and allocation of capital with the help of conveying individual savings in to loans to businesses, government and individuals. The role of banking division in the concentration and distribution of capital in Ghana can not be disputed. The recent credit crunch has left a deep impact over the performance of various banks all over the world. Thus, in order to survive in the long run, the institutions need to adopt competitive strategies. One and the most important of such strategies in the banking sector constitute customer loyalty to business which makes the banking businesses competent. In this paper, we will analyze the determinants of customer loyalty and their impact on the share market and firm profitability with the help of studying the customer relationship management (CRM) and contact management of Barclays Bank in Ghana. In the late seventies and early eighties, the state owned banks in Ghana dominated the formal banking system of the country as they had monopoly with respect to their spread and operations (Hinson and Hammond, 2006). However, the banking environment has now been evolved. According to Hinson and Hammond (2006; p.45), universal banking law has permitted all categories of banking to be performed under a single body for corporate banking which has greatly restructured the scopes of competency in various banking products in Ghana. Thus, the banking sector in Ghana has been brought in to the competitive arena which is based on the customers and products due to the reforms and deregulations. This infers that the management of the banks in Ghana should employ the strategies that provide customer satisfaction, customer loyalty, customer retention and thereby, increase firm profitability and market shares. 1.1 Service Quality Concept The European school of thought, vastly expressed by the work of Gronroos (1984), explains that the customers recognize service quality from two aspects which are: (1) the technical aspect of service and (2) the functional aspect of the service. Technical quality is determined by knowing if the customers expectations from the service are fulfilled or not. The functional quality is recognized through the customers perception about the service production and its delivery. According to Richard and Allaway (1993), both of these distinctions are correct and needed to define customers service quality analysis and loyalty behaviour. However, this concept does not consider the physical environment of the service. Thus, the American school of thought led by the work of Parasuraman et al., (1985, 1988) has been adopted in various studies which states that service quality is basically the difference between perception and expectation of the delivery of service. According to this model, service q uality has five dimensions on which customers judgement about perceived service quality is based. These dimensions are: Reliability: Performance assurance, accuracy and dependability of the service. Responsiveness: Will to help and provide prompt service to the customers. Assurance: Knowledge, courtesy and ability of the employees that ensures trust and confidence. Empathy: Care and special attention given to the customers. Tangibles: Outlook of the personnel, equipments and other physical facilities. These five dimensions will be measured through a scale called SERVQUAL comprising of 22 items. Service quality is operationalized according to the gap between perception and expectation (P-E). Thus, the SERVQUAL determines the gaps in the service delivery of a firm. SERVPERF is another service quality measure that has been developed by Cronin and Taylor (1992) considering that SERVQUAL was inadequate. According to them, performance and not perception minus expectation determines service quality by proving that expectations have almost no impact on the customers evaluation about service quality. Both of the SERVQUAL and SERVPERF conceptualizations have been incorporated in our research model for this study. Although, our research model includes P E, we measure service quality on the basis of perception only since expectation is insignificant (Cronin and Taylor 1992; Brady et al., 2002). However, the basics of Parasuraman et als., (1988) dimensions of service quality have been retaine d in our model. Moreover, the 22 items of these dimensions in our study are slightly modified according to relevancy. 7 point likert scale will be used to measure P. 1.2 Customer Loyalty Concept In our study, we have incorporated both attitudinal and behavioural concepts of customer loyalty. The following cues will be used to measure customer loyalty in the banking sector of Ghana. Word of Mouth: Recommendations made by the customers to their friends and family for using the services of the bank. Repeat Purchase: Repetition or consistency in making purchases by the customers for the banks products and services. Satisfaction: The level of pleasure or happiness of the customers with their banks services and products. 2. SERVICE QUALITY MODEL The Disconfirmation Paradigm (Parasuraman et al., 1985) allows service quality model to measure disparity between consumers perceptions and their expectations for the quality of service. Figure 1 given below represents the service quality model for the banking sector. This model illustrates that there are five gaps in delivering the quality service to the customers. These gaps are described below. Gap 1: This gap can be referred as Understanding as it depicts the difference between expectations of the customer and the management perceptions of the customers expectations. Gap2: This gap can be referred as Service Standards since it depicts the disparity between management perceptions of customer expectations and specifications of service quality. Gap 3: This gap can be referred as Service Performance as it illustrates the disparity between the service quality specifications and the actual service delivered to the customer. Gap 4: This gap can be referred as Communications since it shows the disparity between service delivery and external communication with the customer about the service. Gap 5: This gap can be referred as Service Quality as it depicts the disparity between customer expectation for the quality of the service and the customers perception about the performance of the firm. Gaps 1 till 4 impact the service delivery leading to Gap 5. Thus, these four gaps have a very strong influence over the gap 5. This study will focus on the potential discrepancies found in all the gaps. The managerial implications associated with these gaps must be assessed in order to formulate proper business strategies. These resultant strategies will then be properly implemented for closing the identified gaps found in the banking sector in Ghana and thereby, to improve service quality and profitability of concerned Bank. Word of Mouth Communication Personal Needs Past Experience Expected Service Perceived Service Gap 5 Service Delivery External Communications with Customers Gap 4 Translation of Perceptions in to Service Quality Specifications Management Perceptions of Costumer Expectations Gap 2 Gap 3 Gap 1 3. PROBLEM STATEMENT The gaps 1 to 4 impact the service delivery and are concerned with the management and service providers of the bank. Thus, the question arises, what variables or factors are responsible for creating these gaps or what is the lacking of the management that refrain them from delivering the quality service to the customers? As for Gap 5, the question arises which business strategies should be adopted to reduce the gaps and thereby, improve service quality and performance of the bank. 4. HYPOTHETICAL MODEL This paper is aimed towards finding loyalty drivers according to the viewpoint of the customers of the Ghanaian retail banking. This chapter of the paper will present a hypothetical model that will be used to determine the relationship among loyalty, loyalty drivers, banks profitability and market share. Figure 2 provided below represents the framework of our hypothetical model. The model presented in figure 2 below explains the service quality as perceived by the customer. This model has been premised on seminal model (SERVQUAL), Cronin and Taylor (1992; SERVPERF), Parasuraman et al., (1988) and Brady and Cronin (2001). The quality of service conceptualized by 2 pathways that are: (1) P-E representing the gap in between perception, P and expectation, E and (2) P that represents only perception as the conceptualization of expectation (E) is not important (Cronin and Taylor, 1992). Thus, perception is what is actually measured. Hence, the questionnaire in the survey will consist of a single set to elicit answers concerning customers perception (Brady and Cronin, 2001) instead of two sets of questionnaires for measuring perception and expectation distinctively and for determining the difference between the two as was done by Parasuraman et al., (1988). The framework provided in this paper demonstrates the fact that fake loyalty may be found abundantly and inco mplete satisfaction will result in customer switching. The model below illustrates a gap which represents the disparity between the customers perception and expectation. Since the expectation of a customer does not influence the actual service delivered to him/her by the bank, thus, it holds an insignificant value. This infers that the actual service delivered will depend on the perceived service quality which in turn is also influenced by various service quality dimensions namely: tangible, reliability, responsiveness, assurance and empathy. Moreover, it is known that these dimensions influence both the customers service quality perceptions and the management designed service quality. Thus, the hypotheses and the hypothetical model are the same for all the gaps mentioned above. This research paper will investigate the disparity between the perceived service quality and the actual quality of service delivered to the customer by measuring the above mentioned service quality dimensions. Service quality dimensions Competitive Price Expectations (Expected Service) Perception  (Perceived Service Quality) Satisfaction Loyalty Actual service Experienced Tangible Reliability Responsiv-eness Assurance Empathy Banks Profitability Bank (image reputation) Market share Dissatisfied customers Switching customers 5. PURPOSE AND OBJECTIVES 5.1 Purpose of the Research The purpose of this study is to empirically analyze the hypothetical model and the related hypotheses. The analysis of the hypothetical model will lead to the formulation of appropriate business strategies that will overcome the potential disparity between perceived service quality and the actual quality of service delivered to the customer upon implementation. 5.2 Research Objectives 5.2.1 Primary Objective The objective of this paper is to investigate the drivers of customer loyalty and firm profitability with the help of collecting empirical evidence through interviewing the customers of various banks in Ghana and also, through assessing a case study of Barclays Bank Ghana. Due to the distinct cultural values of the Ghanaian Society, our study will focus on the extant literature. 5.2.2 Secondary Objectives Businesses conventionally implement aggressive marketing strategies in order to draw the attention of the new customers and thus, increase market share at the cost of competitors. According to the latest trends in competition, those businesses benefit the most that focus on retaining their customers while providing them the goods and services (Roberts, 2005). Customer retention with the help of enforcing quality in products, services, prices and accessing facilities of the bank among others play a critical role in customer satisfaction. Studies have shown that satisfied customers always return to their service providers and also, make their recommendations to friends and families which in turn increase both market share and profitability of the firm. In the banking sector of Ghana, it is generally hypothesized that high performance of the bank is associated with high customer retention. Thus, Bankers appraise customer loyalty as the key factor towards maintaining market share and increasing profitability of the bank. Due to the high customer chum, it is important to know that what drives customer loyalty. Ghauri and Grà ¶nhaug (2005; p. 14) state that assumptions and speculations should not be accepted or rejected unless these assumptions are critically studied to give logical and reliable reasoning for their acceptation or rejection. This study seeks to attain this aim that requires investigation of the drivers of customer loyalty serving as the core of design strategies that result in the increase of customer retention and bank performance by taking in to account the case study of Barclays Bank in Ghana. 6 RESEARCH QUESTIONS AND HYPOTHESES 6.1 Research questions In order to study the optimization of the enterprise contact management through a CRM enabled contact centre platform by taking in to consideration the case study of Barclays Bank in Ghana, the following question are being posed in this paper. What are the factors driving customer loyalty in Ghanas banking sector, in particular Barclays Bank Ghana? What are the factors that set back customer loyalty and retention in the banking sector in Ghana, particularly Barclays Bank Ghana? Does customer loyalty is achieved through customer satisfaction? Do reluctant customers approach other banks in order to get better and improved customer relations and services? 6.2 Hypotheses Our study will test the following hypotheses in this paper. H1- Service quality influences loyalty and satisfaction of the customer. H2- Tangibility, responsiveness, reliability, assurance and empathy are the five dimensions of service quality that vary to the extent to which they instigate customer loyalty and satisfaction. H3- Customer loyalty and satisfaction depend upon competitive pricing. H4- Perceived reputation and image of the bank stimulate customer loyalty. H5- Banks or enterprises profitability can be increased by customer loyalty and market share. H6- Reluctant customers approach other banks in order to get improved service quality from other banks. 7. BACKGROUND- BANKING IN GHANA Ghana has a well structured financial system that is built around the capital market, the Bank and the non Bank Financial Institutions. Banks are further divided in to the following classes on the basis of a licensed system: Universal Banking under Class I banking license. Universal and off-shore Banking under Class II banking license. Universal, off-shore Banking and ARB (Association of Rural and Community Banks) APEX Banking under the general banking license. (Bank of Ghana, Annual report, 2007). At present, the minimum amount of GHC 60 million is required to be possessed by the banks that are operating in Ghana as their stated capital (Bank of Ghana, Annual report, 2007). Ghana has 26 major banks operating under the Universal banking license and 126 rural and community banks that have been licensed for ARB Apex banking system. And also, 41 non Banking Financial Institutions which comprise of Discount Houses, Finance Companies, Mortgage Finance Companies, Savings Companies, Loans Companies and Leasing Companies. All of these NBFIs are supervised by the Bank of Ghana that is the central bank of Ghana. The activity based division of Commercial, Merchant and Development banking operating previously in Ghana have been replaced by this categorization. This was done in the wake of the initiative for the financial reforms that enabled universal banking in Ghana and thus, dissolved the operating limits hypothesized on the initial activity of incorporation. The goal was to transform t he conventional way of banking operation in order to welcome competitive trading in to the banking sector. Dr. Acquah, the Governor of the Bank of Ghana stated in his speech at the Fifth Banking Award Ceremony that universal banking was introduced in order to promote new banks, liberalize the options for the banking services, extend the branch network and increase competition for deposit at the level of retail (Acquah, 2009). Since the banks constitute 70 per cent of the financial sector, thus, they are the most common source for contributing to the economy (Bawumia, 2008). The head offices of all the banks in Ghana are situated in the national capital of the country while their several branches are located in major cities and town of Ghana that are owned by the government, Ghanaians, foreigners or the combination. Currently all the banks in Ghana possess Universal Banking License. Only 12 banks in Ghana are owned by its citizens. The table below shows the banks operating in Ghana with their branch networks, area of activity and proprietorship. Name of Bank Number of Branches Ownership Current Banking Licence Barclays Bank of Ghana Ltd 120 Non- Ghanaian Universal Merchant Bank (Ghana) Ltd 16 Ghanaian Universal Ecobank Ghana Limited 32 Non- Ghanaian Universal Ghana Commercial Bank Ltd 143 Ghanaian Universal National Investment Bank Ltd 24 Ghanaian Universal Standard Chartered Bank Ghana Ltd 19 Non- Ghanaian Universal SG-SSB Bank Limited 36 Non- Ghanaian Universal The Trust Bank Limited 17 Ghanaian Universal Agricultural Development Bank Ltd 50 Ghanaian Universal Amalgamated Bank Limited 10 Non- Ghanaian Universal Prudential Bank Limited 10 Ghanaian Universal Fidelity Bank Limited 6 Ghanaian Universal Zenith Bank Limited 9 Non- Ghanaian Universal Stanbic Bank (Ghana) Limited 10 Non- Ghanaian Universal Unibank Ghana Limited 11 Ghanaian Universal Intercontinental Bank Limited 12 Non- Ghanaian Universal HFC Bank Ghana Limited 11 Ghanaian Universal First Atlantic Merchant Bank Ltd 4 Ghanaian Universal International Commercial Bank Ltd 12 Ghanaian Universal Guaranty Trust Bank Limited 5 Non- Ghanaian Universal CAL Bank Limited 10 Ghanaian Universal United Bank for Africa (Gh) Ltd 16 Non- Ghanaian Universal Bank of Baroda Ghana Ltd 1 Non- Ghanaian Universal BSIC 1 Non- Ghanaian Universal BPI Bank Limited 9 Non- Ghanaian Universal Table 1: Banks in Ghana (Source: Price Waterhouse Banking Industry Survey, 2008). 7.1 The era of post Banking Reform in Ghana Developments in the era of post Banking Reforms in Ghana can be concisely expressed as the transformation of the distressed and dysfunctional banking system with illiquidity and insolvency, credit rationing and interest rate controls in to a market based regime along with improving the bank supervision in order to ascertain that efficiency and profitability is increased (Acquah, 2006). The Economic Recovery Programmed (ERP) introduced the Financial Sector Adjustment Program, generally referred as FINSAP so that the banking sector can play a vital role in promoting the economic development. This program was executed in two in two phases. In the first phase, FINSAP 1, provisions were made for liberalizing the banking industry and restructuring the distressed banks in Ghana (Brownbridge et al., 1998). The restructuring part was very crucial since these banks were either extremely important for the economy or deeply associated with other economic activities such that their demolition may result in disastrous ramifications. The second phase, FINSAP 2 brought new dimensions in the financial industry reform program through privatizing state owned banks, technological advancements, human capital development and careful supervision and regulation by the central bank of Ghana. In addition to this, the second phase of FINSAP characterized cautious banking through revising the Banking Law of 1970 and through introducing the Banking Laws of 1989 and 2004 which enforced the requirement of minimum capital keeping in view the increased number of banks and branches. Due to FINSAP 2, the banking and the financial industry in Ghana experienced strong regulation and supervision along with the advancement in latest payments and settlement system. Above all was the Payment Systems Development Strategy by the central bank of Ghana that focused at the delivery of financial services that enhanced the financial intermediation with the help of the progress of electronic payment products that include ATM (Automated Teller Machine) services, e-money, transfer of funds at the point of sale, SMS (Short Message Service), internet and telephone banking. Recently, e-zwich was brought in to the market in order to build a common platform that assisted in connecting the different banking institutions through a biometric smart card (Acquah, 2009). All the banks responded positively to the introduction of information and communication technology (ICT) in delivery of financial services which in turn improved the financial performance. This outlook over shadowed the competition and distinguished market share and profitability among the banks in Ghana. The new foreign and private banks launched latest technologies whereas the government banks have to cope up with the redundant man power and non-performing assets. The new banks encounter the challenges of market share, spread and size from the conventional banks. In order to overcome this challenge, the new banks employed the strategic option of swift implementation of the prescribed new products and the development of financial services administered by the Bank of Ghana so that the un-banked, banked and under banked customer classes of the population could be captured. 7.2 The Case Study of Barclays Bank, Ghana As shown in the table 2 provided above that Barclays Banks holds a leading position in the Ghanaian financial services market place in addition to an aggressive nationwide branch network. Thus, Barclays being the premier banking institution of Ghana is leveraging its distinct characteristics in order to compete effectively in the highly competitive and fast progressing banking and financial services industry of Ghana. In order to further differentiate itself from the rest in the competition, Barclays Bank is headed towards promoting its strategy of holding its market leadership position through developing its customer management functionality with the help of implementing a robust solution for customer relation management (CRM) with strongly emphasizing over its customer service operations. Barclays commenced this initiative for CRM in order to facilitate the customer facing the banks operations with the technology platform enhancing the banks operations and enabling the bank to compete effectively in addition to becoming a truly customer focused organization. Thus, Barclays is looking forward to working with a reputable organization in order to develop and upgrade its existing customer contact centre along with integrating it with CRM Dynamic Solution by Microsoft. Completely equipped, contact centre of Barclays Bank will eventually enable the customers to interact and deal with the bank via multiple channels such as voice, e-mail, fax, IVR, web, etc.) that fulfils various functionalities of sales, marketing and service at the time of their convenience either with a customer representative or through self service. It is highly vital for Barclays to enhance its processes facing customers in order to develop the business relationship in between its customers and employees for attaining its business goals. The implementation of such an advance and complex customer management project is to be based upon detailed and comprehensive planning, apt consulting and allocation of technical resources to ascertain that the desired goals are achieved with in a certain time period, being as cost effective as possible. Electronic services department of Barclays strongly believes that the goals of this initiative required being in line with the overall business strategies of Barclays Bank. It has been observed from similar engagements that spanning numerous industries is not adequate to ensure desired result. Barclays must recognize the important role that it has to play in the initial stages of the project. Complete commitment and dedication from Barclays is required through out the total time frame of the project in order to ascertain and realize the significance of enhancing its customer management functionality which will ultimately result in the growth in revenue and profitability. 7.2.1 Requirements for the Barclays Bank Ghana Barclays Bank Ghana is looking forward to improving its overall customer management operations through commencing a CRM strategy that is most likely to enhance the banks customer focus strategy. The first stage of this CRM initiative will emphasize over improving the customer service function of the bank through making new advancements in its current platform for the centre. This is achieved by employing latest tools that will improve the interaction of the customers with the bank either through the customer service representation or by means of self service. The first stage of CRM initiatives is most likely to improve the sales and marketing processes of the operation of the bank and set the stage for linking these processes with the customer service operations and allowing them to access the tools that will support in improving their performance, enhance their functions and recognize understand the customer as the Banks primary asset. The bank has recognized the following basic functions necessary for improving its existing contact centre platform. Outbound Calls and Multimedia Channels Automatic Distribution of Calls Caller Line Identification Complaint Management Interactive Voice Response Integration of CRM Computer Telephony Integration Call Recording Reports or Dashboard System Backup Barclays Bank has also recognized the following modules of Microsoft Dynamics CRM platform as the desirable milestones for the project. Marketing module Service Module Sales Module Workflow Module Analytical Module 7.2.2 Recommended Solution The recommended solution is divided in to the following three different components. CRM-Workshop for Business Process Mapping Implementation of Microsoft Dynamic CRM Up gradation of the platform of Contact Centre Technology 7.2.3 Business Process Mapping The aim of this exercise is to recognize the current business processes, future business processes and the gap between the two scenarios. It is formulated to overcome barriers between the business values and its technology. The outcome is strict accountability and a higher probability of customer satisfaction through its deployment. The exercise will determine the metric that need to be tracked down, managers and customers that will be held accountable for these measurements of the performance, required new processes, impact of processes and sub processes on data importing, solution configuration and integration with other technologies and systems used at the back end. The results of this exercise are given below: Detailed Process Map that consists of report on current state as validated by the stockholders. Detailed Process Map consisting of report on future state as validated by the stockholders. Gap Analytical Report Business Requirements Report After the above documents have been produced, the business users will eventually examine and validate the provided information. After approval, these documents will be used to support project execution. 7.2.4 Deployment of CRM System The desired outcome of the successful deployment of a CRM system is determined through the end users usage and willingness to use it daily in order to improve their personal productivity. In this regard, the adapted methodology gives a frame work for dealing with customer relationship management as a business strategy and also as a project for developing technical systems. The concept behind this process is that technology alone with out strategy does not produce business results. Thus, a proper strategy for CRM is required to be adopted side by side with the deployment of the technical system. The success of CRM lies in the implementation of the technology with the clear picture of the improvements in measurable business performance. 7.2.5 Strategy The strategic model used by the Barclays Bank Ghana constitutes of four components that must be understood in order to achieve real business advantage from any CRM based project. Figure 2 (Source: e.Services Africa Ltd. 2010). Performance Management The purpose of any CRM project in an organization is to improve or optimize its performance. However, it is complicated to precisely define: the areas and object to be improved, the extent of this improvement and the enhancement of this improvement measure through the CRM system. This objective is fulfilled by embedding key point indicators, business metrics in the form of understandable charts and graphs in to the user interface of the CRM system. This enables the user to use the system as a routine activity. User can easily find the changes made by them to the system in clear metrics on their dashboard. Users and the management must seriously operate the business in accordance to the embedded metrics on the dashboards. Management Commitment Commitment of the management serves as the basis for success of any CRM project. Senior managers must completely comprehend and be involved in adopting CRM as a strategy and they must also, actively take part in the implementation of CRM project. Existing processes need to be changed for improving performance of any business or system, thus, any CRM project could be referred to an effort for changing management and modifying behavior. Managers are supposed to support such changes. Irrespective of the technological functions, the managers must back the process changes along with communicating the fact that new procedures need to be adopted in order to achieve the desired goals of the business.

Friday, January 17, 2020

Contact (Call) Center Managers?

1. What lessons are there from these two examples for contact (call) center managers? Services are different from manufacturing, with the key service difference being the interaction of the customer in the delivery process. Service design is no longer considered to be an art form as logical approaches to better design and management of service systems are emerging. In a facilities-based service, the customer must go to the service facility. In contrast, in a field-based service, the production and consumption of the service takes place in the customer's environment. Internal services refer to services required to support the activities of the larger organization. There is a blurring of manufacturing and service firms since the manufacturer product always has a certain percentage of service content. Services are also seen as the next source of competitive advantage for firms. In services we also consider the amount of customer contact or the physical presence of the customer in the system. Service systems range from those with a high degree of customer contact to those with a low degree of customer contact. Service encounters can be configured in a number of different ways. The service-system design matrix includes six common alternatives. Flowcharting, like in manufacturing process design, is the standard tool for service process design. The flowchart, or service blueprint, emphasizes the importance of design. Poka-yoke systems applied to services prevent mistakes from becoming service defects. Approaches to services include the production line approach, the self-service approach, and the personal attention approach. Service guarantees are not only a marketing tool for services but, from an operations perspective, these guarantees can be used as an improvement incentive and can focus the firm's delivery system on things it must do well to satisfy the customer

Thursday, January 9, 2020

The Process of Ipo - 3185 Words

A Guide to the Initial Public Offering Process Katrina Ellis (kle3@cornel.edu) Roni Michaely (rm34@cornell.edu) and Maureen O’Hara (mo19@cornell.edu) January 1999 *All Authors are from Cornell University, Johnson Graduate School of Management, Cornell University Ithaca NY 14853. Michaely is also affiliated with Tel-Aviv University. A Guide to the Initial Public Offering Process A milestone for any company is the issuance of publicly traded stock. While the motivations for an initial public offering are straightforward, the mechanism for doing so is complex. In this paper, we outline the process by which companies are brought to market in an initial public offering. Our goals here are to delineate the specific steps†¦show more content†¦The remaining portion of the gross spread (approximately 20%) is used to cover underwriting expenses (underwriter counsel, road show expenses, etc.). If anything remains after deducting all expenses, it is divided proportionately among the underwriter and syndicate members depending on the amount of securities each underwrote. One of the lead underwriter’s first-agenda items (usually before any significant expenses have been incurred) is to draft a letter of intent. Indeed, an important aspect of the letter of intent is to protect the underwriter against any uncovered expenses in the event the offer is withdra wn either during the due diligence and registration stage, or during the marketing stage. Thus, the letter of intent contains a clause requiring the company to reimburse the underwriter for any out-of-pocket expenses incurred during the process. Another important aspect of the letter is the gross spread or the underwriting discount. In most cases, the gross spread is 7% of the proceeds (see Chen and Ritter, 1998 for an excellent discussion of the uniform size of the gross spread). 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The term initial public offering (IPO) is used by company to raise capital by selling stock in primary market. Investopedia defines an initial public offering (IPO) as the first time a company sells its stock to the public. This is a way to raise money by issuing debt and it is only called IPO if the company have never issued equity to the public before. IPO is usually referred â€Å"going public† because company by selling portion The Process of Ipo - 3185 Words A Guide to the Initial Public Offering Process Katrina Ellis (kle3@cornel.edu) Roni Michaely (rm34@cornell.edu) and Maureen O’Hara (mo19@cornell.edu) January 1999 *All Authors are from Cornell University, Johnson Graduate School of Management, Cornell University Ithaca NY 14853. Michaely is also affiliated with Tel-Aviv University. A Guide to the Initial Public Offering Process A milestone for any company is the issuance of publicly traded stock. While the motivations for an initial public offering are straightforward, the mechanism for doing so is complex. In this paper, we outline the process by which companies are brought to market in an initial public offering. Our goals here are to delineate the specific steps†¦show more content†¦1 The power of Congress to enact legislation regulating securities transactions is based in the Commerce Clause of the constitution. The Commerce Clause which is contained in Article I, Section 8 of the constitution gives Congress the power â€Å"to regulate commerce †¦ among the several states †¦Ã¢â‚¬  So long as a transaction makes use of â€Å"any means or instruments of transportation or communication in interstate commerce†, it will fall within the reach of the federal securities laws. This includes the use of telephones and the mails. It is rare that a transaction will not use some instrumentality of interstate commerce and will thus fall outside the reach of the law. In addition, Congress has given the Securities and Exchange Commission the authority to administer the securities laws and to promulgate rules and regulations to supplement its enforcement powers. These additional rules are necessary to clarify statutes that are vague or ambiguous or to make substantive additions to the statutes so long as they are not inconsistent with the legislatively enacted statutes. In addition to the federal laws, the states all have their own securities laws, 4 To achieve this, the underwriter has a â€Å"due diligence† requirement to investigate the company and verify the information it provides about the company to investors. The Securities Act also makes it illegal to offer or sell securities to the public unless they have first been registered.Show MoreRelatedThe Process of Ipo3185 Words   |  13 PagesA Guide to the Initial Public Offering Process Katrina Ellis (kle3@cornel.edu) Roni Michaely (rm34@cornell.edu) and Maureen O’Hara (mo19@cornell.edu) January 1999 *All Authors are from Cornell University, Johnson Graduate School of Management, Cornell University Ithaca NY 14853. Michaely is also affiliated with Tel-Aviv University. A Guide to the Initial Public Offering Process A milestone for any company is the issuance of publicly traded stock. While the motivations for an initialRead MoreIpo Process in Bangladesh2563 Words   |  11 Pagesbasic idea of Initial Public Offering (IPO). In this report we try to find out, what are steps a company has to go through for IPO, according to the Security Exchange Commission (public issue rules 2006). At beginning of this report we give a little idea about IPO, then we descried why company go for IPO, after then we go through the IPO process step by step, and finally we draw a flowchart of IPO process with time allocation. Generally companies go for IPO to raise capital and other reasons areRead MoreIpo Process : Going On A Road Show1671 Words   |  7 PagesIPO Process – going on a road show: An IPO road show is a presentation by the company offering the initial public offering (IPO) to analysts, fund managers and potential buyers. The most important part of the IPO process is going on a road show. The purpose of the road show is to attract deep-pocketed investors. The road show happens before the deal is announced to the market and it represents action packed 2 weeks consisting of intensive meetings. The show requires 8-10 days multiple cityRead MoreFeasibility Report On Ipos, And The Process Of Buying An Ipo1446 Words   |  6 PagesI compile, through various mediums, information regarding initial public offerings, or IPO’s. The report includes areas such as defining an IPO, the performance of IPO’s, the current market for IPO’s, and the process of buying an IPO. Therefore, the feasibility report is directed at the retail or non-professional investor who may be engaged in purchasing IPO’s. I look to determine if the underlying facts creat e certainty that these instruments are profitable currently and in the long run. It appearsRead MoreThe Process of an Initial Public Offering (Ipo). the Underpricing Problem.3310 Words   |  14 Pagesa portion of itself to a large number of diversified investors. What occurs in this case is named IPO (Initial Public Offering): a security is sold to the general public for the first time, and thanks to this, usually, a liquid market will develop. The process is long and subject to strict rules and regulations. My purpose is that of going through the main steps of it, analysing pros and cons of IPOs and providing explanations for their apparent â€Å"underpricing†. I will mainly concentrate on the URead MoreWhat Type of Ipo Should Avaya Use - a Traditional Ipo or an Online Auction1428 Words   |  6 PagesCourse Number: FIN501 Module 1 Case Assignment Introduction Upon deciding to go public, a company looks into preparing an initial public offering (IPO). There are two IPOs with which a company can utilize: a traditional IPO or the relatively new Auction-based IPO that was made popular by Google. Avaya is currently planning for IPO. â€Å"Avaya is a global leader in business communications systems. The company provides unified communications, contact centers, data solutions and related servicesRead MoreInitial Public Offering: A Case Study of Avaya1315 Words   |  5 Pagespublic offering (IPO), the firm needs to determine how it wants to go about that process. There are a number of factors that the company needs to take into consideration. These include the expected buyers, the price, the method of the offering (online or traditional) and the choice of brokerage. Avaya is a phone systems maker that has a value of approximately $1 billion. The market for technology-based IPOs is good right now, with several companies coming to market. No t all the IPOs have been successfulRead MoreFin501 Case 11361 Words   |  6 PagesTrident University International Module 1 Case Assignment FIN501: Strategic Corporate Finance Dr. John Halstead August 9, 2013 AVG Technology: Traditional IPO VS. Auction Based IPO Our nation has suffered through a recession for the past decade. Small and large businesses, alike, have suffered directly resulting in American jobs being lost, the national debt skyrocketing into the trillions, and parents struggling to keep food on the table for their children. Foresight is a trait thatRead MoreInitial Public Offering For A Global Firm1196 Words   |  5 Pagesï » ¿Initial Public Offering for a Global Firm Introduction Initial Public Offering is a rigorous process where a firm decides to go public in order to enable it raise capital for the company that will enable it to fund its operations such as expansion plans, generate profits as well as make its investors happy. For the IPO to go successfully there are a number of important factors and players that come into consideration. These include investment bankers, underwriters, pricing, demand and supply amongRead MoreIpo : A Business Cycle Essay1305 Words   |  6 Pagesand start making positive profits, a company may choose of make an IPO. The term initial public offering (IPO) is used by company to raise capital by selling stock in primary market. Investopedia defines an initial public offering (IPO) as the first time a company sells its stock to the public. This is a way to raise money by issuing debt and it is only called IPO if the company have never issued equity to the public before. IPO is usually referred â€Å"going public† because company by selling portion

Wednesday, January 1, 2020

The Supreme Court s Court - 848 Words

The Supreme Court’s ruling to allow same sex marriage has been a big change in this country and a huge victory for the LGBT (Lesbian, Gay, Bisexual, and Transexual) community. The ruling has changed millions of American’s lives and touched even more. In fact, my manager is a lesbian legally married and being around them, for even a short amount of time, makes it obvious how happy they are to be married. As a religious man, I feel that it is unusual for me to support same sex marriage. Be that as it may, after observing my manager with her wife and considering how many other couples in the LGBT community could experience such happiness, there is no way that I could agree with denying them the right to marry their loved ones. When I assess the situation, it simply comes down to letting Americans live the lifestyle that they desire (within rationality) and putting them in the best position to live happily. I think equal opportunity marriage does that very well. As big of a step in the right direction as equal opportunity marriage is for the LGBT community, there is still more steps to take. They still have many social issues that they have to deal with such as discrimination and a lack of acceptance from our fellow Americans. Acceptance is always huge for a minority group and discrimination is something that nobody wants to endure. The problem is that often, people don’t consider the negative effects that they have on others. A study was done on students in 2009 on theShow MoreRelatedThe Supreme Court s Court1135 Words   |  5 Pages Analysis The Supreme Court’s ruling in Burns is important because the case involves a critical shift in Canada’s approach to extradition in cases involving capital punishment. In â€Å"effectively overruling† the decisions in Kindler and Ng, the Burns verdict now means that almost all extraditions from Canada that do not contain assurances that the death penalty will not be imposed violate the principles of fundamental justice. In that respect, â€Å"in all but exceptional cases† any exercise of theRead MoreThe Supreme Courts Decision And The Court s Court1338 Words   |  6 PagesIn the first scenario, there was a motion to suppress the rifle and shells that were seized from the glove compartment and under the passenger seat. However, the Supreme Court established three components that an officer may search in vehicle searches if the search is valid. Conduct a search of the passenger compartment of a car and of the contents therein if it is incident to a lawfu l arrest. Search the entire car and open the trunk and any packages or luggage found therein that could reasonablyRead MoreJeffery Rosen s The Supreme Court1681 Words   |  7 Pages Jeffery Rosen’s novel, The Supreme Court: The Personalities and Rivalries that Defined America follows the history of the Supreme Court of the United States through both personal and philosophical rivalries that shaped the transformation of laws and our lives. Rosen shows us the rivalries between justices and their ideologies and how their ideologies have shaped our laws today. Starting in 1952 with President Harry S Truman and ending fifty four years later with the presidency of George W. BushRead MoreAnalysis Of Antonin Scalia s The Court Of The Supreme Court975 Words   |  4 PagesAntonin Scalia, who is an Associate Justice of the Supreme Court of the United States, wrote A Matter of Interpretation: Federal Courts and The Law in 1997. Scalia is the Senior Associate Justice since he is currently the longest-serving justice on the Court. Scalia was born in New Jersey, but attended public grade school and catholic high school in New York City. Later, he moved onto attending undergraduate school at Georgetown University, and then receiving his LL.B degree from Harvard Law SchoolRead MoreThe Supreme Court s Support For Segregation1886 Words   |  8 PagesThe Supreme Court’s support for segregation in public transportation, decided in Plessy v. Ferguson, surged the implementation of the â€Å"separate but equal† doctrine into an array of facilities affecting everyday lives, including schools. The facilities and schools reserved for Blacks were strikingly separate but not equal to the services available for Whites. Blacks received out-dated, hand-me-down textbooks, school buildings lacked stability and comfort and Black students overall, were not givenRead MoreThe Supreme Court s Constitutional Bonds Essay1553 Words   |  7 Pagesprocess for an issue of such gravity and lasting implications. Chief Justice Roberts made a principal dissent, claiming that in just one day, the court has transformed the societal institution of marriage that has banded humanity together for millennia. Roberts made clear that no consensus is worth a decision he feels completely overstepped the Supreme Court’s constitutional bonds, stating â€Å"Celebrate the opportunity for a new expression of commitment to a partner†¦but do not celebrate the constitution†Read MoreThe Cherokee Nation s Supreme Court916 Words   |  4 Pages The Cherokee Nation’s supreme court recent decision to revoke citizenship of many Cherokee citizen defended of freed afro-Cherokees has caused a recent uproar. This, albeit without complete knowledge of the subject, calls into question the view of land sovereignty and how it acts with race throughout the history after the forced migration to what is now Oklahoma. Along with Cherokee norms and more broadly forced native migrants, it is also importa nt to regard the laws established through the DawesRead MoreThe Supreme Court s Judgment On Roe And Doe842 Words   |  4 Pagesealth Care Following the Supreme Court’s judgment on Roe and Doe, among the initial federal legislative reactions was enacting restrictions on the utilization of federal funds for abortions. For instance, there were restrictions on Medicaid money, and this was referred to as the Hyde Amendment. However, the restrictions were challenged almost immediately in the courts. Consequently, two classifications of the public funding cases were heard and judged by the Supreme Court. Principally, these involveRead MoreThe United State s Supreme Court1428 Words   |  6 PagesRepeatedly throughout history, the United State’s Supreme Court has changed their standing on labor laws, from supporting the right’s of employees to supporting the right’s of employers. In 1903, the Supreme Court concluded through Lochner v. New York that the government did not have the right to oversee businesses, but in 1908 the Supreme Court passed an unprecedented decision regarding labor laws. In Mu ller v. Oregon, the Supreme Court alternatively sided with the workers and upheld restrictionRead MoreEarl Warren s Supreme Court Rulings1161 Words   |  5 Pages Earl Warren s Supreme Court rulings helped various rights for many Americans, most of which are still used and enforced today. The Warren s Court ruling in Brown v. Board of Education ruled that segregation in public schools as unconstitutional. It s rulings on Mapp v. Ohio ended up resulting in the exclusionary rule. The rule made any evidence obtained illegally as inadmissible in court. In Reynold s v. Sims required that legislative districts across states be made as equal as possible in