A comparison of two poems by Robert Frost: “Ghost House” and “A Cabin in the Clearing”

The first of the two poems, â€Å"Ghost House† is formally structured. It is made up of six stanzas, each with five lines. It has a strict rhyme scheme: the first, second and last lines of each stanza rhyme, as do the third and fourth lines. This creates two neat rhyming couplets in each stanza, with the final line appearing disjointed as if it were an addition. This echoes the sentiments of belonging, in contrast with isolation and loneliness, that Frost expresses in the text. The tone of this poem is established immediately by the title. Although it is a commonly used phrase, and is also quite brief, the words â€Å"Ghost House† have uneasy and frightening implications. The poet has created an eerie mood in the poem that is contributed to by the use of the narrator character, the unknown â€Å"I†. The question of who, or what, this character is has been intentionally left unanswered by Frost, as well as many other questions. This encourages the reader to think more deeply about the poem, as the answers are not obvious, and in most cases not revealed at all. Unanswered questions instil in the reader a sense of instability and confusion, which serves to enhance the atmosphere of the poem. As these are the feelings expressed by the narrator character, this creates empathy. The subject of the poem is the house where the narrator lives, or â€Å"dwells†, and the â€Å"mute folk† that share it with him. Central to the poem is the fact that the house has â€Å"vanished† and that nature has returned and reclaimed the land where it once was. The sense of the passage of time, and the inevitability of life, existence and death, is a theme common to much of Frost's work. In this poem the reader is told that the house was destroyed â€Å"many a summer ago†. Although the circumstances surrounding the fate of the house are unclear, it is suggested that a natural disaster was the cause. Use of the word â€Å"vanished† implies that the house was destroyed suddenly, and the fact that it â€Å"left no trace but the cellar walls†¦ † suggests a disaster such as a fire, especially as the poem is set in America where wooden houses are common. Imagery is used, as â€Å"a cellar in which the daylight falls† is depicted, and the raspberries growing on the site are described as â€Å"purple-stemmed†. These images involve the reader in the poem, and highlight the combination of human influences and nature that is happening. The reader is given the impression that nature is the controlling force in the situation, that nature is infinite and perpetual, and people are insignificant in comparison. While they may have made an impact on their environment, nature has quickly erased it, as â€Å"the footpath down to the well is healed†. The word â€Å"healed† is an emotive one as it has connotations of pain, implying that the footpath was a wound on the landscape that has now been restored. It is a reminder of the fact that when we die it does not change the world; nature carries on, and we are soon forgotten. Throughout the second stanza there are examples of the site returning to its natural state, as the â€Å"woods come back†¦ † and the trees grow freely again. There is a sense of protection, with the use of the word â€Å"shield† to describe the grapevines growing over the fences. Nature is shown as a regenerative force as well as a destructive one. In the third stanza there is a repetition of the word â€Å"vanished†, referring to the house; it is described as a â€Å"vanished abode†. This reinforces the unusual situation of the narrator, that he lives in a house that does not exist. The narrator describes his â€Å"strangely aching heart†. This is a powerful reference, as the word â€Å"aching† describes a physical sensation, which is more effective than a purely emotional one, and a sense of pain is indicated. There seems to be a connection between the narrator and the house, he relates how the house is linked to the rest of the world by a â€Å"disused and forgotten road† possibly indicating that this is how he feels, that his connection with the world has been destroyed, and that he himself is â€Å"forgotten†. Imagery is used throughout the poem, as Frost describes the area surrounding the house, and the â€Å"stones out under the low-limbed tree†, presumably gravestones, that have been covered by mosses so that the names cannot be read. This conveys a sense of mystery, as the reader is not informed to whom the stones belong. There are a number of themes that recur through the text. The last two stanzas are primarily concerned with the â€Å"mute folk†, who cohabit the house. They are introduced abruptly, relatively late in the poem. They are mentioned casually, and it appears as if the narrator makes the assumption that the audience is already aware of their existence. This indicates that they are a permanent presence in the narrator's life, and are a concern to him. It is not clear who, or what, these people are, just as it is with the narrator. This sense of confusion is reinforced many times. There is an entire stanza devoted to the apparently irrelevant â€Å"whippoorwill†. This could be simply to create atmosphere, and to contrast with the shock of the next stanza in which the â€Å"mute folk† are introduced. The â€Å"mute folk† are described as â€Å"tireless folk, but slow and sad† with the possible partial exception of two individuals, referred to only as â€Å"lass and lad†. It is possible that these two people are not as sad as the rest of their peers because they have a connection; they â€Å"belong† to each other. One theme of the poem is loneliness and isolation. The house is described as â€Å"lonely† and the road as â€Å"forgotten†. The narrator is a lonely character, isolated from the world and unable even to communicate with the â€Å"mute folk†. It appears that the narrator has no home, that he does not belong anywhere. Even the house where he dwells is not described as his; he calls it a â€Å"house I know† and does not claim that it belongs to him. It is assumed that the title of the poem refers to a house inhabited by ghosts, but it could refer to the â€Å"ghost of the house† or the memory of a time when the narrator had a home, and a sense of belonging. There is an eerie sense of death in the text. The word â€Å"vanished† is repeated, indicating a presence which was, but is no longer, there. The abruptness with which the house â€Å"vanished† leads to the assumption that death was involved; that people died in a disaster of some kind. In the third stanza there is a reference to the night, often used as a metaphor for death. It is expressed simply as â€Å"Night comes.. † and this supports the suddenness of death in the poem. The narrator describes his environment as â€Å"the unlit place†. Although this could be a literal reference to the house, darkened now that night has fallen, it could also mean that â€Å"the unlit place† is death, and the fact that the â€Å"mute folk† share the place means that they are also dead. There is an obvious reference to death in the mention of the â€Å"stones† or gravestones. The second poem, â€Å"A Cabin in the Clearing†, has a similar tone to the first poem, and addresses similar issues. However, the two poems have very different forms. In contrast to the structure and rhythm of â€Å"Ghost House†, the second poem appears to be constructed in a much more random way. This is partly due to the conversational style in which Frost has chosen to write. As a result of this there is no rhyme scheme to the poem, and no set stanza format. The poem is made up entirely of dialogue between two characters, â€Å"mist† and â€Å"smoke†. In the first poem the title influences the tone of the poem considerably as it affects the way that the rest of the poem is read. In the second poem the title is more vague, and although it sets the scene for the rest of the text it does not establish mood in the same way. The title of this poem uses the definite article â€Å"the† when referring to the clearing, and the indefinite article â€Å"a† when referring to the cabin. This places emphasis and importance on the clearing and detracts from the influence of the people on the landscape, as the cabin is manmade and the clearing is natural. The subject of this poem is the â€Å"sleepers†, presumably the inhabitants of the â€Å"cabin in the clearing†. They are present in the poem from the start, as the character of â€Å"mist† states, â€Å"I don't believe the sleepers in this house know where they are. † The two characters seem to hold different opinions of the â€Å"sleepers†, with mist appearing more accusatory and demanding of them, while smoke is more sympathetic. Both narrators appear not to understand the actions of the people There are many similarities between the two poems. Both have narrator characters, and the perspective of these characters is the same. In â€Å"Ghost House† the narrator is an observer of the â€Å"mute folk†, while in the second poem the narrators are observers of the â€Å"sleepers†. However in the first poem there is only one narrator, who expresses one view, and in the second poem there are two narrators who express two different and slightly conflicting views. The narrators in the two poems have different attitudes towards the people that they are watching. In the first poem the reader is given the impression that the narrator would like to communicate with the â€Å"mute folk† but is unable to. In the second poem it seems as if the narrators could communicate with the â€Å"sleepers† if they wanted to, but they choose the role of observers voluntarily. However in both poems the narrators seem removed from the world of those they observe. In â€Å"Ghost House† this removal becomes isolation, and the audience is made to feel more sympathetic towards this narrator than the equivalent characters in â€Å"A Cabin in the Clearing†, as in this poem the narrators have a bond with each other, and are not as dependant on the â€Å"sleepers†

Research: Oxygen and Carbon Dioxide Essay

I walk into my first period class at 9:29 right before the 9:30 bell rings for class to begin. My science teacher, Mr. Sherman, has to make an announcement to the class. He says, â€Å"I am assigning a five paragraph essay due at the end of the week about photosynthesis and cellular respiration. † I thought to myself, how am I going to write a five paragraph essay on photosynthesis and cellular respiration? But then again, all it takes is some research. To begin with, the process of photosynthesis starts with Carbon Dioxide, Water, and Sunlight. The Carbon Dioxide, Water, and Sunlight starts of by going in to the plant and makes its way through the plant and out. Its job is to convert sunlight energy into chemical energy. As the cycle is ending glucose (sugar), and oxygen come out of the plant and transfers into cellular respiration. This all takes place mainly in the leaves of the plant. Obviously, the photosynthesis cycle isn’t that complicated. Secondly, cellular respiration is the process when the glucose and oxygen that comes out of a plant then transfers into either a plant or animal cell. It allows organisms to use energy stored in the chemical bonds or glucose. The energy in glucose is used to produce ATP energy. Cells use ATP to supply their energy needs. Cellular respiration is therefore a process in which the energy in glucose is transferred into ATP energy. In addition, during the process of photosynthesis the carbon dioxide goes through the leaves and the water goes in the roots of the plant. The sunlight then hits the plant so that the carbon dioxide and water mix with the sunlight in side of the chloroplast where the light is trapped. The mixture then gives off a substance called glucose (sugar) and also oxygen. Then the glucose and oxygen transfer to a plant or animal cell . This is called cellular respiration which is when the chemical energy of â€Å"food† molecules is released and partially captured in the form of ATP. Carbohydrates, fats, and proteins can all be used as fuels in cellular respiration. At the end of the cycle carbon dioxide and water is produced, then sunlight is added and put back through the process of photosynthesis. To conclude, by the end of the week it was time to finally turn in my essay. It only took a slight amount of research to come up with a five paragraph essay. Before, I thought I would never be able to wright it, but I proved myself wrong and I happily turned in my essay. As an overview, carbon dioxide, water, and sunlight are mixed and go inside a plant and glucose and water comes out. Then, the glucose and water goes in either a plant or animal cell and ATP energy is created and what comes out is carbon dioxide and water and then the cycle begins all over again.

HIPPA Tutorial Summary Essay

HIPAA stands for Health Insurance Portability and Accountability Act. HIPAA privacy rule was passed by congress in August of 2002. According to Understanding Health Information Privacy (2014), â€Å"The HIPAA Privacy Rule provides federal protections for individually identifiable health information held by covered entities and their business associates and gives patients an array of rights with respect to that information. At the same time, the Privacy Rule is balanced so that it permits the disclosure of health information needed for patient care and other important purposes.† The Security Rule specifies a sequence of administrative, technical, and physical safeguards for covered entities and their business associates to use to assure the confidentiality, availability, and integrity of electronic protected health information (Understanding Health Information Privacy, 2014). The HIPAA, Health Insurance Portability and Accountability Act, tutorials are a memento that there is c ontinuous need for progress on the part of health care professionals and individuals. There is a strong need among health care professionals to know the guidelines, rules and regulations to stay within the laws set onward by the federal government. What did you learn from the HIPAA tutorial? The HIPAA tutorial was very educational and informative. I learned many things from this tutorial; however, I found the online information the most fascinating. Personally, I started in healthcare soon before we had EMR’s (electronic medical records) or as HIPPA calls them, EHR’s (electronic health records). A majority of us feel that our health information is personal as well as private and should be protected. The federal government put in position the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule to ensure you have rights over your own personal  health information, no matter what form it is in (Understanding Health Information Privacy, 2014). The government also created the HIPAA Security Rule to require specific protections to safeguard your electronic health information (Understanding Health Information Privacy, 2014). A few possible procedures that can be built in to EHR/EMR systems may include: â€Å"Access control† tools like PIN numbers and passwords, to help limit access to your information to authorized individuals (Understanding Health Information Privacy, 2014). â€Å"Encrypting† your stored information. That means your health information cannot be understood or read except by those using a system that can â€Å"decrypt† it with a â€Å"key† (Understanding Health Information Privacy, 2014). An â€Å"audit trail† characteristic, which records who accessed your information, when and what changes were made (Understanding Health Information Privacy, 2014). There is so much new technology and more modern advances in technology to come. With just about everything being based on computers comes with a whole new set of procedures and policies to keep individuals personal health information private. Federal law requires hospitals, doctor offices, doctors, and other health care providers/professionals to notify you of a â€Å"breach† (Understanding Health Information Privacy, 2014). The law also requires the health care providers/professionals to notify the Secretary of Health and Human Services (Understanding Health Information Privacy, 2014). The Understanding Health Information Privacy (2014) â€Å"If a breach affects more than 500 residents of a state or jurisdiction, the health care provider must also notify prominent media outlets serving the state or jurisdiction.† This requirement helps patients know if something has gone erroneous with the protection of their information and helps keep providers accountable for HER/EMR protection (Understanding Health Information Privacy, 2014). Also, I did not know before the tutorial explained it that there are several layers of protection each computer system has. The different types of  protection systems have are fire wall, virus detection, cryptography, and intrusion detection systems (Understanding Health Information Privacy, 2014). Firewalls get rid and/or locate viruses (Understanding Health Information Privacy, 2014). Virus detection blocks distrustful traffic from entering the computer system (Understanding Health Information Privacy, 2014). Cryptography preserves confidentiality (Understanding Health Information Privacy, 2014). Intrusion detection systems look for patterns of misuse (Understanding Health Information Privacy, 2014). The tutorial provided imperative information on integrity, confidentiality, and availability of all e-PHI’s created. Integrity is based on an individual’s values and trust (Understanding Health Information Privacy, 2014). Confidentiality is shielding information from unofficial disclosure (Understanding Health Information Privacy, 2014). Availability is appropriate authorized people having access to individuals personal health (medical) information that is required (Understanding Health Information Privacy, 2014). All of the knowledge I have learned from the HIPPA tutorial I will be able to use not only in my future health care career but also as a patient myself. Why is this information important? Privacy allows us to make our own decisions free from compulsion (Understanding Health Information Privacy, 2014). Privacy is valuable because it facilitates and/or promotes other essential values including ideals of personhood such as (Understanding Health Information Privacy, 2014): †¢ Personal autonomy (the ability to make personal decisions) (Understanding Health Information Privacy, 2014). †¢ Individuality (Understanding Health Information Privacy, 2014). †¢ Respect and †¢ Dignity and worth as human beings (Understanding Health Information Privacy, 2014). †Informational privacy is seen as enhancing individual autonomy by allowing individuals control over whom may access different parts of their personal information† (Pritts, 2010). It also allows people to maintain their dignity, to keep some characteristic of their life or behavior to themselves (merely because it would be embarrassing for other people to know about it) (Pritts, 2010). Pritts (2010), †Privacy also allows people to protect their assets or to avoid sharing information with others who would use it against them, such as discrimination by employers, educators, or insurers.† An individual’s health/medical records can include some of the most intimate details about a person’s life. They document a patient’s physical and mental health, and can include information on social behaviors, personal relationships and financial status (Pritts, 2010). I learned a huge amount of important information from the HIPAA tutorial. Case in point: the HIPAA law was passed in August of 2002 and it requires a covered entity to secure patient records containing individually identifiable health information so that the confidentiality of the information is protected (HIPAA Security Basics: Health Care Workforce, 2004-2010) (Hippa Health, 2010). Another item I learned was the six steps to comply and document each process (Hippa Health, 2010). Throughout the tutorial it discussed an assortment of information about risk assessments, viruses, and denial of services, hackers, and breaches and consequences of HIPAA Security policy (Hippa Health, 2010). How will you use this information in the future? The information I learned from the HIPAA tutorial will help not only me but other health care professionals to understand how important complying with the rules and regulations has to be in order to provide the best protection for patient information. Understanding the regulations implemented in HIPAA will help health care professionals make the right decisions when releasing, sharing and discussing patients health care information. Every person is entitled to privacy in their lives and it is no different when it comes to health care. Conclusion Understanding and having the general knowledge of the rules and regulations implemented in HIPAA will further assist health care professionals to make the correct decisions when releasing, sharing, and discussing patient’s personal health care information. The privacy of health information as well as personal information continues to be a challenging issue. As a majority of health information is computerized, individuals communicate concern about their privacy over their personal health information. To help alleviate public concerns, According to Understanding Health Information Privacy (2014) â€Å"Federal rules governing the use and disclosure of health information were promulgated under the Health Insurance Portability and Accountability Act (known as the HIPAA Privacy Rule).† References Understanding Health Information Privacy. (2014). Retrieved from http://www.hhs.gov/ocr/privacy/hipaa/understanding/index.html Pritts, J. L. (2010). The Importance and Value of Protecting the Privacy of Health Information: The Roles of the HIPAA Privacy Rule and the Common Rule in Health Research . Retrieved from http://www.iom.edu/~/media/Files/Activity%20Files/Research/HIPAAandResearch/PrittsPrivacyFinalDraftweb.ashx HIPPA HEALTH. (2010). Retrieved from https://www.courses.learnsomething.com/scripts2/content.asp?a=9F7B983E559541A692699E4D6709D56D&ph=0A2241E0A9004D7EB6AD1293A5A86346&r=BeginFlashCourse&screenw=1280&screenh=800

The Service Factors of the Sunderland International Hotel Essay

The Service Factors of the Sunderland International Hotel - Essay Example This paper illustrates that the poor service quality of the Sunderland International hotel has resulted in the fact that the customers of the Sunderland International hotel have started providing negative feedback about the Sunderland International hotel on the facebook page of the Sunderland International hotel and on trip advisor. The company has not put great emphasis on the service of the Sunderland International hotel and this has resulted in the company earning negative reviews. Throughout the course of this report, the focus is on to try and resolve this problem. The report progresses through the steps of first defining the different concepts of service marketing and service quality, then the report tries to focus on the problems of service that the Sunderland International hotel currently faces and the steps that can be undertaken to solve the problems relating to the service. In the analysis of the problems relating to the service, it is found that the main problem lies with the fact that the employees of the Sunderland International hotels are not motivated enough to provide adequate service to the guests of the Sunderland International hotel. It is also found that the Sunderland International hotel lacks proper communication with the customers of the Sunderland International hotel and does not know what the customers actually want. The solution to the problem lies in the improvement of the human resource practices and improving connectivity with the customers. Service quality management is considered as an important aspect of the hospitality industry. The service quality management is engaged in improving the quality of the services that are provided to the customers. It deals with minimizing the gap that exists between the service expected and service perceived by the customer. The importance of the service quality management can be ascertained from the fact that it improves the productivity and profitability of the industry. The main aim or the obj ective of improving the service quality management in the hospitality industry is to retain its customer by satisfying its customers or clients.

Occupational Safety and Health (OSHA) Essay Example | Topics and Well Written Essays - 3500 words

Occupational Safety and Health (OSHA) - Essay Example Prior to the 1970s, such risks were left to the companies to handle and there was minimal intervention from the federal government by way of work safety-related policies and regulatory standards. By the late 1960s, workplace accidents resulted to the death of an average 14,000 workers per year while an estimated two million more were harmed or disabled. Furthermore, there was too little known about the health effects of the variety of chemicals that were being churned out of factories even as environmental advocates have been raising the alarm on the possible dangers of exposure. This disturbing rates and figures prompted President Nixon to sign the Occupational Safety and Health Act in Dec. 17, 19701. The enactment of the Occupational Safety and Health Act of 1970 (OSH Act) marked the first time that a federal program was established to protect and ensure the health and safety of the entire country’s work force by reducing job-related illness, injury, disability, accidents, and death. Then-Secretary of Labor James Hodgson’s first step was to establish the Occupational Safety and Health Administration (OSHA), a special agency within the United States Department of Labor tasked to implement and enforce the said Act; OSHA was established effective April 28, 19712. In order to carry out the mission which it was set out for, OSHA had to start from scratch, using the Bureau of Labor Standards as the nucleus from which to build up the program3. The OSH Act also established the National Institute for Occupational Safety and Health (NIOSH) as the agency to conduct researches on known and possible work-related safety and health problems and to recommend regulatory standards which OSHA should consider based on their findings; as well as that, NIOSH was also to provide technical assistance to OSHA4. OSHA’s principal client groups are mainly organized labor and the business community; as such, they have played active roles

Enterprise Networking and Security Assignment Example | Topics and Well Written Essays - 3000 words

Enterprise Networking and Security - Assignment Example 1 Introduction It has been concluded by some experts that the year 2012 is considered to be the worst year in terms of computer network security breaches (Schirick 2012). Likewise, the year that has not even passed the half year mark, some of the foremost companies were sufferers of network security breaches resulting in massive losses (Schirick 2012). However, the news buzz only highlights Sony and Citibank to be victims of network security breaches, as these companies are popular among the public. The other sides of the picture highlights organizations of all sizes are affected by the consequences of network security breaches. Likewise, it can be concluded that network security risks are continuously evolving, modifying and growing at a rapid pace. Organizations normally install a firewall and even intrusion detection systems that triggers alerts of any suspicious activity, as these two components only covers the technical domain and not the human and physical domain. The current n etwork scenario is utilizing a Virtual Private Connection that is connecting one or more sites. However, the VPN connection is also entitled to allow internet traffic on the same dedicated line from the Internet Service Provider. Moreover, the current network only utilizes a single firewall that is located at the main campus of the university. It concludes that the rest of the two remote sites are only protected via a simple Network address translation function that is incorporated in a DSL modem. Moreover, there are no advanced security appliances such as Intrusion detection systems for analyzing and monitoring any suspicious activity that may possibly become a threat to the University’s computer network. Moreover, there is no patch management for updating security patches in the workstations connected to the network. There are no indications of hardening servers for instance, email server, application server, centralized server and database server must be hardened and needs physical protection as well. 2 Security Vulnerabilities The current network security vulnerabilities will be accessed in three categories i.e. logical security, internal security and external security. As far as logical security is concerned, we can see that the fig 1.1 demonstrates a firewall, Microsoft Internet Security and Acceleration (ISA) server and a domain controller with Microsoft Active Directory. The three categories for network vulnerabilities are categorized as below: 2.1 Logical Vulnerabilities The current logical controls for protecting information assets within the network are active Microsoft Active directory, ISA server and a Firewall. The Microsoft active directory is not primarily a security control, as it does not mitigate any risks associated with viruses, worms, Trojans, phishing, spam, denial of service attacks etc. however, it provides a secure administration of user profiles and File sharing features. File sharing threats are spreading on a rapid pace, as every now and then, new file sharing technologies are getting being developed and in demand. Controls will not only provide value from all network based services, but will also augment productivity for the organization in terms of revenue, customer loyalty and competitive advantage. Workgroup based environment is not centralized. For instance,

To what extent, Salford University lecturers & under graduate students Essay

To what extent, Salford University lecturers & under graduate students adopt the idea of social network communication - Essay Example The important key factors of communication are accuracy, time consuming and readable content. â€Å"Most impotent factors when transferring data from one computer to another or telephone call are time – consuming, quality and connection † (Jordon & Churhill 1987). Digital communication is defined according to the free dictionary by Farlex â€Å"electronic transmission of information that has been encoded digitally† (www.thefreedictionary.com). Education organisation uses communications to build a strong relation between lectures and students. Student can gain maximum level of knowledge, improving their skills and get the kind of support they need from their lectures using the gate of communication. In the UK, Salford University the main communicate between students and lectures are Salford University website (Black Board) or university email account. However, as individual effort some lectures at Salford University are recently trying to use social network to com municate with student. â€Å"Social network defined as a â€Å"users can send messages to public or particular group in different form as text, media etc. In this case social network can communicate with one or multi members† (Price at al, 2009). For the last three years studying at Salford University I found many students checking their social network first before they start their main work. Also in my first academic year in business school I learned from emerging technology lectures the use of social network for the benefits of education. This observation gives me an idea of the research topic. Some education staff at different level of education round the word use social network for the benefit of education with a limitation due to the risk and lack of awareness. In the other hand social network in not used in Salford University by all lectures this is my main reason for my research which I will try to cover to what extend Salford University will adopt the idea by student s and lectures. 2. Aims My intention is to find out to what extend Lectures and under graduate students at Salford University are interested in social network communication during their academic year. 3. Objective 3.1. Primary objective a) Discussing the topic with my supervisor. b) Finding previous research reports, article, and books. The research framework c) Develop and run questionnaire d) Get in contact with lecturers using social network within Salford University for more knowledge. e) Data analysis with the help of math scope at Salford University. f) Final report. 3.2. Secondary objective a) Finding and study the method of an education organisation adopting the idea. b) Get in touch with lecturers using social network outside Salford University and discuss the concept. 4. Literature Review How social net work is used? â€Å"Today there is a lot of thematic social networks that are trying to get the attention of new visitors and members every day†. â€Å" Education i s an evolutionary realm; it has been changing and including new practices since its beginnings in order to support changes in society, from the most recent technologies one of the most popular are society networks especially among youngsters† (A. Mora-Soto, 2009). Many people use social network for different purposes. Table 1 below shows how many people use social network spicily above the age of 15 years. In table 2 shows a statistic figure of important cities in UK like Manchester using social netw

Risk Assessment of Strident Marks Essay Example | Topics and Well Written Essays - 500 words

Risk Assessment of Strident Marks - Essay Example This also computes a covariance of returns between any the stocks and the market value where they have positive covariance, and those that move in opposite directions will have negative covariance. The expected return and variance of several stocks, a portfolio of these stocks that has a desired variance (risk) with a certain expected return. The expected return is the measurement of investment risk, what variances can be expected by the amount of investment. CAPM formula. The CAPM formula is: Beta is the overall risk in investing in a large market, like the New York Stock Exchange Beta is the R-squared statistic found in the regression analysis. The Beta of a Strident Marks is risk compared to the Beta (Risk) of the overall market. Beta indicates the volatility of the security, relative to the asset class (Frontline Systems, Inc. 2006). In conclusion, the Beta statistic defined by R-Square is positive 1 in the Market analysis, and 0.004 in the Stock analysis, it can be assumed, provided that the stock and market follow a normal distribution, that the stock holds a 40% greater risk than that market

Review of Evaluation of Jamaica's Path Essay Example | Topics and Well Written Essays - 2000 words

Review of Evaluation of Jamaica's Path - Essay Example The program is concerned with provision of cash transfers to health centers and academic institutions. The program has grown to other parts of the world. In the article the growth of CCT is referred to as the CCT wave. This program has been proved to be very efficient in the education and the health sectors in many countries in the world. The program is also affected by some factors like the household and the quality of the services provision. Furthermore, the program is implemented differently in different parts of the world. In addition, the other variables are the amount of benefits accrued and the input amount also varies. In Jamaica the program analyzed is called the PATH- program of advancement through health and education. PATH as an organization has two major components. It gives assistance to the children below 17 years in education and health sectors. The organization is committed as it visits health centers after two weeks during the first year and two times in the second and consecutive years. It offers social grants to pregnant women, the poor mothers, the disabled women and the destitute adults below 65 years. The care and the grants are non-conditional in all the regular clinics. To fully understand the program, figure 1 gives the facts in a table manner. There are some differences between short term and the long term outcomes of this program. In the model, the short-term outcomes are felt after the beneficiaries enroll. In the model, the long term outcomes is shown by dotted lines and it takes some more time to cause an effect that can increase human capital for the poor. There are several conditions that are put out for one to be eligible to participate in this program. First, a firm has to apply to the labor and the Social Security Ministry parish offices. Also it has to provide a detailed socio-economic and a demographic information which will allow MLSS to be in a position to calculate an applicable household score. The score is later used i n finding the eligibility of the program. The evaluation program was based on the site visit which was conducted in two distinct rounds. In each of the rounds that were conducted, there was a random visit to the chosen parishes in whole country. There was focus on groups which had some beneficiaries and an interview with the MLSS representatives either from health centers, schools and post offices. Eligibility information was given out by the interviewees and the participants of the focus group. The two parties also provided adequate information about the health, education requirements and the adequate benefits. The success of PATH was fostered by MLSS operations. The stakeholders had a feeling that the program’s missions had been adequately accomplished. Despite the success in the program, there are some weaknesses that should be improved. First, the beneficiaries have to receive their dues on time. This will reduce the hardships that the beneficiaries face. Delays can lead to many problems as the shareholders in PATH do not have any spare resources which can lead to difficulties in finance management. Secondly, the stakeholders have to be provided by accurate information about participation of the healthcare and schools. The suspension of the PATH benefits should be disputed. Furthermore, MLSS should make a quick pay after an error has been realized. This will lead to a satisfaction of the both parties. During the analysis, PATH was created to increase Jamaica’

Where you may get it wrong when writing English Essay Example for Free

Where you may get it wrong when writing English Essay Reporting and Paraphrasing Introduction Paraphrasing is the use of different words to express meaning or clarify either written or spoken statement. Paraphrasing is a commonly used feature when writing. It is when one puts another person’s ideas in his or her own words (someone elses ideas in your own words) and not just rewriting a paragraph. Some of the important words in paraphrasing include: passive this is written from an active sentence. I.e. John drives a car, this active the passive form of this is a car is driven by John. Existential clause in a sentence refers to the existence of something (there exists or there is) (Barkho, 2011). For example, ‘there are girls in the class’ this is an existential clause. Extra-position is the act of putting the keywords at the end of a sentence (Barkho, 2011). For example, ‘how frustrated with their kids are they?’ This can be rewritten as ‘how frustrated are they with their kids?’ cleft sentence is one that contains a main clause as well as a dependent clause. I.e. who did Stan see at the party? It was Nick that Stan saw at the party. It was Stan who saw Nick at the party. The three sentences can be written as ‘Alice told me that Stan saw someone at the party that he knew from his high school days. It turns out it was Nick that Stan saw at the party. Fronting or preposing. Is a sentence construction in which a word group that customarily follows the verb is placed at the beginning of a sentence? (Barkho, 2011) For examp le, the garage was on the right of the house, ‘On the right of the house was the garage.’ Reported speech is the opposite of the direct speech for example I like ice cream (Direct speech). She says she likes ice cream (Reported speech) (Barkho, 2011). Question 2 article                   Mick and his brother Trig are hanging on a rail outside their home enjoying the scene of the neighbourhood. Dressed in their trainers, the caretaker to their estate sees them ordering them down from the rail. 19 year old Mick who himself is a member of the east London gang shouts back at the caretaker and threatens to beat him up. These kinds of confrontation between Mick add the caretaker is the order of the day in the inner-city London, symbolizing broken Britain. Having been raised from a broken family (fronting), his life had gone a mess. He indulged in sex at the age of 14 and at age 15 he was doing drugs. Despite his good performance in GCSE which could have enabled him secure a place in Sixth Form College, he only looked forward to one place that he dreamed of joining was Feltham jail (Reported speech). This urge came from the time he watched a documentary on TV which portrayed young inmates. Mick’s wish was achieved (passive) when he was sentenced (passive) for 14 months after being charged (passive) with robberies in east London. According to Mick, the Feltham turned to be the best place he has ever been. Three meals in a day, TV, private bedroom (existential) and other luxuries are part of what you enjoy in the jail. The impression to the young people outside is that, they want to be jailed as they think it is an honour, and it is even better than school. The mentality in the jail among the youth is that one does not have to hustle for a living as everything is provided. For the rest of boys in the streets and outside there, going to Feltham is a key part in their lives. Moreover, they find it a substitute to their homes and the chaotic life associated to the homes. The main question arising from this perception is ‘if the prisons are no longer deterrent, then what could be to the young ones in the society. Lewis refers to Mick as a head case Mick. This is after saving him from the young gang that hand threatened to him. Lewis got Mick into a plumbing course hoping to turn him round but to no avail. Despite the situation Mick talks of other gangs made of youth such as the Black hawk boys and Asian gang. However, his group is the most feared d in east London. Despite the police being aware of his group, they are not successful in hunting them down as there is no particular group leader. Mick’s day is entailed with taking care of the drug business. He gets the staff from the supplier, and takes to his customers, later in the day he enjoys the evening with his girlfriend. Despite dong the drugs, Mick claims it is easy to sell wind, but it does not make good money as cocaine and heroin do. Despite the rotten life in drugs, Mick has a dream of a good big house and cars and hopes to one day get a job, but he is not sure of the best time to legit. A two year feud with another boy leaves Mick with a gashed lip. Despite respect for Lewis, Mick plans to make it even with the boy by revenging. He likens the life to a video game you either die early or you play to the end. The incident makes Mick always walk around armed with a weapon (9mm Glock pistol). The jail is not solving the purpose intended, and Lewis looks for an alternative to save the at-risk boys in London. He looks forward to coming up with 1000 ‘Capital Men’ to save the boys. However, the menace has greatly the black families which the politicians have all feared to address. After a period of 5years in drugs and city crimes, Mick is tired of it now. However, trig who has all time watched his mentor Mick, says, â€Å"I dint fear Feltham if Mick made it, I can also handle it†. At the end, Mick says Young people are like blind people crossing the highway. They cannot be able to tell what coming down road and instead he to me for guidance. Feltham was a good experience but as one gets older, you comprehend there are better places to go on holiday. I can tell Trig that, but I highly doubt he would even listen to me. (Direct speech). References Barkho, L. (2011).  Where you may get it wrong when writing English: A practical guide for students, teachers academics and professionals. Norderstedt: Books on Demand. Smaby, R. M. (1971).  Paraphrase grammars. Dordrecht: Reidel. Source document

Impact of New Media Technologies on the News

Impact of New Media Technologies on the News This essay argues that new media technologies have impacted on the structure of international news. As development of new media technologies is not a linear progression (Logan, 2010), what constitutes ‘new media technology’ changes from time to time. The exact definition of new media is arbitrary as television back in the 1950s is considered the new media but at this present moment, it no longer is. Recognising the transitory of the term ‘new media technologies’, I agree with Logan (2010)’s definition of new media technologies as digital, two-way interactive media with ‘the ability to combine text, audio, digital video, the Web, email, chat and a cell phone’ (ibid, 2010: 5), which is different from electric mass media such as TV or Radio posit by McLuhan in 1964 (ibid, 2010). As Shapiro (1999) articulates, â€Å"the emergence of new, digital technologies signal a radical shift of who is in control of information, experience and resources † (cited in Croteau William, 2003: 322) reinforces my support on the statement that new media technologies have impacted the structure of international news. Therefore, in order to illustrate my stance, I will discuss how the functionality of new media technologies, specifically mobile devices and the social media platform- Twitter have impacted the structure of international news in terms of its news production and distribution. Furthermore, I will look at the wider discussion sphere as to how new media technologies have impacted the media environment with relations to the structure of international news. As media coverage on international news according to Moeller (1999) focuses mainly on war, famine, pestilence and human misery issues, I will be using the case studies of 7/7 London Bombing and the Israel-Gaza conflict as examples. First of all, this essay argues that the functionality of new media technologies like smartphones have impacted the structure of international news in terms of news production. With the increase to access and ownership of new media technologies, in this context culture production tools, â€Å"today everyone is a reporter† (Utley cited in Holms, 2001: 126). Smartphones are typically defined as mobile phones with advanced capabilities such as internet access, camera function, voice and video recording (Smith, 2011). These capabilities within a mobile device, I argue are potential mediated tools for news gathering, enabling ordinary citizens to generate their own news content especially in times of unfortunate event. For example, during the 7/7 London bombing incident where journalists were denied access to the sites of bombings, the public capture images and videos of the bombing attacks using smartphones (Allan, 2007). These photographs and videos captured by ‘people who are not professional journalists and are unrelated to news organisations’ are what Wardle Williams (2008) defined as user-generated contents (UGC). With relations to the 7/7, news agency and organisation like Reuters and Sky News initially have no confirmation of what was going on at London’s Liverpool Street station (Allan, 2007). Instead of obtaining news material from professional journalists, evidences of this breaking news came from UGC captured by eye-witnesses (Allan, 2007). This demonstrates that in times of emergency, producer of international news rested in the hands of whoever has the means of cultural production (Beckett, 2009). Realizing the difficulties entering the site of incident, BBC News site publicly solicit photos and statement of witness (Allan, 2007) and as a result, received over thousands of news materials. As such, this proves that the functionality of new media technologies like that of smartphones has enabled the production of UGC, thus aff ecting the production of international news which are formerly generated ‘exclusively’ by professional journalists (Beckett, 2009). Due to the functionality of smartphones that connects users to the Internet, this essay moves on to argue that social media, another form of new media technology has impacted the structure of international news in terms of news sourcing and distribution. Hahn (2013) asserts that BBC journalists’ referral to Twitter has increased by 500% between 2010 and 2012. As opposed to traditional international news sourcing which rely on the four global news agencies namely Agence France-Presse, Associated Press, Reuters and Agencia EFE (Belair-Gagnon, 2013), Twitter has become a valuable source of reportage for modern journalists (Hermida, 2010). BBC News editor agreed that social media help journalists to see what people were seeing and experiencing in real time (Belair-Gagnon, 2013). For example, updates of 7/7 bombing documented by citizens on Twitter allow news organisations to come up with a precise timeline of the attacks. Furthermore, amateur journalists who are on the ground in t imes of emergency sent texts on to Twitter and further spread it across other social media like Facebook, Instagram and MySpace through actions of ‘re-tweeting’, re-blogging’, ‘sharing,’, and ‘tagging’ (Belair-Gagnon, 2013). This decentralized distribution of international news to not only official news organisations but also other unofficial avenues like that of social media is a sign of how new media technologies have impacted on the previously vertically distributed international news (Goode, 2009) by changing it into the present day horizontally shared model. However, I acknowledge that there have been concerns over the quality of UGC and legitimacy of tweets used in international news reporting (Bowman Willis, 2003). For example, in the event of the 7/7 bombing, mainstream media misreported the number of explosions, causing many to thought there were six explosions but in actual there were only three (BBC News, 2005). Despite the uncertainty over the authenticity of the information extracted from social media, mainstream media still adopts the ‘publish then filter’ journalistic style (Kperogi, 2011). As messages on Twitter often consist of unsubstantiated rumours whenever there is a major breaking news event, such unverified news source may jeopardizes a media organisation’s corporate ideology such as that of BBC’s ‘being impartial and accurate’ (Hermida, 2010). Nevertheless, despite such risks, BBC still broadcasted a ‘shaky’ video clip taken with camera documenting the real-life sto ry event of commuters being trapped underground (Allan, 2007). This is probably due to public’s demand for minute-by-minute report (Belair-Gagnon, 2013), especially in times of emergency like that of 7/7 has changed the traditional structure of international news of presenting news as a whole. Owing to globalization, flow of information has speeded up and with global communications infrastructures that links distant communities across the globe, new media technologies supply us news feeds across the world (Terry, 2007). As such, this essay argues that despite the controversy over the inaccuracy and low quality of news sourced via new media technologies, UGC remain valuable to newsgathering in times of crisis (Belair-Gagnon, 2013). After looking at how new media technologies have impacted the structure of international news in terms of production and distribution, I further argue that new media technologies has caused a ripple effect to the wider international news media environment. This statement is supported by Kperogi (2011)’s assertion that the new media technologies have challenged the ‘dominant cultural hegemony’ of global media organisations. For example, the emergence of citizen journalists which is the resultant of new media technologies have become the watchdog of mainstream media (McQuail, 2008), thus indirectly affecting the structure of international news. Meraz (2011) further contends that as contemporary cultural production tools have been ‘democratized to the masses’, the increase in citizen journalism has contributed to the creation of panopticon effect where mainstream media are under the surveillance of citizen monitoring (Stones cited in Meraz, 2011). As a m atter of fact, citizen journalists who are generally perceived to uphold the notion of ‘freedom of expression’ (Krumsvik, 2010) often question the editorial structure of international news which they condemned as narrow, homogenous and pre-determined by news agencies (Holm, 2001). As the Internet has allowed media users to bypass traditional gatekeeper in publishing news (Holm, 2001), citizens are being given an opportunity to create a networked public sphere that deviates from the hegemony public sphere. For example, the creation of Twitter-sphere and the use of hashtag ‘#’ (Butcher cited in Hermida, 2010) such as #GazaUnderAttack demonstrate a deviation from the Western international news that deliberate structure Israel as the only victim in the Israel-Gaza conflict. As such, I argue that the prominent usage of hashtag demonstrates how new media is used to provide narratives of war from a marginalized group’s news angle. As the intention of contem porary journalists practice is to provide independent and wide-ranging information that a democracy requires in news reporting (Bowman Willis, 2003), Goode (2009) reckons such journalistic practices poses challenge to mainstream corporate media. Therefore, new media technologies have empowered citizen journalists the ability to challenge the spreading of the dominant Western worldview on the structure of international news. In order to mediate the contestation from citizens as discussed above, international news organisations such as CNN, BBC, ABC, Fox News and MSNBC initiate corporate-mediated citizen journalism projects such as iReport.com, UCG Hub, i-Caught, uReport.com and FirstPerson.com. (Belair-Gagnon, 2011; Kperogi, 2011). This incorporation of citizen journalism in the mainstream media offers ordinary people the opportunity to contribute unedited, unfiltered and uncensored UGC (Kperogi, 2011), reflecting news organisations democratic practice in news structuring. Furthermore, news organisations also solicit public’s opinion for example, BBC uses SMS poll to gather audiences’ heterogeneity views (Lee-Wright, 2010). This connotes news organisations, in the face of new media technologies advocate open conversation, transparency as well as encouraging heterogeneity of opinions in structuring international news reporting (Belair-Gagnon, 2011) by recognizing the usefulness and credibili ty of UGC (Bruns, 2007). Nevertheless, I argue that this adoption of corporate-mediated citizen journalism is a double-edged sword that on one side, seemingly advocating citizen journalism but on the other hand, retaining the dominant hegemony ideology. As Jurrat (2011) asserts, structure of international news can never be free of hegemonic control. Kperogi (2011) further points out that the very creation of corporate-mediated citizen journalism in actual represent hegemony cooptation of citizen journalism. This statement is reflected through Moeller (1999)’s assertion that international news reporting have always made references that resonates and emphasizes the Americans in mainstream news channel. This is because media globalization is dominated by Western transnational media corporation and as such, allowing the West, particularly the United States to exert hegemony across the world (Terry, 2007). For example, even though UGC are gathered in CNN’s iReport.com, the selection of these UGC is still subjected to the control of gatekeeper (Kperogi, 2011). Such highly editorially controlled news suggests that homogeneity opinions are still very much preferred (Lee-Wright, 2010), thus implying that media cultural imperialism still exist. News help stronger countries influence weaker ones. For example, in the Israel-Gaza conflict, CNN and Fox News presents the Hamas group as terrorist organisation, framing the idea for audiences that US support for Israel is justified. Being one of the superpower in the media industry, the spreading such homogenous media content worldwide (Terry, 2007) is undeniable, branding Hamas or rather Palestinians as terrorists. Furthermore, there may even be a possibility of media domestication (MacGregor, 2013) where actions of altering video and text supplied by making it relevant to local context such as modifying news angles and omitting irrelevant material. For example, the way how the current Gaza war is narrated conforms to the Western’s dominant hegemony ideology of framing the Hamas as terrorist organisation instead of showing how Palestinians being victimized. Such deliberate framing I argue, gives the US authority the justification to supply ammunition to Israel. This essay concludes that new media technologies have indeed impacted on the structure of international news in terms of its production, where news organisations have become reliant on user-generated content and its distribution, where previously vertically distributed news have become horizontally distributed. Besides that, social media, Twitter in particular has emerged as a powerful tool for reporting breaking news stories and generating stories angles (Belair-Gagnon, 2011). Even though there have been speculations over the usage of UGC and Twitter feeds, I argue that these new media technologies still have positive significances in the structure of international news. Discussing on a wider spectrum, new media technologies have further advocated the manifestation of citizen journalism which proves to pose quite a challenge to the hegemonic structure of international news. Nevertheless, I concede that the dominant Western ideologies of media organisations though being contested, re main dominating in this global media landscape. As a conclusion, in this globalized technological determinism society, technology is the impetus in the development of cultural production, in this context, the structure of international news.

High Technology Semiconductor Company Acquisitions

High Technology Semiconductor Company Acquisitions The fast rate of technological change was one of the most important trends in the 1990s and this brought an increasing complexity and cost to the development of new technologies. Companies used their innovative assets as a major source of competitive advantage to quickly introduce new products and adopt new processes (Sen and Egelhoff, 2000). Acquisitions are completed in many industries for reasons that are aligned with the dominant competitive driving forces for that industry. In the area of high technology and seminconductors, the competitive drivers are short product life cycles and process advancement. Process advances are required to both support the incremental changes to existing products and to allow the creation of radically new one. The number of acquisitions rapidly increased through the decade for several reasons: the product life cycle was getting shorter; participating in the creation of industry and product standards was crucial; early entry helped capture market shar e; and R D risk could be reduced. Hagedoorn (1993) found the reduction in innovation time and acquisition of needed technologies as the most important reasons for one company to pursue another. Several researchers have written about the radical and incremental innovation capabilities, their distinguishing factors and the important consequences to the corporation. It has also been argued that large firms are effective with incremental innovations and small firms are better at radical innovations. (Ettlie, Bridges, and OKeefe, 1984; Dewar and Dutton, 1986; Christensen, 1992). Corporate decision to acquire or not acquire another company embodies a high level, serious management strategy decision toward repositioning a company in the competitive landscape. The decade from 1990 to 2000 was chosen as an important time for acquisition activity. There was frequent activity in acquisitions during a time of stable economic conditions creating good conditions for analysis. In 1990, the dollar value of all acquisitions and mergers in the United States was two percent of the Gross Domestic Product (GDP). In 2000, the value reached over 15% of the GDP (Mergerstat, 2003). In the first 10 months of 2000, in the technology sector alone, there were 2,019 acquisition and merger deals worth $573 billion (Reason, 2000). This occurred despite studies done in the 1980s and 1990s that found little positive effect financially for the acquiring company. The magnitude of the activity strongly suggests that some positive relationship could be found if examined in a different way o r using new metrics. This research uses a different methodology by exploring a single industry, selecting profitability growth as the metric from theoretical industry driving forces and analyzing profitability over time as a statistical repeated measures model using SPSS software. The results from this work may have strategic implications for remaining competitive in high technology, high-velocity industries. It should be noted here that the term acquisition, mergers and acquisitions and M A will be used interchangeably in this research and are defined in Appendix A along with other important terms. In high technology industries, such as semiconductors, a firm interested in new product innovation must aggressively invest to stay at the leading edge. Creating or acquiring new offerings can be dependent on a combination of efforts directed either internal or external to the company. Internal efforts include primarily Research and Development (R D) or newly formed affiliates, termed greenfields (Vermeulen Barkema, 2001; Sonenclar, 1984; Bradley Korn, 1981). External efforts can take the form of acquisition or mergers to best capture the intellectual property (IP) that is maintained in the categories of trade secret and proprietary know-how. Acquisitions, when done well, appear to have the advantage of capturing this kind of IP as compared to the other forms of external efforts. Acquisitions also potentially offer faster repositioning with less risk and lower cost than pursuing internal company endeavors (Singh Montgomery, 1987). A high technology companys success hinges on crea tion of innovative ideas, availability of creative personnel, speed of new product execution and cost effectiveness. Mergers and acquisitions are a highly favored management avenue for growth and competitive positioning. The importance of this management consideration and the impact of mergers and acquisitions continue to expand with billions of dollars involved. The importance in the technology sector becomes apparent when looking at the 724 firms that made their initial public offering (IPO) in 1992, but were not acquired or merged. Of these companies, 58% were selling at less than their IPO price six years later (Small Business Statistics, 2000). Product and service offering must constantly evolve and change (Thompson Strickland, 2001). High velocity innovation is fundamental to the growth and survival of high technology businesses. Organizations that are successful have a regular stream of unique products and services. Hewlett-Packard had over 50% of revenue in 1999 coming from products introduced in the previous two to four years. In high technology companies, the highest profit levels come from the newest products. Consequently, it is imperative to accelerate the innovation cycle, often through mergers and acquisitions, and this is critically important to remaining competitive. Entrepreneurial firms consistently outperform larger firms in both market and earnings growth on the Inc. 500 and Forbes 200 lists (Imparato Harari, 1994). There are several potential reasons for making an acquisition that have been identified and studied in the literature. In addition to the reasons for actually acquiring, there are a number of factors following the event that will influence the degree of success or failure that these efforts may experience. These elements that play a part in determining the outcome have been the focus of studies that are summarized in the Literature Review. WHAT MAKES HIGH-TECH COMPANIES AND THEIR ACQUISITIONS UNIQUE Both the popular business press as well as recent academic research seems to uniformly accept the unique nature of high-tech stocks. Kohers and Kohers (2000) state: The high-growth nature of technology-based industries distinguishes them from other types of industries. In addition to their high-growth potential, however, another distinctive feature of high-tech industries is the inherent uncertainty associated with companies whose values rely on future outcomes or developments is unproven, uncharted fields (p. 40). In fact, many pure technology stocks are young companies, underfunded and without prospects for generating any cash flows in the near future. Nevertheless, despite the inherent uncertainty of high-tech industries, investors seemed to disregard most equity fundamentals when valuing technology stocks, especially during the market upturn in the late 1990s. As a result, even though high-tech stocks were in general extremely volatile, many of them were trading at remarkable pre miums. The exploding rate of growth in M A activity that involved high-tech industries can be partly attributed to those overly optimistic valuations. Puranam (2001) argues: On the acquirers side, booming stock market valuations have made acquisitions for stock feasible for several relatively small (revenue wise) firms, as well as the more established larger ones. On the targets side, an increasing preference for the ready liquidity offered, by an acquisition, as opposed to the paper profits from an IPO have created an environment conducive to acquisitions of small start-ups. At the same time many of these acquisitions were also motivated by the acquirers need to obtain critical technologies and expertise in order to quickly enhance their own technological competence. Despite the burst of the high-tech market bubble and the failure of most of these acquisitions, investors continue to show an extreme faith on these stocks. Americans still believe that technology can create a better world. Each time the U.S. tech sector falls into a trough, new technologies and companies emerge to lead it forward again (Business Week, August 27, 2001). PROBLEM MOTIVATING THIS STUDY This research effort seeks to understand the relationship between acquisitions and profitability by looking at the industrial sector for high technology semiconductor companies. Many prior studies have shown little financial benefit to the acquiring company in research conducted beginning in the 1980s and extending to today using a variety of variables, measures and company sample selection. These studies will be discussed in more detail in the Literature Review. The researchers Rumelt (1984), Ravenscraft and Scherer (1987), Porter (1987) and Kaplan and Weisbach (1990) separately found that acquisitions that could be categorized as unrelated, or diversifications, did not lead to profitability improvements, but most of these studies obviously included a cross-section of divergent industries. The importance of innovation and new products in high velocity, competitive environments is discussed in literature and high velocity innovation is fundamental to the growth, profitability and sur vival of these businesses (Thompson and Strickland, 1999; Betz, 2001; Burgelman, Christensen and Wheelwright, 2004). The competitive advantage of capturing intellectual property through acquisition has also been discussed more recently. More clear evidence is beginning to emerge concerning the drive to acquire technology and the unique features of doing so (Prentice Fox, 2002). This research examines the correlation between the event of acquisition and subsequent company performance and growth of profitability in the decade of 1990-2000. Practicing managers in the area of management of technology are faced with the challenge of high velocity innovation being a requirement to maintain competitive positioning (Thompson Strickland, 2001). Two methods for constant innovation include internal efforts, such as Research Development (R D), and external efforts, such as acquisitions, on which this paper focuses. Prior studies have been cross-sectional across different industries and analyzed the benefits gained in terms of patents and R D (Bettis 1981), stock price (Matsusaka, 1990; Schleifer and Vishny, 1990; and Lubatkin, 1982) or increase in company size versus the cost of acquisitions. These studies have not captured one of the most unique features of the high technology industry where innovation and new products are dependent on intellectual property (IP) that is maintained in the categories of trade secret and proprietary know-how. Because of this characteristic, the high technology industry would be expected to yield different results. The importance of IP and know-how has been an area of academic focus working to clarify the concept of absorptive capacity in the 1990s, but empirical work to tie these concepts to firm performance was not pursued (Cohen and Levinthal, 1990; Barney, 1991; Prahalad and Hamel, 1990). The use of patents as a measure, as used in prior research (Acs and Aud retsch, 1988; Pakes and Griliches, 1980; Hitt, Hoskisson, Ireland and Harrison, 1991), does not capture the IP benefits in these categories or measure the success resulting from these external efforts. Acquisitions, when done well, should be expected to have an advantage on capturing this kind of IP. Acquisitions potentially offer faster positioning with less risk and lower cost than internal company endeavors which include primarily Research and Development (R D) (Gulati, 1995; Singh Montgomery, 1987). STUDY OVERVIEW This research effort focuses on one high technology industrial sector of semiconductors and studies the correlation between acquisitions, profitability, survivability and RD intensity over time. Many prior studies (Rumelt, 1984; Ravenscraft and Scherer, 1987; Porter, 1987; and Kaplan and Weisbach, 1990) have shown little financial benefit to the acquiring company, but most of these studies included a cross-section of divergent industries. The importance of innovation and new products in high velocity, competitive environments is widely discussed in literature. High velocity innovation is fundamental for the theory of growth, profitability and survival of these businesses. The competitive advantage of capturing intellectual property through acquisition has also been discussed more recently. More clear evidence is beginning to emerge concerning the drive to acquire technology and the unique features of doing so (Prentice Fox, 2002). This paper researches the correlation between the ev ent of acquisition and subsequent company performance, survivability, the growth of profitability and R D spending. CHAPTER 2 LITERATURE REVIEW ON HIGH-TECH COMPANIES Most research on high-tech companies is relatively recent and has its origin in various business fields. Chaudhuri and Tabrizi (1999) study the practices of 24 high-tech companies involved in acquisitions, and try to identify the key factors in capturing the real value in high-tech acquisitions. They conclude that in order to make a successful acquisition managers need to move beyond the traditional model of acquisitions where the people acquired are secondary to physical assets and brands. High-tech acquisitions need to focus on the people since technological capabilities tied to skilled people are the key to long-term success in these industries. Arora, Fosfuri and Gambardella (2000) examine how the growth of markets for technology affected the corporate strategies of the leading companies, which can now sell technologies that they do not use in-house and increase their potential returns to R D. They argue that globalization, along with the low transportation costs of technologies, has made large R D intensive companies realize that they have the potential to exploit their technology on a very large scale by licensing. However, in deciding how to exploit their technology small firms and technology-based startups face a different set of challenges. According to the authors they need to trade off the costs of acquiring capital and building in-house production, distribution and marketing capability against the rents that would be lost or shared with their partners in a licensing deal. Also, the authors argue that integration may reduce the innovative potential of the firm, because the acquisition of the complementary assets in evitably increases the size of firms and induces important changes in the culture of the firm and in the speed and fluidity of information flows. Finally, they claim that evaluating technologies and being able to use them requires substantial in-house scientific and technological expertise and therefore internal and external R D can be reviewed as complements and not substitutes. Liu (2000) focuses on a different issue by examining the markets reaction to innovation news announcement made by the U.S. biotech firms during the 1983-1992 period. He finds that the average AR to the announcements is as high as 3.98 percent for a three-day event window and biotech stocks trading volumes almost double on the day of the news announcement. The announcement period ARs are negatively related to firm-size and underwriter reputation, while positively related to the firms technology depth as measured by R D intensity. However, during the months following the announcement the average three-month post announcement AR is 2.73 percent. The negative drift in stock prices appears to be mainly driven by the firms weak science and technology (less R D intensive), firms with high Book to Market (B/M) ratios and large firms. In explaining his findings the author proposes an expectation error hypothesis. According to this hypothesis it is hard for investors or even managers to prec isely evaluate the economic value of innovations which in turn leads to the possibility of forming erroneous expectations. In high-tech industries the erroneous expectation is reflected in the investors over-optimism towards high-tech firms innovation news. Eventually, the stock prices adjust itself to reflect the firms fundamentals, especially its technology depth. The author attributes the observed evidence to the costly information required to value a high-tech firms innovation. Prentice and Fox (2002) provide a comprehensive review of the merger and acquisition process while focusing on the distinctive characteristics of high-tech companies. They argue that technology mergers are different from traditional mergers because of the importance that must be placed on people and their ability to innovate. Targets must be evaluated on intangible assets such as intellectual property and human capital. At the same time managers need to consider the issues of retention, culture and integration strategy from the beginning of the merger process to ensure success. There are two studies that are most relevant to this research. The first one is by Kohers and Kohers (2000) who examine the value creation potential of 1,634 mergers in the various high-tech areas between 1987 and 1996. They find that acquirers of high-tech targets experience significantly positive Ars at the time of the merger announcement, regardless of whether the merger is financed with cash or stock. Othe r factors influencing bidder returns are the time period in which the merger occurs, the ownership structure of the acquirer, the ownership status of the target and the high-tech affiliation of acquirers. They conclude that the market appears to be optimistic about such mergers and expects that acquiring companies will enjoy future growth benefits. The second related study is also by Kohers and Kohers (2001) who examine the post-merger performance of acquirers that purchase high-tech targets in order to determine whether the high expectations regarding the future merits of these investments are actually justified. Their results indicate that compared to non acquirers, acquirers perform poorly over the three-year period following the high-tech takeover announcement. Furthermore, glamour bidders show significantly lower long-run ARs, while value bidders do not experience significant post-merger ARs. Also, glamour bidders with a higher risk of agency problems show even worse post-merger performance while institutional ownership in the acquiring firm has a positive influence on acquirer long run ARs. Overall, the authors conclude that the market tends to exhibit excessive enthusiasm toward the expected benefits of high-tech mergers but many of these benefits do not materialize. CHAPTER 3 HYPOTHESES, METHODOLOGY AND DATA SOURCES STATEMENT OF HYPOTHESES Previous research in the literature has generally found little financial benefit for the acquiring companies that were associated with occurrence of the acquisition activity (Rumelt, 1974; Ravenscraft and Scherer, 1987; Porter, 1987; and Kaplan and Weisbach, 1990). Consequently, the first and second questions for this study are focused using the single industry of semiconductors, are stated in the null hypothesis format. First, firm profitability growth rates are compared in two groups, one that does acquire and one that does not. Secondly, individual firm profitability growth is examined before and after an acquisition event looking for a change in growth rate that is significant. Hypothesis 1 (H1): There will be no significant difference in profitability growth when firms making acquisitions are compared to firms not making acquisitions in the high-tech sector. Hypothesis 2 (H2): Acquiring firms making acquisitions are expected to have no significant change in profitability growth before and after the acquisition event. The literature yields less empirical work in analyzing the relationship between merger and acquisition actions and the longevity of a corporation. Theory certainly recognizes the close link between competitive capability and company survival. For the high technology industry of semiconductors, high velocity innovation is a requirement for remaining competitive. Research questions three and four are also stated in the null hypothesis format. Company longevity, or survival rate in number of year, is compared in two groups also, where one group does acquire and one does not. Lastly, an individual firms spending rate on R D is examined before and after an acquisition event looking for a significant change in the rate compared to the trend for the company. Hypothesis 3 (H3): Firms making acquisitions are expected to have no difference in survivability in this industry than firms who do not make acquisitions. Hypothesis 4 (H4): A companys R D intensity will show no significant change following the event of acquisition within this industry. SELECTION OF VARIABLES This research was conducted in a concentric approach by starting with one independent and one dependent variable initially to define the relationship and guide the next treatment in the study. As work continued, variables were selected and the methodology expanded to assess both within-subject and between-subject effects. The variables used in this study for Hypothesis 1 (H1) include profitability growth rate and a dummy variable to represent the presence or absence of the event of acquisition. The event of acquisition is represented by a dummy variable with a zero (0) representing no acquisition and with a one (1) representing an acquisition event. An acquisition event is identified by using a firms reported cash flows attributed to acquisition as stated in the Compustat database. The profitability growth rate is calculated from the total gross profit margin reported by year and cumulated over three years, then averaged to reduce fluctuations and facilitate identification of trends. The variables used for H2 analysis of profitability growth rate before and after an acquisition were the dummy variable for the presence of acquisition, the gross profit margin percentage (GPM %) calculated as a three (3) year cumulative average growth rate (CAGR) to smooth fluctuations and better identify a trend. This relationship was studied for three (3) years prior to the actual acquisition and five (5) years following the action. As the study progressed, a second dummy variable was used for company size to separate the effect of this independent variable as well. A repeated measures matrix was designed with two dummy independent variable as well. A repeated measures matrix was designed with two dummy independent variables, each with two levels and one dependent variable with repeated measures over nine years for a 2 x 2 x 9 repeated measures analysis using the SPPS software. The variables used for H3 analysis of acquisition relation to firm longevity were the acquisition dummy variable and the data from Compustat for the number of years that the company did financial reporting during the period of this study. H4 looks for the effects between acquisition and RD spending or intensity by using the acquisition dummy independent variable and R D intensity as the dependent variable. R D intensity is calculated using the R D expense reported as such by the companies and in the Compustat database. This Compustat item represents all costs incurred during the year that relate to the development of new products or services. This amount is only the company`s contribution and includes software and amortization of software costs and complies with Financial Accounting Standard Board (FASB) standards. This item excludes customer or government-sponsored research and development (including reimbursable indirect costs) and ordinary engineering expenses for routine, ongoing efforts to define, enrich, or improve the qualities of existing products. Methodology This study encompasses the time period of ten years from 1990-2000, inclusive. Semiconductor companies were selected as an entire group according to their NAICS/SIC codes. Using the Standard Poors Compustat database, there are 153 semiconductor companies included that were identified as active companies at the end of the calendar year 2000 by Compustat. These companies are listed in Appendix B. Active reporting for one year. Companies are designated as inactive and reclassified in the Compustat database when it is no longer actively traded on a stock market exchange due to bankruptcy, becoming a private company, leveraged buyout or merging. The research effort started with analysis one independent variable and one dependent variable in order to initially establish what the relationship was that existed, if it was significant and how to proceed with analysis. Exploratory work on Hypothesis 1 showed that there was a statistically significant and positive correlation between acquisitions and gross profit margin (GMP) growth broadly over the decade which differs from prior research. Hypothesis 2 moves toward a more detailed analysis of this finding. Consequently, in this chronology of discovery, the next step presented in Section 4.2 look at one dependent variable of profit margin growth and two independent variables of company size and acquisition activity. 3-way ANNOVA and regression treatments of the data are conducted using the data analysis tool available under Microsoft Excel Software looking at individual years in the ten year study period. The results show significance again and suggest that other interactions betwe en variables would yield additional understanding. The next step in the research was set up to look at one dependent variable, again gross margin (GPM) growth, repeatedly measured over time for each subject or company was entered for the nine (9) years 1995-2000 inclusive to capture acquisition effects giving 2 x 2 x 9 repeated measures design. The two independent variables were used in the dummy format with non-acquires given a code zero 0 and acquires assigned at one (1). Company size was the second dummy variable with firms less than $100M in sales per year coded zero (0) and if greater than $100M in sales, assigned a one (1). The statistical analysis using a repeated measures design analyzed the variable interactions and their relationship to GPM growth using the SPSS software. These results are presented in Section 4.5 Repeated Measures Analysis that was done using SPSS software. Descriptive statistics were an important first treatment of the data sets created. This includes the values for the following parameters: mean, median, range variance, standard deviation, kurtosis, and skewness. This treatment looks at characteristics of the data and the degree of normal distribution. The 3-way ANOVA investigations and regression treatment of the data were initially done using the data analysis tool software available in Microsoft Excel. Generally, the data sets for this study vary somewhat from the classical normal distribution, but ANOVA and MANOVA (multivariate ANOVA) within a repeated measures analysis are considered robust to violations of the normal distribution assumption (Maxwell Dealney, 1990; Stevens, 1996) SPSS Advanced Models 11.0 software was used to create general linear models of the data and conduct analysis of variance (ANOVA), regression, and analysis of covariance (ANCOVA) for the multiple variables in this model with repeated measures. The factors or independent variables were used to divide the population of 153 active semiconductor companies into groups. There were two independent variables used that were designated as dummy variables. The first variable of acquisition separated companies that did complete acquisitions from those that did not complete acquisitions during the decade of study. The second variable grouped the companies by size of sales at the end of the decade by either greater than $100 million or less than $100 million. Then the general linear model procedure was used to test the four null hypotheses, as stated above, regarding the effects of the independent variables on the dependent variable of gross profit margin growth as a repeated measure over the perio d 1992-2000. The investigation included looking at interactions between factors as well as the individual factors and the effects and interactions of covariates. This model specifies the independent variables as covariates for regression analysis. The SPSS repeated measures model creates a matrix for the sums of squares due to the model effects, gives the approximate F statistics and estimates parameters in addition to testing hypotheses. When an F test shows significance, SPSS performs post hoc tests to evaluate the differences between the means. This yields a predicted mean value for the cells of the model. Analysis of variance (ANOVA) was applied to named variables to study the portion of variance in the each variable that could be identified as explained and unexpected with regard to the event of acquisition. A covariance tool was also used when looking at the variables described above such as acquisition occurrence, company size and profitability growth changes. This compares whether the two ranges of data move together à ¢Ã¢â€š ¬Ã¢â‚¬Å" that is, whether large values of one set were associated with large values of the other (positive covariance), whether small values of one set were associated with large values of the other (negative covariance), or whether values in both sets were unrelated (covariance near zero). DATA SOURCES Standard Poors Compustat database was used for data collection in this research. The database contains fundamental financial, statistical and market data derived from publicity traded companies trading on the NYSE, NASDAQ, AMEX, OTC and Canadian stock exchanges. The calendar year for a company is the year in which the fiscal year ends and is the time period used as standard in this research. Companies with fiscal years ending in January through May are assigned by Compustant into the year in which the fiscal year begins. Companies with fiscal years that end in June through December are assigned to the year in which the fiscal year ends. The EDGAR (Electronic Data Gathering, Analysis and Retrieval) System database maintained by the United Stated Security and Exchange Commission (SEC) was also used. The EDGAR data is also collected from the same sources that are used to generate the Compustat database. Data from these controlled and verifiable sources were corroborated and augmented with information collected from semiconductor trade journals, company annual reports and the Mergers Acquisitions Journal that tracks statistics in this area. CHAPTER 4 RESULTS AND DISCUSSION HI à ¢Ã¢â€š ¬Ã¢â‚¬Å" ACQUISITON AND PROFITABILITY RELATIONSHIP A strong positive relationship was found to exist between the presence of acquisition activity and the growth in gross profit margin (GPM) by the end of the ten year study period. The statistical analysis is detailed below and is a departure from previous findings. This finding addresses the central question of this research endeavor to look for a relationship between acquisition events and profitability growth within the one industry of semiconductors. A positive financial effect is found and opens the path for additional analysis in this direction. Consequently, this information forms the foundation for the additional work presented in this research. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>ANALYSIS GOING ON ANALYSIS GOING ON ANALYSIS GOING ON ANALYSIS GOING ON ANALYSIS GOING ON ANALYSIS GOING ON ANALYSIS GOING ON ANALYSIS GOING ON ANALYSIS GOING ON ANALYSIS GOING ON ANALYSIS GOING ON ANALYSIS GOING ON ANALYSIS GOING ON ANALYSIS GOING ON ANALYSIS GOING ON >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> High Technology Semiconductor Company Acquisitions High Technology Semiconductor Company Acquisitions The fast rate of technological change was one of the most important trends in the 1990s and this brought an increasing complexity and cost to the development of new technologies. Companies used their innovative assets as a major source of competitive advantage to quickly introduce new products and adopt new processes (Sen and Egelhoff, 2000). Acquisitions are completed in many industries for reasons that are aligned with the dominant competitive driving forces for that industry. In the area of high technology and seminconductors, the competitive drivers are short product life cycles and process advancement. Process advances are required to both support the incremental changes to existing products and to allow the creation of radically new one. The number of acquisitions rapidly increased through the decade for several reasons: the product life cycle was getting shorter; participating in the creation of industry and product standards was crucial; early entry helped capture market shar e; and R D risk could be reduced. Hagedoorn (1993) found the reduction in innovation time and acquisition of needed technologies as the most important reasons for one company to pursue another. Several researchers have written about the radical and incremental innovation capabilities, their distinguishing factors and the important consequences to the corporation. It has also been argued that large firms are effective with incremental innovations and small firms are better at radical innovations. (Ettlie, Bridges, and OKeefe, 1984; Dewar and Dutton, 1986; Christensen, 1992). Corporate decision to acquire or not acquire another company embodies a high level, serious management strategy decision toward repositioning a company in the competitive landscape. The decade from 1990 to 2000 was chosen as an important time for acquisition activity. There was frequent activity in acquisitions during a time of stable economic conditions creating good conditions for analysis. In 1990, the dollar value of all acquisitions and mergers in the United States was two percent of the Gross Domestic Product (GDP). In 2000, the value reached over 15% of the GDP (Mergerstat, 2003). In the first 10 months of 2000, in the technology sector alone, there were 2,019 acquisition and merger deals worth $573 billion (Reason, 2000). This occurred despite studies done in the 1980s and 1990s that found little positive effect financially for the acquiring company. The magnitude of the activity strongly suggests that some positive relationship could be found if examined in a different way o r using new metrics. This research uses a different methodology by exploring a single industry, selecting profitability growth as the metric from theoretical industry driving forces and analyzing profitability over time as a statistical repeated measures model using SPSS software. The results from this work may have strategic implications for remaining competitive in high technology, high-velocity industries. It should be noted here that the term acquisition, mergers and acquisitions and M A will be used interchangeably in this research and are defined in Appendix A along with other important terms. In high technology industries, such as semiconductors, a firm interested in new product innovation must aggressively invest to stay at the leading edge. Creating or acquiring new offerings can be dependent on a combination of efforts directed either internal or external to the company. Internal efforts include primarily Research and Development (R D) or newly formed affiliates, termed greenfields (Vermeulen Barkema, 2001; Sonenclar, 1984; Bradley Korn, 1981). External efforts can take the form of acquisition or mergers to best capture the intellectual property (IP) that is maintained in the categories of trade secret and proprietary know-how. Acquisitions, when done well, appear to have the advantage of capturing this kind of IP as compared to the other forms of external efforts. Acquisitions also potentially offer faster repositioning with less risk and lower cost than pursuing internal company endeavors (Singh Montgomery, 1987). A high technology companys success hinges on crea tion of innovative ideas, availability of creative personnel, speed of new product execution and cost effectiveness. Mergers and acquisitions are a highly favored management avenue for growth and competitive positioning. The importance of this management consideration and the impact of mergers and acquisitions continue to expand with billions of dollars involved. The importance in the technology sector becomes apparent when looking at the 724 firms that made their initial public offering (IPO) in 1992, but were not acquired or merged. Of these companies, 58% were selling at less than their IPO price six years later (Small Business Statistics, 2000). Product and service offering must constantly evolve and change (Thompson Strickland, 2001). High velocity innovation is fundamental to the growth and survival of high technology businesses. Organizations that are successful have a regular stream of unique products and services. Hewlett-Packard had over 50% of revenue in 1999 coming from products introduced in the previous two to four years. In high technology companies, the highest profit levels come from the newest products. Consequently, it is imperative to accelerate the innovation cycle, often through mergers and acquisitions, and this is critically important to remaining competitive. Entrepreneurial firms consistently outperform larger firms in both market and earnings growth on the Inc. 500 and Forbes 200 lists (Imparato Harari, 1994). There are several potential reasons for making an acquisition that have been identified and studied in the literature. In addition to the reasons for actually acquiring, there are a number of factors following the event that will influence the degree of success or failure that these efforts may experience. These elements that play a part in determining the outcome have been the focus of studies that are summarized in the Literature Review. WHAT MAKES HIGH-TECH COMPANIES AND THEIR ACQUISITIONS UNIQUE Both the popular business press as well as recent academic research seems to uniformly accept the unique nature of high-tech stocks. Kohers and Kohers (2000) state: The high-growth nature of technology-based industries distinguishes them from other types of industries. In addition to their high-growth potential, however, another distinctive feature of high-tech industries is the inherent uncertainty associated with companies whose values rely on future outcomes or developments is unproven, uncharted fields (p. 40). In fact, many pure technology stocks are young companies, underfunded and without prospects for generating any cash flows in the near future. Nevertheless, despite the inherent uncertainty of high-tech industries, investors seemed to disregard most equity fundamentals when valuing technology stocks, especially during the market upturn in the late 1990s. As a result, even though high-tech stocks were in general extremely volatile, many of them were trading at remarkable pre miums. The exploding rate of growth in M A activity that involved high-tech industries can be partly attributed to those overly optimistic valuations. Puranam (2001) argues: On the acquirers side, booming stock market valuations have made acquisitions for stock feasible for several relatively small (revenue wise) firms, as well as the more established larger ones. On the targets side, an increasing preference for the ready liquidity offered, by an acquisition, as opposed to the paper profits from an IPO have created an environment conducive to acquisitions of small start-ups. At the same time many of these acquisitions were also motivated by the acquirers need to obtain critical technologies and expertise in order to quickly enhance their own technological competence. Despite the burst of the high-tech market bubble and the failure of most of these acquisitions, investors continue to show an extreme faith on these stocks. Americans still believe that technology can create a better world. Each time the U.S. tech sector falls into a trough, new technologies and companies emerge to lead it forward again (Business Week, August 27, 2001). PROBLEM MOTIVATING THIS STUDY This research effort seeks to understand the relationship between acquisitions and profitability by looking at the industrial sector for high technology semiconductor companies. Many prior studies have shown little financial benefit to the acquiring company in research conducted beginning in the 1980s and extending to today using a variety of variables, measures and company sample selection. These studies will be discussed in more detail in the Literature Review. The researchers Rumelt (1984), Ravenscraft and Scherer (1987), Porter (1987) and Kaplan and Weisbach (1990) separately found that acquisitions that could be categorized as unrelated, or diversifications, did not lead to profitability improvements, but most of these studies obviously included a cross-section of divergent industries. The importance of innovation and new products in high velocity, competitive environments is discussed in literature and high velocity innovation is fundamental to the growth, profitability and sur vival of these businesses (Thompson and Strickland, 1999; Betz, 2001; Burgelman, Christensen and Wheelwright, 2004). The competitive advantage of capturing intellectual property through acquisition has also been discussed more recently. More clear evidence is beginning to emerge concerning the drive to acquire technology and the unique features of doing so (Prentice Fox, 2002). This research examines the correlation between the event of acquisition and subsequent company performance and growth of profitability in the decade of 1990-2000. Practicing managers in the area of management of technology are faced with the challenge of high velocity innovation being a requirement to maintain competitive positioning (Thompson Strickland, 2001). Two methods for constant innovation include internal efforts, such as Research Development (R D), and external efforts, such as acquisitions, on which this paper focuses. Prior studies have been cross-sectional across different industries and analyzed the benefits gained in terms of patents and R D (Bettis 1981), stock price (Matsusaka, 1990; Schleifer and Vishny, 1990; and Lubatkin, 1982) or increase in company size versus the cost of acquisitions. These studies have not captured one of the most unique features of the high technology industry where innovation and new products are dependent on intellectual property (IP) that is maintained in the categories of trade secret and proprietary know-how. Because of this characteristic, the high technology industry would be expected to yield different results. The importance of IP and know-how has been an area of academic focus working to clarify the concept of absorptive capacity in the 1990s, but empirical work to tie these concepts to firm performance was not pursued (Cohen and Levinthal, 1990; Barney, 1991; Prahalad and Hamel, 1990). The use of patents as a measure, as used in prior research (Acs and Aud retsch, 1988; Pakes and Griliches, 1980; Hitt, Hoskisson, Ireland and Harrison, 1991), does not capture the IP benefits in these categories or measure the success resulting from these external efforts. Acquisitions, when done well, should be expected to have an advantage on capturing this kind of IP. Acquisitions potentially offer faster positioning with less risk and lower cost than internal company endeavors which include primarily Research and Development (R D) (Gulati, 1995; Singh Montgomery, 1987). STUDY OVERVIEW This research effort focuses on one high technology industrial sector of semiconductors and studies the correlation between acquisitions, profitability, survivability and RD intensity over time. Many prior studies (Rumelt, 1984; Ravenscraft and Scherer, 1987; Porter, 1987; and Kaplan and Weisbach, 1990) have shown little financial benefit to the acquiring company, but most of these studies included a cross-section of divergent industries. The importance of innovation and new products in high velocity, competitive environments is widely discussed in literature. High velocity innovation is fundamental for the theory of growth, profitability and survival of these businesses. The competitive advantage of capturing intellectual property through acquisition has also been discussed more recently. More clear evidence is beginning to emerge concerning the drive to acquire technology and the unique features of doing so (Prentice Fox, 2002). This paper researches the correlation between the ev ent of acquisition and subsequent company performance, survivability, the growth of profitability and R D spending. CHAPTER 2 LITERATURE REVIEW ON HIGH-TECH COMPANIES Most research on high-tech companies is relatively recent and has its origin in various business fields. Chaudhuri and Tabrizi (1999) study the practices of 24 high-tech companies involved in acquisitions, and try to identify the key factors in capturing the real value in high-tech acquisitions. They conclude that in order to make a successful acquisition managers need to move beyond the traditional model of acquisitions where the people acquired are secondary to physical assets and brands. High-tech acquisitions need to focus on the people since technological capabilities tied to skilled people are the key to long-term success in these industries. Arora, Fosfuri and Gambardella (2000) examine how the growth of markets for technology affected the corporate strategies of the leading companies, which can now sell technologies that they do not use in-house and increase their potential returns to R D. They argue that globalization, along with the low transportation costs of technologies, has made large R D intensive companies realize that they have the potential to exploit their technology on a very large scale by licensing. However, in deciding how to exploit their technology small firms and technology-based startups face a different set of challenges. According to the authors they need to trade off the costs of acquiring capital and building in-house production, distribution and marketing capability against the rents that would be lost or shared with their partners in a licensing deal. Also, the authors argue that integration may reduce the innovative potential of the firm, because the acquisition of the complementary assets in evitably increases the size of firms and induces important changes in the culture of the firm and in the speed and fluidity of information flows. Finally, they claim that evaluating technologies and being able to use them requires substantial in-house scientific and technological expertise and therefore internal and external R D can be reviewed as complements and not substitutes. Liu (2000) focuses on a different issue by examining the markets reaction to innovation news announcement made by the U.S. biotech firms during the 1983-1992 period. He finds that the average AR to the announcements is as high as 3.98 percent for a three-day event window and biotech stocks trading volumes almost double on the day of the news announcement. The announcement period ARs are negatively related to firm-size and underwriter reputation, while positively related to the firms technology depth as measured by R D intensity. However, during the months following the announcement the average three-month post announcement AR is 2.73 percent. The negative drift in stock prices appears to be mainly driven by the firms weak science and technology (less R D intensive), firms with high Book to Market (B/M) ratios and large firms. In explaining his findings the author proposes an expectation error hypothesis. According to this hypothesis it is hard for investors or even managers to prec isely evaluate the economic value of innovations which in turn leads to the possibility of forming erroneous expectations. In high-tech industries the erroneous expectation is reflected in the investors over-optimism towards high-tech firms innovation news. Eventually, the stock prices adjust itself to reflect the firms fundamentals, especially its technology depth. The author attributes the observed evidence to the costly information required to value a high-tech firms innovation. Prentice and Fox (2002) provide a comprehensive review of the merger and acquisition process while focusing on the distinctive characteristics of high-tech companies. They argue that technology mergers are different from traditional mergers because of the importance that must be placed on people and their ability to innovate. Targets must be evaluated on intangible assets such as intellectual property and human capital. At the same time managers need to consider the issues of retention, culture and integration strategy from the beginning of the merger process to ensure success. There are two studies that are most relevant to this research. The first one is by Kohers and Kohers (2000) who examine the value creation potential of 1,634 mergers in the various high-tech areas between 1987 and 1996. They find that acquirers of high-tech targets experience significantly positive Ars at the time of the merger announcement, regardless of whether the merger is financed with cash or stock. Othe r factors influencing bidder returns are the time period in which the merger occurs, the ownership structure of the acquirer, the ownership status of the target and the high-tech affiliation of acquirers. They conclude that the market appears to be optimistic about such mergers and expects that acquiring companies will enjoy future growth benefits. The second related study is also by Kohers and Kohers (2001) who examine the post-merger performance of acquirers that purchase high-tech targets in order to determine whether the high expectations regarding the future merits of these investments are actually justified. Their results indicate that compared to non acquirers, acquirers perform poorly over the three-year period following the high-tech takeover announcement. Furthermore, glamour bidders show significantly lower long-run ARs, while value bidders do not experience significant post-merger ARs. Also, glamour bidders with a higher risk of agency problems show even worse post-merger performance while institutional ownership in the acquiring firm has a positive influence on acquirer long run ARs. Overall, the authors conclude that the market tends to exhibit excessive enthusiasm toward the expected benefits of high-tech mergers but many of these benefits do not materialize. CHAPTER 3 HYPOTHESES, METHODOLOGY AND DATA SOURCES STATEMENT OF HYPOTHESES Previous research in the literature has generally found little financial benefit for the acquiring companies that were associated with occurrence of the acquisition activity (Rumelt, 1974; Ravenscraft and Scherer, 1987; Porter, 1987; and Kaplan and Weisbach, 1990). Consequently, the first and second questions for this study are focused using the single industry of semiconductors, are stated in the null hypothesis format. First, firm profitability growth rates are compared in two groups, one that does acquire and one that does not. Secondly, individual firm profitability growth is examined before and after an acquisition event looking for a change in growth rate that is significant. Hypothesis 1 (H1): There will be no significant difference in profitability growth when firms making acquisitions are compared to firms not making acquisitions in the high-tech sector. Hypothesis 2 (H2): Acquiring firms making acquisitions are expected to have no significant change in profitability growth before and after the acquisition event. The literature yields less empirical work in analyzing the relationship between merger and acquisition actions and the longevity of a corporation. Theory certainly recognizes the close link between competitive capability and company survival. For the high technology industry of semiconductors, high velocity innovation is a requirement for remaining competitive. Research questions three and four are also stated in the null hypothesis format. Company longevity, or survival rate in number of year, is compared in two groups also, where one group does acquire and one does not. Lastly, an individual firms spending rate on R D is examined before and after an acquisition event looking for a significant change in the rate compared to the trend for the company. Hypothesis 3 (H3): Firms making acquisitions are expected to have no difference in survivability in this industry than firms who do not make acquisitions. Hypothesis 4 (H4): A companys R D intensity will show no significant change following the event of acquisition within this industry. SELECTION OF VARIABLES This research was conducted in a concentric approach by starting with one independent and one dependent variable initially to define the relationship and guide the next treatment in the study. As work continued, variables were selected and the methodology expanded to assess both within-subject and between-subject effects. The variables used in this study for Hypothesis 1 (H1) include profitability growth rate and a dummy variable to represent the presence or absence of the event of acquisition. The event of acquisition is represented by a dummy variable with a zero (0) representing no acquisition and with a one (1) representing an acquisition event. An acquisition event is identified by using a firms reported cash flows attributed to acquisition as stated in the Compustat database. The profitability growth rate is calculated from the total gross profit margin reported by year and cumulated over three years, then averaged to reduce fluctuations and facilitate identification of trends. The variables used for H2 analysis of profitability growth rate before and after an acquisition were the dummy variable for the presence of acquisition, the gross profit margin percentage (GPM %) calculated as a three (3) year cumulative average growth rate (CAGR) to smooth fluctuations and better identify a trend. This relationship was studied for three (3) years prior to the actual acquisition and five (5) years following the action. As the study progressed, a second dummy variable was used for company size to separate the effect of this independent variable as well. A repeated measures matrix was designed with two dummy independent variable as well. A repeated measures matrix was designed with two dummy independent variables, each with two levels and one dependent variable with repeated measures over nine years for a 2 x 2 x 9 repeated measures analysis using the SPPS software. The variables used for H3 analysis of acquisition relation to firm longevity were the acquisition dummy variable and the data from Compustat for the number of years that the company did financial reporting during the period of this study. H4 looks for the effects between acquisition and RD spending or intensity by using the acquisition dummy independent variable and R D intensity as the dependent variable. R D intensity is calculated using the R D expense reported as such by the companies and in the Compustat database. This Compustat item represents all costs incurred during the year that relate to the development of new products or services. This amount is only the company`s contribution and includes software and amortization of software costs and complies with Financial Accounting Standard Board (FASB) standards. This item excludes customer or government-sponsored research and development (including reimbursable indirect costs) and ordinary engineering expenses for routine, ongoing efforts to define, enrich, or improve the qualities of existing products. Methodology This study encompasses the time period of ten years from 1990-2000, inclusive. Semiconductor companies were selected as an entire group according to their NAICS/SIC codes. Using the Standard Poors Compustat database, there are 153 semiconductor companies included that were identified as active companies at the end of the calendar year 2000 by Compustat. These companies are listed in Appendix B. Active reporting for one year. Companies are designated as inactive and reclassified in the Compustat database when it is no longer actively traded on a stock market exchange due to bankruptcy, becoming a private company, leveraged buyout or merging. The research effort started with analysis one independent variable and one dependent variable in order to initially establish what the relationship was that existed, if it was significant and how to proceed with analysis. Exploratory work on Hypothesis 1 showed that there was a statistically significant and positive correlation between acquisitions and gross profit margin (GMP) growth broadly over the decade which differs from prior research. Hypothesis 2 moves toward a more detailed analysis of this finding. Consequently, in this chronology of discovery, the next step presented in Section 4.2 look at one dependent variable of profit margin growth and two independent variables of company size and acquisition activity. 3-way ANNOVA and regression treatments of the data are conducted using the data analysis tool available under Microsoft Excel Software looking at individual years in the ten year study period. The results show significance again and suggest that other interactions betwe en variables would yield additional understanding. The next step in the research was set up to look at one dependent variable, again gross margin (GPM) growth, repeatedly measured over time for each subject or company was entered for the nine (9) years 1995-2000 inclusive to capture acquisition effects giving 2 x 2 x 9 repeated measures design. The two independent variables were used in the dummy format with non-acquires given a code zero 0 and acquires assigned at one (1). Company size was the second dummy variable with firms less than $100M in sales per year coded zero (0) and if greater than $100M in sales, assigned a one (1). The statistical analysis using a repeated measures design analyzed the variable interactions and their relationship to GPM growth using the SPSS software. These results are presented in Section 4.5 Repeated Measures Analysis that was done using SPSS software. Descriptive statistics were an important first treatment of the data sets created. This includes the values for the following parameters: mean, median, range variance, standard deviation, kurtosis, and skewness. This treatment looks at characteristics of the data and the degree of normal distribution. The 3-way ANOVA investigations and regression treatment of the data were initially done using the data analysis tool software available in Microsoft Excel. Generally, the data sets for this study vary somewhat from the classical normal distribution, but ANOVA and MANOVA (multivariate ANOVA) within a repeated measures analysis are considered robust to violations of the normal distribution assumption (Maxwell Dealney, 1990; Stevens, 1996) SPSS Advanced Models 11.0 software was used to create general linear models of the data and conduct analysis of variance (ANOVA), regression, and analysis of covariance (ANCOVA) for the multiple variables in this model with repeated measures. The factors or independent variables were used to divide the population of 153 active semiconductor companies into groups. There were two independent variables used that were designated as dummy variables. The first variable of acquisition separated companies that did complete acquisitions from those that did not complete acquisitions during the decade of study. The second variable grouped the companies by size of sales at the end of the decade by either greater than $100 million or less than $100 million. Then the general linear model procedure was used to test the four null hypotheses, as stated above, regarding the effects of the independent variables on the dependent variable of gross profit margin growth as a repeated measure over the perio d 1992-2000. The investigation included looking at interactions between factors as well as the individual factors and the effects and interactions of covariates. This model specifies the independent variables as covariates for regression analysis. The SPSS repeated measures model creates a matrix for the sums of squares due to the model effects, gives the approximate F statistics and estimates parameters in addition to testing hypotheses. When an F test shows significance, SPSS performs post hoc tests to evaluate the differences between the means. This yields a predicted mean value for the cells of the model. Analysis of variance (ANOVA) was applied to named variables to study the portion of variance in the each variable that could be identified as explained and unexpected with regard to the event of acquisition. A covariance tool was also used when looking at the variables described above such as acquisition occurrence, company size and profitability growth changes. This compares whether the two ranges of data move together à ¢Ã¢â€š ¬Ã¢â‚¬Å" that is, whether large values of one set were associated with large values of the other (positive covariance), whether small values of one set were associated with large values of the other (negative covariance), or whether values in both sets were unrelated (covariance near zero). DATA SOURCES Standard Poors Compustat database was used for data collection in this research. The database contains fundamental financial, statistical and market data derived from publicity traded companies trading on the NYSE, NASDAQ, AMEX, OTC and Canadian stock exchanges. The calendar year for a company is the year in which the fiscal year ends and is the time period used as standard in this research. Companies with fiscal years ending in January through May are assigned by Compustant into the year in which the fiscal year begins. Companies with fiscal years that end in June through December are assigned to the year in which the fiscal year ends. The EDGAR (Electronic Data Gathering, Analysis and Retrieval) System database maintained by the United Stated Security and Exchange Commission (SEC) was also used. The EDGAR data is also collected from the same sources that are used to generate the Compustat database. Data from these controlled and verifiable sources were corroborated and augmented with information collected from semiconductor trade journals, company annual reports and the Mergers Acquisitions Journal that tracks statistics in this area. CHAPTER 4 RESULTS AND DISCUSSION HI à ¢Ã¢â€š ¬Ã¢â‚¬Å" ACQUISITON AND PROFITABILITY RELATIONSHIP A strong positive relationship was found to exist between the presence of acquisition activity and the growth in gross profit margin (GPM) by the end of the ten year study period. The statistical analysis is detailed below and is a departure from previous findings. This finding addresses the central question of this research endeavor to look for a relationship between acquisition events and profitability growth within the one industry of semiconductors. A positive financial effect is found and opens the path for additional analysis in this direction. 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