Debate & MySpace Essay

The motion here today is that Social networking sites can actually cause more harm than good. We do not however deny the fact that in today’s society, these social networking sites do bring benefits to our daily life and also in the ever growing business industry. For example, it helps us connect with our loved ones who are halfway round the globe, or even a marketing platform for business developers with its vast consumer reach. On the other hand, what we are affirming today is that despite it upsides, it can bring about MORE harm than good. It is an increasingly untenable fact, especially with the ease of access to the internet to virtually anyone, that these social media can have more negative effects than good. This is Veronica, she will be speaking about the negative effects that it will bring to our health and financial fraud. Secondly, Hema will elaborate further the effects on business risk and personal risk. Thirdly, Nazrul will touch on the topic of productivity and cyber-criminal activities. Last but not least, Joshua will briefly wrap up about this debate. This is a 5-round debate, and we look forward to challenging our opponent in this controversial topic. Social networking sites are websites that facilitate communication between 2 or more individuals. When we are communicating with 2 or more individuals, many fail to realise that we are essentially putting out information on ourselves out there on the World Wide Web. There are obviously a lot of privacy issues at hand when this happens. I’m certain that the opposition will argue that we have control of what we share over the internet, and we can prevent these issues from happening. Even if we are very careful on what information we share, we still cannot prevent all forms of privacy violation  from happening. An article on The Guardian UK states that Facebook users are unwittingly revealing intimate secrets – including their sexual orientation, drug use or political beliefs. A research shows that just by looking at a user’s â€Å"Like† activities, they can predict information about the user. Researchers are able to predict a user’s characteristics, race, religion, beliefs and political views with up to an accuracy rate of a shocking 88%. Even if we do put in controls, data on these sites are still accessible to anyone, especially those with expertise in the IT arena. A student from the University of Georgia is suing her university of $2 million dollar over the misuse of her Facebook picture. The University have pulled out a picture of her in a bikini from her social media account for a district-wide presentation campaign raising awareness on what not to do on social media. Incidentally, this student has set her privacy settings to only allow her friends to view her pictures. These examples here gives a fair indication of how our personal information can be accessed by almost anyone regardless of the measures that we took to protect our information. And if the opposition party would like to argue that it is the user’s decision NOT to put anything on the social sites, then I think that it would be considered as NOT USING these social media sites in any case, and as such, would be irrelevant to the topic of today. Another issue that I would like to address today is Cyber Bullying. Cyber bullying is a very serious problem because it’s very harmful to younger generation psychologically and also physically. Most bullies don’t think about what they say or do have an enormous effect on others. A very famous case sparked the attention of many people to realize that cyber bullying does have a very negative effect. The case of Amanda Todd shocked the world as she posted a video before committing suicide. In the black & white video, Amanda tells the world her story of years of bullying. I now would like to pass on to my fellow colleague who will go on to the second point. Cyber Bullying Amanda Todd http://www.abc4.com/content/news/top_stories/story/Girl-Commits-Suicide-After-Being-Cyber-Bullied/qIO2h9LBhUaCEB_3oQlbzg.cspx Jessica Laney http://www.nydailynews.com/news/national/social-media-blamed-teen-suicide-article-1.1218550 Eden Wormer http://abcnews.go.com/US/bullied-teen-commits-suicide-posting-loves-haterz/story?id=15887174 http://www.theguardian.com/technology/2013/mar/11/facebook-users-reveal-intimate-secrets http://www.digitaltrends.com/social-media/student-sues-school-district-for-using-her-facebook-bikini-picture-in-school-wide-presentation/ http://www.nydailynews.com/life-style/selfies-damage-relationships-study-article-1.1424830 http://www.irishexaminer.com/ireland/internet-is-bad-for-kids-mental-health-237178.html In Wake Of Teen Suicides, Ask.fm Faces A â€Å"Myspace† Problem

Frankenstein by Mary Shelly Essay

   The setting in both books is mainly in the 18th century where there wasn’t anything too modern which helped add the theme of gothic horror to the reading audience as in those times it was a lot darker and more horrifying. In an Interview with a vampire the story is set over 200 years. Showing as the theme of gothic horror in the book decreases, as the book becomes more modern. This is shown when Lestat is scared of the modern world and the artificial lights as he thinks they are sunlight scaring him into hiding. There are various themes in both books for example they have written one of the characters acting like God, Lestat in Interview with a vampire and Victor in Frankenstein. This was especially scary in Frankenstein 1816 as the people took religion very seriously and to talk about gods in this way was known as evil, which scared the people who read the book Which would inspire terror into the people who read it. When in Frankenstein the creature says † I am thy creature, I ought to be thy Adam† And in Interview in the vampire when Lestat acts as god by creating Louie and also when Lestat says they are the same as God when he says † Gods kill, and so shall we† This shows the God theme as Lestat connects being a vampire to being Gods which is shown in the quote. Another thing in both books they deal with the themes of outsiders. In Frankenstein when the creature is looking in â€Å"On examining the dwelling, I found that one of the windows of the cottage had formally occupied part of it but the panes had been boarded up with wood. In one of these was a small and almost imperceptible chick, through which the eye could just penetrate. Through this crevice a small room was visible. † Also in Interview with a vampire Louie became an outsider when he became a vampire. † I said goodbye to the sunrise and went out to become a vampire† The two texts are very similar though in many ways. First of all in both texts the main character is an outsider, Louie as a Vampire as he is different from everyone else as he is a vampire and Victor as an outcast to everyone else as he created this monster and is a criminal for doing so making him an outsider and different to other people. Also both authors have lost a child which may have helped write the book using their life experiences to help them writing the book. Both books have roughly the same plot when Louie or the creature both have a natural birth and find it hard to survive. Also in both books they murder when the creature kills people or Louie kills people for blood. As when Louie said, † Now I am guilty of murder. † I think the authors of these two texts have don’t an excellent job in dealing with the theme of outsiders in the text as the setting, the characters and what’s happening around them all make them outsiders. Also what the characters are and how they act and what they do which inspires terror or horror into the reader create the genre of Gothic horror and make it stand out. But what most of all stuck into my mind were the words from Louie, which really made me think Gothic horror and outsiders, was â€Å"I wanted love and goodness in this which is living death’ I said ‘ It was impossible from the beginning, because you cannot have love and goodness when you do what you know to be evil, what you know to be wrong† and also in Frankenstein when Victor said † It was necessary that I should return without delay to Geneva, there to watch over the lives of those I do fondly loved; and to lie in wait for the murderer, that if any chance led me to the place of his concealment, or if he dared† Both showing the Gothic horror in their words like when they say â€Å"murderer† and â€Å"evil† creating the gothic horror feeling. Show preview only The above preview is unformatted text This student written piece of work is one of many that can be found in our GCSE Mary Shelley section.

Different Views on Affirmative Action Essay

This paper will discuss the different views on affirmative action. I will go over both views of this issue, and will explain which side my personal views fall on. I will also discuss the pros and cons of affirmative actions, and the effects it has on the workplace. â€Å"In its tumultuous 45-year history, affirmative action has been both praised and pilloried as an answer to racial inequality. The â€Å"affirmative action† was first introduced by President Kennedy in 1961 as a method of redressing discrimination that had persisted in spite of civil rights laws and constitutional guarantees† (Brunner, 2008). Affirmative action is a highly controversial policy that is designed to help minorities gain access to jobs and schools, etc. that they normally would not be able to enter into. â€Å"Affirmative action generally means giving preferential treatment to minorities in admission to universities or employment in government and businesses. The policies were originally developed to correct decades of discrimination and to give disadvantaged minorities a boost. The diversity of our current society as opposed to that of 50 years ago seem to indicate the programs have been a success. But now, many think the policies are no longer needed and that they lead to more problems than they solve† (Messerh, 2008). The benefits were very great for minorities at one time. There was a time when minorities and women faced an uphill battle for equality in the workplace and in education. The majority of people believed that the better paying jobs should not only go to white men; but that they were the better qualified candidates. â€Å"Keep in mind that all people have more shared than different characteristics, and no group is biologically superior to another. Nevertheless, racism, the belief that some racial groups are inherently inferior to others, has been common and is used to justify discrimination and equality† (Lauer & Lauer, 2006, p. 225). This belief was spurred on by racism and sexism in the past. â€Å"Focusing in particular on education and jobs, affirmative action policies required that measures be taken to ensure that blacks and other minorities enjoyed the same opportunities for promotions, salary increases, career advancement, school admissions, scholarships, and financial aid that had been the nearly xclusive province of whites. From the outset, affirmative action was envisioned as a temporary remedy that would end once there was a â€Å"level playing field† for all Americans† (Brunner, 2008). I think that this policy was a good idea to begin with. There were many people back in the 50’s who would go out of their way to make sure that blacks were not able to raise above their â€Å"born into roles†. At the time, a law like this was needed very bad. It was very important at that time in our history to include every one of all races and sexes. I believe that we have now reached a time in our history, where inclusion is at an all time high nationwide. This brings us to the problems that affirmative action has caused in our society. The biggest problem is reverse discrimination. â€Å"Affirmative action leads to reverse discrimination. Affirmative action is designed to end discrimination and unfair treatment of employees/students based on color, but it in effect does the opposite. Whites who work harder and/or more qualified can be passed over strictly because they are white. Contrary to many stereotypes, many minorities fall into the middle or upper class, and many whites live in poverty. Unfortunately, the way things are set up now, a poverty-stricken white student who uses discipline and hard work to become the best he can be can be passed over by a rich minority student who doesn’t put in much effort at all† (Messerh, 2008). Many people do not want to admit to this problem; however, affirmative action has created discrimination of the majority. If a person is a white male, they may actually be looked over for the simple fact that a university or company does not have enough minority employees. This is a discriminatory practice in the process. â€Å"By the late 70’s, however flaws in the policy began to show up amid its good intentions. Reverse discrimination became an issue, epitomized by the famous Blakke case in 1978. Allan Blakke, a white male, had been rejected two years by a medical school that had accepted less qualified applicants – the school had a separate admissions policy for minorities and reserved 16 out of 100 places for minority students. The Supreme Court outlawed inflexible quota systems in affirmative action programs, which in this case had unfairly discriminated against a white applicant. In the same ruling, however, the Court upheld the legality of affirmative action per se† (Brunner, 2008). I personally feel like affirmative action has also lowered the quality within the universities and in the workplace. â€Å"Affirmative action lowers standards of accountability needed to push students or employees to perform better. If a minority student can get into Harvard with a 3. 2 grade-point average, why should she push herself to get a 4. 0? Although some students or employees are self-motivated, most people need an extra push or incentive to do their best, by setting lower standards for admission or hiring, we are lowering the level of accountability. We should reward hard work, discipline and achievement, we shouldn’t reward a student simply because he or she is a certain race, nor punished because he or she isn’t† (Messerh, 2008). All positions regardless of what it is, is better filled by filling it with the best and most qualified applicant. The best tool against discrimination and unfair hiring practices, would be to make sure all of our lower, middle, and high schools are up to par in order to create the best applicants overall.

Human Resources Essay Example | Topics and Well Written Essays - 2000 words - 2

Human Resources - Essay Example As the report declares a job description is one of the most crucial documents that an employer needs to have because it determines productivity and prevents lawsuits. A detailed description concerning a position is given that helps in attracting the most appropriate individual for the position. In addition, it helps in performance management, employee development as existing employees attempt to acquire a promotion, compensation, and recognition. With regard to the HR process, job descriptions clarify as well as enhance communication between the management and the employee. This is because they support almost all employment actions such as promotion, hiring, and compensation. This research stresses that one of the best modes of evaluation is performance appraisal. A reliable performance appraisal system ensures that the employees are aware of what is expected of them and is undertaken at least once per year. The goal of the overall appraisal process is to help the employee to get an idea concerning where they are as compared to the previous period of evaluation. While the evaluation process allows an organization to provide feedback to the employees and offer positive criticism of their work, they are also used to identify the areas that require improvement. The evaluations should be realistic and consider individual employees while evaluating in addition to concentrating to evaluating their performance instead of their personality.

Supply and Demand Simulation_365 Essay Example | Topics and Well Written Essays - 750 words

Supply and Demand Simulation_365 - Essay Example The level of competition is also a macroeconomic factor because the firm is a monopoly, rather it has no competitors. The reasons the two are concepts under consideration in macroeconomics is because the firm does not have control over them as seen in the study work of Adil (2006). The shift in the supply curve is as a result of lowering rental rates. This will imply that the number of property will be on demand and making the supply to increasing leading to a shift of the supply curve to the right. The shift is also due to increased advertising whereby the property is in demand from many clients because, through advertisements, many people will learn of the two-bed roomed apartments increasing the occupant and increasing the supply. This implies that the quantity demanded increases. This shift will arise from the renting of property at a low rental rates. The shift will also arise from increased demand of apartment as a result of increased advertisement schedules. The shift in supply will affect the equilibrium price because, at some point, there is no further adjustment in the rental rates this also applies to the shift in demand. The shift in supply would affect the quantity, where according to Adil (2006) the shift to the right will indicate an increase in quantity supplied. The shift in the demand curve to the right will also indicate an increase in quantity demanded. The management will also make their decisions based on the shift in the supply curve, whereby the shift to the right will make the management set the rental rates at the equilibrium price. This also applies to the shift of the demand curve to the right, whereby the management has to reduce the advertisement as the demand will be high enough. Application of the concept of demand and supply would be to determine the amount of advertising to do, such that in case the demand goes up due to increased

Labor law Essay Example | Topics and Well Written Essays - 1250 words

Labor law - Essay Example In return, employers gained a loyal â€Å"internal labor market† of semi-trained workers that would save employers money required to recruit, and train. Beyond the implicit contract, unions were also successful in protecting against termination, requiring â€Å"just cause† instead of the more current employer flexibility of â€Å"at will† employment1. The ushering in of the boundaryless workplace has dismantled much of the New Deal labor structure, and has put a premium on individual skills and knowledge. Employees have become free agents in the workforce, needing such skills to compete for prevailing wages with no implicit or explicit guarantee of job security. The strongest protection workers now have is education and training. Stone also notes that those hurt the most by this instability are blue collar and untrained workers2. While the lack of security is tumultuous in itself, Stone argues that the current labor structure does not have answers for many of issues that the changing economy present. Using Stone’s method of chronicling historical changes in the employer-labor relationship, the trend towards a more flexible and boundaryless workforces has worked to improve opportunities for women and minorities. At the same time, however, she believes that, †the new employment relationship makes discrimination hard to identify and difficult to challenge3.† Successful attempts have been made to prevent overt discrimination such as Title VII, of the landmark 1964 Civil Rights law, the Age Discrimination Act of 1967, the Equal Pay Act of 1962, and the 1990 Americans with Disabilities Act4. This legislation is effective in allowing women and minorities to gain access to the points of entry into an internal labor market, however, due to the breakup of internal labor markets, these acts do not address more modern forms of discrimination. Modern forms of discrimination have become

Conformity and obedience Research Paper Example | Topics and Well Written Essays - 750 words

Conformity and obedience - Research Paper Example To the contrary those who rebelled or disobeyed probably got eaten by a tiger or fell off a cliff in the primitive settings of our species’ development. (Kassin, et.al, 2007) Hence, obedience to significant others has a definite value. In other words, â€Å"child socialization values, the values that parents hold in high regard and try to impart to their children, occupy a central place in the studies of the family and social stratification. Socialization values not only condition parental behavior in childrearing practices, they also help shape children's value systems and behavior, which affect their life chances and pathways to success.† (Xiao, 1999, p.641) Conformity has its value too, in terms of its social utility. In order for societies to maintain cohesion and harmony, a certain degree of shared virtues, behaviour and values are to be upheld by all members of the society. Otherwise, discord and disharmony are likely to ensue. As the famous adage ‘When in R ome, be a Roman’ hints, conformity holds great survival value for any individual anywhere in the world. But it must be remembered that our country is founded on principles of individual freedom and rights and the concept of ‘individualism’ is cherished and held dear by most of the citizens. Hence there are equally powerful and legitimate countervailing tendencies in the form of conformity and individualism. As author Wilfred McClay notes succinctly in his journal article for The Virginia Quarterly Review, â€Å"As the example of Huck Finn suggests, American thought and expression have always been rich with figures of heroic individuality-and correspondingly poor in convincing and binding representations of community or social obligation. Whether one considers our accounts of the great colonial religious controversies, such as those involving rebels Roger Williams and Anne Hutchinson, or the moral fables embedded in our popular culture, such as that offered in th e movies One Flew Over the Cuckoo's Nest, The Dead Poets' Society, and Fiddler on the Roof, we seem to have a boundless appetite for fables of personal liberation. We are almost invariably asked to side with the put-upon individual, cast as an unjustly thwarted soul yearning to breathe free, and we are instructed to hiss at the figures of social or political authority, the John Winthrops and Nurse Ratcheds of life, whose efforts to sustain order establish them instead as monsters and enemies of humanity.† (McClay, 2001, p.392) One particular illustration of a call for individualism is seen in the movie Dead Poets Society. In this Robin Williams starrer, topics of conformity and obedience are explored cinematically. Williams, who moves into a vacant English professor position in a up-scale prep school (Welton Academy in Vermont), finds his students tough to deal with in the beginning. The students are prone to make trouble both inside and outside the classroom. Williams takes u pon himself to channel their energies into more creative activities and subjects of poetry and literature serve as inspirational tool, with which he wins over the minds and hearts of the pupils. The students start behaving much better as a result and in the process engage in the learning and enjoy the classroom experience. With stimulated minds and liberated thoughts, the students are confounded and conflicted by the emergent and the established. Despite

Detail three differences of the colonies listed in the chapter 1 and 2 Assignment

Detail three differences of the colonies listed in the chapter 1 and 2 - Assignment Example They relied on ship-building due to the sturdy pines that existed there. Also their economy was largely supported by fishing. People increasingly clustered around the coastal regions and built farm lands for promoting agriculture. Their institution of extreme importance was their church which overlooked their morality – this colony was formed mainly for religious purposes (Remini 21). The Middle colony mainly relied on farming and commerce; agriculture thrived in this region because of the climatic conditions and several animals were used to provide fur for export. The fur was actually what the Dutch colonists had shown interest in initially. The fur was not only exported to Europe but also to Southern colonies and West Indies. The culture of this region was especially diverse due to the presence of Dutch, Germans and several other nations. Though some regions of this area were predominantly occupied for religious reasons, a larger portion of this area was colonized for exploiting the natural and material treasures of this land (Remini 21). The Southern colony largely relied on the cultivation of crops and agriculture, with enormous lands reserved for serving this purpose and an enormous workforce requirement. Initially, the workforce comprised largely of indentured servants, which were soon replaced by African slaves. Southern colonies were the first to recognize and institutionalize slavery. Vast social class differences were present in this colony between the natives and the colonists. On the whole, the population of this region was more homogenous than Middle and New England Colonies (Remini 22). Inspite of these differences, all three regions established governance structures based on whether the region was royal, corporate or proprietary. Continuous evolution, colonization and disregard for rules often brought the three colonies into clashes, which eventually

Biorefinery Coursework Example | Topics and Well Written Essays - 750 words

Biorefinery - Coursework Example Switch grass is current used for the production of biofuel (Jefferson, McCaughey, May, Woosaree, & McFarlane, 2002). Biomass in Alberta Province of Canada (Jefferson, McCaughey, May, Woosaree, & McFarlane, 2002) Biomass Mean annual yield (Mg/h) Prairie sand reed 9.5 Switch grass 7.0 Big bluestem 5.5 Western wheat grass 8.8 Mammoth wild rye 7.7 Green needle grass 15.8 wheatgrass 7.5 Thick spike 6.7 Question 2 The following bio-products can be obtained from the bio-refinery: bio-diesel, ethanol, modified proteins, adhesives and resins, solvents and lubricants as well as industrial plant-based oil products (such as fertilizers, plastics), and plant-made industrial products (such as composites), Propose conversion technologies that can be applied in the biorefinery to produce the identified products; at least two different paths to ethanol should be included Biomass handling technologies for the production of different bio-products from the biomass listed in the Table above involved harv esting, transportation, storage and pre-processing and fermentation or anaerobic digestion. Pretreatment is carried out by hydrolysis of lignocellulosic material with dilute sulphuric acid (0.7-5% v/v) in two stages to yield fermentable sugars such as D-glucose, D-mannose, D-galactose, L-rhamanose, D-xylose, L-arabinose, and uronic acids. The first stage is carried out at 140 Â °C for 15 min to hydrolyze the hemicelluloses and in the second stage proceeds at 190 Â °C for 10 min to breakdown the cellulose. Any residue cellulose is hydrolyzed enzymatic ally. The bioconversion of D-xylose into ethanol from hemicellulosic materials is limited by the presence of toxic compounds, such as phenol, furfural, 5-hydroxymethylfurfural and acetic acid. These toxic compounds decrease the bioprocess productivity. The toxic compounds are removed by use first adjusting the pH to 9-10 by using Ca(OH)2 to facilitate the removal of the toxic compounds and this is followed by readjusting the pH back t o 5. The hydrolyzed hemicellulosic material will be fermented with S. cerevisiae for ethanol production. Alternatively, ethanol can be obtained from the biomass by carrying the pretreatment process by means of steam explosion at 160-290 Â °C, 0.7-5 MPa. The process depolymerizes the cellulose and the hemicellulosic materials. Detoxification and fermentation processes as describe above is carried out to yield ethanol. For each possible path, estimate how much ethanol can be produced per year. Use theoretical yield if the actual conversion efficiency is unknown. Theoretical yield Percentage of cellulose in Switch grass is 40.2% (Jefferson, McCaughey, May, Woosaree, & McFarlane, 2002) Percentage of hemicelluloses in Switch grass = 32.5% (Jefferson, McCaughey, May, Woosaree, & McFarlane, 2002) Hydrolysis of 1 kg C6 sugar polymers gives 1.11 kg monomer sugars Hydrolysis of 1 kg C5 sugar polymers gives 1.14 kg monomer sugars Fermentation of 1 kg glucose (C6) gives 0.511 kg ethanol Theore tical yield = ([(40.2 *1.11) + (32.5*1.14)] * 0.51) Theoretical yield = 41.65/100 = 0.42 kg/kg feed = 0.55 L/kg feed Comment on the logistic aspect (mainly the transportation of feedstock) of the biorefinery, taking into account the scale of operation, the distribution of feedstock, and

Following Military Orders That May Be Unethical Research Paper

Following Military Orders That May Be Unethical - Research Paper Example There are many legal and social standards through which an action is ethical, but these standards do not solve the contradiction that comes with the relativity in situations, individuals and societies. While soldiers pledge to obey their superior’s orders they do so in view of the uniform code of military justice and the constitution. As such, soldiers â€Å"should not† obey illegal commands. Establishing the legality or illegality of a command has over the years has raised controversial ethical issues. Under the UCMJ, articles 90 to 92 hold that willful or un-willful disobedience of lawful orders from a senior officer is a criminal offence (Mason, 2011). During war, article 90 further stipulates that such an action is punishable by death (Mason, 2011). Unlawful orders are those that are repugnant to the Constitution seeing as the constitution is the supreme law of the land. The constitution derives form societal ethics and religious doctrines. However, the constitution does not take into account all societal ethics and religious standings of a people (Mason, 2011). There are many examples of illegal or potentially unethical orders issued every day in the army and other military organizations. This paper examines two accounts of death orders. The first example is that of William Calley 1968 during the Vietnam War (Thomas, 2012). The then Second Lieutenant claimed to have received orders from his superior to open fire and subsequently kill civilians. He then passed these orders to his juniors who, like him opened fire on innocent, unarmed civilians in the absence of duress (enemy fire) (Thomas, 2012). In 1971, William received a life sentence with the charge of premeditated murder. The aftermath of the sentence aside, Lieutenant William was guilty of murder while following the orders of a superior (Thomas, 2012). With the rise of terrorism threats cases of inhumane, unconstitutional mistreatment of prisoners is on the rise. A second example is an i ncident that occurred in the year 2004 during America’s invasion of Iraq. The 343rd Quartermaster Company on 13th October refused to go on a mission as ordered by their superiors (Mason, 2011). The unit cited unsafe and insufficient equipment as their reason to disobey orders claiming that the order was a suicide mission. The consequences of their actions have negative far reaching effects on their careers. These consequences include detainment, dishonorable discharge and forfeit of pay (Mason, 2011). In 1986, the U.S army listed some values an organization should have considered to form the foundation on which ethics stems from. These values included integrity, loyalty, selflessness and duty (Mason, 2011). For the individual, the army listed courage, commitment, candor and competence. This proclamation spells out two things. The first is that the superior officer (representative of the organization) should give due consideration to ethical matters while giving orders. Second ly, the officer receiving the orders should follow them while maintaining an ethical approach. Military laws and courts hold military persons accountable if their actions are unlawful regardless of the situation (whether they were following orders from a superior or not) (Mason, 2011). There are various theories that one can apply to examine the above situations. These theories include utilitarianism, deontology, virtue ethics relativism, emotivism and ethical egoism. John Stuart Mill advanced Consequentialism, a

USSR History Essay Example for Free

USSR History Essay The peasant women collectivization took place in the era between 1928 and 1932 (Lynne, 1992). This collectiveness can be seen as a modern day social movement geared towards fighting for human rights. The peasant women proved their political maturity through making efforts to fight for their rights in a country where opposition was unheard of. To modern historians the peasant women can be seen as agents as social change who used mental prowess to bring about social change. This collectiveness however was faced with many obstacles, for instance Soviet Union used propaganda to stop peasant women from getting together and uniting in their fight against state policy (Lynne, 1996). Soviet Union knew that such a unity would be detrimental to its fascist regime (Lynne, 1992). The success of peasant women collectivism would also be detrimental to the objectives and goals of Soviet Union. The Soviet Union can be argued to have been obsessed with its fascist kind of leadership and any slight threat had to be dealt with. For instance, peasant women were considered to be backward and incapable of spearheading any social action from its oppressive government (Lynne, 1996). With this in mind, the only possible explanation for the women collectiveness was incitement from anti soviet groups. Consequently it can be argued that the Soviet Union had a very low opinion of the peasant women. This is shown in their mode of leadership whereby they use brainwashing tactics to make the peasant women do what they wanted them to do. For instance the Soviet Union made the women take their side through propaganda and those who opposed them were treated with much violence (Lynne, 1996). On the other hand, it can be argued that the first step by the women in realizing their plight and using unity (collectiveness) to fight for their rights was a big milestone in the development of democracy not only in Soviet Union but in the world.

Attack on elements of society Essay Example for Free

Attack on elements of society Essay The Crucible is set in a puritan town in New England, Salem Massachusetts. The girls are caught dancing by the Reverend Parris the parish minister. This then start of a witch-hunt, which gets the town talking. People that are innocent are accused and the term name names or else is being used by the courts. The innocent people of Salem get accused, and punished. This is an allegory of McCarthyism because this is what happened in the trials in 1950s, society was shattered by a rumour and fingers were pointed at innocent people. Its also an allegory of McCarthyism because it shows the court officials being unfair and unjust, just how they were in The Crucible. The first way in which the setting of Act 3 can be interpreted as an attack on the severity of the authorities in Salem and 1950s America is shown through the stage directions Arthur Miller presents us with. Firstly uses the adjectives forbidding, empty and solemn to describe the room on the stage. The effect this has on the audience is curiosity and concern and this builds up a sense of tension within the audience. Also while we see all of this there is silence. In drama, silence is more powerful then words of actions. The silence and appearance surrounding the stage would build up a very strong sense of tension within the audience. Another reason for silence maybe that Miller wants to convey the presence of or the sign of evil in the court and probably that something is wrong, not right, or something bad is going to happen. The other way Arthur Miller has an impact on the audience is by using symbolism and imagery. In the opening of act 3 Arthur Miller has two high windows. This makes the room sound very familiar to a prison cell and again a prison cell is where you dont want to be and maybe Millers trying to sat that the courts were like a prison. Also not forgetting the sunlight pouring through. Back in the days traditionally sunlight was meant to be good luck and also it was meant to be the representative of God and truth. This can have a great effect on the audience because it gets them thinking and into the mood, and that the current problems surrounding Salem arent going to get any better but maybe worse. Again this an attack on the elements of society because it shows that the court was a place where people werent treated fairly in the 1950s and that the authorities in America were harsh and wanted people to get into all sorts of problems and trouble and this is what exactly Arthur Miller went through and trying to get across by writing The Crucible. The second way that Act 3 can be interpreted as an attack on the severity of the authorities in Salem is by Millers exposure of the characters in The Crucible. The way they dress and act. In the actual film most of the men are seen wearing black clothes, this may put forward that Salem is a holy religious society and believe very strongly in Christianity. If you take Judge Danforth, he adopts a blinkered attitude and refuses to use common sense and logic in dealing with these cases. His exact loyalty blinds him from the truth and if he believe that the people accused were with God and announced them innocent he would be accusing the girls of lying, and also fact that he is too worried of calling of the witch trials because what would the people of Salem think of him and the fact that is reputation is at stake. This can be interpreted as an attack on elements of society because it shows that even the authorities in this case the Judge arent always fair even if they are people of high authority or religious. This is how Arthur Miller got his point across that the authorities of America in the 1950s were unfair and unjust and wanted to put down as many people as possible, on the whole the authorities were very harsh and severe on punishments. The third way in which the setting of act 3 can be interpreted as an attack on the severity of the authorities in Salem and 1950s America is by the language Arthur Miller has used in the opening lines in the scene. Judge Hathorne asks Martha Corey if she denies being a witch. Martha Corey claims she knows not what a witch is, to which he replies, how do you know then that you are not a witch. We see Hathornes question after question on Martha Corey gets her paranoid and the pressure is huge on her, to come up with the answers quickly but if she takes too long she maybe considered more of a witch and therefore this sets the mood and tone for the scene. Its as if Judge Hathorns trying to possibly trick into saying that shes a witch rather then finding out the exact truth.

Theories of Merger and Takeover Waves

Theories of Merger and Takeover Waves Merger Wave The American economy experienced two great takeover waves in the postwar period, first in the 1960s and the second in the 1980s. Both waves had a deep affect on the structure of corporate America. The main trend in the 60s was diversification and conglomeration. In contrast the 1980s takeover reversed the previous process and brought US corporations back to specialization. In this respects, the last thirty years were a roundtrip for corporate America. This paper is an overview of the salient features of the two takeover waves. 1.1 The 1960s Conglomerate Merger Wave The merger wave of the 1960s was the major since the turn of the century (Stigler, 1968). A typical characteristic of the 1960s transaction was a friendly acquisition, frequently for stock, of a smaller private or public firm which was outside the acquiring firms main line of business. During this period unrelated diversification was widespread among the large companies. Rumelt (1974) has reported that the fraction of single business companies in the Fortune 500 decreased from 22.8% in 1959 to 14.8% in 1969. Further, the portion of conglomerates with no dominant businesses increased to 18.7% from 7.3%. There was also a considerable move to diversification among companies that retained their core business. The driving force behind the 1960s wave was high valuations of company stocks and large corporate cash flows. However the management was unwilling to pay out the high cash flows as dividends, and on the other hand able to issue equity at attractive terms therefore, turned their atte ntion to acquisitions (Donaldsoni. 1984).Dividends were considered as a complete waste, and acquisitions as a very attractive way to conserve corporate wealth. There are two sets of arguments used to explain why companies diversify. The first set argues that firms diversify to increase shareholder wealth. A number of authors have discussed different aspects of diversification that can potentially raise shareholder wealth. Williamson (1970), suggest that firms diversify to beat imperfections in external capital markets. Through diversification, managers create internal capital markets, which are less prone to asymmetric information problems. Lewellen (1971), argues that conglomerates can carry on higher levels of debt since corporate diversification reduces earnings variability. if conglomerate firms are more valuable than companies operating in a single industry If the tax shields of debt increase. Shleifer and Vishny (1992), state that conglomerates may have a higher debt capacity since they can sell assets in those industries that suffer the least from liquidity problems in bad states of the world. Finally, Teece (1980) argues that divers ification leads to economics of scale. The second set of arguments states diversification as a product of the agency problems between shareholder and managers. Amihud and Lev (1981) argue that managers follow a diversification strategy to protect the value of their human capital. However, Jensen (1986) suggests that companies diversify to increase the private benefits of managers. Similarly, Shleifer and Vishny (1989) suggest that managers diversify because they are better at managing assets in other industries. Thus, diversifying will make skills more indispensable to the firm. 1.2 The 1980s Merger Wave Form a longer historical perspective, Golbe and White (1988) presented time series evidence of U.S. takeover activity from the late 1800s to the mid-1980s. Their findings have suggested that takeover activity above 2 to 3 percent of GDP is unusual. However, the greatest level of merger activity occurred around 1980s, at roughly 10 percent of GNP. By this measure, takeover activity in the 1980s is historically high. The size of the average target in the 1980s had increased extremely from the modest level of the 60s. By 1989 28%, of Fortune 500 companies were acquired and many transactions, particularly the large ones, were hostile. Further the medium of exchange in takeovers was cash rather than stock, they were characterized by heavy use of leverage. Firms were purchased by other firms by leveraged takeovers by borrowing rather than by issuing new stock or using solely cash on hand. Other firms restructured themselves, borrowing to repurchase their own shares. The 80s was also characterized by latest forms of control changes, which included bustup takeovers. Bustup takeovers involved the sell off of a substantial fraction of the targets assets to other firms. (Bhagat, Shleifer, and Vishny, 1990; Kaplan, 1997). 2 Merger Motives The following sections will explain the motive behind the two merger waves. 2.1 Managerial Motives Agency theory predicts that unless managers are strictly monitored by large block of shareholders they will certainly act out of self-interest. Amihud and Lev (1981) have provided proof that unless closely monitored by large block shareholders managers will attempt to reduce their employment risk through diversification. Lane et al.(1998) in this study have reexamined Amihud and Lev findings about agency theory Using a sample of 309 US firms that diversified between 1962 1970, from the Federal Trade Commission (FTC) Statistical Report on Mergers and Acquisitions (1976). This study falls in the third broad category[1] of agency studies. However this analysis only examines the strategic behaviors of managers when they are not under siege and are also not in a situation, in which their interests are clearly in conflict with those of shareholders. Specifically, firms without large block shareholders are expected to engage in more unrelated acquisitions and show higher levels of diversif ication than firms with large block shareholders (Jensen and Meckling (1976)) Using Multiple Regression, the study found no evidence for the standard agency theory predictions that management controlled firms are linked with strategically lower levels of diversification and lower levels of returns than are firms with large block shareholders. It was found that Ownership structure and diversification are largely independent constructs. Thus, managers may be are worthy of more trust and autonomy than what the agency theorists have prearranged for them. Rather than seeking to restrict managerial discretion through extreme oversight, a more balanced approach by principals is needed. Some safeguards are essential as conflicts of interests between managers and shareholders do arise in certain situations, therefore, the assumption that such conflicts dominate the day-to-day management is not realistic. Matsusaka,(1993) takes a deep look at the astonishingly high pre-merger profit rates of target companies during the conglomerate merger wave. The main goal of the study is to assess how important was managerial discipline as a takeover motive. The analysis uses an extensive data set of 806 manufacturing sector acquisitions that took place in 1968, 1971 and 1974. The sample was collected from New York Stock Exchange listing statements. Sample of 609 observations was taken from 1968, 117 from 1971, and 129 from 1974. The results did not differ in any vital way by year, so observations from the three periods were pooled. Because antitrust enforcement was strict in the late 1960s and early 1970s, it was safely assumed that the sample mergers were not motivated to increase market power Ravenscraft and Scherer (1987). This allowed the investigation to focus on a narrow set of merger motives. Profitability[2] throughout the study was measured as a rate of return on assets. The theory identified two basic characteristics of mergers motivated to discipline target management. First it wsa observed that the target was underperforming its industry and the only reason to discipline the managers was that they were not maximizing profit. It could be because of incompetence that they were pursuing their own objectives. The second, the target company had publicly traded stock and the only posibility to discipline management was by electing an appropriate board of directors. In this situation a takeover was necessary to effect a change as the diffused stock ownership resulted in free-rider problems. Owners can remove bad managers of privately owned firms, as they are closely held. The problem occurs in large publicly traded firms with diffuse ownership. The statistical results revealed that both public and private targets had extremely high profit rates prior to acquisition compared to their size classes and industries. Therefore, takeovers were not motivated to discipline target managers during the conglomerate merger wave. The second finding of the study is that public targets were not as particularly profitable as private targets. It was also found that the largest public targets had the lowest profit rates. A credible interpretation of the evidence is that managerial discipline may have been significant for just a small set of acquisitions that involved large publicly-traded targets. Matsusaka (1993) leaves the bigger question unexplained. Why buyers time and again sought high profit targets during the merger wave. There is a simple clarification, that high quality assets are generally favored to low quality assets, as high quality assets are more expensive. In addition to explaining why firms seek high-profit targets, an asset complementarity theory implies that firms tend to divest their low-profit divisions Palmer and Barber (2001) have determined the factors that led large firms to participate in the1960s wave. The theoretical approach, of the study conceptualizes corporate elites (managers and directors) as actors. However it is assumed that these actors have interests which have arisen from positions held in organizational and institutional environments, and from multidimensional social class structure. Often Acquisitions are deviant and innovative ways by which corporate these elites can increase their status and wealth. Corporate elite diversify to the extent that their place in the class structure provides them with the capacity and interest to augment their wealth and status in this way. The authors have examined how the firms top directors and managers class position influenced its tendency to employ diversification in the 1 960s. More specifically the following arguments on social status[3] have been tested empirically. Firstly, Firms run by top managers who attended an exclusi ve secondary school or whose family was listed in a metropolitan social register were less likely than other firms to complete diversifying acquisitions in the 1960s. Secondly, Firms run by top managers who were Jewish were more likely than other firms to complete diversifying acquisitions in the 1 960s. Thirdly, Firms run by top managers situated in the South or west were more likely than other firms to complete diversifying acquisitions in the 1960s. The study selected a sample of the largest 461 publicly traded U.S. industrial corporations from the Federal Trade Commissions Statistical Report on Mergers and Acquisitions (1976), between January 1, 1963, and December 31, 1968. This particular time period was chosen because as the merger wave took off at the end of 1962 and crested in 1968. The results of the study were found through count and binary regression models. The findings of the study are consistent with that of Zeitlin (1974). According to him top managers capacities and interests are shaped by their social class position. Corporate elite members differ in their social class position. It is this variation that influences the behavior of the firms they command. The results indicate that social club memberships and upper-class background influenced a firms propensity to complete diversifying acquisitions in the 1960s. Network embeddedness and status influenced acquisition likelihood in opposite directions. Corporations that were run by chief executives who were central in social networks but marginal with respect to status were more likely than other firms to complete diversifying acquisitions in the 1960s. Therefore, individuals with high status had small interest in adopting innovation. Corporate elites can inhibit the spread of an innovation when it threatens their interests. As observed by Hayes and Taussig (1967), One must never under estimate the moral suasion that the business and financial communities can bring to bear on those who engage in practices of which they disapprove. In this respect, the analysis provides additional evidence that intraclass conflict shaped corporate behavior during the 1960s merger wave. It seemed that in the 1960s, it was not concentrated ownership but, ownership in the hands of capitalist families that reduced a firms tendency to complete diversifying acquisitions. Further, as predicted by agency theory , concentrated ownership would lower acquisition rates most when in the hands of the CEO or other top managers, as opposed to outsiders, However it was found the reverse to be the case. Overall, there was very little support for any of the agency theory in the 1960s merger wave. Further, the results provided no support for several of the class-theory hypotheses. Firms headquartered in the South or West run or by Jewish CEOs did not have a greater propensity to complete diversifying acquisitions during the 1960s. The process of diversification of American firms reached its height during the merger wave of the late 1960s. Matsusaka(1993)evaluated the 1960s merger wave. In an attempt to do so the author has proposed a number of explanations that drove managers to diversify during the conglomerate merger wave. There are reasons to suspect that managers may have pursued a diversification strategy even when it impaired the shareholder. They may have entered new lines of business to protect their organization-specific human capital or establish themselves. On the other hand, they may have been pursuing size as an end and because of strict antitrust opposition to horizontal and vertical mergers they had to expand by buying into unrelated industries. The study has evaluated whether manager were diversifying for their own advantage or in the interest of shareholders returns .To do so the author inspected the effect of diversification on the value of his firms equity. Thus, if the value of a firm declined upon announcement of an acquisition, then its management was not acting to maximize shareholder wealth. One explanation for conglomeration stated in the study, stems from Managerial-Discipline theory. Firstly, Firms were taken over to discipline or replace their bad managers ie â€Å"Managerial-Discipline. Secondly, Managerial Synergy theory states that the bidder management wanted to work with target management, not replace it. In this case the acquirer management believed that the target management would complement to their skills. Therefore firm that had Managerial-discipline problem were likely to have had low profits, and on the other hand managerial-synergy targets were likely to have had high profits. Another explanation is that buyers were motivated by earnings-per- share (EPS) manipulation. This explanation states that conglomerates have a high price-earnings ratio (P/E). [4] Therefore the bidder management was bootstrapping, by buying firms with low P/Es. Construction of the dataset began with a list of mergers from the sample of 1968, 1971 and 1974 .The sample was identified from the takeovers from New York Stock Exchange listing statements and the results were presented through regression. The announcement-period return to the bidders shareholders was measured through dollar return, [5] .Regression of the dollar-return measure found that the return to a diversification acquisition was significantly positive. On average their shareholders enjoyed an $11.0 million value increase in value when bidders made a diversification acquisition,. This rejects the hypothesis that diversification hurt shareholders and is thus inconsistent with the idea that diversification was driven by managerial objectives. On the other hand, bidders who made related acquisitions cost their shareholders $6.4 million on average. Thus, the hypothesis that the markets reaction was the same to related acquisitions and diversification is rejected, suggesting that there was a market premium to diversification. Using descriptive statistical summaries it was found that both diversifying and horizontal buyers preferred to buy firms that were profitable. For both type of acquisitions the average operating profit was more than 5% in excess of the targets industry average. Therefore fame of high-profit targets argues against the importance of a managerial-discipline motive for both types of acquisition and in favor of a managerial-synergy motive. This is because Managerial-discipline takeovers should have been directed at low-profit firms, whose profitability needed improved. The motive was Managerial-synergy as the targets were takeovers were high- profit firms, this is because synergy-motivated managers were looking for good partners Matsusaka(1993). Another factor linked to the managerial theories is whether or not the targets management was retained.Top management is said to have been retained if it meet the following criteria. Firstly It was reported in the Wall Street Journal that the acquired firms management would continue to operate under the new management. Secondly, it was indicated in the buyers listing statement that the targets management would be retained. Lastly, when the merger took place at least one of the top three executives of the target firm was still managing the firm three years later from when the merger took place. According to the above mentioned definitions, 61.8% of the managers in the sample were retained and only 3.5% of the acquisitions fell in the Replaced category. The main finding is that buyers earned significantly positive announcement-period returns during the conglomerate merger wave when they made diversifying acquisitions. The hypothesis that conglomerates were driven by empire building or some other managerial objective can be rejected because such explanations imply value decreases to unrelated acquisitions. Another explanation of the conglomerate merger wave is that mergers were driven by an accounting trick rather than expected efficiencies. Therefore, investors watched EPS; when the EPS went up they bid up the price of the stock. According to this argument, Conglomerates, tended to buy companies with lower P/E ratios than their own in order to increase their EPS and boost their stock prices. There was no evidence that firms earned positive returns which inflated EPS in this way. The study indicated that early conglomerators earned significantly positive returns simply because they were first. They may have gained some rents to organizational innovation. Possibly the men who built the first conglomerates had a unique talent for diversification, which the market rewarded. Hubbard, Palia (1999), have examined the likelihood that internal capital markets were formed to alleviate the information costs associated with the less well-developed external capital markets of the time; that is, whether they were expected to create value by the external capital markets in the 1960s.In this paper, the authors have inspected a form of cross-subsidization that occurs when a financially unconstrained bidding firm takes over a financially constrained target firm and as a result forms an internal capital market.The study examined whether the external capital markets expected that the formation of internal capital markets in the 1960s were value-maximizing for the bidding firm. However, existing research has argued that internal capital markets can be value-enhancing. As argued by Geneen(1997), the financing and budgeting expertise that a firm possesses is not necessarily related to its degree of diversification. Accordingly, the internal capital market hypothesis for all acquisitions is tested. The study also tests the bootstrapping explanation for conglomeration in the 1960s, which takes place when firms with a high price-earnings ratio (P/E) took over low P/E target firms and fooled the stock market with an increased combined earnings-per-share. In the 1960s, external capital markets were less developed in terms of company-specific information production than in later years. The authors have classified company-specific information into two general categories. Firstly, production information; and secondly, financing and budgeting expertise. However, in this study information-intensive activities were introduced. This was because; it assists the manager to internally allocate capital across divisions of a diversified firm. It was suggested that diversified firms were perceived by the external capital markets to have an informational advantage, because external capital markets were less well developed at that time. Comparing it to the current decade, there was less access by the public to computers, data- bases, analyst reports, and other sources of company-specific information. Not only this there was less large institutional money managers and the market for risky debt was illiquid. The authors selected a sample of 392 acquisitions that occurred during the period from 1961 through 1970. Diversifying acquisitions were defined as those in which the bidder and target do not share any two- digit SIC code Matsusaka(1993), and related acquisitions as those in which they do share a two-digit SIC code. Further the Wall Street Journal was used for announcement date as the event date. Four measures of abnormal returns to the conglomerate bidding firm were calculated. These measures are as follows. Firstly, the usual percentage returns or the cumulative abnormal returns from five days before to five days after the event date. Secondly the percentage returns until date of last revision or the cumulative abnormal returns from five days before to five days after the date of the last revision (Lang et al. (1991)). Thirdly, the dollar returns or the percentage return times the market value of the bidder six days before the announcement (Malatesta(1983); Matsusaka(1993)). Lastly , the investment return defined as the change in the value of the bidder divided by the purchase price (Morck et al. (1990)). Tobins r ratio[6] is used as a proxy for a firms capital market opportunities. The evidence from these measures is mixed. Positive abnormal returns for all four measures were shown for related acquisitions. On the other hand, two of the four measures had shown statically significant positive abnormal returns for diversifying acquisitions in. Not only that diversifying acquisitions do not significantly earn less than related acquisitions in two of the four measures. Thus, evidence suggests, the capital markets believed acquisitions to be generally good for bidder shareholders during the 1960s. More significantly, it was found that when financially unconstrained buyers acquired constrained target firms, highest bidder returns were earned. Further, bidders generally retain target management, signifying that management may have provided company- specific operational information and the bidder on his part also provided capital budgeting expertise. Therefore, external capital markets expected information benefits from the formation of the internal capital markets. The study found no evidence in support of the bootstrapping hypothesis, as the coefficient on the dummy variable[7] was not statistically different from zero. This result is consistent with Matsusaka, (1993), who also finds no evidence for bootstrapping.Therefore, firms merged to form their own internal capital markets as there was a deficiency of well-developed external capital markets in the 1960s. Some firms apparently had an information advantage over the external capital markets and were expected to produce value in an internal capital market. In the 1960s diversified acquisitions were rewarded by financial markets, the informational advantage that acquiring firms appeared to possess was likely to be in the capital budgeting, allocation process and operational aspects of each division. Bidder firms generally retained the target management as it would facilitate them running the operational part of each target firm. The Motives discussed in the above mentioned articles are appealing; however evidence from the stock market suggests that shareholders preferred their firms to diversify. Using a data set from the 60s and early 70s, Matsusaka (1993) reported that, when the company announced an unrelated acquisition, the stock price of the bidder increased on average of $8 million. However, on the announcement of a related acquisition, the bidding firms stock price fell by $4 million. The difference between the two returns is quite significant. Thus it appears that investors fully believed that unrelated acquisitions benefited their firms relative to the alternatives. Thus the managers just did what the stock market told them to do that is to diversify. Evidence from 1980s stock market suggested that shareholders, again, liked what was happening. Shleifer, and Vishny (1992) found that in the 1980s, stock prices of the bidding firms rose when they bought other firms in the same industry, and fell with unrelated diversification. It is clear that the market disapproved unrelated diversification. Therefore it does not astonish that, in light of such market reception, managers stopped diversifying and did what the stock market directed them to do. 2.2 Legal Motives Matsusaka (1996) investigated whether the antitrust enforcement of the 1960s led firms to take on the diversification goal, by preventing them from expanding within their own core industries. If correct, diversification should have occurred more less frequently when small firms merged than when large firms merged since small mergers were less likely to have attracted antitrust attention. Further the author examined the diversification patterns in the United Kingdom, Canada, Germany, and France in the late 1960s and early 1970s, where none of these countries had legal restrictions on horizontal growth similar to those in the Unites States. The US Clayton Antitrust Act was the antitrust legislation in the postwar period (1950 Celler-Kefauver amendment to Section 7). The act, prohibited mergers that would substantially lessen competition, or tend to create a monopoly. This new law was used by the antitrust authorities and the courts to limit the number of mergers between vertically related and firms in the same lines of business. The strictness of the antitrust environment in 1968 is illustrated by the observation that in the earlier 12 years, all antitrust cases that reached the Supreme Court had been resolved in support of the government. The study indicates the following two implications. Firstly, large horizontal mergers were more liable to have been challenged on antitrust grounds than small horizontal mergers. Secondly mergers between unrelated firms were unlikely to have been blocked, regardless of size. Firms diversified in 1960s, since antitrust authorities prevented them from expanding in their home industries. Later when antitrust policy became less rigid in the 1980s, firms expanded horizontally, leading them to refocus on their core business. Stigler (1966) was perhaps the first to present evidence on the antitrust hypothesis, concluding that, the 1950 Merger Act has had a strongly adverse effect on horizontal mergers by large companies. The author selected a sample of 549 mergers (that took place in 1968) from the New York Stock Exchange. Results of the study were reported through Logit regressions .It was found that bidders were as likely to have entered new industries when they made small acquisitions as when they made large acquisitions, and small buyers were as likely to have diversified as large buyers. Further the total number of diversification acquisitions concerning small companies was high.Though, according to the antitrust hypothesis; diversification should have been widespread primarily in large mergers where same industry acquisitions were prohibited by tough antitrust enforcement. Secondly assembled international evidence indicated that diversification took place in many industrialized nations in the 1960s and 1970s, although restrictions against horizontal combinations were unique to the United States. Yet, most other industrialized Western nations[8] experienced diversification merger waves and general movements toward diversification in their largest companies (Chandler (1991)).Thus most of the evidence, is not consistent with the antitrust hypothesis, signifying that other explanations for corporate diversification should be emphasized not the anti trust hypothesis. Scholes and Wolfson (1990) state, that the changes in U.S. tax laws[9] in the 1980s had obvious affect on the desirability of mergers and acquisitions. However such transactions were not only motivated by tax factors but also non tax factors[10]. Tax laws can have number of affects on mergers and acquisitions , which can include the following capital losses, presence of tax-attribute carry forwards such as net operating losses , investment tax credits, and foreign tax credits, among others, that might be cashed in more quickly and more fully by way of a merger; the desire to step up the tax basis of assets for depreciation purposes to their fair market value; the desire to sell assets to permit a change in the depreciation schedule to one that is more highly accelerated. The authors in this study have examined the effect of changes in tax laws passed in 1980s on merger and acquisition activity in the United States. The authors selected the annual values of mergers and acquisitions from 1968 through 1987 in nominal dollars. The data source for nominal values was W. T. Grimm and Company for 1968-85 and Mergers Acquisitions (1987-88, rev. quarterly) for 1986 and 1987. Using time series analysis it was found that the dollar volume of merger activity between 1980-1981 increased from $44.35 billion to $82.62 billion (86%) in nominal terms. The percentage increase was approximately twice as large as the next largest percentage increase in annual merger and acquisition activity over the 1970-86 periods. There was spectacular increase in merger activity that began with the passage of the Economic Recovery Tax Act of 1981, however this was not the only merger wave that occurred in that time frame. Unusual merger activity was also witnessed in the 1960s. The termination of 1960s wave was accompanied by quite a few regulatory events that depressed such transactions. Firstly, the Williams Amendments had en larged the cost and difficulty of effecting tender offers. Secondly the issuance of Accounting Principles Board Opinions 16 and 17, forced many acquiring firms to boost depreciation expense, goodwill amortization and cost of goods sold. Thirdly the Tax Reform Act of 1969, made transferability of tax attributes (net-operating-loss carry forwards) more restrained. Therefore there was a sudden decline in merger activity from the peak in 1968. Relative to the tax benefits when the non tax benefits of the transaction were small, current management were the most efficient purchasers, as they had an advantage along the hidden information dimension. Therefore 1981 act had increased the incidence of cases in which non tax benefits were less than the common tax benefits of mergers and acquisitions. As a result, there was an increase in the number of transactions involving management buyouts. The annual dollar value of unit management buyouts between 1978-80 increased by a factor of 3, and by a factor in excess of 20 for the period 1981-86. The antitrust proposition mentioned above is appealing as one of the most important reason for diversification, during the 60s and 70s, which simply disallowed mergers of firms in the same industry, regardless of the effects of these mergers o Theories of Merger and Takeover Waves Theories of Merger and Takeover Waves Merger Wave The American economy experienced two great takeover waves in the postwar period, first in the 1960s and the second in the 1980s. Both waves had a deep affect on the structure of corporate America. The main trend in the 60s was diversification and conglomeration. In contrast the 1980s takeover reversed the previous process and brought US corporations back to specialization. In this respects, the last thirty years were a roundtrip for corporate America. This paper is an overview of the salient features of the two takeover waves. 1.1 The 1960s Conglomerate Merger Wave The merger wave of the 1960s was the major since the turn of the century (Stigler, 1968). A typical characteristic of the 1960s transaction was a friendly acquisition, frequently for stock, of a smaller private or public firm which was outside the acquiring firms main line of business. During this period unrelated diversification was widespread among the large companies. Rumelt (1974) has reported that the fraction of single business companies in the Fortune 500 decreased from 22.8% in 1959 to 14.8% in 1969. Further, the portion of conglomerates with no dominant businesses increased to 18.7% from 7.3%. There was also a considerable move to diversification among companies that retained their core business. The driving force behind the 1960s wave was high valuations of company stocks and large corporate cash flows. However the management was unwilling to pay out the high cash flows as dividends, and on the other hand able to issue equity at attractive terms therefore, turned their atte ntion to acquisitions (Donaldsoni. 1984).Dividends were considered as a complete waste, and acquisitions as a very attractive way to conserve corporate wealth. There are two sets of arguments used to explain why companies diversify. The first set argues that firms diversify to increase shareholder wealth. A number of authors have discussed different aspects of diversification that can potentially raise shareholder wealth. Williamson (1970), suggest that firms diversify to beat imperfections in external capital markets. Through diversification, managers create internal capital markets, which are less prone to asymmetric information problems. Lewellen (1971), argues that conglomerates can carry on higher levels of debt since corporate diversification reduces earnings variability. if conglomerate firms are more valuable than companies operating in a single industry If the tax shields of debt increase. Shleifer and Vishny (1992), state that conglomerates may have a higher debt capacity since they can sell assets in those industries that suffer the least from liquidity problems in bad states of the world. Finally, Teece (1980) argues that divers ification leads to economics of scale. The second set of arguments states diversification as a product of the agency problems between shareholder and managers. Amihud and Lev (1981) argue that managers follow a diversification strategy to protect the value of their human capital. However, Jensen (1986) suggests that companies diversify to increase the private benefits of managers. Similarly, Shleifer and Vishny (1989) suggest that managers diversify because they are better at managing assets in other industries. Thus, diversifying will make skills more indispensable to the firm. 1.2 The 1980s Merger Wave Form a longer historical perspective, Golbe and White (1988) presented time series evidence of U.S. takeover activity from the late 1800s to the mid-1980s. Their findings have suggested that takeover activity above 2 to 3 percent of GDP is unusual. However, the greatest level of merger activity occurred around 1980s, at roughly 10 percent of GNP. By this measure, takeover activity in the 1980s is historically high. The size of the average target in the 1980s had increased extremely from the modest level of the 60s. By 1989 28%, of Fortune 500 companies were acquired and many transactions, particularly the large ones, were hostile. Further the medium of exchange in takeovers was cash rather than stock, they were characterized by heavy use of leverage. Firms were purchased by other firms by leveraged takeovers by borrowing rather than by issuing new stock or using solely cash on hand. Other firms restructured themselves, borrowing to repurchase their own shares. The 80s was also characterized by latest forms of control changes, which included bustup takeovers. Bustup takeovers involved the sell off of a substantial fraction of the targets assets to other firms. (Bhagat, Shleifer, and Vishny, 1990; Kaplan, 1997). 2 Merger Motives The following sections will explain the motive behind the two merger waves. 2.1 Managerial Motives Agency theory predicts that unless managers are strictly monitored by large block of shareholders they will certainly act out of self-interest. Amihud and Lev (1981) have provided proof that unless closely monitored by large block shareholders managers will attempt to reduce their employment risk through diversification. Lane et al.(1998) in this study have reexamined Amihud and Lev findings about agency theory Using a sample of 309 US firms that diversified between 1962 1970, from the Federal Trade Commission (FTC) Statistical Report on Mergers and Acquisitions (1976). This study falls in the third broad category[1] of agency studies. However this analysis only examines the strategic behaviors of managers when they are not under siege and are also not in a situation, in which their interests are clearly in conflict with those of shareholders. Specifically, firms without large block shareholders are expected to engage in more unrelated acquisitions and show higher levels of diversif ication than firms with large block shareholders (Jensen and Meckling (1976)) Using Multiple Regression, the study found no evidence for the standard agency theory predictions that management controlled firms are linked with strategically lower levels of diversification and lower levels of returns than are firms with large block shareholders. It was found that Ownership structure and diversification are largely independent constructs. Thus, managers may be are worthy of more trust and autonomy than what the agency theorists have prearranged for them. Rather than seeking to restrict managerial discretion through extreme oversight, a more balanced approach by principals is needed. Some safeguards are essential as conflicts of interests between managers and shareholders do arise in certain situations, therefore, the assumption that such conflicts dominate the day-to-day management is not realistic. Matsusaka,(1993) takes a deep look at the astonishingly high pre-merger profit rates of target companies during the conglomerate merger wave. The main goal of the study is to assess how important was managerial discipline as a takeover motive. The analysis uses an extensive data set of 806 manufacturing sector acquisitions that took place in 1968, 1971 and 1974. The sample was collected from New York Stock Exchange listing statements. Sample of 609 observations was taken from 1968, 117 from 1971, and 129 from 1974. The results did not differ in any vital way by year, so observations from the three periods were pooled. Because antitrust enforcement was strict in the late 1960s and early 1970s, it was safely assumed that the sample mergers were not motivated to increase market power Ravenscraft and Scherer (1987). This allowed the investigation to focus on a narrow set of merger motives. Profitability[2] throughout the study was measured as a rate of return on assets. The theory identified two basic characteristics of mergers motivated to discipline target management. First it wsa observed that the target was underperforming its industry and the only reason to discipline the managers was that they were not maximizing profit. It could be because of incompetence that they were pursuing their own objectives. The second, the target company had publicly traded stock and the only posibility to discipline management was by electing an appropriate board of directors. In this situation a takeover was necessary to effect a change as the diffused stock ownership resulted in free-rider problems. Owners can remove bad managers of privately owned firms, as they are closely held. The problem occurs in large publicly traded firms with diffuse ownership. The statistical results revealed that both public and private targets had extremely high profit rates prior to acquisition compared to their size classes and industries. Therefore, takeovers were not motivated to discipline target managers during the conglomerate merger wave. The second finding of the study is that public targets were not as particularly profitable as private targets. It was also found that the largest public targets had the lowest profit rates. A credible interpretation of the evidence is that managerial discipline may have been significant for just a small set of acquisitions that involved large publicly-traded targets. Matsusaka (1993) leaves the bigger question unexplained. Why buyers time and again sought high profit targets during the merger wave. There is a simple clarification, that high quality assets are generally favored to low quality assets, as high quality assets are more expensive. In addition to explaining why firms seek high-profit targets, an asset complementarity theory implies that firms tend to divest their low-profit divisions Palmer and Barber (2001) have determined the factors that led large firms to participate in the1960s wave. The theoretical approach, of the study conceptualizes corporate elites (managers and directors) as actors. However it is assumed that these actors have interests which have arisen from positions held in organizational and institutional environments, and from multidimensional social class structure. Often Acquisitions are deviant and innovative ways by which corporate these elites can increase their status and wealth. Corporate elite diversify to the extent that their place in the class structure provides them with the capacity and interest to augment their wealth and status in this way. The authors have examined how the firms top directors and managers class position influenced its tendency to employ diversification in the 1 960s. More specifically the following arguments on social status[3] have been tested empirically. Firstly, Firms run by top managers who attended an exclusi ve secondary school or whose family was listed in a metropolitan social register were less likely than other firms to complete diversifying acquisitions in the 1960s. Secondly, Firms run by top managers who were Jewish were more likely than other firms to complete diversifying acquisitions in the 1 960s. Thirdly, Firms run by top managers situated in the South or west were more likely than other firms to complete diversifying acquisitions in the 1960s. The study selected a sample of the largest 461 publicly traded U.S. industrial corporations from the Federal Trade Commissions Statistical Report on Mergers and Acquisitions (1976), between January 1, 1963, and December 31, 1968. This particular time period was chosen because as the merger wave took off at the end of 1962 and crested in 1968. The results of the study were found through count and binary regression models. The findings of the study are consistent with that of Zeitlin (1974). According to him top managers capacities and interests are shaped by their social class position. Corporate elite members differ in their social class position. It is this variation that influences the behavior of the firms they command. The results indicate that social club memberships and upper-class background influenced a firms propensity to complete diversifying acquisitions in the 1960s. Network embeddedness and status influenced acquisition likelihood in opposite directions. Corporations that were run by chief executives who were central in social networks but marginal with respect to status were more likely than other firms to complete diversifying acquisitions in the 1960s. Therefore, individuals with high status had small interest in adopting innovation. Corporate elites can inhibit the spread of an innovation when it threatens their interests. As observed by Hayes and Taussig (1967), One must never under estimate the moral suasion that the business and financial communities can bring to bear on those who engage in practices of which they disapprove. In this respect, the analysis provides additional evidence that intraclass conflict shaped corporate behavior during the 1960s merger wave. It seemed that in the 1960s, it was not concentrated ownership but, ownership in the hands of capitalist families that reduced a firms tendency to complete diversifying acquisitions. Further, as predicted by agency theory , concentrated ownership would lower acquisition rates most when in the hands of the CEO or other top managers, as opposed to outsiders, However it was found the reverse to be the case. Overall, there was very little support for any of the agency theory in the 1960s merger wave. Further, the results provided no support for several of the class-theory hypotheses. Firms headquartered in the South or West run or by Jewish CEOs did not have a greater propensity to complete diversifying acquisitions during the 1960s. The process of diversification of American firms reached its height during the merger wave of the late 1960s. Matsusaka(1993)evaluated the 1960s merger wave. In an attempt to do so the author has proposed a number of explanations that drove managers to diversify during the conglomerate merger wave. There are reasons to suspect that managers may have pursued a diversification strategy even when it impaired the shareholder. They may have entered new lines of business to protect their organization-specific human capital or establish themselves. On the other hand, they may have been pursuing size as an end and because of strict antitrust opposition to horizontal and vertical mergers they had to expand by buying into unrelated industries. The study has evaluated whether manager were diversifying for their own advantage or in the interest of shareholders returns .To do so the author inspected the effect of diversification on the value of his firms equity. Thus, if the value of a firm declined upon announcement of an acquisition, then its management was not acting to maximize shareholder wealth. One explanation for conglomeration stated in the study, stems from Managerial-Discipline theory. Firstly, Firms were taken over to discipline or replace their bad managers ie â€Å"Managerial-Discipline. Secondly, Managerial Synergy theory states that the bidder management wanted to work with target management, not replace it. In this case the acquirer management believed that the target management would complement to their skills. Therefore firm that had Managerial-discipline problem were likely to have had low profits, and on the other hand managerial-synergy targets were likely to have had high profits. Another explanation is that buyers were motivated by earnings-per- share (EPS) manipulation. This explanation states that conglomerates have a high price-earnings ratio (P/E). [4] Therefore the bidder management was bootstrapping, by buying firms with low P/Es. Construction of the dataset began with a list of mergers from the sample of 1968, 1971 and 1974 .The sample was identified from the takeovers from New York Stock Exchange listing statements and the results were presented through regression. The announcement-period return to the bidders shareholders was measured through dollar return, [5] .Regression of the dollar-return measure found that the return to a diversification acquisition was significantly positive. On average their shareholders enjoyed an $11.0 million value increase in value when bidders made a diversification acquisition,. This rejects the hypothesis that diversification hurt shareholders and is thus inconsistent with the idea that diversification was driven by managerial objectives. On the other hand, bidders who made related acquisitions cost their shareholders $6.4 million on average. Thus, the hypothesis that the markets reaction was the same to related acquisitions and diversification is rejected, suggesting that there was a market premium to diversification. Using descriptive statistical summaries it was found that both diversifying and horizontal buyers preferred to buy firms that were profitable. For both type of acquisitions the average operating profit was more than 5% in excess of the targets industry average. Therefore fame of high-profit targets argues against the importance of a managerial-discipline motive for both types of acquisition and in favor of a managerial-synergy motive. This is because Managerial-discipline takeovers should have been directed at low-profit firms, whose profitability needed improved. The motive was Managerial-synergy as the targets were takeovers were high- profit firms, this is because synergy-motivated managers were looking for good partners Matsusaka(1993). Another factor linked to the managerial theories is whether or not the targets management was retained.Top management is said to have been retained if it meet the following criteria. Firstly It was reported in the Wall Street Journal that the acquired firms management would continue to operate under the new management. Secondly, it was indicated in the buyers listing statement that the targets management would be retained. Lastly, when the merger took place at least one of the top three executives of the target firm was still managing the firm three years later from when the merger took place. According to the above mentioned definitions, 61.8% of the managers in the sample were retained and only 3.5% of the acquisitions fell in the Replaced category. The main finding is that buyers earned significantly positive announcement-period returns during the conglomerate merger wave when they made diversifying acquisitions. The hypothesis that conglomerates were driven by empire building or some other managerial objective can be rejected because such explanations imply value decreases to unrelated acquisitions. Another explanation of the conglomerate merger wave is that mergers were driven by an accounting trick rather than expected efficiencies. Therefore, investors watched EPS; when the EPS went up they bid up the price of the stock. According to this argument, Conglomerates, tended to buy companies with lower P/E ratios than their own in order to increase their EPS and boost their stock prices. There was no evidence that firms earned positive returns which inflated EPS in this way. The study indicated that early conglomerators earned significantly positive returns simply because they were first. They may have gained some rents to organizational innovation. Possibly the men who built the first conglomerates had a unique talent for diversification, which the market rewarded. Hubbard, Palia (1999), have examined the likelihood that internal capital markets were formed to alleviate the information costs associated with the less well-developed external capital markets of the time; that is, whether they were expected to create value by the external capital markets in the 1960s.In this paper, the authors have inspected a form of cross-subsidization that occurs when a financially unconstrained bidding firm takes over a financially constrained target firm and as a result forms an internal capital market.The study examined whether the external capital markets expected that the formation of internal capital markets in the 1960s were value-maximizing for the bidding firm. However, existing research has argued that internal capital markets can be value-enhancing. As argued by Geneen(1997), the financing and budgeting expertise that a firm possesses is not necessarily related to its degree of diversification. Accordingly, the internal capital market hypothesis for all acquisitions is tested. The study also tests the bootstrapping explanation for conglomeration in the 1960s, which takes place when firms with a high price-earnings ratio (P/E) took over low P/E target firms and fooled the stock market with an increased combined earnings-per-share. In the 1960s, external capital markets were less developed in terms of company-specific information production than in later years. The authors have classified company-specific information into two general categories. Firstly, production information; and secondly, financing and budgeting expertise. However, in this study information-intensive activities were introduced. This was because; it assists the manager to internally allocate capital across divisions of a diversified firm. It was suggested that diversified firms were perceived by the external capital markets to have an informational advantage, because external capital markets were less well developed at that time. Comparing it to the current decade, there was less access by the public to computers, data- bases, analyst reports, and other sources of company-specific information. Not only this there was less large institutional money managers and the market for risky debt was illiquid. The authors selected a sample of 392 acquisitions that occurred during the period from 1961 through 1970. Diversifying acquisitions were defined as those in which the bidder and target do not share any two- digit SIC code Matsusaka(1993), and related acquisitions as those in which they do share a two-digit SIC code. Further the Wall Street Journal was used for announcement date as the event date. Four measures of abnormal returns to the conglomerate bidding firm were calculated. These measures are as follows. Firstly, the usual percentage returns or the cumulative abnormal returns from five days before to five days after the event date. Secondly the percentage returns until date of last revision or the cumulative abnormal returns from five days before to five days after the date of the last revision (Lang et al. (1991)). Thirdly, the dollar returns or the percentage return times the market value of the bidder six days before the announcement (Malatesta(1983); Matsusaka(1993)). Lastly , the investment return defined as the change in the value of the bidder divided by the purchase price (Morck et al. (1990)). Tobins r ratio[6] is used as a proxy for a firms capital market opportunities. The evidence from these measures is mixed. Positive abnormal returns for all four measures were shown for related acquisitions. On the other hand, two of the four measures had shown statically significant positive abnormal returns for diversifying acquisitions in. Not only that diversifying acquisitions do not significantly earn less than related acquisitions in two of the four measures. Thus, evidence suggests, the capital markets believed acquisitions to be generally good for bidder shareholders during the 1960s. More significantly, it was found that when financially unconstrained buyers acquired constrained target firms, highest bidder returns were earned. Further, bidders generally retain target management, signifying that management may have provided company- specific operational information and the bidder on his part also provided capital budgeting expertise. Therefore, external capital markets expected information benefits from the formation of the internal capital markets. The study found no evidence in support of the bootstrapping hypothesis, as the coefficient on the dummy variable[7] was not statistically different from zero. This result is consistent with Matsusaka, (1993), who also finds no evidence for bootstrapping.Therefore, firms merged to form their own internal capital markets as there was a deficiency of well-developed external capital markets in the 1960s. Some firms apparently had an information advantage over the external capital markets and were expected to produce value in an internal capital market. In the 1960s diversified acquisitions were rewarded by financial markets, the informational advantage that acquiring firms appeared to possess was likely to be in the capital budgeting, allocation process and operational aspects of each division. Bidder firms generally retained the target management as it would facilitate them running the operational part of each target firm. The Motives discussed in the above mentioned articles are appealing; however evidence from the stock market suggests that shareholders preferred their firms to diversify. Using a data set from the 60s and early 70s, Matsusaka (1993) reported that, when the company announced an unrelated acquisition, the stock price of the bidder increased on average of $8 million. However, on the announcement of a related acquisition, the bidding firms stock price fell by $4 million. The difference between the two returns is quite significant. Thus it appears that investors fully believed that unrelated acquisitions benefited their firms relative to the alternatives. Thus the managers just did what the stock market told them to do that is to diversify. Evidence from 1980s stock market suggested that shareholders, again, liked what was happening. Shleifer, and Vishny (1992) found that in the 1980s, stock prices of the bidding firms rose when they bought other firms in the same industry, and fell with unrelated diversification. It is clear that the market disapproved unrelated diversification. Therefore it does not astonish that, in light of such market reception, managers stopped diversifying and did what the stock market directed them to do. 2.2 Legal Motives Matsusaka (1996) investigated whether the antitrust enforcement of the 1960s led firms to take on the diversification goal, by preventing them from expanding within their own core industries. If correct, diversification should have occurred more less frequently when small firms merged than when large firms merged since small mergers were less likely to have attracted antitrust attention. Further the author examined the diversification patterns in the United Kingdom, Canada, Germany, and France in the late 1960s and early 1970s, where none of these countries had legal restrictions on horizontal growth similar to those in the Unites States. The US Clayton Antitrust Act was the antitrust legislation in the postwar period (1950 Celler-Kefauver amendment to Section 7). The act, prohibited mergers that would substantially lessen competition, or tend to create a monopoly. This new law was used by the antitrust authorities and the courts to limit the number of mergers between vertically related and firms in the same lines of business. The strictness of the antitrust environment in 1968 is illustrated by the observation that in the earlier 12 years, all antitrust cases that reached the Supreme Court had been resolved in support of the government. The study indicates the following two implications. Firstly, large horizontal mergers were more liable to have been challenged on antitrust grounds than small horizontal mergers. Secondly mergers between unrelated firms were unlikely to have been blocked, regardless of size. Firms diversified in 1960s, since antitrust authorities prevented them from expanding in their home industries. Later when antitrust policy became less rigid in the 1980s, firms expanded horizontally, leading them to refocus on their core business. Stigler (1966) was perhaps the first to present evidence on the antitrust hypothesis, concluding that, the 1950 Merger Act has had a strongly adverse effect on horizontal mergers by large companies. The author selected a sample of 549 mergers (that took place in 1968) from the New York Stock Exchange. Results of the study were reported through Logit regressions .It was found that bidders were as likely to have entered new industries when they made small acquisitions as when they made large acquisitions, and small buyers were as likely to have diversified as large buyers. Further the total number of diversification acquisitions concerning small companies was high.Though, according to the antitrust hypothesis; diversification should have been widespread primarily in large mergers where same industry acquisitions were prohibited by tough antitrust enforcement. Secondly assembled international evidence indicated that diversification took place in many industrialized nations in the 1960s and 1970s, although restrictions against horizontal combinations were unique to the United States. Yet, most other industrialized Western nations[8] experienced diversification merger waves and general movements toward diversification in their largest companies (Chandler (1991)).Thus most of the evidence, is not consistent with the antitrust hypothesis, signifying that other explanations for corporate diversification should be emphasized not the anti trust hypothesis. Scholes and Wolfson (1990) state, that the changes in U.S. tax laws[9] in the 1980s had obvious affect on the desirability of mergers and acquisitions. However such transactions were not only motivated by tax factors but also non tax factors[10]. Tax laws can have number of affects on mergers and acquisitions , which can include the following capital losses, presence of tax-attribute carry forwards such as net operating losses , investment tax credits, and foreign tax credits, among others, that might be cashed in more quickly and more fully by way of a merger; the desire to step up the tax basis of assets for depreciation purposes to their fair market value; the desire to sell assets to permit a change in the depreciation schedule to one that is more highly accelerated. The authors in this study have examined the effect of changes in tax laws passed in 1980s on merger and acquisition activity in the United States. The authors selected the annual values of mergers and acquisitions from 1968 through 1987 in nominal dollars. The data source for nominal values was W. T. Grimm and Company for 1968-85 and Mergers Acquisitions (1987-88, rev. quarterly) for 1986 and 1987. Using time series analysis it was found that the dollar volume of merger activity between 1980-1981 increased from $44.35 billion to $82.62 billion (86%) in nominal terms. The percentage increase was approximately twice as large as the next largest percentage increase in annual merger and acquisition activity over the 1970-86 periods. There was spectacular increase in merger activity that began with the passage of the Economic Recovery Tax Act of 1981, however this was not the only merger wave that occurred in that time frame. Unusual merger activity was also witnessed in the 1960s. The termination of 1960s wave was accompanied by quite a few regulatory events that depressed such transactions. Firstly, the Williams Amendments had en larged the cost and difficulty of effecting tender offers. Secondly the issuance of Accounting Principles Board Opinions 16 and 17, forced many acquiring firms to boost depreciation expense, goodwill amortization and cost of goods sold. Thirdly the Tax Reform Act of 1969, made transferability of tax attributes (net-operating-loss carry forwards) more restrained. Therefore there was a sudden decline in merger activity from the peak in 1968. Relative to the tax benefits when the non tax benefits of the transaction were small, current management were the most efficient purchasers, as they had an advantage along the hidden information dimension. Therefore 1981 act had increased the incidence of cases in which non tax benefits were less than the common tax benefits of mergers and acquisitions. As a result, there was an increase in the number of transactions involving management buyouts. The annual dollar value of unit management buyouts between 1978-80 increased by a factor of 3, and by a factor in excess of 20 for the period 1981-86. The antitrust proposition mentioned above is appealing as one of the most important reason for diversification, during the 60s and 70s, which simply disallowed mergers of firms in the same industry, regardless of the effects of these mergers o