Effective Management of Training and Development in an Economic Essay

Effective Management of Training and Development in an Economic Downturn - Essay Example Layoffs are among the most common and popular measures that have been taken up by firms as a part of their cost cutting activities. Recessionary periods are also characterised by unavailability of credit to firms as governments are forced to reduce liquidity in the market owning to high levels of inflation. Banks are forced to cut down on their lending activities which lead to unavailability of credit. In such situations firms are forced to cut down on production which leads to job cuts. The preset financial crisis saw the downfall of many corporate giants like Lehman Brothers and Bear Sterns and also saw large scale job cuts which left numerous employees jobless. In this aspect it becomes important for firms and employees alike to analyse and formulate effective measures that seek to help employees prepare survival strategies during such crisis periods. It has also been observed that employees who perform below the benchmark standards are first ones to get the pink slips. Hence it b ecomes essential for employees to have greater efficiencies so as to ensure job security. This aspect assumes significance for organizations as well as human resources are the most important and valuable assets for any organization. Presence of a talented pool of employees is very essential for organizations because it determines the competitive advantage for the firms. Recessionary periods are characterised by large scale competition leading to price wars. In this context it becomes significant for organizations to have a talented pool of employees which would help in generating better product features and greater efficiency in the product and services of the firm which would help organizations to maintain their competitive edge in the tough market situation. Training and development therefore assumes a major importance for both employees and organizations. The present study focuses on the aspect of training and development in

Ethics Research Paper on Euthanasia Example | Topics and Well Written Essays - 500 words

Ethics on Euthanasia - Research Paper Example ciety that undervalues life sees no guilt in committing acts of violence, particularly murder, thereby making life value dangerously demoralized and humanity altogether  ­weakened (Doerflinger, 1989, p. 16-19, Koop, 1989, p. 2-3). The â€Å"slippery slope† or the â€Å"wedge theory† is an assumption that makes the distinction between voluntary euthanasia and involuntary euthanasia hardly recognizable, thereby supposing that agonizing individuals request their deaths because they feel they are a burden to themselves; and society requests to terminate an individual’s life because of being a burden to the people around them and to society, as a whole. Kamizar, a professor of law at the University of Michigan and a non-supporter of the â€Å"wedge theory† argues that "Once society accepts that life can be terminated because of its diminished quality, there is no rational way to limit euthanasia and prevent its abuse.† (Wolhandler, 1984, p. 377). If euthanasia is legalized, the probability for exploitation and mistreatment of individuals by the more supreme individuals will enormously amplify (Le Baron, 2010). In direct conjunction with this dispute is the argument that individuals having control over the more vulnerable individuals might develop addiction to euthanasia (Le Baron, 2010, Doerflinger, 1989, p. 19). A strong proof of advocacy on euthanasia was done by the Nazis in 1939, when Hitler ordered mass â€Å"mercy killing† of the sick and the disabled or those individuals with unworthy lives. Disabled children were killed by means of lethal injection or gradual starvation, while sick/disabled adults, particularly those with epilepsy, schizophrenia, senility, paralysis and syphilis were murdered in gas chambers. Six killing centers were established in Germany. It was approximated that more than one hundred thousand people perished in the Nazi euthanasia program (â€Å"Holocaust Timeline: Nazi Euthanasia,† 1997). The Netherlands, being the first nation to

Analysis of Response Surface Methodology (RSM)

Analysis of Response Surface Methodology (RSM) 1.3 DESIGN OF EXPERIMENTS 34, 35 Trans-Pacific Partnership economic framework agreement has clearly defined that many studies must be conducted to develop a formulation. Design of experiments (DOE) has proven to be an effective tool for formulation scientists throughout the many stages of the formulation process. At every step of formulation development, DOE can aid in making intelligent decisions. These steps include excipient compatibility studies, process feasibility studies, formulation optimization, process optimization, scale-up and manufacturing process characterization. Lastly, the product and manufacturing process must be validated before it is on the market. The word optimize is defined as, making as perfect, effective or functional as possible. Optimization may be interpreted as to find out the value of controllable independent variable, that gives the most desired value of dependent variables. The application of formulation optimization techniques is relatively new to the practice of pharmacy when used intelligently, with the common sense, these â€Å"statistical† methods will broaden the perspective of the formulation process. At the Preformulation stage, before any experiment is conducted certain problem arises, it is often not known before hand which variable will significantly influence the response. Screening designs and ANOVA helps to solve this problem. A second serious complication may arise with new excipients and new process factor, for which qualitative or quantitative effects are not known and are unpredictable. The following questions must be answered before choosing any design of experiment. The third complication is that formulated products, in particular dosage form has to confirm to several requirements, very often competing. The formulator has to trade off objectives and choose a compromise. A fourth problem is the lack of insight` to perform an adequate optimization studies. Above all in the performance of an optimization study, the formulation development scientist can also be a factor as personal variation. 1.3.1 Terms used in Design of experiments Variables These are the measurements, values, which are characteristics of the data. There are two types of variables; dependent variables and independent variables. Independent variables(X) are set in advance, which are not influenced by any other values e.g., Lubricants concentration, drug to polymer ratio, etc. Dependent variables(Y) are the outcome variables, influenced by the independent variables e.g., hardness, dissolution rate, etc. Factor Factor is an assigned variable such as concentration, temperature, lubricant agent, drug to polymer ratio, polymer to polymer ratio or polymer grade. A factor can be qualitative or quantitative. A quantitative factor has a numerical value to it for example, concentration (1%, 2%†¦ so on), drug to polymer ratio (1:1, 1:2†¦etc). Qualitative factors are the factors, which are not numerical value, for example, the polymer grade, humidity condition, type of equipment, etc. these are discrete in nature. Levels The levels of a factor are the values or designation assigned to the factor. For e.g. in concentration (factor) 1 % will be one level, while 2% will be another level. Two different plasticizers are levels for grade factor. Usually levels are indicated as low, middle or high level. Normally for ease of calculation the numeric and discrete levels are converted to –1 (low level) and +1 (high level).The general formula for this conversion is Where ‘X’ is the numeric value Response Response is mostly interpreted as the outcome of an experiment. It is the effect, which we are going to evaluate i.e. Disintegration time, duration of buoyancy, etc. Effect The effect of a factor is the change in response caused by varying the levels of the factor. This describes the relationship between various factors and levels. Interaction Interaction is also similar to effect, which gives the overall effect of two or more variables (factors) on a response. For example, the combined effect of lubricants (factor) and glidants (factor) on hardness (response) of a tablet. In the trial and error method, a lot of formulations have to be prepared to get a conclusion, which involves lots of money, time and energy. These can be minimized by the use of optimization technique. 1.3.2 Optimization Process Generally optimization process involves the following steps. Based on the previous knowledge or experience or from literature, the independent variables are determined and set in the beginning. Selection of a suitable model, based on the results of the factor, screening is done. The experiments are designed and conducted. The responses are analyzed by ANOVA, test on lack of fit, to get an empirical mathematical model for each individual response. The responses are screened, by using multiple criteria to get the values of independent variables. Experimental Design Experimental design is a statistical design that prescribes or advises a set of combination of variables. The number and layout of these design points within the experimental region, depends on the number of effects that must be estimated. Depending on the number of factors, their levels, possible interactions and order of the model, various experimental designs are chosen. Each experiment can be represented as a point within the experimental domain, the point being defined by its co-ordinate (the value given to the variables) in the space. 1.3.3 Response Surface Methodology Response surface methodology (RSM) is an experimental strategy that was developed in the 1950’s36. RSM is comprised of a group of mathematical and statistical techniques that are based on fitting experimental data generated from studies established using an experimental design, to empirical models and that are subsequently used to define a relationship between the responses observed and the independent input variables37, 38. RSM is able to define the effect of independent variables alone and in combination with the manufacturing processes under investigation. A typical RSM study begins initially with the definition of a problem to be investigated and involves establishing which variables and associated responses are to be studied, monitored, and measured and how these will be measured. A summary of the subsequent RSM approach includes36 Performance of the relevant DOE. Estimation of the coefficient in the relevant response surface equation. Checking of the adequacy of the equation to describe the fit. Studying the response surface to identify and evaluate the region(s) of interest. The term RSM originates from the graphical perspective generated after fitness of the mathematical model has been established 37, 38 with a graphical representation of the data presented primarily as a three-dimensional (3D) image and/or as contour plots39. The relationship between a response and an input variable can be described by Equation 1.1 y= f(x1, x2, x3†¦xn) +ÃŽ µ Where, y = relevant response f = unknown function of a response x1, x2,..xn = independent variables n= number of independent variables ÃŽ µ = statistical error that represents other sources of variability not accounted for by f Contour plot can be described as: i. Mound-shaped that has elliptical contours with a stationary point at the position of a maximum response. ii. Saddle-shaped that has a hyperbolic system of contours with a stationary point that is neither a maximum nor minimum point. iii. Constant (stationary) ridge response surface in which the contours are presented as concentric elongated ellipses with a stationary point in the region of the design region. iv. A rising (or falling) ridge response surface with a stationary point that is outside the design region 39. The stationary point is a combination of design variables where the surface presents as either a maximum and/or a minimum in all directions. If the stationary point is a maximum in one direction and minimum in another direction, the stationary point is termed a saddle point. When the surface is curved in one direction but is fairly constant and this is considered a ridge response 40. By plotting a response, y, against one or two input variables a surface, known as the response surface can be generated in two or three dimensions. In general the form of the function, f, is unknown and may be very complicated depending on the effect of the input variables on the response. Therefore RSM aims at approximating f by use of a suitable, ordered polynomial equation in some region(s) of the values for the independent process variables41. The mathematical or polynomial equations that describe the relationship(s) between the independent and dependent variables may be first, second or third order, depending on how the output variables or responses react to changes in the input variables. If the response is a linear function of the independent variables, then the function can be written as a first order model (Equation 1.2). In this model the response variables that fit a linear model are generally variables that are significantly affected by a small change in the value of the input factors and that exhibit little or no interaction(s) between the input variable terms. y= ÃŽ ²0+ ÃŽ ²1x1+ ÃŽ ²2x2+†¦..+ ÃŽ µ Second order equations are used to generate linear and quadratic response equations that exhibit interactions between the input factors and can be represented by Equation 1.3. y= ÃŽ ²0+ ÃŽ ²1x1+ ÃŽ ²2x2+ ÃŽ ²12x12+†¦Ã¢â‚¬ ¦+ ÃŽ µ It has been reported that second order models are also applicable to input factors that exhibit extensive variability over an experimental domain and these relationships are best described using Equation 1.4 y= ÃŽ ²0+ ÃŽ ²1x1+ ÃŽ ²2x2+ ÃŽ ²12x12+ ÃŽ ²11x12+ ÃŽ ²22x22+†¦..+ ÃŽ µ Where y= response x1, x2,..xn = input factors ÃŽ ²0= constant that represents the intercept ÃŽ ²i= coefficient of first order term ÃŽ ²ii= coefficient of second order term ÃŽ ²ij= coefficient of second order interaction The values of the coefficients in the model are generated through multiple linear regression analysis of the data that has been collected. A coefficient with a positive value points to an agonistic effect of the input factor on the response, whereas coefficients with negative values indicate an antagonistic effect. 1.3.4 Choice of Response Surface Design Central Composite Design (CCD) A CCD was originally presented by Box and Wilson and is based on a factorial design with additional points to estimate the curvature of that design. CCD encompasses a full factorial or fractional factorial approach which can be represented, as shown in Figure 1.1, as the eight corners of a cube. There are the six points, known as the axial or star points, located in the centre of each face of the cube with a final point located in the middle of the cube that is known as the centre point 37. The axial points are experimental runs where all but one of the factors to be investigated is set at the intermediate level under consideration. The axial points are all equidistant from the centre point and are denoted using the symbol, alpha (ÃŽ ±). The factors under consideration are usually investigated at five different levels and are always represented by coded values viz., -ÃŽ ±, -1, 0, +1 and +ÃŽ ±. Figure 1.1Schematic diagram representing the levels studied in a Central Composite Design The distance of the axial points from the centre point is dependent on the number of factors investigated in the design and is established using Equation 1.5. ÃŽ ± =2k/4 Where, k= the factor number ÃŽ ± = axial point The number of experiments required for a CCD approach is calculated using Equation 1.6 N= k2+ 2k+ C0 Where, N= the experiment number k= the factor number C0= the replicate number of the central point The number of experiments required in an experimental study is important as it determines how much data will be generated, in addition to being an indicator of the amount of time that will be required to conduct the study. Types of central composite design Central composite design can be divided into three types. Table 1.2 Types of central composite design Box-Behnken Design (BBD) The BBD describes a class of second-order designs based on a three-level incomplete factorial approach which are also represented as coded values viz., -1, 0 and +1 42 . In this design approach, the treatment combinations are located at the midpoint(s) of the edge of the process space and at the centre, as represented in Figure 1.2. Figure 1.2 Schematic diagram representing the levels studied in a Box-Behnken Design The number of experiments for Box-Behnken Designs can be calculated using Equation 1.7. N= 2k (k-1) +C0 Where, N= the number of experiments k= the factor number C0= the replicate number of the central point For experiments in which there are three or less input variables the BBD design offers some advantage over the CCD approach, in that a fewer number of experimental runs are required. However this advantage does not exist when four or more parameters are to be investigated. A further advantage of BBD is that it does not include the need to evaluate situations in which all factors are simultaneously held at their highest and lowest levels. The use of a BBD therefore allows a formulation scientist to avoid undertaking experiments that are to performed under extreme conditions and that may produce substandard results due to the inclusion of data generated from these extreme high and low levels 37. Doehlert Design The Doehlert design is an experimental design approach in which different factors can be studied at different levels simultaneously43. This aspect of the Doehlert design is an important characteristic when using some input variables that may be subject to restrictions such as for example cost or experimental constraints (limited amounts of raw material or limited amount of time available) thereby making it a practical and economic alternative to other, second-order experimental design approaches37.This design describes a circular domain of two input variables, a spherical domain for three input variables and a hyper-spherical space for situations in which more than three input variables are to be investigated and which highlights the uniformity of the input variables to be studied in the experimental domain 37. The schematic design space of a Doehlert design for two variables is shown in Figure 1.3, and is represented by a central point and six points of a regular hexagon. An interesting feature of the Doehlert design is that new factors may be introduced during the course of a study without losing relevant and/or valuable information from the data already generated from the experimental runs that have already been completed. Figure 1.3 Schematic diagram representing the levels studied in a Doehlert Design The number of experiments required for a Doehlert design is determined using Equation 1.8 37 N= k2+ k+ C0 Where, N= the number of experiments k= the factor number C0= the replicate number of the central point 1.3.5 Mathematical Optimization Optimization is a mathematical method used to determine an optimum response and is defined as the most advantageous state of existence of the system under investigation44. Multiple linear regression equations generated from statistically designed experiments provide a description of the change of a response with a change in input factors and further, allows for the determination of input variables that will produce an optimized response. A difficulty that occurs in optimization procedures is the need to establish a compromise between the anticipated response variables. This challenge is often encountered in the process of optimization of tablets where the optimum tablet may be one that has superior strength and little or no friability, yet must also have a short disintegration time. Often an increase in tablet hardness results in an increase in the disintegration time of a tablet and therefore a compromise between these contradictory response variables is necessary to achieve an optimized formulation. 1.3.6 Advantages of RSM The primary advantage of RSM in relation to classical experimental methods and approaches of data evaluation in which only one variable is investigated at a time, is that a large amount of information can be generated from a relatively small number of experiments 38. RSM is therefore less time and cost consuming than the classical approach that requires a large number of experiments to be conducted to be able to explain the behavior of a system 38, 39. A further advantage, with the use of RSM is that it is possible to observe interaction effects of the independent input parameters on the response(s) being monitored 38. The model equation that is generated from the data is able to be used to explain the effect of combinations of independent input variables on the outcome of a process or product. 1.3.7 Disadvantages of RSM A primary disadvantage of RSM is that fitting data to a second order polynomial for systems that contain some curvature is often not well accommodated by the second order polynomials that are produced. If the system cannot be explained by a first or second order polynomial, it may be necessary to reduce the range of independent input variables under consideration as this may then increase the accuracy of the model being considered38. Another disadvantage is that although RSM has the potential to evaluate interaction effects of the independent input parameters, it is unable to be used to explain why an interaction(s) has occurred (210). A further disadvantage is that RSM is poor at predicting the potential outcomes for a system operated outside the range of study under consideration45 1.3.8 Software for Design of experiments Many commercial software packages are available which are either dedicated to experimental design alone or are of a more general statistical type. Software’s dedicated to experimental designs DESIGN EXPERT ECHIP MULTI-SIMPLEX NEMRODW Software for general statistical nature SAS MINITAB

Breaking Up Essay -- Personal Narrative, essay about myself

It should have been raining. It almost always rains in the movies when girls get their hearts broken. When that young man with a bittersweet smile and â€Å"I’m sorry† eyes shows up on the doorstep; telling his sweetheart that he is going off to war or beginning a battle with a fatal disease. Instead here I am: the blundering heroine of my own crazy film, with a script that seems to have a few gaping holes where all the witty lines are supposed to be. In the hot, sticky passenger seat of a black ’02 Grand Am, subconsciously capping and uncapping an Ice Mountain water bottle, listening to my boyfriend jumble up a bunch of words that eventually translate into: it’s over. C’est fini. He stops talking and takes a deep, shuddering breath and I realize that it’s my cue to talk. He’s waiting for me to say something along the lines of: â€Å"Sure Matt, I totally agree with you. I think it’s a great idea to end this relationship that I have put my whole being into for two years. I’m so relieved that you brought it up first, seeya around and good luck with all your future chicks.† I look out the...

Effects of mass media worksheet Essay

What were the major developments in the evolution of mass media during the 20th century? In the early 1900’s newspapers was the main form of mass media. Over the years there were many developments in the evolution of mass media in the 20th century. The major developments were the radio, television, and the internet. Radio came along in the early decades of the 20th century. They were considered to less expensive than telephones and by the 1920’s it was likely that most homes had a radio. Radio did something that newspapers could not do. It allowed many people all over to listen to same thing at the same time. Many people tuned in for updates on the war going on at this time. After radio the next form of mass media was the television. In 1946, about 17,000 televisions existed in the United States; within 7 years, two-thirds of American households owned at least one set. (â€Å"Media and Culture†, Ch. 1, p.32) Television brought along the ability for Americans to not only hear a certain message but for them to see it also. ABC, NBC, and CBS were the 3 major networks that controlled most of the things that Americans watched on television. After television the next major development in mass media was the internet. The first computers were big and bulky and were mainly used by businesses. Eventually computers that people could have in their home were produced. People could access the internet through the phone lines in their home. The internet became a new way for people to communicate with others all around the world. It also opened up many other possibilities for people like doing research, or shopping. How did each development influence American cul ture? The development of radio influenced American culture in many ways. It opened up a whole new way marketing for those who were trying to sell products. It gave them the ability to reach massive audiences they could not reach before. Radio became the main source of entertainment for most Americans early in the 20th century. They would get their news updates,  listen to sporting events, and listen to advertisements. Many believe everything that was said on the radio and lived their lives according to what they heard. From what food to eat, what clothes to wear, radio gave them a sense of how they should be living. With the development of television it gave Americans the ability to put a face to the voice we hear on the radio. I would say that television is a big part of most people’s lives today. Many people today form their beliefs and opinions about certain things from what they see about it on the TV. Politics is a very good example of this. The development of the internet has major influences on American culture today. Most of the world uses the internet daily in some form whether it is on our computer, tablet, smartphone or some other internet ready device. The internet has opened many doors that were not open in years past. One example is it gives people that are not able to attend college in person a chance to earn a college degree. The internet has now become one of the main ways that people communicate. It offers us the ability to stay in touch with friends and family through social media and it gives us ways to meet new people.

Royal Ahold’s Case Write Up

Executive Summary The case discusses the Royal Ahold’s the major events that led to the demise of a great European company. The case presents some of the key issues in the areas of leadership, strategy, audit and accounting fraud that resulted in their disaster. The case identifies the problems made by the management in selecting the improper growth strategy and incentive plan that encouraged unethical behaviour from the senior management. The events presented touch and highlight management and governance issues, which are so important in managing global companies.After analysis of the cases and financial statements, I have come with questions and concerns on the management and financial statements that could have caught this earlier on. Questions to be asked and process of approving budgets, corporate strategy, risk controls would have raised concerns on the management style. Some of the other recommended actions for board and its various committees would have discouraged the improper management practices. Some of these questions might have surfaced real issues and / or encouraged the right practice.I found various accounting standards, challenges of global audit process; in this case it was led by Deliotte. The CEO’s and leadership growth strategy was the reward and recognition was improper. The number of acquisitions made during the 90s and continuous pressure was put on all subsidiaries to grow the sales by 15% were bad decisions. This alone led to many other problems within the company. The CEO’s growth strategy and desire to quickly grow the company put immense pressure on all other companies and senior management to somehow meet the CEO’s expectation.It all resulted into fraudulent activities and ultimately disaster of great company. I recommend adopting changes to incentive plans, non-financial factors be part of success criteria. In measuring financial success, working capital ratio, inventory days, receivable and payable ta rgets should be part of incentives. Above all, I recommend changes to the board committees and ensuring their work is independent was also important, i. e. audit committee, establishment of HR committee to raise issues and improve the overall organization culture. The case also highlights the issue of multiple accounting standards being practiced in very country.A standard corporate wide accounting standard in Royal Ahold must have been used. Both external and internal auditors must have report ed numbers in a consistent approach. I recommend that auditors had direct reporting to board and should have empowered and trained to look for documentation and management structures in their audit process. Had they dig deep on all areas of concerns of material significance they might have found side letters. I have also highlighted other recommendations including the controls in the accounting standards and in preparing financial papers.Incentive plans and corporate strategy be realistic to avoid unwanted behaviors. Tone of the top management including the board’s, assignment of responsibilities be clearly stated and periodically measured. Student id: 250712690 1 Management Accounting Exam Problem Identification: The case depicts another case of fail of governance and business ethics. This appears to be a fraud and not just accounting mistakes. By 2003, the time of the case, Enron, WorldCom and few others had already identified the need of business ethics and corporate governance.Royal Ahold series of events happened mainly due to greed and unethical behaviour but what really underlies is the objective setting, growth strategy and, rewards recognition criteria set by management. The case also presents issues of cost accounting, in terms of, when to apply the manufacturing rebates. Consolidation of subsidiaries and joint ventures also played a role in this fraud. It also shows bad governance, flaws in external audit, failure of internal audit functions and to som e degree their competency. Leadership strategy: Royal Ahold’s CEO’s strategy of 15% growth year-over-year was very aggressive.The reward and recognition structure around the sales number was improper as it led management of all subsidiaries and other business units to increase the revenue and meet the targets. CEO kept communicating to board and shareholders the expectation around the sales strategy and likelihood of meeting these targets. Consequently, it created a culture whereby senior management were under pressure to meet the sales objective. The senior management and head of subsidiaries must have felt that missing the sales targets is not even an option. Accounting Fraud: The case presents few big issues of accounting.Firstly, the issue is of the incorrect accounting treatment of manufacturing rebates and promotional allowances. My opinion is that rebates cannot decrease the cost of goods unless there is a certainty of getting the rebates. If the rebates are unc ertain they cannot decrease the cost of goods incorrectly. From the case, it appears that management ordered more quantity of goods then they could have sold. They booked the rebates at time of goods received and decrease the cost of goods prematurely. (Assumption: It is not very clear from the case, if these rebates were booked as income or adjusted against the cost of goods i. . decrease in cost of item. I have assumed that Royal Ahold accountants decreased the costs (prematurely as per above paragraph). If these were booked as income, then it is even a bigger fraud and not an accounting error) Second accounting fraud problem is the accountants preparation of Royal Ahold’s parent company financial statements. They consolidated the financial statements including some of the joint ventures when Royal didn’t even had control over them. Royal Ahold did not own more than 50% of these Joint Ventures and did not have the control of the decision making.They created fraudulen t paper work to show they had control on these join venture companies. This is a pure fraud as they created agreements to satisfy auditors and try to hide the real facts. Audit: Both external auditors and internal auditors (and audit committee) failed to detect any of the accounting issues. It could have been missed as accounting standards in many countries is different. External auditors, even though they may all be of Deloite, of one country only audits that country statements, so they may not be familiar what might be happening in other parts of the company.However, the Royal Ahold parent company auditors are responsible to have an oversight of companywide audit and should be held responsible for over -looking these fraudulent transactions. Internal audit and board’s audit committee failed to detect any of the misrepresentation either. On top of that in Netherlands there were two boards (Governing Board and Supervisory Board) and both boards weren’t able to detect o r raise red flag on any of these problems and misrepresentations. Management having two sets of paper work with JV (Joint Ventures) without coming under the investigation shows incompetency of audit functions.Governance / Audit Structure The way the governance and audit structure was laid out at Royal Ahold, there were five different committees and entities were responsible to review accounting and financial controls and practices that could have asked questions and raise concerns (red flags). They were: The governance board, supervisory board, the audit committee, internal audit department and the external auditors. Each should have independently reviewed management controls and financial statements and raise concerns and issues. Raising Red FlagsIn my opinion, the governance structure and audit committees and external auditors were sufficient enough to handle or uncover such fraudulent activities had they been critical, created the right controls, empowered the internal auditors a nd obviously asked the right questions while reviewing the financial statements and other management documentation. As part of board, I would have asked questions following questions, or have acted when seen abnormalities. This would have helped me in identifying issues, concerns and in raising red flags on the Royal Ahold 1999-2001 financial statements.Also some of them are related to mid 90’s management attitude and strategy. Strategy and Growth Approach: The target of meeting 15% year-over-year in sales, especially in US in 2000-01 when economy was in recession should have alarmed the board and internal auditors. They should have investigated how the sales targets are being achieved. It is not easy to meet 15% sales in US food industries under this economic climate. This may have led the management behaviour in meeting the targets.As board member, I would have asked CEO to explain the strategy of rewards and recognition, mainly on top line bonus as it is a wrong choice. (I have personally worked at Compaq during 1999-2000 and have seen the issue of top line bonus and commission on sales. This led to Compaq’s continued crises and eventually it was bought by HP in 2003). I would tried to influence the board and hence the CEO to consider a more comprehensive rewards strategy. From my experience bonus strategy plays a big role in company culture. The other important factor that develops the management attitude is what CEO likes to hear.It seems Royal Ahold’s CEO, Cees van der Hooven, wanted to hear from all his subsidiaries and Joint Ventures that sales targets are being met every quarter. I would have influence the management style and company culture to be protected by changing (or diluting) this approach. CEO’s attitude and leadership style was one of the leading cause of Royal Ahold demise. His aggressive acquisition approach would have resulted in integration issues within the company. As board member, I would have asked the man agement plans on integration and how culture of the organization would not be negatively impacted.I would have created the board HR committee to influence management not to allow the negative impacts on the organization culture, integration within the organization, rewards and recognition be such that it would not have allowed the culture to deteriorate. The cultural issues, integration issues and above all greed among the management team members was uncontrolled in Royal Ahold’s accounting scandal. The growing number of acquisitions was extremely risky initiative; the corporate strategy was carrying high risks at all operational levels including controls, integration that may have led to frauds.Also, this had potential to be a reputation risk as well. In my opinion, board should not have approved such an aggressive corporate growth strategy. Consolidated Statements Although Royal Ahold ownership is less than 50% in some Join venture companies, they showed controlling interes ts in some companies. To me an agreement paper presented by the management is not sufficient. I would have asked the significance of Royal Ahold’s control and ask management which areas of Joint Venture management we have been making decisions on.If we are making decisions, even though we don’t own more than 50%, what are the risks associated with these decisions. As a board member, I would have understood how Royal Ahold has influenced the Joint Venture management. I would have also asked audit committee to understand the management structure of Joint Ventures. Taking a step further, assuming that 20% share would have given Royal Ahold right to appoint a board member on Joint Venture’s Board, I would have understood from the Joint Venture board member (through Royal Ahold appointed director) how the joint ventures decision making process really works.By asking such questions and efforts in trying to understand from the board and management of Joint ventures how the organization is actually structured and working. If Royal Ahold does not have a controlling authority on the acquired company, the company financial statements cannot be consolidated. Royal’s accounting practice o f consolidation will first bump up the revenue numbers. This was purposely done to beef up the revenue figures. This may have resulted bigger bonus for the senior management. Also, the balance sheet would be more attractive to the shareholders (and potential shareholders). To explain this here is simple illustration:Parent Current Assets Assets Total Assets Current Liabilities Liabilit ies Total Liabilities Shareholder's Equity Debt to Equity Ratio Subsidiary Consolidated 3 7 10 1 3 4 4 10 14 4 1 5 3 7 0. 5 1. 5 3. 5 8. 5 3 2. 5 5. 5 2. 3 0. 6 1. 5 As illustrated in the hypothetical example above example, by consolidat ion the debt looks more attractive then it would have looked otherwise in the parent company. The debt to equity shows debt-to-equity of ($1. 5: $1) when consolidated, and ($2. 3:$1) when not consolidated. Similarly, other financial ratios would have looked good with consolidation of financial statements.The consolidation resulted in better financial statements; hence Royal Ahold used this approach. In actual, this should not have used consolidated method. As per the accounting text, Parent when owns an investee company’s 20%-50% should use the equity method of accounting. The equity method would have mainly impacted the earnings on the Income statements. The net income, however, would result the same earnings without changing the revenue numbers. On the balance sheet side, the equity method would only show true â€Å"Assets† number, as per the investments made in the JV by Royal Ahold. The financial ratios (e. . debt to equity or quick ratio etc. ) will not be as appealing as it started to sound with consolidated statement. Risk Controls: As board member, I would have influenced the entire board not to approve the corporate strategy as a budget was too aggressive and unrealistic. As pointed out above, realistic targets are extremely important. If strategy is too aggressive and corporate culture is to share good news with the CEO the unrealistic budgets targets may lead to malpractice and improper (fraudulent) activities. In my opinion it is supervisory board obligation to approve only realistic targets.The corporate strategy in the growth years of mid ‘90s was too aggressive. This has done part of the damage in the culture and mind-set of the senior management that 15% growth is not unrealistic and has created an attitude to meet these targets in any way possible. This encouraged the wrong doings and possible frauds that started to take place in 1999-2001. Although it is not very clear from the case, were there any wrong doing (or activities) in 199798, but in the hind-sight, it appears that some of the issues must have started or existed in that time as well.The board and senior m anagement should actively work on identifying risks to the organization and work on strategies that mitigates the risks. A key here is to have a formal risk assessment process on an annual basis. The assessment is under supervision of the board and results are reviewed by the board. Inventory 2001 balance sheet shows 20% rise in inventory, I would have raises some concerns that might have uncovered the management improper decision to order such high quantity of stocks to get the manufacturing rebates. Accounts ReceivableIn 2001, accounts receivable increased by Euros 605M i. e. 21. 2%. I would have asked questions around the assumptions and likelihood receiving the Account Receivable. More importantly, who owes this receivable to Royal Ahold. This may have been due to the manufacturing rebates included in the accounts receivable. If so, it would have led to the whole issue of management aggressive behaviour on ordering stocks to get rebates. It might have opened up the entire incorr ect accounting treatment of manufacturing allowances and rebates. General ReserveRoyal Ahold is showing consistently on their balance sheet a general reserve item that is over 5 to 6 Billion euros (approx). This appears to be high, I would have asked on what assumptions these provisions are made. It might have uncovered some of the assumptions that are being made by management. This general reserve is in addition to the 1. 5B euros in other provisions. This is should have been a red flag. Other Recommended Preventive Measures Besides the concerns and red flags mentioned above, I would have raised based on what I would have seen.I would have also taken following measures to prevent this from happening. Incentive (Bonus) Structure: The bonus structure cannot solely be based on financial goals. The bonus structure has to base on non-financial goals as well. Within financial goals all aspects to kept in mind when designing the appropriate incentive program. The increase in working capit al (inventory, receivables, payables etc. ) is kept at minimum or in line with the net income. The increase or decrease in working capital beyond the realistic proportion to earnings should be discouraged through the incentive program as well.Audit Committee Structure: The case presents the audit committee and internal audit department weaknesses and signs of some of their inefficient processes and competency issues. Besides reviewing the audit committee performance, monitoring and control issues were also been found. I would have influence the audit committee to have a metrics of internal audit department. This may have encouraged more objectivity of audit functions and may have aligned management controls to the overall governance issues. It is the responsibility of audit committee that internal and external auditors have an open communication.Besides audit of the current financial statements, and review of controls and structures, the auditors must identify areas of improvement i n controls and work on action plan in improving the organization controls and monitoring process. HR Committee As mentioned above, I would have asked board to create HR committee that takes an active role in setting the controls in the organization. The committee should take an active role in reviewing the annual compensation and objective setting. Committee should have taken an independent review of key hiring decisions and management capability on integration and organization culture.Some key decisions in this area should only made by committee after consulting with the management, audit and board’s general direction. IT System: I would have asked internal audit committee to ensure all IT systems are audited to ensure proper controls are in place. Usually, in fraud IT systems controls could have loop holes or management may have the ability to bypass some of the checks and balances and/ or segregation of duties. Consistency in financial Statements Royal Ahold had companies in four different continents and in many countries.Financial statements presentation and laws across the globe are not consistent. US GAPP, Netherlands GAAP, IFSA and others are not standard across all countries where the Royal Aholds companies are in operation. While the fact makes a challenge for the board, it doesn’t give them an excuse of letting things slip. The board should have worked out with internal and external auditors in creating a minimum corporate standard across the group of companies. It is the flaw in governance and leadership to over-look this fundamental point.