Parenting theory Essays

Parenting theory Essays Parenting theory Essay Parenting theory Essay Parenting org will try to answer 2 question: which business should we own? What parenting approach will get the best performance from those busineses? Instead of looking at how businesses relate to one another, a parent organization should look at how well its skill fit its businesses needs and whether owning them creates or destroy value. Parenting theory suggest that most CEO should concern with two crucial questions: what business should this company, rather than rival, own and why? And What org structure. Management process and philosophy will foster superior performance from its businesses? The best parent companies create more value in their businesses than rivals would. Multi business bring together under a parent org businesses that could potentially be independent. Such parent company can justify themselves economically only of their influence creates value. For example: The parent org can improve business plan and budget , promote better linkages among them, provide especially competent central function or make wise choices in its own acquisitions , divestment and new ventures. How corporate parenting add value to its businesses units? That occur when the parents skills and resources fit well with the needs and opportunities of the businesses. If there is not a fit, the parent is likely destroy value. A parent that does not understand the critical success factors in a business is likely to destroy vale. To add value: ICM, Restructure, Knowledge, transfer skill and sharing activities. A parent without detailed knowledge of a business market my not be aware of the opportunity to combine sales. Synergy. Five type of synergies: Cost savings, Revenue enhancements, process improvements, financial engineering and tax benefit. COST SAVINGS This is the most common type of synergy and the easiest to estimate. Peter Shaw, head of mergers and acquisitions at the British chemical and pharmaceutical company ICI, refers to cost savings as hard synergies and points out that the level of certainty that they will be achieved is quite high. Usually, they come from eliminating jobs, facilities, and related expenses that are no longer needed when functions are consolidated, or they come from economies of scale in purchasing. Cost savings are likely to be especially large when one company acquires another from the same industry in the same country. For example, SBC Communications, the former South-western Bell, realized substantial cost savings when it acquired Pacific Telesis. Within the first two years of this merger, SBC saved more than $200 million in information-technology operating and maintenance costs. It also saved tens of millions of dollars by combining the merged companies purchasing power. Even though cost savings are t he easiest synergy to calculate, overly optimistic projections certainly do occur, so you need to look very carefully at the numbers you 1 re presented with. If youre evaluating projections, be aware of three common problems. First, analysts may overlook the fact that definitions of cost categories vary from company to company. (For example, are warranty costs included in the cost of production or the cost of sales?) So it may appear that there are more easily eliminated costs in a category than turn out to be the case. Second, costs are incurred in different places depending on the structure of each company. Acquirers may assume they can eliminate more corporate or divisional administrative costs than they actually can because essential work is getting done in unexpected places. Third, it is easier to eliminate positions than the people who fill them. Often a job is eliminated on paper, but the person in the job is very talented and must be shifted ewhere in the company. Therefore, if a consolidation Ins to suggest that 200 jobs are destined for the ax, that doesnt mean that 200 salaries are, too Acquirers often underestimate how long it will take to realize cost savings. Sometimes that happens because the plans specifying how integration will proceed are insufficiently detailed. In other cases, it happens because the people in both companies are resistant to change, and senior managers often delay making tough cost cutting decisions. And, of course, the longer it takes for cost savings to be realized, the less value they create. REVENUE ENHANCEMENTS Its sometimes possible for an acquirer and its target to achieve a higher level of sales growth together than either company could on its own. Revenue enhancements are notoriously hard to estimate, however, because they involve external variables beyond managements control. The customer base of the acquired company, for instance, may react negatively to different prices and product features. A combined customer base may balk at making too many purchases from a single supplier. And competitors may lower their prices in response to an acquisition. Revenue enhancements are so difficult to predict, in fact, that some wise companies dont even include them when calculating synergy value. Matthew Slatter, the CEO of Bank of Melbourne, says, We model this [revenue enhancements], but never factor it into the price. Similarly, Peter Shaw at ICI considers them soft synergies and discounts them heavily in calculations of synergy value. Despite their dangers, revenue enhancements can create real value. Sometimes the target brings a superior or complementary product to the more extensive distribution channel of the acquirer. That happened when Lloyds TSB acquired the Cheltenham and Gloucester Building Society (which had a better home-loan product) and Abbey Life (which had insurance products). In both cases, Lloyds TSB was able to sell those products to its dramatically larger retail customer base, thus generating more revenue than the three entities could have done individually. Similarly, having acquired Duracell for a 20% premium, Gillette was confirmed in its expectation that selling Duracell batteries through Gillettes existing channels for personal care products would increase sales, particularly internationally. Gillette sold Duracell products in 25 new markets in the first year after the acquisition and substantially increased sales in established international markets. In other instances, a target companys distribution channel can be used to escalate the sales of the acquiring companys product. That occurred at Gillette when it acquired Parker Pen. In calculating what it could pay, Gillette estimated that it would be able to get an additional $25 million in sales for its own Waterman pens by taking advantage of Parkers distribution channels. A final kind of revenue enhancement occurs when the bigger, post-acquisition company gains sufficient critical mass to attract revenue neither company would have been able to realize alone. Consider what happened when ABN and AMRO merged to form ABN AMRO, the large Dutch bank. Afterward, other large banks pulled the new company in on syndicated loans that neither ABN nor AMRO would have been asked to participate in individually. PROCESS IMPROVEMENTS Cost savings result from eliminating duplication or from purchasing in volume; revenue enhancements are generated from combining different strengths from the two organizations. Process improvements, by contrast, occur when managers transfer best practices and core competencies from one company to another. That results in both cost savings and revenue enhancements. The transfer of best practices can flow in either direction. The acquirer may buy a company because the target is especially good at something. Conversely, the acquirer may see that it can drastically improve the targets performance in a key area because of some competence the acquirer has already mastered. Take the case of National Australia Banks purchase of Florida mortgage lender HomeSide. HomeSide has an extremely efficient mortgage-servicing process that NAB plans to transfer to its banking operations in Australia, New Zealand, and. the United Kingdom. The same was true of ABN AMRO when it acquired the U.S. commercial bank Standard Federal. In that case, process improvements went hand in hand with cost savings: because its mortgage operation was so efficient, SF eventually took over the combined banks entire mortgage business. Product development processes can also be improved so that new products can be produced at lower cost and get to market faster. Such was the case when Johnson Controls acquired Prince Corporation, a maker of rear-view mirrors, door panels, visors, and other parts of automobile interiors. Prince was better than Johnson Controls at understanding customers needs-both existing and anticipated-and consequently it produced higher-margin products. Prince also had an excellent process for ramping up production of new products, which enabled it to move from design to mass production about twice as fast as Johnson Controls could, maintaining higher quality levels while speeding cycle times. Johnson learned from Prince and was soon able to apply those advantages to its own products. For an example of the process improvements an acquiring company can bring to the table, take a look at newspaper giant Gannett. Gannett has a database of financial and nonfinancial measures for each of its 85 newspapers; executives use this rich resource to determine best practices, both boosting revenue and lowering costs. Larry Miller, Gannetts CFO, explains, We have been able to dramatically improve the papers weve bought. The key for us is knowing in very minute detail how to run a business. This gives us very specific ideas for improvement. Through more efficient production and distribution processes, Gannett has been able to extend its deadlines for news and advertising copy while simultaneously delivering the newspaper more quickly. That helps advertisers and improves Gannetts revenue. Gannett is also able to determine where classified rates are too high, hurting volume, and where they are too low, leaving money on the table. Because it can expect to yield quick, substantial p rocess improvements, Gannett can pay very high premiums for its acquisitions. When you consider that many of the acquisitions are run independently-and so dont offer many consolidation opportunities-the high premiums are quite extraordinary. In fact, Miller has told us, People are often shocked at what we pay. In nearly all cases, though, performance improvements after the fact have justified the high prices. The synergies of cost savings, revenue enhancements, and process improvements may be easy to understand conceptually, but our research demonstrates how hard they are to forecast accurately. Why? Most calculations of synergy value occur under horrendous conditions: time pressure is intense, information is limited, and confidentiality must be maintained. Since conditions are so far from ideal, the managers and board members responsible for the final decision should always scrutinize the assumptions underlying the numbers. FINANCIAL ENGINEERING Acquirers often think-and hope-that if they borrow cash to finance a transaction, theyll reduce the weighted average cost of capital. That is not a good reason to do a deal. If either the acquirer or the target company could afford to take on more debt; each could have borrowed it on its own. However, some companies can find genuine synergies through financial engineering. For example, an acquisition can increase the size of a company to a level where there are clear economic benefits to pooling working- capital finance requirements and surplus cash, as well as netting currency positions. These benefits can be quite substantial. When the Credit Suisse Group merged with Winterthur, 10% of the forecasted synergies came from reducing funding costs through optimized capital management. Heres another genuine financial-engineering synergy: a transaction may allow a company to refinance the targets debt at the acquirers more favourable borrowing rate without affecting the acquirers credit rating. That is especially likely to happen in the financial services sector because those companies are big and their risk is diversified. TAX BENEFITS Tax considerations are often a barrier that must be overcome to justify a deal, a fact that makes tax-related synergies very difficult to assess. Its useful to distinguish between tax structuring, which makes the deal possible, and tax engineering (also called tax planning), which ensures that the overall tax rate of the combined company is equal to or lower than the blended tax rates of the two companies before the deal. Regulators often believe that companies using perfectly legitimate structuring and engineering techniques to avoid incurring additional costs are simply taking advantage of loopholes. Thus companies are not anxious to disclose any clever techniques they may have used. The goal of tax structuring is to avoid as many onetime tax costs as possible. Those costs may include capital and transfer duties, as well as change-of-ownership provisions that can trigger capital gains or prevent tax losses from being carried forward.

Pope Francis Quotes on Racism, Xenophobia, Immigration

Pope Francis Quotes on Racism, Xenophobia, Immigration Pope Francis has received praise for his forward-thinking views since 2013 when he became the first pontiff from Latin America. While the Catholic Church leader has not backed same-sex marriage or reproductive rights, he’s suggested that gay people and women who’ve had abortions deserve empathy and forgiveness, a departure from previous pontiffs. Given his views on these issues, progressives wondered what the pope might have to say about race relations when he made his first visit to the United States in September 2015. At that time, racial tensions continued to run high in the nation, with police killings and allegations of police brutality routinely making the news and trending on social media networks. Prior to his U.S. visit, Pope Francis had not specifically commented on the Black Lives Matter movement, but he had weighed in on racism, xenophobia, stereotypes, and diversity around the world. Familiarize yourself with the pope’s views on race relations with the following quotes. All Forms of Intolerance Should Be Fought Pope Francis  came down hard on intolerance while speaking to a group from the Simon Wiesenthal Center in Rome in October 2013. He highlighted the center’s goal â€Å"to combat every form of racism, intolerance, and anti-Semitism† and noted that he’d recently reaffirmed the Catholic Church’s condemnation of anti-Semitism. â€Å"Today I wish to emphasize that the problem of intolerance must be confronted in all its forms: wherever any minority is persecuted and marginalized because of its religious convictions or ethnic identity, the well-being of society as a whole is endangered and each one of us must feel affected,† he said. â€Å"With particular sadness I think of the sufferings, the marginalization and the very real persecutions which not a few Christians are undergoing in various countries. Let us combine our efforts in promoting a culture of encounter, respect, understanding, and mutual forgiveness.† Although the pope could have limited his discussion of religious intolerance, he included intolerance based on ethnic identity in his speech as well, an indication that he’s concerned about the treatment of all minority groups. The World Cup as an Instrument of Peace When the FIFA World Cup kicked off in June 2014, many sports fans focused exclusively on whether their favorite teams would advance in the soccer (football) tournament, but Pope Francis offered a different viewpoint on the games. Before the opening match between Brazil and Croatia, Francis said the World Cup could teach the public a great deal about solidarity, teamwork, and honoring opponents. â€Å"To win, we must overcome individualism, selfishness, all forms of racism, intolerance, and manipulation of people,† he said. One cannot be a self-centered player and experience success, he said. â€Å"Let nobody turn their back on society and feel excluded!† he said. â€Å"No to segregation! No to racism!† Francis is reportedly a lifelong fan of the Buenos Aires soccer team San Lorenzo and hoped the World Cup served as a â€Å"festival of solidarity between peoples.† â€Å"Sport is not only a form of entertainment but also - and above all I would say - a tool to communicate values that promote the good that is in humans and help build a more peaceful and fraternal society,† he said. End Racism Against U.S.-Bound Migrants A year before real estate mogul-turned-President Donald Trump branded some undocumented immigrants from Mexico as rapists and drug traffickers, Pope Francis called on the United States to adopt a humanitarian approach to the migrants crossing the border, especially children. â€Å"Many people forced to emigrate suffer, and often die tragically,† the pope stated on July 15, 2014, in a message addressing a global conference in Mexico. â€Å"Many of their rights are violated, they are obliged to separate from their families and, unfortunately, continue to be the subject of racist and xenophobic attitudes.† Francis could have framed the situation on the U.S.-Mexico border as a humanitarian crisis without invoking racism and xenophobia, but he made a point to recognize how attitudes about â€Å"the other† influence immigration policy. The pope has a history of advocating for refugees, remarking on an Italian island in 2013 that the public was indifferent to the dire circumstances in which North African and Middle Eastern migrants find themselves. Stereotypes and the Criminal Justice System On Oct. 23, 2014, Pope Francis addressed a delegation from the International Association of Penal Law. Speaking to the group, Francis discussed the widespread idea that public punishment is the solution to difficult social problems. He expressed his disagreement with this view and questioned the motives of public punishment. â€Å"Scapegoats are not only sought to pay, with their freedom and with their life, for all social ills such as was typical in primitive societies, but over and beyond this, there is at times a tendency to deliberately fabricate enemies: stereotyped figures who represent all the characteristics that society perceives or interprets as threatening,† he said. â€Å"The mechanisms that form these images are the same that allowed the spread of racist ideas in their time.† This is the closest Francis came to addressing the Black Lives Matter movement before his visit to the U.S. in September 2015. Like many activists in the movement, Francis suggests that racial scapegoating factors into why society favors taking freedom away from some groups and placing them behind bars for years rather than remedy the social ills that keep prisons overflowing. Embracing Differences While discussing tensions between Catholics and Muslims in January 2015, Pope Francis once again emphasized the need to accept differences. He told a delegation affiliated with the Pontifical Institute of Arab and Islamist Studies that â€Å"patience and humility† are musts in the Islamic-Christian dialogue to avoid fueling â€Å"stereotypes and preconceptions.† â€Å"The most effective antidote to every form of violence is education about discovering and accepting difference as richness and fertileness,† Francis said. As his other remarks on diversity indicate, accepting differences can apply to religious faith, ethnicity, race and much more. The lesson to be learned, according to the pope, is that people don’t divide themselves and lash out against others based on differences.