Business

Small businesses are a major building block to our nation’s economy.  Statistical evidence has shown that an estimated 65 percent of the employment opportunities in our American nation are provided by the small business sector. It is also to be realized that most of the innovations in our nation have been from small business enterprises. Just to be understood here is the fact that innovation is the most important factor in ensuring sustainable economic growth in any nation. It is in fact due to this reason that the federal government has put in place policies which strive to encourage innovation in the society. Additionally, it should be understood that sustainable economic growth should be accompanied with increased employment opportunities for the citizens. Small business enterprises have sufficiently proved to be reliable in creating employment opportunities to the citizens of the nation.  It is thus clear that the existence of small business investment s is a great boost to the realization of sustainable economic growth in our nation. Indeed, history has it that the economy of any nation dependent on the small business investments as it is this investments which under viable conditions can grow into big multinational corporations (Sawai, Odaka, 1999).

It is in the interest of this research that the author of this paper gives a critical look at the role that is played by small businesses in the economic growth of the US nation as well as identifying its shortcomings. The paper also talks of the necessary measures that the federal should put in place for assisting and sustaining small businesses in our society.

Importance of small business investment to the economic growth in our American nation
    Small businesses are a main source of income to the investor.  It is in a capitalistic economy like ours that each and every individual should be out to find his or her own means of leading a sustainable independent life. It is therefore based on this argument true that small scale investors are important to our economy in that they reduce the number of dependents in the society (Anglund, 2002).  Such investments should not be seen just as a source of income to the owners but also as a reason behind the sustainability of our human community as the investor can sustain his or her family and even initiate other goodwill projects in the community.

    It is also to be noted here that small scale business investments in our nation are a great source of employment for many of the American citizens (U.S. department of State, 2009). Just to be stated is the fact that the economic growth of any nation is mainly dependent on the levels of employment in the nation as well as the living standards of its citizens. It is therefore in this reasoning that small businesses are greatly important as a source of employment to the citizens of this nation. It has evidently been proved from statistical evidence that of the whole American population, over 65 percent of the employment opportunities are provided by the small business sector (U.S. Department of State, 2009). This means that our small business investment sector is a major drive to the improving the living standards of our citizens through creation of employment opportunities.

    Economic growth is a factor of the overall contribution to the government through taxation schemes. It is in the law that any investment and/or individual in our American society should contribute in support of the government in proportion to their income. Therefore, it is clear that with the many small businesses investments in the American nation, the level of contribution in support of the government is greatly improved. Such boosts of the revenue collections of the government lead to increased execution of more citizen friendly projects by the government thus improving the overall development levels of the nation. It is indeed true that small business investments if protected and encouraged could give a solution to the economic recovery strategies our American government is involved in.

    Statistical information has evidently proved that small businesses are the main driving force to the innovative development in our nations (Anglund, 2002). As common knowledge is clear to all, innovative thoughts and acts are the most fundamental element that is necessary in ensuring a sustainable economic growth in any nation. Given the competitive nature of our modern markets, it is only by striving to produce customer tailored products that market can be ensured in the society.  It should here be noted that sustainable market for a business is quite useful to our economic growth (Lunt, 2001). This is because such developments will ensure sustainable job creation to the citizens, assured government tax contribution and sustainable availability of goods and services to the nation’s population. It is owing to this importance of innovation in ensuring sustainable economic growth that small business investments should be encouraged and protected from unnecessary threats by the government (Edmiston, 2007).

Government and small business investments    
The American government appreciates the importance of small businesses in its sustainable economic growth. This is evidently seen in its tax schemes and incentive policies in favor of small business investors. It should however be realized that much is still needed to ensure the certainty of small businesses survival in the competitive market witnessed in our nation. It has been a common problem that many small businesses tend to loose in the marketplace due to the unfair and discriminative practices of multinational corporations (Bannock, 2005). It is therefore in the interest of the future of this nation and its economic prosperity that the government should put in place rules and regulations to safeguard small businesses from the anticompetitive practices of other highly established competitors in the marketplace.

    Still to be noted is the fact the government’s assistance through incentives and tax reductions for small business investors are far behind the levels acceptable for realizing sustainable economic growth in our nation. It is here clear that the small business sector is the leading provider of employment in America. Owing to this reason, it should be reasonably recommended that the American nation should increase its incentives for small business investments as well as reduce the tax contributions from such investments. It is only through such acts that the sustainability of small businesses in our economy could be realized.

    It is clear that small businesses are a major building block to our nation’s economy. It is this economic sector of our nation that provides for the highest number of employment to the citizens. It is therefore for the good of our nation’s future that better policies should be put in place to encourage and protect this economic sector. Such policies should safeguard the small scale investor from anticompetitive practices of big companies in the marketplace. It should also seek to address the question of sustainable taxation and investment invectives for such investments.

Keeping in mind that an organization is referred to two or more people working together towards similar goals & achievements, we can analyze the reasons for Eric Murphy’s behavior in the first three episodes of the popular TV show ‘Entourage.’ In the first episode, we see that Eric Murphy plays a big role in the organization as Vincent Chase’s advisor, both professional & personal.  In order to continue living their extravagant lifestyles, Vincent needs to continue making movies & he pressurizes Eric to read his script and make a decision for him. There lies the first element that pushes Eric towards making a bad decision.  Eric is not working on monetary incentives but under the pressure of an emotional responsibility. He not only has to make a decision that will determine the income of the whole entourage, but he also has to look out for Vince’s career. Apart from that, Eric is an introvert & under confident about making difficult decisions or taking risks. At this point, Eric’s goals are still towards personal safety rather than esteem or self-actualization. Given his inexperience in the field & fear of failure, Eric lets his personal opinion get in the way of his professional judgment, thus letting a multi-million dollar deal slip & retarding the progress of their organization.

Once again in episode two, Eric shows poor decision-making skills when he lets Vince spend his money on an expensive car when they had recently received a bad review about Vince’s performance. Ari Gold, Vince’s agent, warns Eric not to bring up bad reviews with Vince in the future, even though Vince does not seem affected by it. Even though Vince has given Eric the power to make his decisions, Eric is not entirely capable as yet & this is why, he is constantly engaged in a conflict with Ari who is much more driven towards the goal of making money than Eric who is striving towards his friend’s safety. Instead of analyzing & looking for a solution for Vince’s bad review, he encourages his to splurge his money in order to boost his esteem and therefore do away with the negative impact of the review.  This leads to short-term satisfaction when what Eric should have been aiming at is a permanent and a feasible solution so that should something like this happen in the future, they will be prepared for it.

In the third episode, Eric acts helps design Vince’s look for the Jimmy Kimmel show & advices him to prepare beforehand to avoid any faux pas & he is too involved with his own relationships to personally help Vince prepare for his appearance, even though it all works out in the end.

The Target Audience
    Analyzing the characteristics of the audience is very important in presenting a specific topic or idea. Through this analysis, a person could easily draw a plan on how he or she is going to approach his or her audience and what kind of communication channel should be used. The audiences have different characteristics, roles, and attitudes toward a topic, and these factors should be evaluated by the speaker first before finally coming up with the strategies of presenting the topic. Apparently, the speaker must analyze the audience not only as individuals but also as members of the group. If the speaker knows the attitudes of the audiences, he or she could easily draw a map and predict the outcome of the presentation.

    In a corporate world, the speaker may encounter all the types of audiences; therefore there are particular techniques that the speaker could use to be able to meet the goals and objectives. Business presentation requires a lot of work, excellent concepts, and even persuasive approach from the speaker because the topics to be presented would determine the tactics that the speaker would use in reporting to his or her target listeners. In presenting the quarterly sales information to different segments of the corporation, the speakers must consider the characteristics and attitudes of each category.

    The stakeholders are the gatekeeper type of listener because they have the control over the message that will be presented. Their authority in the company should be taken into consideration because they have the power to stop the message instead of sending it to the other audience segments. The managers are the primary audience and this segment would be the ones to decide or reorganize the business plan based on the messages that was delivered to them. The salespeople  are the secondary message because they could provide comments regarding the report and they would be the ones to act upon the ideas if after those ideas have been approved by the higher authorities. In the business environment, the customers serve as the auxiliary audience who may encounter the message but will not have to interact with it. Aside from considering the type of audiences, the speaker must also evaluate the members of the group based on their behaviors to be able to draw an effective and persuasive messages. 

The Communication Channels
    Evaluating the appropriate message to convey to the listeners is as important as analyzing the proper audience segment to be targeted. Communication channels refer to the means by which the speaker convey the message. The speaker may use different approaches to each category based on their roles to the corporation, attitudes, and characteristics as members of the organization. Company executives are extremely meticulous when it comes to company data. Their excessive concern to the company's performance is the first thing that the speaker should be taken into consideration in presenting the quarterly sales of the organization. The speaker may report with the use of extensive data and specific information in a shorter time possible. Time and profit are the most important for the company executives and the presentation will only be effective if the speaker would always take them into consideration.

    Salespeople are the front men of the organization, they are the sellers and performers on the company's show; therefore, this segment of listeners should be treated based on their functions in the corporation. The speaker could provide the data, deliver other necessary information, and add activities to encourage them to perform better. The target market is the most important element of the marketing plan and this fact should well-established on every presentation in the company. Proper marketing strategies and promotions should be enforced in presenting the product of services to the audience. Apparently, the customers are lightly interested to the financial statements of the company. They just buy the products or avail the services without looking for more information regarding the fiscal background of the corporation. In order to make the customers interested and participate in the presentation, the speaker should search for another channel that would make these people interested with the topic. The company data could be used by the company in the advertising campaigns to present the corporation's strength and credibility of providing quality goods to the market.

Considerations
    Basically, there are many factors that the speaker should consider in the presentation of financial statements to different categories of listeners. The speaker should mind the necessary information to be given to the audience as well as the consequences of the techniques to be used. Aside from the types of audiences and their level of participation to your report, the speaker should also need to be specific with  his or her goals and objectives in using a particular communication channel.

The speaker should keep in mind that each category of listeners also consist of different personalities. The gatekeeper kind of audience may have introverted or extroverted types of listeners and this requires the speaker to be flexible enough in presenting his or her ideas to them.

The data to be presented are very important to the growth and expansion of the corporation; therefore, the speaker should be careful in selecting the strategies to be used and deliver the proper message to each of them.

Aside from the techniques, accurate data and information must be delivered because each segment should get the same level of awareness and must have a deeper understanding regarding the topic.

Presentation is costly not only in terms of money, but also in employees' time and effort; therefore, the speaker should make every minute worthy of the audience's attention. The speaker should be wise in selecting which communication channels would be effective but would give back the company its anticipated level of success.

The speaker should always consider the benefits that the audience may get after the said presentation. He or she must keep in mind that aside from the organization, the audience should also benefit from the report.

The Message
    By careful evaluation and analysis of the type of listeners, the speaker could easily predict whether the presentation will be successful or not. During the meeting, the audiences' behavior and reactions may show if the speaker have selected the proper technique in presenting the data to the listeners. If the listeners are being responsive, the speaker must have designed the entire report based on his or her evaluations of audience as well as the information. After the presentation, the performance of the company may show if the target listeners were able to absorbed the information that the speaker wished to deliver to them.

    Selecting the proper audience for a specific information may take a of  time of effort for the speaker; however, this would definitely lead to the company's success in the future. Some speakers are able to meet their goals and objectives not because of the positivity of the data and information that should be presented but because of their effort in analyzing the proper technique in presenting a data to different types of listeners.

The automobile companies need to adapt to a changing marketplace. Here there is a demand for greater fuel efficiency besides cutting edge design. In fact, it is superseding brand loyalty or even vehicle size, as is evident from the latest innovations in India, US & China.

In India Tata Motors has come out with Nano, which is the people’s car. It is an engineering marvel. This is the dream of the middle class. The tata nano is the cheapest car in the world. “The car is being offered at the price of Rs one lakh. Though the road tax, service tax etc will augment the cost and the car will finally be available at a price of about one lakh and thirty thousand rupees.” (Tata, 2009) It is not only Nano which is creating news in India. In early 2011, the Tata Nano Europa will be launched in the European countries. These cars will be affecting the two wheeler segment as well as the replacement sector.

 Tata nano is an engineering marvel which has come out of India. It is a true innovation in terms of cost efficiency, space as well as fuel efficiency.

One example of innovation in the US is Tesla Motors. It has already succeeded in producing an all-electric vehicle. “Tesla already is selling a sporty two-seater, zero emission, electric car that goes 0 to 60 mph in less than four seconds with a range of 244 miles on one charge. They are also planning to produce a four-door sedan that will sell for less than $50,000.” (Wesley, Steve. 2009)

“The flagship Red Flag CA7460 unmanned limousine is the first China “smart” automobile, having been jointly developed by FAW Group's engineering development and test center, and the National University of Defense Technology. The unmanned high-tech vehicle is a leap ahead for the automotive industry, featuring the core technology for vehicle active safety systems and smart cars.” (FAW. 2008)

One thing is certain today. Automobile industry impacts the global economy in a big way. The automobile industry impacts the redistribution of global economic power & energy dependence. This is quite evident with the three innovations mentioned above. The international automobile industry is highly impacted by the collaboration between companies which is leading to joint development, production as well as marketing. In fact, the exchange of components taking place is resulting in decentralized automobile production. There are fundamental changes today in strategic management for success. The latest innovations are based on technology, which is leading to faster realization of both product as well as process.

The auto industry of tomorrow which is emerging today is based entirely on a different model.  Innovation is the key here. It will have to cater to new economic realities. It will need to listen to customers.

As per your request, here are some important considerations before visiting and conducting business in Japan. I researched three of the most significant factors on which the US and Japan differ in terms of business, professionalism and the market in which Yuppie will be introduced. We, as a team of foreign business people, will have to keep these key factors and their implications in mind while doing business and interacting with the Japanese corporate world and the target market.
 
Social Differences

• The main aspect in which Japan mainly differs from the USA is the social aspect. Since the product marketed is gaming systems, special considerations will have to be made with respect to the Japanese pop culture. The Japanese market is flooded with technology based products, especially from smaller independent innovation firms that do not market globally as compared to the industry giants such as Sony. These small innovative firms are usually more capable in terms of creating a unique offering and will pose serious competition to Yuppie. In the US, there are relatively few innovative independent firms that develop similar technology.
• The Japanese target market will also differ from USA in certain aspects. Although demographically, the age group may be the same, but other psychographic factors such as lifestyle, interests, income levels, exposure to technology, preferences and social backgrounds. Japanese pop culture revolves around pure entertainment and has a touch of traditionalism and originality such as the Manga, anime influences and tech savvy portrayals. #
• The internet and IT culture in Japan has developed more in to an underground culture relative to the US. Technology like the Yuppie that uses games purchased off the internet will face piracy and copyright issues with illegal downloads, game development and even alteration of the game console in order to ‘tweak’ systems so that they can be customized and run elf-developed games or even illegally downloaded games without licenses. Such

• Games and offers will have to be developed specifically for the Japanese society and pop culture. A line of anime based games or licensing from game developing companies that have developed popular Japanese games for other gamin platforms can be collaborated with in order to produce those same games on the Yuppie platform. For example in a particular car racing game, drag racing will be more popular in the US while drifting will be more popular in Japan. This could boost Yuppie sales due to the combination of gesture control gaming, lightweight transportability and the popular games being available. Game developers such as Sega and other similar companies can be partnered with for licensing and game development. #
• Finally, some other social considerations need to be made with respect to our business trip to the country. These must be kept in mind while interacting with Japanese representatives in order to familiarize the team of their culture and norms. The Japanese people are generally humble and have strong values regarding hospitality. Greeting is generally down with a slight bow and a handshake; it will be polite to reciprocate the act on our behalf. A generally friendly attitude must be observed with professionalism in mind.

 
Legal and ethical difference

• Legal considerations with respect to the gaming market are abundant and they differ from that in the US. First, piracy laws are more stringent in the US as compared to Japan, which means that piracy is more common in Japan. Piracy as mentioned earlier can be in the form of illegal game downloads, development and alteration of the Yuppie console itself for needs of customization. 
•  Rating of media which will include vide games, differs from that in the US. Legal authorities like the censorship boards, FCC etc restrict video game violence and sex content and have strict age restrictions and ratings for video games. Such laws are more relaxed in Japan and customers and gamers have more access to such content. The ratings

• General business ethics are similar to that of USA but special care should be taken about not including any such games, references or hints that mock or disrespect the Japanese culture. Since the product will be new in the market and will not be local, it would be considered unethical to add insulting features to the tradition and heritage of Japan or any such mockery. Things are different in the US where the general public is more open to freedom of speech and looks for humor in insults or offensive material in games.

 
Age differences

• The target market for Yuppie is demographically placed between ages 13 to 22 years of age. According to statistics of June 2008, the population that falls in that age bracket is lower than that of USA. With stiff competition and a smaller market, intense promotional activities based on functional positioning of the product must be performed in order to popularize Yuppie in Japan.

 
This research based memo provided a brief overview on some of the factors we need to consider for our initial visit and promotion of  Yuppie and will suffice. I request you to circulate this memo among your team and anyone else who would be accompanying us on this business tour so that they are aware of the above cultural and business considerations.
 
For further interactions and business related meetings, I will prepare a comprehensive research based handbook or document that looks into the Japanese social and business world in detail, touching all factors that need to be considered in doing business with representatives from the country.

This is a situational leadership analysis of the History Channel documentary: ‘Last Stand of the 300: The Legendary Battle of Thermopylae’ (Padrusch, Gornell, Beck, Koed, & Impollonia, 2007). It explores insights on how the strategic elements of the documentary relate to Paul Hersey’s and Ken Blanchard’s situational leadership models in war and business. Furthermore, it makes comparisons on how each major character of the documentary has reacted to specific situations and how current business leaders also react today under similar circumstances. This begins with a brief summary of the film. Next, it investigates how each character reacted and adapted to each situation in their capacity as leaders. Afterwards, it makes comparisons on certain selected situations in the documentary as these relate in similar business situations today. Finally, this ends with a conclusion on how situational leadership can be applied to business through an understanding of case studies that are based on historical events like war such as the Battle of Thermopylae.

Summary
The 91-minute History Channel documentary on the Battle of Thermopylae has ten parts of more than 9 minutes each. It is focused on two battles: (1) The Battle of Thermopylae which is a ground battle; and (2) The Battle of Artemesium Strait which is a naval battle. It has three major characters. King Leonidas is a Spartan king who led the Greek defense at the narrow pass of Thermopylae against the Persians. Themistocles is an Athenian politician who led the Greek navy against the Persians. Xerxes is the Persian emperor who led the invasion of Greece. The documentary also mentions of Cyrus, The Great and Darius I of the Persian Empire which extended from the Nile River in Egypt up to the Indus Valley, now modern day Pakistan. Cyrus is Xerxes’ great grandfather while Darius is Xerxes’ father. The documentary has employed several historians and book authors to provide expert insights and opinions on each important aspect of the historical event. Most of these insights however are derived from the written accounts of Herodotus, the Greek historian who lived in one of the cities of the Persian Empire. The Battle of Thermopylae can be divided into three major events to understand what led to it, how the Persian Empire attempted to subdue Greece, and finally, how the battles have been fought in land and at sea. First is the Greek revolt in the Persian city of Sardis, capital of Ionia—a satrap or province of the Persian Empire sometime in 500 B.C. which is now modern day Turkey. The Athenians have sent troops to Sardis and burned down the city killing many Persians in the process (Kar, 2007, p. 3). Second is the Battle of Marathon sometime in 491 B.C. The Persian Emperor Darius I sent 30,000 troops via the Aegean Sea to Athens in retaliation to the burning of the capital city of Ionia several years back. However, the 30,000 contingent has been routed by the combined forces of the Greek city states numbering some 8,000 excluding the Spartans. Third is the second attempt of the Persian Empire to invade Greece, this time under Darius’ son, Xerxes who brought along some 300,000 troops via land and supplied by sea in 480 B.C.

The Battle of Thermopylae is a strategic initiative of several Greek city states, mainly Athens and Sparta that were constantly at war with each other which are now faced with a big opponent, the Persian Empire. In 480 B.C. “Greece [then] was a collection of city states who fought each other more than they fought together” (Padrusch, Gornell, Beck, Koed, & Impollonia, 2007). After a Greek spy has discovered the Persians crossing Asia into Europe through pontoon bridges of some 700 ships fixed together with linen and papyrus cables at a narrow one mile strip of sea at Hellespont, several of the warring city states decided to unite and engage the huge Persian army of 300,000 with 7,000 heavy infantry of hoplites at a very narrow land bottleneck on the way to Athens—Thermopylae. Since the Persians are also likely to send troops via the sea, the Greek navy of some 200 warships also blocked the narrow Artemesium Strait to prevent some 1,200 Persian warships from dropping troops at the rear of the defending Greeks at Thermopylae. The Battle at Thermopylae and simultaneously the Battle of the Artemesium Strait raged for three days until the Greek contingent of 300 Spartans and 1,000 Thespians led by King Leonidas have been annihilated. The defeat was due to an opening in the Greek defense through an unknown mountain track that a traitor informed King Xerxes about and which 1,000 Phocian defenders abandoned. This compromised the Greek coalition of defenders at Thermopylae which would have remained unassailable if not for the treachery and the abandonment of the defensive post. Ultimately, Themistocles, commander of the Greek navy fell back from Artemesium Strait to the island of Salamis. Themistocles then ferried the Athenians to a much safer place while the remaining Greek coalition fell back to another defensive position at the Isthmus of Corinth. Eventually, King Xerxes successfully burned down the evacuated city of Athens. However, Themistocles’ took a strategic initiative and annihilated the Persian navy at Salamis thereby rendering the Persian supply chain weak (Hugos, 2003, p.7). This defeat prompted King Xerxes to leave the battlefield and delegate the conquering of the remaining Greek city states to one of his generals. Eventually, the unified Greek forces annihilated the remaining Persians in Greece and drove them back to Asia, finally destroying the pontoon bridges at Hellespont. Several years later, all Greek city states have been united by Philip, The Macedonian. His son Alexander, The Great conquered the Persian Empire and extended the Greek Empire up to the Indus Valley.

King Leonidas of Sparta
    One of two Spartan kings, King Leonidas has been approached by the Athenians for help in defending against the impending Persian invasion. This meant that if Leonidas sent majority of the Spartan troops, Sparta would have been weakened and later on Sparta’s enemies like Athens and other neighboring Greek city states would have taken advantage of the situation. Hence, Leonidas consulted with the Spartan elders as well the Oracle at Delphi. The elders decided that only 300 of the 9,000 Spartan forces should be sent when Leonidas insisted that it is to Sparta’s best interest that he helped in the defense against the Persians. With King Leonidas’ military reputation among the warring Greek city states, he has been chosen to lead some 7,000 soldiers; the combined forces of several Greek cities. Leonidas selected his 300 soldiers on the criteria that they all had living sons. These 300 became the frontline force of the +7,000 Greek coalition troops at Thermopylae. The defense of Thermopylae consisted of three areas: (1) The narrow bottleneck of the pass; (2) The secret mountain tracks leading down to Phocia and Thermopylae; and (3) The Artemesium Strait at sea. The narrow point of the pass has around 6,000 Greek soldiers including the 300 Spartans. The secret mountain track meanwhile has 1,000 Phocians while Artemesium Strait has 200 trireme warships with 170 oarsmen each and commanded by Themistocles. Essentially, Leonidas led the ground forces while Themistocles led the navy. Among the Greek ground troops, the Spartans are the best trained. Spartan soldiers start military training at 7 years of age and end this at 18 when they are immediately sent to war. Greek city state wars occur during the summer and these yearly wars have prepared much of the still fragmented Greek states into war. The Greeks have sophisticated armors, weapons and a time-tested battle formation in the Phalanx, a platoon of 8 x 4 soldiers. Aside from Thermopylae’s strategic terrain which rendered the Persian’s cavalry and numerical superiority ineffective, the Greek soldiers also had equipment that are more superior to the Persians. (1) The Greek Hoplon shield with an argive grip which is made from wood and reinforced with bronze is broader and stronger than the Persian wicker shield with ordinary hand grips. (2) The Greek Corinthian Helmet is made of bronze while the Persian heavy infantry, the Immortals, only had tiaras covering their heads. (3) The Greek body armor, the Lamellar is made from strips of linen, leather and thin bronze glued together while the Persian Immortals only had metal sheet armor as thin as playing cards. (4) The Greek dory or spear is longer than the Persian spear. Moreover, the dory has metal points from end-to-end, capable of delivering injury from both the iron spearhead and the butt plate. (5) The Greek sword, Xiphos, is a double-edged sword designed for close fights when the spears got broken while the Persian infantry swords are designed to be used in a combined infantry-cavalry attack.

King Leonidas appears to be the consultative type of leader who has to obey his elders. This is synonymous to a CEO who reports to a powerful board of directors that has not given him a freehand. This leadership behavior type is the S1 under the Situational Leadership Model where the Spartan elders are the default leaders and King Leonidas is just a follower with a big title. In S1, the elders had a say as to the what, how, when and where on the defense of Thermopylae (Schermerhorn, 2001, p. 2; Ninth House, Inc., 2005, p. 1). For whatever strategic reasons, the Spartan elders decided to sacrifice one of its kings with only 3% of Sparta’s military strength supporting a primary figure. Of course, even with King Leonidas’ military reputation, this move sent a mixed signal among the other Greek armies as to how the Spartans valued their king. Moreover, this also gives insight into Leonidas’ leadership quality or leadership style. Tactically, Leonidas knew how to use his men on the battlefield, replacing front liners during the course of the battle so they can be rested to fight another day. Leonidas successfully held his ground during the first two days since the situation did not change. However, on the third day, Xerxes exploited a tactical opportunity courtesy of information from a Greek traitor. Here, Leonidas’ leadership among the coalition is tested. The Phocians did not follow his orders and abandoned their post. Strategically, although Leonidas knew the terrain and his advantage in training and equipment, he failed to understand the dynamics of his coalition forces. He chose the Phocians to guard the secret mountain track where another road leads to their city. Leonidas could have divided his 300 Spartans into two groups to keep the Phocians in place and/or assigned some other groups in the mountain track together with some of his Spartans. This could have been like a portfolio of different soldiers to disperse his risk, yet Leonidas decided otherwise. With the bottleneck at Thermopylae, his 6,000 coalition forces would have been more than enough to keep the Persians at bay with just, say, 200 Spartans where the remaining 100 would have guarded the secret mountain track together with mixed forces of Thespians, Thebans, or Corinthians. With the Phocian’s abandonment of their defensive position, Leonidas knew that if he did not adapt to the situation, his remaining +6,000 coalition forces would be annihilated. Here, Leonidas adapted to the situation by withdrawing some 5,000 of the Greek troops so these can fight another day while choosing to remain with his 300 Spartans and some 1,000 Thespians in order to save the retreating 5,000. This is a strategic move rather than a tactical one since its effect is long term rather exploiting the heat of the moment to his advantage. Of course, this time Leonidas has none and so he got defeated and died at Thermopylae in heroic fashion that inspired the Greek to be united into one nation. In another light however, King Leonidas has been placed in the difficult position of running several mergers in a very short span of time. Thus, in a business-sense, he has no strong management control of the several small companies and each group of soldiers had different levels of maturity. For instance, the 300 Spartans could be categorized under M4 in the Situational Leadership Model which is the most mature level while the Phocians can be categorized under M1, the lowest level in the maturity scale (Blank, Weitzel, & Green, 1990, p. 583).

Themistocles
    An Athenian politician and soldier, Themistocles had a first hand view on how the Persians fought their war in the earlier Battle of Marathon. Themistocles realized the great importance of the navy in supplying the Persian ground forces and in the deployment of troops. Themistocles’ leadership style is the S2 behavior of the Situational Leadership Model because he tried to sell the idea of improving the Athenean navy which only had 100 warships during the Battle of Marathon (Schermerhorn, 2001, p. 2; Ninth House, Inc., 2005, p. 1). Rejected at first, Themistocles tried to find ways to get the approval of the Atheneans in the execution of his plan. Perhaps due to his merchant family background, Themistocles was able to convince and negotiate with the Atheneans through the clever use of a lie that would ultimately save Greece and make it one of the ancient superpowers. Moreover, he was also able to find the funding and get approval for his shipbuilding project. Hence, when the Persians under Xerxes finally came in 480 B.C., the Greek navy’s strength has been doubled to 200 triremes. Furthermore, Themistocles was credited with forming the strategy at Thermopylae and the Artemesium Strait. In battle, it has been clearly evident that he knew how to adapt to the circumstances and changing situations on the battlefield. For instance, realizing that the Greek navy was outnumbered 6 is to 1, Themistocles fought the battle according to his terms during the first day. He attacked the Persian fleet at late afternoon to shorten the time of battle in his favor. In ancient times, a nighttime naval battle was simply impossible to execute. Moreover, unlike the Greek ground forces that have an advantage in equipment, training and terrain, Themistocles’ ships have the same technology as the Persians have on their own triremes. Training-wise, the Persian fleet had more experience. This left the Greek fleet with only two factors in its favor—the terrain in the Artemesium Strait bottleneck and Themistocles’ skill in strategy. While the historians on the documentary admit that there were no clear written accounts on how the naval battle went, it has been clear that the Greek won the first and second days of the naval battle. When Leonidas fell on the third day, Themistocles immediately adapted to the situation and made the Athenean ships fall back to the Salamis islands. From there, he ferried most of the Atheneans to save them from the onslaught of the invading Persians. Hence, when the Persians finally arrived at Athens and burned the temples there, there were only few Atheneans who remained mainly because they choose to do so. Once, the Atheneans were safe, Themistocles used a double-spy to lure the Persian fleet into the Salamis islands for a naval ambush. Here, Themistocles annihilated the Persian fleet consequently eradicating Xerxes’ means of supply transport. Without a supply chain, Xerxes was forced on a strategic retreat and delegated the invasion of the Greek city states to one of his generals. Eventually, the Greeks defeated the Persian invasion and drove them back to Asia, destroying the Persian pontoon bridge at Hellespont.

    From a business perspective, Themistocles is a CEO who knows his way around the Greek terrain; the political landscape within Athens; Athenean Greek enemies and ultimately its allies; and the Greek coalition enemy, Persia. The terrain can easily represent the knowledge of the business operating environment. The political landscape could easily be the business’s stakeholders and/or shareholders as well as its human resources. Athen’s neighbors could stand for industry and market knowledge while Persia could represent a big multinational corporation that is about to dominate the industry. Themistocles knew his market and industry very well. He has managed to lead the Greek alliance without stealing the limelight away from King Leonidas, working silently and ultimately gaining victory for the future Greek nation. Themistocles also managed to raise the necessary financing as he sold his idea of a strong navy to the people of Athens and consequently sold his idea also to other Greek cities on the advantages of defending Greece as a coalition against the invading Persians. He chose the battlefields well, effectively nullifying the Persian advantages of numerical superiority and its fast cavalry. His timing on when, how and where to fight was also well-considered. Most significantly, he is lucky to have his own people in his navy and be directly in command of building the navy from the very start up to the actual battle. This gave him enough time to mature his organization. Finally, his knowledge of the enemy’s weakness—the supply chain, eventually saved Greece and rendered the Persian invasion unsustainable (Hugos, 2003, p.7).

King Xerxes
    King Xerxes has been trained at an early age as the Persian emperor. He gained skills in mathematics as well as the fighting arts. When his father Darius I failed in the Battle of Marathon, he personally took charge of the second Greek invasion when he became emperor. Since the Battle of Marathon was immediately met on the shore by 8,000 Greeks versus 30,000 Persians Xerxes adapted to the situation. Instead of an invasion via the sea again, he mounted a massive transport of troops via land through the pontoon bridges he built at Hellespont. He supplied these troops via sea. As an emperor, his leadership style can be categorized as S1 or telling like that of King Leonidas (Schermerhorn, 2001, p. 2; Ninth House, Inc., 2005, p. 1). Xerxes basically knew what to do from the Battle of Thermopylae and even up to the Persian fleet’s defeat by the Greeks at the Battle of Salamis. The Persian army can classified as M3 as a group under the Hersey-Blanchard Situational Leadership Maturity Model. This refers to a group being experienced enough and able to execute the tasks at hand but is still not confident enough to take on the responsibility and make the activity succeed (Blank, Weitzel, & Green, 1990, p. 583).

    From a business perspective, Xerxes is a CEO who lacked foresight. He didn’t know how to employ market research at an early stage. When he sent emissaries to the Greek city states including Athens and Sparta to ask for tributes of earth and water as a symbol of peaceful submission to the Persian Empire, he failed to instruct his men to gather information on the Greek terrain on where the Greeks will possibly defend from the Persian invasion. If he had known this beforehand, Xerxes would have been able to defeat King Leonidas on the first day of battle at Thermopylae. However, he seems to know how to use spies at the late stage of the war but was ultimately outmaneuvered by the Greeks in the knowledge of employing double-agents that greatly influenced the outcome in the Battle of Salamis in Greece’s favor. Xerxes also encountered great problems in knowing beforehand how the Greeks did battle. If he had the strategic knowledge on Greek weaponry and armor, Xerxes could have had improved his troops’ equipment. Perhaps it was due to its size as a big ‘multinational corporation’ that the Persians have been overconfident in their numbers although they have been defeated already in the Battle of Marathon.

Modern-Day Business Comparisons
    Starting with the Persian Empire, its most fitting modern-day business equivalent would be the multinational corporation. It is big. It has resources. It has the technical know-how in building marvels of engineering like the pontoon bridges at Hellespont. However, it is a multinational corporation that lacked market research or technological innovation. Xerxes knew how to use spies and yet he failed to gather enough information since the Persian Empire’s first defeat at the Battle of Marathon or even in their much earlier encounter with the Atheneans at Sardis in the Persian satrap of Ionia. This could have had swayed the Battle of Thermopylae in Persia’s favor very early into the war. Moreover, with good information on the Greek’s superior equipment and manner of fighting battles, the Persian Empire could have had developed new armors or even new weapons to counter the Greek’s advantage. The Persians had the engineering sophistication to build pontoon bridges across the sea and therefore they should also have had the technical know-how to build missile-based siege weapons that could have had thrown huge boulders into King Leonidas’ position. The Persians could have had also built better armor. In modern-day business, market research is a crucial aspect more important than the organization of huge troops, the financing of a big organization, or planning how to supply such big troop movement into strange territory. Moreover, modern-day businesses have an advantage in the use of strategic analytical frameworks like PESTLE and Porter’s Five Forces analysis. If the Persians had these tools of strategic analysis, the Greeks would have been easily defeated.

    From a Greek perspective, the city states can be likened to a cooperative of small businesses about to undergo a merger or consolidation with the initiation of the Atheneans. After the Battle of Marathon several years before the Battle of Thermopylae, the Atheneans could have had built alliances beforehand that would have had resulted into a more cohesive coalition. Yet of course, there was no opportunity for profit and so the necessity for cooperation and collaboration to fight the Persians had been postponed much later when the threat of invasion had been imminent. The Greeks also had the sophistication of market research in their effective use of spies and double agents. The routine wars among themselves also gave them much experience and education in battle and thus the Greeks were better skilled in this area compared with the Persians. This is similar to a modern-day business that is keenly aware of case studies of other businesses to derive insights on how to run its operations more efficiently and effectively. Another feature of Greek culture that has a relation to business is the need for justification of major endeavors like war. For instance, Themistocles had to seek consensus and approval in the building up of the Athenean navy. Likewise, King Leonidas had to justify his support of the Atheneans in the Greek coalition defense against the Persians. This is similar to the presentation of a major project for the evaluation and approval of the board, executive committee, or management committee. The Greek strategic initiatives are also worthy of comparison in how global businesses position themselves in emerging markets. The trend seems to be an analysis of the viability of the supply chain as they have learned the importance of this aspect from their battles with the Persians before embarking on a major war effort (Hugos, 2003, p.7). Another strategic initiative of the Greeks is on how they use terrain to their advantage. This is like the experience of Doritos chips in exploiting the prime-time snacking market when they learned about a vacuum in demand for this market (Superbrands Ltd., 2004) or ALDI stores’ effective use of a small selection of product offerings when management used information on market behavior to its advantage (ALDI, 2009, p. 1). Another Greek strategic initiative is on how they use technology to their advantage which is similar to how Ducati used its advantage on the unique design of its engine (Cavetti, 2002, p. 701-132). Another Greek strategic initiative is the effective use of long distance communications as exemplified by the naval battle at Artemesium Strait. Evaluating the limited facts provided by the documentary, it appears that Themistocles’ effective use of flag signals made his navy well-coordinated in its attack and defensive positions. Meanwhile, the Persian fleet appears to have fought based on the uncoordinated commands of each ship captain. The modern day equivalent of this is HSBC’s effective use of its IT infrastructure to gain an upper hand in global banking despite the financial meltdown caused by the global financial crisis or GFC. While the other major British global banks had to get capital infusions from the government, HSBC did not require such help (Schildbach, 2009, p. 5). HSBC’s bank branches worldwide are simply too well-coordinated to counter the negative impact of the GFC (HSBC Holdings plc., 2008, p. 8).

Introduction
Risk management is a “process of identifying, assessing, communicating and managing the risks facing an organization to ensure that an organization meets its objectives.”(lesrisk.com, n.d.)

The whole process entails finding options, analyzing them after considering legal, behavioral and economic factors so that risk can be mitigated.

Risk is a high probability of having an unfavorable outcome. This uncertainty is known as a risk. "Risk can be defined as the combination of the probability of an event and its consequences" (ISO/IEC Guide 73, 2002). For different companies, risk has different meanings. For instance, for a farmer, the risk is the probable loss of the crop due to bad weather, pest attacks, etc. Companies face risks due to manufacturing errors, errors in design of the product, loss of goods during shipping, doubtful debts that may turn into bad debts, etc. Companies also need to hedge against financial risk; which includes interest rate risk, market risk, liquidity risk and operational risk. (SBP, n.d.) For a manufacturer, increases in the cost of production due to inflation is also a risk.

There are different types of risks: financial, process, intangible, time, human, legal and physical risks. Financial risk is the not having enough funding of resources. Process risk means uncertainty in business processes can cause project failure. Intangible risks involve damage to the organization’s image or brand. Time risks are caused due to delays or forgone opportunity costs. Natural hazards can cause physical risks. Legal risks can be caused due to changes in government policies and regulations. Human risk is related to loss of important employees or their knowledge which in turn effects the organization.

The process of risk management is continuous. It is important to assess and identify risks so that one can minimize the unexpected losses to the business entity so that the adverse events causing them can be identified and avoided or mitigated. (Exforsys Inc, n.d.)

Risk management is a tool which helps in managing these risks in an uncertain environment. There are three goals of risk management:

To relate all the decisions of the organization to risk and to create an implementation process of decision making.
To allocate resources to different areas/ risks
To identify and understand trade offs and opportunity costs of any given decision.

The organizations can manage risk by transferring it to another party, avoiding it or reducing or mitigating the effect of the risk, or accepting the consequences of the risk. (Exforsys Inc, n.d.)
Risk Management Methodology:

Risk management is conducted in an orderly manner. First, the threats that pose risks need to be identified, characterized and assessed. Criticality of these threats is gauged and the most risky threats are identified. Then the expected consequences of these threats are identified. Then, the organizations need to identify ways to mitigate these risks. The risks can be transferred, avoided or reduced. The organizations need to decide what measures to take according to the strategy they choose. (ISO/DIS 31000, 2009)

This whole process of risk management is planned in a systematic manner. The stakeholders and their objectives are identified. The constraints of the risks are also evaluated. All these steps assist in building a framework for identifying and analyzing the risks. Risks can be mitigated using the technological, human and organizational resources.
Effective risk management requires a “strategic focus, forward thinking and active approaches to management, balance between cost of managing risk and anticipated benefits, and contingency planning when critical threats are realized.” (Murdoch.edu, 2003) The actual process of risk management varies from company to company. (Tatum, n.d.)

The risk management process requires the following decisions to be made. These decisions are explained in detail below: (Murdoch.edu, 2003)

1.    Establish a Context. The context gives the criteria for evaluating risks and for providing a structure for the risk.

2.    Identify Risks. The organizations need to identify what events can pose threats, why are some actions risky, what are the consequence and how can they prove to be risky.

3.    Analyze Risks. Once the risks are identified, they should be analyzed in terms of the consequences they may cause, and the likelihood and frequency of their occurrence. The risks are high when the financial impact is higher than a certain limit, the impact on the company's strategy and operational activities is higher and there is a significant stakeholder concern.

4.    Evaluate Risks. The analysis of the risk helps in their estimation of the “risk levels against the pre-established criteria". The criteria used are associated costs and benefits of the legal, socio-environmental, cultural factors, etc. This helps in ranking and prioritizing the risks. The rankings are given on the basis of requirement of the resources, number of competents vying for the same resource and pursuing it and the extent of the availability of the resources.

5.    Treat Risks. The risk is treated according to the funding considerations and risk vibration. Risks are monitored regardless of the low priority ranking. Risk treatment is the process of selecting and identifying ways to modify risk.

6.    Monitor and Review is the most important step that aims to improve the whole process, and help in identifying the risks, analyzing them and mitigating their affects.

7.    Communication and Consultation should occur at each stage of the process and also the process as a whole. It involves collaborating with the internal and the external stakeholders. The board and the shareholders should be aware of all the risks involved in the business. The business units need to know their own risks and how these need to be dealt with. The employees need to know those risks that they are accountable for, they can help mitigate, avoid or transfer.

The process of risk management is graphically depicted as follows: (Murdoch.edu, 2003)

The sources of the risks are:

1.    Humans in strikes sabotage and riots.

2.    Natural disasters like fire, earthquake, disease, etc.

3.    Legislative changes in the government policies

4.    Technological issues such as obsolescence, innovation, etc.

5.    Poor management control and inadequate security

6.    Fraudulent activities in the organization.

Risks have various areas of impact. They can be assets of the company, the human resources, the costs and revenues of the company, the business processes, the internal and the external environment and the company's goodwill and reputation.

Business decision making is very complex and there is no right or wrong answer in it. While deciding, one needs to conduct a cost and benefit analysis of taking that decision. Similar is the case for making decisions regarding risk management. Cost benefit analysis is an analytical tool that can help decide whether a certain decision is worth it or not. It is helpful institutions where consequences are subjective and can't be properly quantified. Risk benefit analysis can also be conducted. It is similar to cost and benefit analysis but trade off needs to be made between risks and benefits. (foodrisk.org, n.d)

The basic decision that the top management has to make is to either accept the risk or to modify it. When treating the risk, the internal controls need to be analyzed properly. Their effectiveness refers to the degree to which they can be modified. Cost effectiveness of these controls means that when benefits of these controls are exceeding the expected benefits. The cost of implementing these internal control measures is also added to the total cost and deducted from the benefits. This exercise can also help in obtaining insurance on the financial risk or any other risk. (The IRM, n.d.)
Direct Costs and Benefits:

There are three ways to deal with risks: reviewing business policy decisions, cash market transactions, and derivatives. Business policies need to be made regarding financial performance objectives and competitive position. In the cash market transactions, the organization needs to realize the industry practices and the government regulations. Also, the role of the financial intermediaries in minimizing the risk should be considered. The derivatives should be the last option that should be considered. Risk/ reward profile should be used for evaluating the options that are pursued for managing the risk. The risk managers need to have a strategy or more so for the implementation so that management needs are met properly. (Strategies &Tactics, 2006)

The organization needs to assess the company’s internal capability of dealing with risk. The organization should have appropriate, robust systems and resources that they can utilize for risk management. (The IRM, n.d.)

The monitoring and review objects help in determining whether the measures adopted resulted in what was intended, what new procedures need to be adopted, how effective were those that have been implemented and what were the lessons learnt. Regular audits help revise risk policies and standards and also identify opportunities for improvement. (The IRM, n.d.)

Risks can be assessed qualitatively and also by quantifying them. Qualitative forecasts are made and then integrated into decision making. Intuitive methods are used for reducing the subjectivity bias. (Edinburgh Business School, 2008)

It is difficult to quantify risk exposure. There are three things need to be looked at while quantifying risk exposure: assets and liabilities, the length or the term of the risk exposure and the direction of the risk exposure. Assets and liabilities are both exposed to risk, therefore the individual risk and the net risk exposure should be considered. The length of the risk exposure should also be considered. Also, one should determine if it is a one-time risk or is it recurrent. Moreover, the risk managers need to determine if the risk is proportional to the direction of the interest rates, price or exchange rate movement. (The IRM, n.d.)

To quantify the risk, the risk manager should also graphically map the AS-IS balance sheet, or the business process. This is the ideal situation that is required by the organization.

The direct costs of risk management are cost of insurance, hedging, alliances and control activities. Insurance policies have a cost attached to them. The comprehensive the organizations; policy, the higher is the cost of reducing risk through insurance. Companies also use hedging techniques for limiting the losses associated with unfavorable movements of the economic variables such as interest rates, prices, exchange rates, etc. it is important to form alliances and partnerships with other companies in the value chain or in the industry. However, there is a risk premium charged for these alliances. The higher the risk, the higher is the risk premium charged by a partner. These direct costs are not difficult to estimate. (Ballou et al. 2009)
Indirect Costs and Benefits:

Indirect costs can be reputation costs, i.e. losses due to loss of reputation due to risks being incurred. (Ballou et al. 2009)

An indirect benefit of conducting this risk management process is that it helps the organization plan and critically evaluates all the aspects that may cause risk such as the organization’s strategy, human resources, business processes, etc. This indirectly helps with the documentation. Moreover, thorough analysis can also help root out problems or any inconsistencies in the business processes this is an indirect benefit as it is not the objective of the risk management process.

In addition to this, the success of the risk policy requires commitment from the top management, teamwork and cohesiveness in the organization, transparency and accountability and allocation of appropriate resources for training and development. (The IRM, n.d.)

Another indirect benefit of effective enterprise risk management is aligning risk management with strategy. It helps in evaluating the company strategy and then developing mechanisms to manage related risks. Moreover, alternatives for dealing with risk need to be considered. This process helps in reducing operational losses and enhancing the capability to identify the events so that losses from the risks can be minimized. In addition to this, companies should have robust risk information that fulfills overall capital needs and also enhancing the capital allocation. (COSO, 2004)

a. Finance: Allocation of resources and funds of the organization in order to maximize the wealth. Firm obtained funds both from external and internal sources at a lower possible cost via sale of stock, bonds, bank loans, etc. Allocation of resources is another aspect of finance as per the needs and the requirement of the business.    

b. Efficient Market: in an efficient market the securities are fairly priced and reflect all the prevailing information with respect to the stock. In addition, any rumor, negative news to the market, etc makes an impression on the stock so in this is manner it is very important that the any particular signals makes an impression on the market on evenly basis.

c. Primary Market: Primary markets are those form of market in which companies raises their newly formed capital. Like General Electric sells its new common stock in order to raise the capital via primary market. Moreover, a company often introduces its IPO in the primary market. In addition, that segments of capital market which deals with new issue of securities and the movements of funds from investors to issuing firms.

d. Secondary Market: Secondary markets are those form of markets in which existing stocks and securities are traded among the investors. Secondary market provides a space where businesses motivate the potential investors to invest in any particular security. The role of secondary market is very pivotal in building the economy of any country and it is the barometer of the economy.

e. Risk: An entrepreneur has viable information with respect to the investment but entrepreneur is uncertain with respect to the future either an entrepreneur gets the low or negative return. There are different forms of risk like interest rate risk, operational risk, etc.  

f. Security: a financial instrument either a stock which reflects the ownership in the company or a bond which indicates a relation with the company by granting a loan to the company. Security is often used a guarantee repayment of debt. It is not essential that there is any particular form of security it exists in different forms like stock, bonds, etc through which an investor participates in the ownership of any company.        

g. Stock: Any individual invest in the business of the company and buying the part of ownership in the business. While the original owner issue the stock in the public. With doing this exercise owner of the business raises its equity finance as well as business wealth. In stock, an individual invest in the business of the company and buying the part of ownership in the business. While the original owner issue the shares in the public. With doing this exercise owner of the business raises its equity finance as well as business wealth. Shares are issued in any form like ordinary share, preference shares, etc. Moreover, equity holders can claim on the residual earnings of the company which is paid out in the form of dividends

h. Bond: a bond is a written agreement between a borrower and lenders in which the borrower agrees to repay a stated sum on a future date and to make periodic interest payments at specified dates (Myers, Brealey and Marcus, 2001).  A bond is a promissory note issued by the firm to the investor. The terms or covenants of the loan arrangement between the firm and the investor are contained in the indenture.

i. Capital: financial assets which is invested in the business in order to generate the revenue and also the profit. The capital mainly exists in the form of cash, inventory, equipment, machinery, etc. Moreover, companies often raises its capital by issuing stocks and bonds in the financial market.

j. Debt: In debt companies sell their bonds, mortgages and notes either in primary or secondary market from which companies generate its finance. Debt is feasible when an entrepreneur wants to fund its assets and knows that the business will produce a positive cash flow stream. In debt financing companies sell their bonds, mortgages and notes either in primary or secondary market from which companies generate its finance. Companies borrow money in order to run their business in smooth and efficient way. In short term debt financing, there are three major sources line credit, revolving credit arrangement and transaction loan. In long term debt financing, firms have a variety of financing alternative such as bonds and debentures.

k. Yield: the actual rate at which bond or security is issued is referred as yield. The yield is very important for an investor in order to assess the rate at which an investor invests in any particular security.

l. Rate of Return: the return of the company either in form of realized or unrealized gained or lost which the company generates throughout the year in relation with their investments (Myers, Brealey and Marcus, 2001). It provides a space for the companies and the investors where they can asses its return and compares it with the past return. It is a very good barometer both for companies and investor to evaluate the return on their investments.        

m. Return on Investment: used to assess the profitability of a firm. The formula of ROI is (annual profit)/ (investment capital). The concept of ROI is applied on project management, real estate, investment made in the stock market, etc. In addition, if an entrepreneur wants an immediate result with respect to its revenue generation, market capitalization and other related matters then ROI provides appropriate results. The major theme and purpose of ROI is to correctly figure out the capital investment decisions.

n. Cash Flow: Cash flow discussed over the company’s operating activities (review the increase and decrease in current assets and current liabilities), investing activities (review over the sale and purchase of fixed assets) and financing activities (review over issuance/payment of loan, issuance/repurchase of share, dividend paid etc) during the year. It also discussed on the in flow and outflow of the cash and also on the cash equivalents (Myers, Brealey and Marcus, 2001).

Worldwide and large companies and organizations have been greatly affected with the ongoing economic recession which has affected the global economy.  American International Group (AIG) has never escaped the economic recession.  Among the various economic struggles that adversely affected its business, it decided to sell out one of its subsidiaries, 21st Insurance Company to Farmer’s Insurance.  During the second quarter of the present year, AIG has declared and in fact lost control over 21st Century after Farmer’s purchased the same for $1.9 billion cash and capital notes.  Farmer’s is a corporate unit of Zurich Financial Services of Switzerland.  The acquisition and consequent joined forces of these two insurance companies is considered to be the largest auto insurance in the country.  In relation to the course, this paper shall treat the nature of the acquisition, legal consequences with respect to the shareholders, and the employees of both corporations and existing insurance contracts entered into by each insurance corporation with their respective policy holders.  

    Corporate acquisition is a mode of expansion, a corporate combination, often resorted to by corporations under distress or are coping from economic distress.  In envisages the process of purchase, sale and combination. It serves to guarantee in one way or another, the continued existence of the corporations which are parties thereto through a continued business operations and corporate dealings. Merger is a common form of corporate combination.  Among the advantages of corporate mergers or acquisitions is the expansion of resources between and among the constituent corporations, increasing the business capacity by penetrating in other forms of business and expanding their respective market share in the long run.  In corporate acquisitions, one of the parties (constituent corporations) to the contract of acquisitions acquires the assets or the shares of stocks including the liabilities of the other constituent corporation.  It has the effect of transferring the ownership of the assets, goodwill, properties and liabilities of the acquired corporation.  As a consequence, management over the acquired corporation/s is shifted to the new owner thereof (Elmerraji, 2009).

    With the consequent outcomes of merger or acquisition, the same is subject to strict regulation by the state.  In connection with, Anti-trust laws become applicable.  Under the Anti-trust law, corporate combinations can not and should not be resorted to in order to obtain a monopoly of the market share or in any way that would result to a restraint of trade.  This is in line with the rule on free competition among businesses and business investors and free trade (No Author, No Year).      
   
    In the present case, the corporate acquisition has not violated the Anti-trust law.  At present, the corporate combination does not have the effect of establishing a monopoly over auto insurance businesses nor does it restrain free trade, in fact the combined business of both companies merely place them under the third rank of corporations involved in the same field.  
   
    The acquisition by Farmers of the 21st Insurance Company does not result to the termination of the latter.  Both insurance companies retain their corporate personality.  21st Century shall retain its business name and management shall remain for the time being.  Both shall continue their respective business operations, but with expanded clientele this time and an expanded resources for both parties.  Robert Woudstra, the present CEO of Farmers declared that there is as yet no plan to change Farmers line of insurance products as an offshoot of the acquisition (DeVore, 2009).  Insurance business offerings of Farmers in particular shall remain the same but with expanded resources incorporating that of 21st’s.  In the same way, insurance agents of 21st Insurance shall remain connected to the latter.  With the expanded business market, Farmer’s agents shall likewise have an expanded clientele from among the 21st‘s customers.  

    However, while the corporations respectively retain their business names, 21st’s shareholders are now the shareholders of Farmers.  Their subscription contracts if any shall now be with the latter.  The consequent change in the parties thereto (in effect creating a novation) may be accompanied by a change in the terms and conditions as to the payment, call or voting rights and shareholders’ benefits among others.  On the other hand, business creditors/lenders may shift their recourse to the present owner, Farmers.  It should be noted that among the terms of the acquisition is the concurrent acquisition of the liabilities of the acquired corporation.  Thus, Farmers shall be held liable for existing contractual obligations of 21st Insurance.  
   
    In the present corporate combination with both constituent corporations having retained their respective business managements, policy holders of both insurance corporations shall remain in the status of which there were in at the time of the actual buy out.  Existing policy contracts shall remain and shall be respected considering that they are already consummated contracts.  Consummated contracts can not be terminated without cause except in cases of blatant and extreme breach thereof.  Contracts to be entered subsequent to the buy out, while in entered into by the respective constituent corporations shall however be in the name of Farmers, the latter now being the owner of 21st and shall be subject to the new rules and guidelines imposed by the new owners.

    In addition, employment contracts with the respective employees particularly of 21st Insurance Company shall be respected.  As has been noted and declared by Woudstra, business operations shall remain and continue.  This implies that there is no reason to alter existing employment contracts for the time being.  While management and corporate practices may vary due to a change in ownership and consequent change in leadership, tenurial rights shall be respected particularly that there has been no massive change in the product lines of the respective corporations.  As a result, no lay offs and dismissals of employees are likely to happen for the time being.    

    Merger and acquisition are considered as business moves among entrepreneurs.  The legal consequences herein discussed may appear as simple, yet, actual buyout and change in management, leadership and corporate visions have a great impact in the business operations of the parties thereto.  These may not be reflected at the outset however, contractors, employees and policyholders ought to be vigilant in their business relation with the constituent parties.  Vested business rights could not be withdrawn particularly those relating to the policyholders and employees.  It should be noted that corporate combinations, may it be for the prejudice or advantage of both or either of the parties, have a strong impact on their respective economic standing in the domestic and global economic sphere.