What are the Four Policy Issues in the Pay Model?

What are the Four Policy Issues in the Pay Model? In the Pay Model, there are four polices that have been used for determining for paying the employee the organization such as internal alignment, external competitiveness, employee contributions and of the pay system but two most important pay model polices are internal alignment and external competitiveness. This is because in internal alignment look how job and skills related to importance to achieve organization objectives. In another way, we look also other method pay model, which is external competitiveness, which indicates of pay comparisons to with the competitor. Not only basic salary or wages are concerned but also what method of payment should be using the organization use for paying their employee of such as base, incentives, stock, benefits are used by these competitors use to compared to the pay mix we use to compete with other organization to stay remain competitive than competitor pay scheme. Compensation also related directly influence key outcomes like job satisfaction, attraction, retention, performance, flexibility, cooperation, skill acquisition and so forth. However, its influence may also be indirect by facilitating or constraining the effectiveness of other human resource activities (Gerhart and Milkovich, 1991). Compensation is only one part of the policies and programs organizations use to manage employee relations. Decisions regarding employment security, development and training, career opportunities, employee assistance programs are important to decide before proceed what method and how it can be done in compensating employee (Milkovich and Broderick, 1989). In this article not the only definition of external competitive and internal alignment are discussed but also why these elements are important to the organization to stay competitive and retain high qualified employee with skills and knowledge need by organization to focus on to achieve goals and objective of the organization that operates around the world that has been studied by many researchers before. We also see why external competitive element plays so many roles in determining the success of the organization rather than internal alignment in the organization. Definition of internal alignment and external competitiveness Internal alignment or internal equity is refers to comparisons among jobs or skill levels inside a single organisations (Milkovich and Newman, 2008). Jobs and peoples skills are compared in terms of their relative contributions to the organisations business objectives. In Internal alignment also focus on why pay relationships that motivating employees to choose increased training and greater responsibility in dealing with customers, internal pay relationships indirectly affect the capabilities of the workforce and hence the efficiency of the entire organization. This also agree by report Business for Social Responsibility (BSR) Report, 2008) that defines internal alignment is the set of commitments, strategies, policies, procedures, systems and behaviours that support integrated customer decision making based on suppliers commercial and ethical commitment and performance. This is translated into practice by the basic techniques of reward management, job analysis, job evaluation, and performance appraisal. The focus is on comparing jobs and individuals in terms of their relative contributions to the organizations objectives (Bratton and Gold, 2001). Pay relationships within the organization affect all three compensation objectives in internal alignment. This method also affect employee decisions which to stay with the organization or leave the organization. Then the organization must motivating employees to attend training and seek greater responsibility in dealing with customers, internal pay relationships indirectly affect the capabilities of the workforce and hence the efficiency of the entire organization. Fairness is affected through employees comparisons of their pay to the pay of others in the organization. If the internal alignment is refers in single organization but either way external competitiveness which refers to pay comparisons with competitors. This basically involves when implementing in organization which are, to be a pay leader, to match the market rate, or to lag behind what competitive organizations are paying (Bratton and Gold, 1999). Basically when practicing external competitiveness two ways first by setting pay level that is above, below or equal to that of competitor secondly, determining of pay mix relative to those of competitors. In both of pay level and pay mix focuses in two objectives which are control cost and attract and retain employee (Milkovich and Newman, 2008). External competitiveness refers to comparisons of the organizations pay relative to the pay of competitive organizations (Bratton and Gold, 2001). Objective of determining external competitiveness decisions in terms of both how much and what forms are (Milkovich and Newman, 2008); To ensure that the pay is sufficient to attract and retain employees if employees do not perceive their pay as competitive in comparison to what other organizations are offering for similar work, they may be more likely to leave To control labour costs so that the organizations prices of products or services can remain competitive in a global economy. Overall the internal alignment and external competitiveness are essential to compensation includes any direct or indirect payments to employees, such as wages, bonuses, stock, and benefits. So external competitiveness directly affects both efficiency and fairness and it must do so in an ethical way that complies with relevant legislation and internal alignment seek that where organizations internal drivers, include vision and mission as well as general goals, are aligned with their words and actions. Factors in internal alignment and external competitiveness In internal alignment factors are divided into three which are External Factors, Organizational Factors and Internal and External Factors combine (Milkovich and Newman, 2008). In external factors divided into several categories which are economic pressures, government policies, laws, and regulations, external stakeholders, cultures and customs. Then in organizational factors also divided into strategy technology, human capital, HR (Human Resource) policy, employee acceptance and cost implications. All these factors can be explained in diagram 1 below; Source: Milkovich and Newman (2008) In external factors, there is economic pressure which has been studied before by Adam Smith and Karl Marx, which also determine marginal productivity that what need of an input (factor of production) the extra is output that can be produced by one using more units of the input and then supply and demand needed for paid wages and purchasing products. In government policies, laws and regulations are which every organization must follow to stay operational in certain country they business on. Finally on culture and customs according G. Hoefstede (1980) is the mental programming for processing information that the people share in common. This also translate into organization culture that help organizational values to develop organizational norms, guidelines, or expectations that prescribe appropriate kinds of behaviour by employees in particular situations and control the behaviour of organizational members towards one another. Organization factors also play crucial part of the determining compensation in internal alignment. First strategy of any compensation method must alignment with organization goals and mission to make sure that any compensation that given to workers is paid back by workers fulfills goals and mission of organization they work for. Technology is the usage and knowledge of tools, techniques, crafts, systems or methods of organization in order to solve a problem. Then Human capital refers to the stock of competences, knowledge and personality attributes embodied in the ability to perform labor so as to produce economic value1. After that HR (Human Resource) policy are the mechanisms that handling risk by staying up to date with current trends in employment standards and legislation. The policies must be stated in proper manner to ensure that companies vision the human resource helping the company to achieve it or work towards it are at all levels benefited and at the same time not deviat ed from their main objective. Then only that worker can have of career progress to ensure that employee can give the best productivity towards organization. Finally when all organization factors has been determined the organization must calculate the cost to sure that is beyond the budget to stay in operation of the company. In internal structure is refers array of pay rates for different work or skills within a single organization. The number of levels, the differentials in pay between the levels, and the criteria used to determine those differences describe the structure. In determining external competitiveness this question should be ask what level of pay base, benefits, incentive, and perquisites should be offered relative to competitors? What mix of these forms should be offered either by fix salary, flexible benefits, stock options, cash bonuses, and stock appreciation rights, etc.? What should the proportion of guaranteed compensation (base or benefits) relative to riskier returns (incentives) be? It is also determined by labour market that determine supply and demand that usually employers or organization always seek to maximize profits, then people are homogeneous and therefore interchangeable, after that pay rates reflect all costs associated with employment and finally markets faced by employers are competitive to other organizations. Product market and labor market competition may provide on the part of employers in choosing a pay level (Gerhart Milkovich, 1990). Product market comparisons are critical, more resources need to be devoted to measuring compensation (or better, unit labor costs) paid by such organizations. In contrast, if labor market comparisons are important, it is necessary to devote resources to find out to which organizations applicants and employees are being lost (Gerhart and Milkovich, 1991). In organization factors that will create competitiveness that influenced by pay level and pay mix either in industry, strategy, size and individual manager. Pay mix and pay level decisions focus on first controlling costs and attracting and secondly retaining employees (Milkovich and Newman, 2008). Equation of pay level is shown below; Pay level =((base + bonuses + benefits + value of stocks))/(number of employees) All factors in external competitiveness are showed in table 1 below; Labour Markets Nature of Supply Level of Product Demand Individual Manager Similarities in internal alignment and external competitiveness In determining internal alignment or external competitiveness or both used for designing the compensation package for an employee in an organization, there are similarities between them, which are efficiency, fairness and compliance. First, efficiency that can help imply the future return can encourage employees to remain within the organization, increasing experience and training, cooperate with workers and seek greater responsibility for the sake of organization they work for. This will diminish shirking among workers and permit hiring best qualified employees (Milkovich and Newman, 2008). Second, fairness also shows that organization must be fair to ensure that good employee dont retire and sustain organization productivity and trust among employees. Even though not everyone is paid equal but at least must be fair according to job, skills and knowledge a certain employee had so what happen when that is perceived as too large? Fortune (1989), for example asserts that this differential is seen by employees as unfair, resulting in a trust gap which suggests that such differentials are necessary to provide incentives for expending effort and taking on added responsibilities and risks to the organization which resulted in higher turnover and dissatisfaction among an employee who work for the organization. Finally, in compliance which compensation either in internal alignment or external alignment must be complied either in terms of policy, rules, acts and regulations that have been set up by government? Other than that this to ensure t all necessary governance requirements can be met without the unnecessary organization manipulation when operates certain countries. Why is external competitiveness so important rather than internal alignment? External competitiveness is established by reference to job advertisements in the press, or by more systematic labour market surveys. This information is then used to construct a pay structure within the organization rather than internal alignment which more in structure of pay in based only knowledge, skills and ability that certain individual had to offer within a single organization. So that why in determining pay structure and compensation method must have external competitiveness to focus and to maintain competitive to another organization. There are several reasons why external competitiveness important rather than internal alignment like following below; Reduce negative perception of employee towards organization. Pay onlywhat be supposed to the organization should be paid towards workers. Get better view what the other organization does to compensate the workers to make workers motivate and minimized turnover among them. Internal alignment is very completed process and hard to implement in organization. External competitiveness is more strategic rather than internal alignment. Reduce negative perception of employee towards organization. While employees negative feelings concerning internal pay equity might be removed by an effective job evaluation scheme, employees will still compare their pay with those in other organizations and industries (Bratton and Gold, 2001). It so is better having combined internal and external to the same to fulfil employee needs and reduce turnover at the same time. These as well agreed by (Milkovich and Broderick, 1989) which choices about the competitive position besides communicating to both prospective and incumbent employees. Savvy employees, for example, can discern the organizations ability and willingness to recognize their needs based on the flexibility and tax protection offered in benefit plans or the opportunity to share in the organization success through stock- and performance-based plans. Even that not all internal alignment structure can be a success one like in General Electric Co.s in 1980s plastics division adopted an exempt pay structure with only four levels: executive, director, leadership, and technical and professional. Managers believe that it provides greater flexibility to move employees without requiring pay changes. It also communicates to employees a relatively egalitarian philosophy about the value (base pay) of different skill groups. However, to be successful, the increased flexibility must be managed effectively. Inconsistencies within levels can result in anarchy and quickly will lead to employee dissatisfaction and distrust (Milkovich and Broderick, 1989). According to Spence (1973) which has studied case of sales jobs, if there is not a large incentive component in which individual effort is important, and one or more of the following three consequences is likely to happen: The right people will not be attracted, They are attracted, but leave when they discover that their efforts are under rewarded, The right people are attracted and retained, but because they are not rewarded for high performance, their performance declines. Rynes (1987) also supported of Spence (1973) idea that compensation systems are capable of attracting (or repelling) the right kinds of people because they communicate so much about an organizations philosophy, values, and practices. Milkovich Bloom (1998) also finds that compensation systems must support organizational goals, foster corporate culture, and help motivate employees to contribute their efforts to further organizational success. Pay onlywhat be supposed to the organization should be paid towards workers. The fact that value to the employee may differ from cost to an employer suggests that, in some cases, fewer costly total compensation packages may actually provide total inducements that are of greater value to employees than those associated with more expensive packages if internal alignment is used for determining paid and compensation for an employee who work for the organization. In many costly benefit options might be the most expensive its value to employees might fall short of the value attached to a compensation package of benefits that is better tailored to employee needs or values. In another study, in which 2000 manufacturing firms were classified into growth, mature, or declining stages, Anderson and Zeithaml (1984) reported that the firms competitiveness (pay level relative to competitors) was greater in each progressive stage. They also reported that the higher relative pay in mature firms adversely affected their return on investment. However, growth firms with higher pay levels relative to competitors reported increased market share of these companies. Therefore, measurement of own and competitors pay levels would ideally include the value to employees of different elements of total compensation. Like study of Gerhart and Milkovich (1991) in Bank of America has eliminated retiree health care coverage for all new hires suggests that organizations believe that different groups of employees (for this, new hires) may differ in the value attached to particular aspects of compensation. Get better view what the other organization does to compensate the workers to make workers motivate and minimized turnover among them. In world of the organization which has paid the works to work not only related in external market without seeing what actually other organization are doing to survive and maintain efficiency of current in the organization. Many organization today organizations do not compete solely in the product market but more refer to market for labour. The classical economics literature suggests that product market and labour market competition may provide relatively little discretion on the part of employers in choosing a pay level (Gerhart Milkovich, 1990). Ford, for example, competes for engineers, lawyers, and human resource managers not only with other automotive companies, but also with companies in the computer, aerospace, electronics, and other industries. Fay (1989) also recognizes that organizations are attempted to gather information about pay practices of competitors through the use of pay surveys. As Rynes and Milkovich (1986) found out, administrative decisions are required about a range of issues including when compensate workers: Which employers are included? Which jobs are included? Which jobs are considered similar enough to use in benchmarking? If multiple surveys are used (fairly typical), how are the multiple rates of pay weighted and combined? Practice in these areas seems to vary across (and probably within) employers. If not following what Rynes and Milkovich (1986) has been done which make the organization make pay level that is too low relative to these competitors could lead to difficulties in attracting and retaining sufficient numbers of quality employees. As such, labour market competition can be seen as placing a lower bound or floor on pay level (Milkovich Newman, 1990). As the importance of a particular comparison increases, so too should the resources devoted to information and measurement. For example, if product market comparisons are critical, more resources need to be devoted to measuring compensation (or better, unit labor costs) paid by such organizations. In contrast, if labor market comparisons are important, it is necessary to devote resources to find out to which organizations applicants and employees are being lost (Gerhart and Milkovich, 1991). Internal alignment is very completed process and hard to implement in organization. Internal alignment is very completed process and hard to implement in the organization even thought validity of conclusions reached through the survey process may depend critically on how the competition is defined, for example, what organizations are chosen for inclusion, little evidence exists on how such choices are made or their implications. Rather, most attention has been focused on potential problems in the job evaluation process, especially in the context of pay equity or comparable worth discussions. Nevertheless, as Schwab (1980) has pointed out, job evaluation is usually validated against some measure of the market rate, meaning that the measure of the pay system is critical. In this manner, many organizations today focus on external competitiveness which is more reliable than internal alignment for determining the compensation scheme for an employee. This has agreed by Lawler (1986) has argued that organizations need to focus greater attention on external competitiveness He believes that an internal focus encourages employees to compare themselves with others within the organization, rather than focusing on the really competition-other organizations. He also suggests that an internal focus result in employees focusing on promotions rather than on performing well on their current job. Moreover, there is some belief that conflicts between external and internal equity may be resolved by increasing the pay of all jobs, not just those were competing in the labour market requires higher pay. Whether true or not, such as organizations would seem to be at a serious labour cost disadvantage in the product market. External competitiveness is more strategic rather than internal alignment. The strategic portfolio model suggests that the notion of compensation system fit may be a messy construct to be done. Generally, strategy refers to the overarching, long-term directions of an organization that are critical to its survival and success. Strategies take advantage of the opportunities and manage the threats in the external environment by marshalling internal resources in some coherent, consistent direction (Dyer, 1985). In from a strategic perspective, organizations and markets are more appropriate units of analysis for understanding changes in international compensation and rewards. The strategic thinking from differences between countries to differences within countries so using internal alignment as medium are unrealistic. Compensation and reward systems are designed to help create and motivate a workforce with the values and capabilities necessary to achieve an organizations unique goals and objectives rather than being designed to meet the national values exhibited by a work force (Bloom, Matt and Milkovich, 1998). Morishimas (1995) study of Japanese companies HR strategies reports differences in compensation approaches associated with organization profitability, size, degree of unionization, capital-labour ratio, and exposure to global competitive forces. For example, Japanese companies operating in protected domestic markets are more likely to use the more traditional nenko system2 than those competing in global and less protected market which reported using more performance and ability-based schemes (Morishima, 1992, 1995; Sano, 1993). Other study related to strategic conditions by Lee, Scarpello, and Rockman (1995) found that factors such as labour market conditions, customer and supplier relations, economic conditions and technology accounted for differences in compensation strategies among Korean chaebols. Pearce, Branyiczki, Bakacsis (1994) study of compensation systems in Hungarian and US companies suggests that political, economic, and institutional forces, rather than national cultures, explain differences in compensation practices. Effective international compensation systems might be those that match internal contingencies for example fit the organizations goals and culture first and then respond to external forces within the constraints of strategic alignment (Bloom, Matt and Milkovich, 1998). Yeung and Wong (1990) assert that organizational goals, political forces, labor market conditions, and demographic factors explain differences in pay and other HRM systems in Japan and the Peoples Republic of China. Recent surveys in Central European countries such as Slovenia and Slovakia also report differences in the use of variable performance based pay schemes, allowances and services, and even in the ratios of top managing directors salaries to the average workforce (Bajzikova, 1996; Zupan, 1995). Although the recent evidence does not suggest national boundaries (national pay systems) can be ignored or overlooked, it does suggest that sufficient discretion for individual organizations exists within these national systems to allow organizations to adopt compensation and reward systems to align them with the organizations business strategies. We believe that The importance of a strategic perspective on compensation rests on three fundamental tenets. The first is that compensation policies and practices differ widely across organizations and across employee groups within organizations. To some students of organizations this may be self evident. But to others, such as economists using human capital models to examine compensation differentials, differences in organizations compensation policies and practices are treated as random noise with little relevance. Anecdotal evidence and sporadic surveys of specific policies or practices report that differences do exist (The Conference Board, 1984; American Productivity Center, 1987). For example, some organizations claim to position their base pay to meet the market, while others follow it; some design incentive schemes to emphasize long-term performance, others short term. Some firms employ individual based incentives while others emphasize group or team based gain-sharing schemes. Some decentra lize the administration of compensation, others do not. Some disclose very specific information about pay to employees, such as ranges and merit guide charts, while others communicate only the broad policies, such as fairness and competitiveness. So a strategy may be intended and formally articulated in some plan or document, or it may emerge through the patterns of decisions shown by the organizations behaviors. Thus, strategies are both plans for the future and patterns from the past to make survival of the organization itself (Mintzberg, 1987). External competitiveness strategies are often expressed as leading, lagging, or matching the market (Milkovich Newman, 2007). In practice, many organizations pursue more than one external competitiveness strategy (Mark, 2008). These organizations may vary their external competitiveness strategies for different groups of jobs. For instance, some organizations may lead for positions deemed critical, whereas for less significant positions th ey may match or lag the market (Milkovich Newman, 2007). What can conclude about this topic? External competitiveness is but one part of an organizations overall compensation strategy. In addition to external competitiveness considerations, issues of internal salary alignment, the design of pay for performance plans, and the administration of the overall pay system are also important. Of these areas, internal salary alignment seems a particularly pertinent area of consideration for those interested in further expanding their knowledge of compensation topics beyond external competitiveness. Internal alignment considers pay relationships between employees inside an organization versus the external relationships considered by external competitiveness. Whereas external competitiveness considers salary comparisons across organizations for employees performing similar work, internal alignment considers salary comparisons inside organizations for employees doing different types of work. Moreover, just as external competitiveness has significant implications for individual and organizational performance, internal alignment has equally important implications. Recommendations The policy on external competitiveness is important if the organization is going to attract, retain, and motivate its employees while achieving the other objectives of controlling labour costs and complying with pay legislation around must be consider due of lack of study about this. To the individual employee, compensation decisions also have important consequences. Salaries and wages represent the main sources of income for most people, and may also be taken as key indicators of a persons social standing or success in life. Benefits, such as health care and pensions, are also important determinants of well being and financial security among employees and their dependents. Not surprisingly then, employees have sought to influence such decisions in a variety of ways, including through unions, supporting government regulation of compensation decisions, and through the courts. Then we must also study more element of strategic involved in determine whatever to attract and retain people in jobs having more unfavourable non-compensation attributes, a compensating differential (for example, higher pay or same pay) is required. Therefore, it is important to understand how individuals are affected by (and react to) different compensation decisions (Gerhart and Milkovich, 1991). Such as what determines variations in patterns of compensation decisions their effects. On the other hand, issues too generally drawn are too time consuming, too ambiguous, too expensive, and often poorly specified. Perhaps a place to begin is to identify compensation decisions that have strategic properties must be included in next study to elaborate more why people attracted to better compensation at organization their work for? Dyer and Theriaults (1976) also mention that in early indication of the potential importance of procedural justice, in addition to distributive justice, in compensation but many researchers has less mention about this manner. Although this particular increment was not large, procedural justice perceptions also explained variance in organizational commitment and trust in supervisor, suggesting that its influence on broader organization attitudes may be greater. Beyond descriptive research, more work is needed to understand both what determines variations in patterns of compensation decisions their effects. A major challenge is to formulate manageable research issues. Issues too narrowly defined suffer from ignoring the multi- dimensionality of compensation and the context in which compensation decisions occur. On the other hand, issues too broadly drawn are too time consuming, too ambiguous, too expensive, and often poorly specified. Perhaps a place to begin is to identify compensation decisions that have strategic properties. For example, do firms within the same industry establish different competitive positions in labour markets? Conventional wisdom is that they do. How do they accomplish thisby different average levels of base pay, by varying the risk-return tradeoffs or the ratio of incentives to total compensation? Do characteristics of organizations vary with their competitive position? These might include some of the determinants di scussed in this paper such as organization strategies, organization characteristics, and external factors. Finally does a firms competitive position have any discernable effect on the size and quality of the applicant pool, on its ability to hire those people it se

Midterm Exam Essay

1. (TCO 1) Suppose your company sold $25,000 in merchandise to a customer for cash. How does this transaction impact the accounting equation? (Points : 12) 2. (TCO 2) Suppose your company sold $50,000 in merchandise to a customer for cash. How does this transaction impact the accounting equation? (Points : 12) 3. (TCO 3) Rationalization is one of the components of the fraud triangle. What types of rationalization could a person use to justify misconduct? How can a company protect itself from rationalization as a part of fraud? (Points : 12) 4. (TCO 4) What is horizontal analysis of financial statements? How does horizontal analysis differ from vertical analysis? (Points : 12) 5. (TCO 3) Separation of duties is a key feature in an internal control system. Why is separation of duties such an important internal control? Give an example of separation of duties as an internal control. (Points : 24) 6. (TCO 1) Describe the balance sheet. Why is this statement important to the company, creditors, and investors? (Points : 24) 7. (TCO 4) Name and describe one liquidity ratio. What does this ratio measure? What is the formula for this ratio? (Points : 24) ACCT 301 Midterm Exam 2 1. (TCO 1) The retained earnings statement shows all of the following except which one? 2. (TCO 1) Management’s views on the company’s short-term debt paying ability, expansion financing, and results of operations are found in which of the following? 3. (TCO 4) For 2010, Fielder Corporation reported net income of $30,000; net sales $400,000; and average share outstanding 6,000. There were no preferred stock dividends. What was the 2010 earnings per share? 4. (TCO 4) A useful measure of solvency is which of the following? 5. (TCO 2) Which pair of accounts follows the rules of debit and credit, in relation to increases and decreases, in the same manner? 6. (TCO 2) The principle purpose of posting is which of the following? 7. (TCO 3) Joe is a warehouse custodian, and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation  indicates 8. (TCO 3) The following information was taken from Hurlbert Company cash budget for the month of June: 9. (TCO 11) Managerial accounting information does which of the following? 10. (TCO 11) Which one of the following is not a direct material? 11. (TCO 11) Sales commissions are classified as which of the following? 12. (TCO 11) Manufacturing costs include which of the following? 13. (TCO 11) Neeley Manufacturing Company reported the following year-end information: 14. (TCO 5) What effect do changes in activity have on fixed costs per unit? 15. (TCO 5) Which one of the following is not an assumption of CVP analysis? ACCT 301 Midterm Exam 3 1. (TCO 5) A company has total fixed costs of $210,000 and a contribution margin ratio of 30%. How much sales are necessary to break even? 2. (TCO 5) How much sales are required to earn a target income of $70,000, if total fixed costs are $100,000 and the contribution margin ratio is 40%? 3. (TCO 6) For which one of the following budgeting aspects does the budget committee generally have the responsibility? 4. (TCO 6) Under what situation might a budget be most effective? 5. (TCO 6) How does long-range planning compare to a master budget? 6. (TCO 6) Which one of the following is a source of information used to prepare the budgeted income statement? 7. (TCO 7) When is a static budget most appropriate in evaluating a manager’s performance? 8. (TCO 7) Which type of center is the housekeeping department of a manufacturing company? 9. (TCO 7) For which of the following is an investment center manager responsible? 10. (TCO 7) Merck Pharmaceuticals is evaluating its Vioxx division, an investment center. The division has a $45,000 controllable margin and $300,000 of sales. How much will Merck’s average operating assets be when its return on investment is 10%? 11. (TCO 11) Financial and managerial accounting are both concerned with the economic events of an enterprise. Similarities between financial and managerial accounting do exist, but they have a different focus. Briefly distinguish between financial and managerial accounting as they relate to (1) the primary users, (2) the type and frequency of reports, (3) the purpose of reports, and (4) the content of reports. 12. (TCO 4) Are short-term creditors, long-term creditors, and stockholders primarily interested in the same characteristics of a company? Explain. 13. (TCO 5) In the month of  September, Nixon Company sold 800 units of product. The average sales price was $30. During the month, fixed costs were $7,200 and variable costs wer e 60% of sales.

John Elder Robison Successful Careers Essay - 1401 Words

John Elder Robison has had many successful careers. From being in a band, creating guitars with special effects, managing an electronics firm, becoming an author and serving on several boards and committees for national institutes (Robison, 4 and 14). John seems like an average person with many different interests. John was actually diagnosed with Asperger’s Syndrome at the age of forty (Johnelderrobison, 00:02:10-00:02:30). In 1957, John was born in Athens, Georgia (Robison, 1). When he was born, both of his parents were in college and his dad was also a preacher (Robison, 1). They moved to different areas until they finally settled down in Amherst, Massachusetts and his father became a professor in Philosophy (1). Throughout John’s childhood, he was always different from his classmates and brother (2). He said he was always sad, a loner and had few friends (Robison, 2). His parents recognized this and tried to help him by having him see therapists and guidance counselors (Robison, 2). At this point in time, Asperger’s Syndrome was not diagnosed yet (Robison, 3). Some therapists thought he was a psychopath because he did not make eye contact with them (Johnelderrobison, 00:00:45-00:01:00). Others said he was lazy or chose to misbehave, when he did not have control over his actions (Robison, 3). Due to all of this negativity and people telling him something was â€Å"severely wrong† with him, John dropped out of school in tenth grade (Robison, 3). For the next ten years JohnShow MoreRelatedStephen P. Robbins Timothy A. Judge (2011) Organizational Behaviour 15th Edition New Jersey: Prentice Hall393164 Words   |  1573 Pages623 Contents Preface xxii 1 1 Introduction What Is Organizational Behavior? 3 The Importance of Interpersonal Skills 4 What Managers Do 5 Management Functions 6 †¢ Management Roles 6 †¢ Management Skills 8 †¢ Effective versus Successful Managerial Activities 8 †¢ A Review of the Manager’s Job 9 Enter Organizational Behavior 10 Complementing Intuition with Systematic Study 11 Disciplines That Contribute to the OB Field 13 Psychology 14 †¢ Social Psychology 14 †¢ Sociology 14 †¢ Anthropology

Sending Emails With Attachments Using Delphi Indy

Below are instructions for creating an email sender that includes an option for sending email messages and attachments directly from a Delphi application. Before we begin, consider the alternative... Suppose you have an application that operates on some database data, among other tasks. Users need to export data from your application and send the data through an email (like an error report). Without the approach outlined below, you have to export the data to an external file and then use an email client to send it. Sending Email From Delphi There are many ways you can send an email directly from Delphi, but the simplest way is to use the ShellExecute API. This will send the email using the default email client installed on the computer. While this approach is acceptable, youre unable to send attachments this way.   Another technique uses Microsoft Outlook and OLE to send  the email, this time with attachment support, but MS Outlook is then required to be used. Yet another option is to use Delphis built-in support for the Windows Simple Mail API. This works only if the user  has a MAPI-compliant email program installed. The technique were discussing here uses Indy  (Internet Direct) components - a great internet component suite comprised of popular internet protocols written in Delphi and based on blocking sockets. The TIdSMTP (Indy) Method Sending (or retrieving) email messages with Indy components (which ships with Delphi 6) is as easy as dropping a component or two on a form, setting some properties, and clicking a button. To send an email with attachments  from Delphi using Indy, well need two components. First, the TIdSMTOP is used to connect and communicate (send mail) with an SMTP server. Second, the TIdMessage handles the storing and encoding of the messages. When the message is constructed (when TIdMessage  is filled with data), the email is delivered to an SMTP server using the TIdSMTP. Email Sender Source Code Ive created a simple mail sender project that I explain below. You can download the full source code here. Note:  That link is a direct download to the ZIP file for the project. You should be able to open it without any problems, but if you cant, use 7-Zip to open the archive so you can extract out the project files (which are stored in a folder called SendMail). As you can see from the design-time screenshot, to send an email using the TIdSMTP component, you at least need to specify the SMTP mail server (host). The message itself needs the regular email parts filled out, like the From, To, Subject, etc. Heres the code that handles sending one email with an attachment: procedure TMailerForm.btnSendMailClick(Sender: TObject) ; begin   Ã‚  StatusMemo.Clear;   Ã‚  //setup SMTP   Ã‚  SMTP.Host : ledHost.Text;   Ã‚  SMTP.Port : 25;   Ã‚  //setup mail message   Ã‚  MailMessage.From.Address : ledFrom.Text;   Ã‚  MailMessage.Recipients.EMailAddresses : ledTo.Text , ledCC.Text;   Ã‚  MailMessage.Subject : ledSubject.Text;   Ã‚  MailMessage.Body.Text : Body.Text;   Ã‚  if FileExists(ledAttachment.Text) then TIdAttachment.Create(MailMessage.MessageParts, ledAttachment.Text) ;   Ã‚  //send mail   Ã‚  try   Ã‚  Ã‚  Ã‚  try   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  SMTP.Connect(1000) ;   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  SMTP.Send(MailMessage) ;   Ã‚  Ã‚  Ã‚  except on E:Exception do   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  StatusMemo.Lines.Insert(0, ERROR: E.Message) ;   Ã‚  Ã‚  Ã‚  end;   Ã‚  finally   Ã‚  Ã‚  Ã‚  if SMTP.Connected then SMTP.Disconnect;   Ã‚  end; end; (* btnSendMail Click *) Note:  Inside the source code, youll find two extra procedures that are used to make the values of the Host, From, and To edit boxes persistent, using an INI file for storage.

Classical Era in Latin America and Europe Essay - 1569 Words

Although each classical civilization developed its own unique style of politics, culture and economies, the economic and social patterns in Latin America distinctly detached this civilization from any Western society, which accounted for obvious distinctions in both culture and politics. In politics, the most apparent feature of the Western Society was the creation of new political ideologies, resulting in neither an absolute or dictatorial structure. The instability of Latin American politics created a weakened structure, therefore creating limitations to regulate criminals, and landlords. Culturally, the Western Societies role of religion lost popularity, as nationalism and socialism provided competition for the church. But the†¦show more content†¦During this time, Liberalism also became a strong political force throughout Western Society. These liberals believed that governments should be controlled, not by institutions such as the church, but constitutionally based upon parliaments. As a result of the popularity that Liberalism had on Western Societies, a new political framework was created involving parliaments, based on voting rights of citizens. Due to this, the power of Catholic and Protestant churches were dramatically scaled down, and most governments no longer looked to the church for symbolic religious observances. One of the most notable results from the development of the liberal organization was the rise of modern political parties, intended to create an order for members of the parliament, as well as a way to distinguish parties for campaigning processes. Politically, Latin America became infamous in the eyes of other countries for frequent regime collapses and violent tactics, which frequented the Latin American civilization. Just as in the Western Society, two politically active groups, the liberals and conservatives divided the country. The liberals who were strongly influenced by Westerners, trusted parliamentary governments, civil rights and constitutions, and wished for a great reduction in the power of the church. The liberal party believed strongly in the need for an extended education, and tended toShow MoreRelatedAn Architect, Former U.s. President Of The National Architecture Essay1258 Words   |  6 Pagesdefine America’s national identity and culture. Background Most famously recognized as â€Å"the father of the National Architecture† in America, Thomas Jefferson sought to make American ideals and its culture unique from that of Europe, from where they had their origins (â€Å"Architecture is My Delight† n.p). At the time Jefferson was developing his architectural skills, America was undergoing its revolution and therefore it needed an identity of its own, something that made it standout; and that is what JeffersonRead MoreThe Renaissance: The Rebirth of Europe1245 Words   |  5 Pagesfreedom across the civilized world; and the birth of the freest country in history, the United States of America. The Renaissance was a significant period within European history that revolutionized its culture. Numerous factors were composed to initiate the Renaissance, and this point in time was recognized with extreme alterations for Europeans. This Renaissance marked the rebirth of classical Greek learning with architectural, philosophical, literary and artistic movements. 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Bank Management Chapter 7 Free Essays

string(202) " able to recapture its costs because its productivity has not increased commensurately or because the technology has already become obsolete, it has invested in a negative NPV investment in technology\." Suggested end-of-Chapter Practice Questions: Chapter Seven Chapter 71, 2, 3, 7, 11, 13, 19, 22, 29, 32, 33, problem similar to HW 1. What is the process of asset transformation performed by a financial institution? Why does this process often lead to the creation of interest rate risk? What is interest rate risk? Asset transformation by an FI involves purchasing primary assets and issuing secondary assets as a source of funds. The primary securities purchased by the FI often have maturity and liquidity characteristics that are different from the secondary securities issued by the FI. We will write a custom essay sample on Bank Management Chapter 7 or any similar topic only for you Order Now For example, a bank buys medium- to long-term bonds and makes medium-term loans with funds raised by issuing short-term deposits. Interest rate risk occurs because the prices and reinvestment income characteristics of long-term assets react differently to changes in market interest rates than the prices and interest expense characteristics of short-term deposits. Interest rate risk is the effect on prices (value) and interim cash flows (interest coupon payment) caused by changes in the level of interest rates during the life of the financial asset. . What is refinancing risk? How is refinancing risk part of interest rate risk? If an FI funds long-term fixed-rate assets with short-term liabilities, what will be the impact on earnings of an increase in the rate of interest? A decrease in the rate of interest? Refinancing risk is the uncertainty of the cost of a new source of funds that are being used to finance a long-term fixed-rate asset. This risk occurs when an FI is holding assets with maturities greater than the maturities of its liabilities. For example, if a bank has a ten-year fixed-rate loan funded by a 2-year time deposit, the bank faces a risk of borrowing new deposits, or refinancing, at a higher rate in two years. Thus, interest rate increases would reduce net interest income. The bank would benefit if the rates fall as the cost of renewing the deposits would decrease, while the earning rate on the assets would not change. In this case, net interest income would increase. 3. What is reinvestment risk? How is reinvestment risk part of interest rate risk? If an FI funds short-term assets with long-term liabilities, what will be the impact on earnings of a decrease in the rate of interest? An increase in the rate of interest? Reinvestment risk is the uncertainty of the earning rate on the redeployment of assets that have matured. This risk occurs when an FI holds assets with maturities that are less than the maturities of its liabilities. For example, if a bank has a two-year loan funded by a ten-year fixed-rate time deposit, the bank faces the risk that it might be forced to lend or reinvest the money at lower rates after two years, perhaps even below the deposit rates. Also, if the bank receives periodic cash flows, such as coupon payments from a bond or monthly payments on a loan, these periodic cash flows will also be reinvested at the new lower (or higher) interest rates. Besides the effect on the income statement, this reinvestment risk may cause the realized yields on the assets to differ from the a priori expected yields. 7. How does the policy of matching the maturities of assets and liabilities work (a) to minimize interest rate risk and (b) against the asset-transformation function for FIs? A policy of maturity matching will allow changes in market interest rates to have approximately the same effect on both interest income and interest expense. An increase in rates will tend to increase both income and expense, and a decrease in rates will tend to decrease both income and expense. The changes in income and expense may not be equal because of different cash flow characteristics of the assets and liabilities. The asset-transformation function of an FI involves investing short-term liabilities into long-term assets. Maturity matching clearly works against successful implementation of this process. 11. A money market mutual fund bought $1,000,000 of two-year Treasury notes six months ago. During this time, the value of the securities has increased, but for tax reasons the mutual fund wants to postpone any sale for two more months. What type of risk does the mutual fund face for the next two months? The mutual fund faces the risk of interest rates rising and the value of the securities falling. 13. What is market risk? How do the results of this risk surface in the operating performance of financial institutions? What actions can be taken by FI management to minimize the effects of this risk? Market risk is the risk of price changes that affects any firm that trades assets and liabilities. The risk can surface because of changes in interest rates, exchange rates, or any other prices of financial assets that are traded rather than held on the balance sheet. Market risk can be minimized by using appropriate hedging techniques such as futures, options, and swaps, and by implementing controls that limit the amount of exposure taken by market makers. 14. What is credit risk? Which types of FIs are more susceptible to this type of risk? Why? Credit risk is the possibility that promised cash flows may not occur or may only partially occur. FIs that lend money for long periods of time, whether as loans or by buying bonds, are more susceptible to this risk than those FIs that have short investment horizons. For example, life insurance companies and depository institutions generally must wait a longer time for returns to be realized than money market mutual funds and property-casualty insurance companies. 19. What is the difference between technology risk and operational risk? How does internationalizing the payments system among banks increase operational risk? Technology risk refers to the uncertainty surrounding the implementation of new technology in the operations of an FI. For example, if an FI spends millions on upgrading its computer systems but is not able to recapture its costs because its productivity has not increased commensurately or because the technology has already become obsolete, it has invested in a negative NPV investment in technology. You read "Bank Management Chapter 7" in category "Essay examples" Operational risk refers to the failure of the back-room support operations necessary to maintain the smooth functioning of the operation of FIs, including settlement, clearing, and other transaction-related activities. For example, computerized payment systems such as Fedwire, CHIPS, and SWIFT allow modern financial intermediaries to transfer funds, securities, and messages across the world in seconds of real time. This creates the opportunity to engage in global financial transactions over a short term in an extremely cost-efficient manner. However, the interdependence of such transactions also creates settlement risk. Typically, any given transaction leads to other transactions as funds and securities cross the globe. If there is either a transmittal failure or high-tech fraud affecting any one of the intermediate transactions, this could cause an unraveling of all subsequent transactions. 22. If you expect the French franc to depreciate in the near future, would a U. S. -based FI in Paris prefer to be net long or net short in its asset positions? Discuss. The U. S. FI would prefer to be net short (liabilities greater than assets) in its asset position. The depreciation of the franc relative to the dollar means that the U. S. FI would pay back the net liability position with fewer dollars. In other words, the decrease in the foreign assets in dollar value after conversion will be less than the decrease in the value of the foreign liabilities in dollar value after conversion. 29. What is country or sovereign risk? What remedy does an FI realistically have in the event of a collapsing country or currency? Country risk involves the interference of a foreign government in the transmission of funds transfer to repay a debt by a foreign borrower. A lender FI has very little recourse in this situation unless the FI is able to restructure the debt or demonstrate influence over the future supply of funds to the country in question. This influence likely would involve significant working relationships with the IMF and the World Bank. 32. What is liquidity risk? What routine operating factors allow FIs to deal with this risk in times of normal economic activity? What market reality can create severe financial difficulty for an FI in times of extreme liquidity crises? Liquidity risk is the uncertainty that an FI may need to obtain large amounts of cash to meet the withdrawals of depositors or other liability claimants. In times of normal economic activity, depository FIs meet cash withdrawals by accepting new deposits and borrowing funds in the short-term money markets. However, in times of harsh liquidity crises, the FI may need to sell assets at significant losses in order to generate cash quickly. 33. Why can insolvency risk be classified as a consequence or outcome of any or all of the other types of risks? Insolvency risk is the risk that an FI may not have enough capital to offset a sudden decline in the value of its assets. This risk involves the shortfall of capital in times when the operating performance of the institution generates accounting losses. These losses may be the result of one or more of interest rate, market, credit, liquidity, sovereign, foreign exchange, technological, and off-balance-sheet risks. 34. Discuss the interrelationships among the different sources of FI risk exposure. Why would the construction of an FI’s risk management model to measure and manage only one type of risk be incomplete? Measuring each source of FI risk exposure individually creates the false impression that they are independent of each other. For example, the interest rate risk exposure of an FI could be reduced by requiring customers to take on more interest rate risk exposure through the use of floating rate products. However, this reduction in FI risk may be obtained only at the possible expense of increased credit risk. That is, customers experiencing osses resulting from unanticipated interest rate changes may be forced into insolvency, thereby increasing the FI’s default risk. Similarly, off-balance sheet risk encompasses several risks since off-balance sheet contingent contracts typically have credit risk and interest rate risk as well as currency risk. Moreover, the failure of collection and payment systems may lead corporate customers into bankruptcy. Thus, te chnology risk may influence the credit risk of FIs. As a result of these interdependencies, FIs have focused on developing sophisticated models that attempt to measure all of the risks faced by the FI at any point in time. Practice 1. A bank has the following balance sheet structure: AssetsLiabilities and Equity Cash$10,000Certificate of Deposit$90,000 Bond$90,000Equity $10,000 Total Assets$100,000Total Liabilities and Equity$100,000 The bond is a Eurobond; it has a ten-year maturity and a fixed-rate coupon of 6 percent. The certificate of deposit has a one-year maturity and a 4 percent fixed rate of interest. The FI expects no additional asset growth. a. What will be the net interest income (NII) at the end of the first year? Note: Net interest income equals interest income minus interest expense. b. If at the end of year 1, market interest rates have increased 100 basis points (1 percent), what will be the net interest income for the second year? Is the change in NII caused by reinvestment risk or refinancing risk? c. Assuming that market interest rates increase 1 percent. (i) What will be the market value of the bond? (ii) What will be the market value of equity? (Assume that all of the NII in part (a) is used to cover operating expenses or is distributed as dividends, so that there is no addition to retained earnings. ) a. What will be the net interest income (NII) at the end of the first year? Note: Net interest income equals interest income minus interest expense. Interest income$5,400$90,000 x 0. 06 Interest expense 3,600$90,000 x 0. 04 Net interest income (NII)$1,800 b. If at the end of year 1, market interest rates have increased 100 basis points (1 percent), what will be the net interest income for the second year? Interest income$5,400$90,000 x 0. 06 Interest expense 4,500$90,000 x 0. 05 Net interest income (NII)$900 The decrease in net interest income is caused by the increase in financing cost without a corresponding increase in the earnings rate. The increase in market interest rates does not affect the interest income because the bond has a fixed-rate coupon for ten years. Note: this answer makes no assumption about reinvesting the first year’s interest income at the new higher rate. c. Assuming that market interest rates increase 1 percent. (i) What will be the market value of the bond? (ii) What will be the market value of equity? (Assume that all of the NII in part (a) is used to cover operating expenses or is distributed as dividends, so that there is no addition to retained earnings. Note: market value of equity falls due to lower market value of the bond If the coupon rate is 6%, yield to maturity = 7%, then using our financial calculator, N = 9 (only 9 years left), PMT = 540, I = 7%, FV = 90,000. Compute PV; find PV = -84,136. 29. Hence the market value of the bond fell from $90,000 to $84,136. 29 (a decrease of $5,863. 71). Since the interest rate on the CD has risen (it had only a one year maturity; so it get s a new interest rate when it is re-issued), the market value of the CD is $90,000 (interest rate = coupon rate on the CD). Consequently, it is the market value of equity that will decline. If the bank must sell the bond, it will sell it at the lower market value and realize the loss. The book value of equity has remained at #10,000, but the market value of equity has fallen by the amount of the decrease in the value of the bonds. This was a problem faced by banks in 2008, when the market value of the mortgage debt and mortgage backed securities and CDOs (collateralized debt obligations) fell; some of them had negative equity in market value terms. How to cite Bank Management Chapter 7, Essay examples

Record Management free essay sample

Running head: Records Management Name Instructor Date of submission Executive Summary An effective records management program is an integral part of an organization’s effective business operations. Organizations must consider records management requirements when implementing the system management strategies or whenever they design and augment an electronic information system. Organizations are required by law to â€Å"make and preserve records containing adequate and proper documentation of the organization, functions, policies, decisions, procedures, and essential transactions of the organization. This legal requirement applies to electronic records kept by the organizations as well. Organizations that do not consistently adhere to standard records management practices run the risk of not having records that can be depended upon in the course of subsequent business transactions or activities. This paper focuses on the various methodologies that organizations can implement in order to develop ECM/ERM strategies that are backed with electronic signature systems. It also gives an insight into the various ways through which organizations can implement good IT practices to complement or parallel existing records management practices. In systems implemented in line with ECM/ERM guidelines, developing the most efficient systems will form the core of organizational success. This will be achieved by making electronically signed records the core of organizational IT systems. The organizational IT professionals will come to terms with the fact that signatures are an integral part of the records they keep. If the records need to be preserved, whether for a short duration of time or permanently, then the organization is required to promote integrity of its records by electronically signing them in scheduled series. Additionally, this paper discusses the general principles that govern application of electronic signature technology in organizations. Organizations can accomplish electronic signatures through the use of different technologies such as Personal Identification Number (PIN), smart cards and biometrics. However, some organizations can decide to apply additional technology specific-record management systems. Introduction Records Life Cycle vs. System Development Life Cycle According to Adam (2008), the terms â€Å"records life cycle† and â€Å"system development life cycle† are significant concepts that are often confused in information technology and records management discussions. Records life cycle: The records life cycle refers to the life span of a record from the time it is created or received to its eventual disposition. The process is usually carried out in three main stages: creation, maintenance and use, and eventual disposition (Sampson, 2002). Majorly, this paper focuses on information creation stage since the electronic signature record is created at the initial stage of the records life cycle. The second stage, maintenance and use, is the part in the records life cycle in which the record is maintained at the organizational level while in active use, or is maintained when not in frequent use. The final stage of the records life cycle is disposition, which marks the ultimate fate finish to the record. Most organizational records are categorized as having either a â€Å"temporary† or â€Å"permanent† disposition status (Addey, 2002). Temporary records are held by organizations for stated periods before they are destroyed or deleted. On the other hand, permanent records are initially held by organizations before they are eventually transferred to state and other involved agencies. The eventual disposition of the electronically-signed records is subject to debate between the involved agency and the statutory bodies, in which some organizations may be authorized to dispose some of the records. System development life cycle: The â€Å"system development life cycle† gives a description of the developmental phases that an electronic information system entails. These phases typically include initiation, definition, design, development, deployment, operation, maintenance, enhancement, and retirement. The most important steps in all this are the definition, development, and refinement of the data model, which mostly involves treatment of the records being created or managed (Stephens, 2007). Information systems are developed according to system development methodologies, including those that organizations use to implement the electronic signature as required by the statutory bodies; which govern production and augmentation of existing records. The records life cycle usually exceeds the system development life cycle. When it does the organization involved needs to retain the particular record for a period of time longer than the life of the electronic information system that generated the electronic signature. However, this presents special challenges, such as maintaining the integrity of record in case of system migration. Background Characteristics of Trustworthy Organizational Records Reliability, authenticity, integrity, and usability are the features used to describe trustworthy records from a records management perspective. An organization needs to consider these features when laying implementation plans for ERM programs; such that it can meet its internal business and legal needs, as well as external regulations (Boiko, 2002). The degree of effort that an organization puts into ensuring that these characteristics are attained depends on the organizational business strategies and the structure of the market environment. Transactions that are of great importance to the organization require greater assurance level than those usable with transactions of less criticality to the organization Reliability: A reliable record is one that carries contents that can be trusted as a whole and actual representation of the transactions, activities, or facts to which it refers and can be relied upon in the subsequent transactions Authenticity: An authentic record is one that is proven to be what it purports to be and to have been created or sent by the person who purports to have created and sent it. A record should be created at the point in time of the transaction or incident to which it relates, or soon afterwards, by individuals who have direct knowledge of the facts or by instruments routinely used within the business to conduct the transaction (Wiggins, 2007). To demonstrate the authenticity of records, organizations should implement and document policies and procedures which control the creation, transmission, receipt, and maintenance of records to ensure that records designers are authorized and identified and that records are protected against unauthorized addition, deletion, and alteration. Integrity: The integrity of a record refers to the state of being complete and unchanged. It is essential that a record be protected against changes without signed permission. Records management policies and procedures should specify what, if any, additions or annotations may be made to a record after it is created, under what circumstances additions or annotations may be authorized, and the people authorized to make the changes. Any authorized annotation or addition to a record made after it is complete should be explicitly indicated as annotations or additions. Another aspect of integrity is the structural integrity of organizational records. The structure of a record refers to its physical and logical format; as well as the relationship between the data elements contained in the record. Failure to maintain the structural integrity of organizational records can easily impair reliability and authenticity of the record Usability: These are records that can be located, retrieved, presented, and interpreted. In any subsequent retrieval and use, the record needs to be directly connected to the business activity or transaction which produced it. It should be possible to identify a record within the context of broader business activities and functions. The connection between records which document a sequence of activities should be maintained. These contextual linkages of records should carry the information needed for an understanding of the transaction that created and used them. Preserving Trustworthy Records For a record to remain reliable, authentic, with its integrity maintained, and useable for as long as the record is needed, it is necessary that it’s content, context and sometimes structure is maintained. A trustworthy record preserves the actual content of the record itself and information about the record that draws relation to the context in which it was first designed and used. Specific contextual information will vary depending upon the business, legal, and regulatory requirements of the business activity (e. g. , issuing land use permits on Federal lands). It is also necessary to preserve the structure of the record, as well as the content arrangement. Failure to preserve the content structure of the record will affect its structural integrity. That, in turn, undermines the record’s reliability and authenticity; which is of great essence. There are special considerations when dealing with the preservation of the content, context, and structure of records that are made possible by Electronic Record Management through electronic signatures: †¢ Content: The electronic signature or signatures in a record are part of the content. They give a clear indication on who signed a record and whether that person gave approval for the record content. In organizations, multiple signatures are an indication of initial approval and subsequent approvals. It should be understood that in ERM, signatures should accompanied by dates and other identifiers such as organizational titles. All of these peripherals are part of the content of the record and needs to be kept well. Lack of this information seriously impairs the reliability and authenticity of a record †¢ Context: Some electronic signature technologies are centered on individual identifiers which are not embedded in the record content, trust paths, and other means used to create and verify the validity of an electronic signature. This information is not inclusive of the record content but is nevertheless significant. It provides contextual support to the record since it provides evidence that can be used to support the authenticity and reliability of the record. Lack of these contextual records seriously impairs subsequent attempts to verify validity of the organizational records. †¢ Structure: Preserving the structure of a record means that the physical and logical formats of a record are well drawn. In doing this, organizations must ensure that the physical and logical formats of the record elements remain intact physically and logically. An organization may find it necessary to maintain the record structural form through the use of an electronic signature. In that case, the organization is required to preserve both the hardware and software that created the electronic signature, which can either be encryption algorithms or chips. This ensures that the electronic record can be revalidated at a later time when required Advantages and disadvantages of using ECM/ERM systems in organizations The main advantage of organizations using ECM/ERM approaches in organizations is the fact that it offers the platform to verify the validity of records. There are various approaches that organizations can use to achieve trustworthiness of electronically-signed records within their systems over time. This requires that organizations choose an approach that is applicable, fit for their particular line of business; as well as risk assessment The first approach may involve an organization deciding to maintain adequate documentation of its records’ validity. This involves maintaining of adequate documentation of the records such as, trust verification of records gathered at or near the time of record signing. This record keeping approach enables organizations to retain contextual information through an adequate document processes carried out at the time the record was electronically-signed, along with the electronically-signed record itself. The additional contextual information is then retained for as long as the electronically-signed record is retained. Thus the agency preserves the signature’s validity and meets the adequacy of documentation requirements by retaining the contextual information that documented the validity of the electronic signature at the time the record was signed. Maintaining adequate documentation of validity gathered at or near the time of record signing may be preferable for records that have permanent or long-term retentions since it is less dependent on technology and much more easily maintained as technology evolves over time (Rockley, 2003). However, using this approach, the signature name may not remain readable over time because of bit-wise deterioration in the record or as a result of technological obsolescence. Agencies must ensure that for permanent records the printed name of the signer and the date when the signature was executed be included as part of any human readable form (such as electronic display or printout) of the electronic record. Similarly, an organization may opt to maintain the capacity to re-validate digital signatures. The re-validation approach demands that an organization retains the ability to revalidate the digital signature, together with the electronically-signed record itself. The information necessary for revalidation (i. e. , the public key used to validate the signature, the certificate related to that key, and the certificate revocation list from the certificate authority that corresponds to the time of signing) must be retained for as long as the digitally-signed record is retained. Both contextual and structural information of the record must be retained. This is of benefit to the organization since it can review it records over time effectively (Jenkins, 2005). However, this approach of record keeping is potentially burdensome, particularly for records that are digitally signed records with long retention requirements. Conclusions Record keeping is consistently becoming a priority for many organizations with advancement in technology. The challenging part is keeping up with the drastic options that are being launched within short periods. As discussed in this paper, the most efficient method of managing organizational records is through the adoption of Electronic Content Management or Electronic Record Management systems (Halvorson, 2009). This is mostly achieved by electronically signing records depending on their importance and usage in the organization. In doing this, organizations are able protect the reliability, authenticity, integrity, and usability, as well as the confidentiality, and legitimacy of their records. When implementing electronic signature technology, organizations are expected to accord special consideration to the use of electronic signatures in electronic records that preserve organizational legal rights. This is based on the fact that long-term temporary and permanent electronically signed records have greater longevity than typical software obsolescence cycles, it is certain that organizations will be required to migrate those records to updated versions of software to maintain access to the records (Hackos, 2002). The software migration (as opposed to media migration) process may invalidate the digital signature embedded in the record. This may adversely affect an agency’s ability to recognize or enforce the legal rights documented in those records. References Adam, A. (2008). Implementing electronic document and record management systems. Boca Raton: Auerbach Publications. Addey, D. (2002). Content management systems. Birmingham: Glasshaus, cop. Boiko, B. (2005) Content Management Bible. Hoboken: John Wiley Sons. Hackos, T. (2002). Content management for dynamic web delivery. New York: John Wiley Sons. Halvorson, K. (2009). Content strategy for the web. Indianapolis: New Riders. 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