Lead America Essay Example

Lead America Essay Procedure for LeadAmerica and Visa. * Cash Flow Forecast * Detailed Day to Day Report * Experience in The Stanford University * Experience after Studies Aim and Objective Our aim to attend the LeadAmerica conference was to â€Å"Explore† our future path, â€Å"Discover† what inspires us most, while learning valuable skills to help us â€Å"Achieve† academic, professional and personal success. The college and career skill development included:- * Increasing college knowledge: how the colleges and universities operate, through college experience. Developing critical academic behaviors for success: we learnt to apply some key strategies for success in the academic years for example time management, communication, self-awareness and team building. * Developing cognitive strategies: through simulations and workshops that focused on thinking and problem solving. Benefits of the LeadAmerica Conference * Confidence: LeadAmerica is designed in such a way that student is e mpowered to be responsive and achieve their full potential. * Purpose: students come to know their strengths and weaknesses and began to build a vision for their future career and life.Procedure for LeadAmerica conference and Visa. Our LeadAmerica process started in a parents-teacher meeting where a LeadAmerica counselor introduced our parents about the conferences held in world best universities like Stanford, Babson, UC, etc. After the meeting got over the school nominated the students who were eligible to go for the conference after a week the students get their nomination letters which included a certificate of recognition, an invitation letter and an information letter for parents. Then we had to decide whether to go for the conference or not.After we decided going we had to fill an application letter which asked for the personal information and insurance. Then the application letter was supposed to be sent to the LeadAmerica staff and when our letter gets confirmed we get a le tter for visa counselor for granting us the visa for USA. Then we had to take an interview date and we had to go to Mumbai for the interview and after getting the visa we are suppose to fill some of the forms. After all the forms are filled up we just need to pack our bags and leave for USA. Cash Flow forecast 1) Conference fees †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. Rs. 64,725($2,995) 2) Visa fees †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Rs. 9,286 3) Rail fare (Ahmedabad-Mumbai-Ahmedabad)+Personal cost in Mumbai †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Rs. 4,000 4) Airfare (Ahmedabad-California-Ahmedabad) †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. Rs. 91,000 5) Airfare (San Francisco-LA) †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚ ¬ ¦Ã¢â‚¬ ¦Rs. 6,000 6) Tour Cost+Accomodation †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. Rs. 58,000 7) Personal Expenses †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..Rs. 27,500 8) Shopping Expenses before tour †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. Rs. 10,000 TOTAL COST = Rs. 318,311 Day To Day Detailed Report (Conference Days) * Friday, July 20th (Day 1) On the very first day we had to reach at Roble Hall the registration place which was our dormitory hall from 10:00 am to 02:00 pm, but unfortunately we were late due to our flight got delayed for half an hour. So, we reached the Roble Hall at around 04:00 pm. The activities which were planned in the schedule were canceled because many of the students came late for the conference.So, the conference for the first day started from the dinner which was at around 0 6:00 pm. On the very first day we had a general session where the Lester Center for Entrepreneurship, David Charron introduced us to the world of entrepreneurship and his lecture covered some topics like:- * What is Entrepreneurship? * Creation of something new. After our first general session we had been taken to the green library for our first breakouts rooms where we had to set our goal for upcoming three years, upcoming five years, upcoming ten years and our ultimate goal. Then we had a RA (Room Assistance) meeting.Where we were explained about the rules and regulation. Then we marched to Roble hall with our RA’s and after getting into our rooms we meet our roommate and were talking and sharing many things. Then we had a good sleep and dreams. * Saturday July 21st (Day 2) This was our second day at the Stanford University. We were much excited so, as soon as the alarm snoozed my roommate and me got up and got ready for the conference. We had to gather down in the main hal l in Roble hall so we all were there and walked the place where we had to have our breakfast. Our TL’s gave us the meeting point and the time for meeting the group after the breakfast.After a stomach full of breakfast we were with our groups and we were been take to the building #531 for the general session where we were introduced to simulation. Then we were been taken in our groups for breakout rooms in the building #610 where we had to design our product. After this tough morning finally we had our lunch time. Again with full of energy we had a general session in the building #550 that included understanding of personality styles. Again after the personality styles lecture we had a general session where the speaker had a discussion about the innovation in the business for success.Then we went towards our breakout rooms where we discussed about the business plan and stated the mission and vision statement of the business. Then after mission and vision comes the time for din ner. We all were so much tired that even we didn’t had our dinner and went for giving a big smile for the group photo. Then after giving a pose we went for our breakout rooms where we had to decide our mission and vision statement but we already had done it so we played a nice and charming game. Then we returned to Roble hall in our rooms and just slept. * Sunday, July 22nd (Day 3)As usual our day’s beginning was full excitement and got ready and went for breakfast after having our breakfast we meet our team. At 09:00 we were been addressed by Dr. Keith Hunter about Business Management and Leadership after one hour lecture we were informed about marketing by our TL’s and then our group marched for lunch and after lunch we had our most interesting lecture by Professor Annette Caneda about communicating in the world of business which gave us knowledge about how to communicate for success in the business and the ways of communication.After this we had something dif ferent from the first two day we had a case study on wal Mart. Then as usual we had our dinner and after dinner we had public speaking activities in our breakout rooms and the we all gathered at the new main quad and then marched towards the Roble hall and had some snacks during the personal time and then slept. * Monday, July 23rd (Day 4) Unusually I was missing India but then got ready and heard that we will be able to talk to family so was somewhat cheered up and went directly to the conference hall without having breakfast.The general session was about the case study on Walt Disney and went for lunch and had lunch and then I was back to normal and was ready to work and then again we were in the general session busy with the case study of apple till we had our dinner. then we were told that we are the best group so we the staff of LeadAmerica will have the dinner at surprise place and the staff took us to the surprise place and the place was Tressider Union and there we had a tal k with my family and was very happy after that we all marched towards Roble hall and slept.ZZZZ!!!!!!! * Tuesday, July 24th This day was very excited for me because we had to start our planning for business plan directly after breakfast. In the breakout rooms we had to select the Vice President and the President of our company so we had a voting system for choosing these people and then we had began with our operation plan. After the planning of operation planning we had our lunch. After lunch we had a very special lecture by the Stanford University’s admission counselor who explained the process of getting into Stanford University.The after this we had lecture from Stratis Giannakouros who gave a lecture on ecological modernization, sustainability and cleantech innovation. Then we were free for the whole day and had dinner and again we were free. * Wednesday, July 25th (Day 5) As usual we had our breakfast from 07:00 am to 08:00 am. After we had our breakfast we had a genera l session for connecting college with our career. After the lecture we had breakout rooms where we had to finalize our business plan. Then we had lunch.After lunch we had a lecture by Dylan Smith the CEO of box. net. Then we had to move to our breakout rooms where we were taught about time management and we had to do financial analysis for the business plan. Then we had dinner. After dinner we were supposed to go to the general session where Richard Hackmann the Founder and chair at epic lectured us. Then we had breakouts where we were supposed to discuss about the business plan but we just played a game because we were done with our business planning. Thursday, July 26th (Day 6) This was day where everyone was waiting for because we were supposed to explore the city of San Francisco, San Francisco Federal Bank, Disney Family Museum, Golden Gate Bridge, Crissy Field and Pier 39. For exploring this entire place we had to leave the university at 07:45 am. We explored these all places and returned the university at 05:45 so we directly went for dinner and then for breakouts for summarizing the business plan and we started our presentation of our business plan.During our personal time also we were making our presentation because we wanted the next breakout to be free. * Friday, July 27th (Day 7) This was also the day we were waiting for because we had to go to the University of California and urban ore for a visit so, directly after breakfast we were loaded in the buses and went to the place and returned back at 05:30 pm and directly went for dinner. After dinner we had breakouts so we made our commercial presentation. And then we went for sleep. * Saturday, July 28th (Day 9)This was the day when we had to present our presentations in front of venture capitalists and all of us were very excited for the performance so, to get the best presentations award we had started preparing as soon after the breakfast and then we came back for lunch and again went for breakout s where we rehearsed for the last time and went to Roble Hall for coming into professional attire from business attire for the presentation and we all had presented the presentation but I personally liked my presentation and the product very much.Then after all kind of presentation and all we had gathered at the Main Quad for just meeting everyone for the last time. After the last night with everyone we went to Roble hall and slept. * Sunday, July 29th (Day 9) We just got up, got ready and took our breakfast and our taxi was waiting for us at the door step. So, it was a byeeeeee-bye to Stanford University. Experience at Stanford University My experience at the Stanford University was awesome because I met many entrepreneurs and got to know many things about business and world of business. Experience After studies * We had visited many places like Six Flags, Disney Downtown, Phoenix mall, San Mateo, Sacramento, etc. * My friends and I enjoyed a lot in the city of LA because of the cl eanliness and the environment. * Everywhere there was greenery but no dust. Thank You.

Free Essays on Affluenza

Affluenza When I get home, the first thing I see is my brother who is more than likely watching television. His favorite television program at the moment is Nickelodeon’s Sponge Bob Square Pants. As he watches this children’s television channel, he is being attacked by many marketers telling him what he should have and absolutely needs. Unfortunately, many young children, like my brother, cannot resist temptation and ask their parents to buy them these toys that they see on television. They are shown at a very young age what plastic money is and are too young to grasp the idea that credit cards are real money. Too many commercials nowadays are being targeted at young children more than ever before. They focus on them because they know there is a big market on things that children want. There is also a pattern that goes with this commercial marketing to children. From a start, children feel like they can never have enough of what they want. When they see something that they do not necessarily need they want it in order for them to fit in with their peers. It’s a vice that will grow with them until they are adults, and the older they get the more serious the problem. More than ever, marketers have their money set on children to buy more, get more and have more. Of course they are the money makers of the family, so they are the ones who are to influence their parents to buy them what they want. Nowadays children are constantly bombarded with television commercials and advertisements. When kids get home from school their first instinct is to rush to the television set to watch their favorite cartoons. Between the hours of three in the afternoon till about six, marketers try to sell their products to the young consumers. They are bombarded with Barbie, Pokemon, Lego, and various action hero toys that children want to have and buy. At the movie theatres, there are always advertisements for upcoming films that are t... Free Essays on Affluenza Free Essays on Affluenza Affluenza When I get home, the first thing I see is my brother who is more than likely watching television. His favorite television program at the moment is Nickelodeon’s Sponge Bob Square Pants. As he watches this children’s television channel, he is being attacked by many marketers telling him what he should have and absolutely needs. Unfortunately, many young children, like my brother, cannot resist temptation and ask their parents to buy them these toys that they see on television. They are shown at a very young age what plastic money is and are too young to grasp the idea that credit cards are real money. Too many commercials nowadays are being targeted at young children more than ever before. They focus on them because they know there is a big market on things that children want. There is also a pattern that goes with this commercial marketing to children. From a start, children feel like they can never have enough of what they want. When they see something that they do not necessarily need they want it in order for them to fit in with their peers. It’s a vice that will grow with them until they are adults, and the older they get the more serious the problem. More than ever, marketers have their money set on children to buy more, get more and have more. Of course they are the money makers of the family, so they are the ones who are to influence their parents to buy them what they want. Nowadays children are constantly bombarded with television commercials and advertisements. When kids get home from school their first instinct is to rush to the television set to watch their favorite cartoons. Between the hours of three in the afternoon till about six, marketers try to sell their products to the young consumers. They are bombarded with Barbie, Pokemon, Lego, and various action hero toys that children want to have and buy. At the movie theatres, there are always advertisements for upcoming films that are t...

The System of Electronic Business Essay Example | Topics and Well Written Essays - 3250 words

The System of Electronic Business - Essay Example Whereas supply chain management is relatively straightforward to define, e-logistics inspires varying definitions. E-logistics can be defined to be the mechanism of automating logistics processes and providing an integrated, end-to-end fulfillment and supply chain management services to the players of logistics processes. Those logistics processes that are automated by e-logistics provide supply chain visibility and can be part of existing e-Commerce or Workflow systems in an enterprise (Zhang 2008). On the other hand, in a commercial manifestation, UPS presents its e-Logistics service as the hosting of a virtual logistics department for other companies that then present this capability as their own, but leave UPS to run and manage it (Levy 2008). These viewpoints can be considered as two halves making a whole in the light of the case study that we have selected: UPS, the company under consideration applies e-logistics in Zhang's sense to its own internal operation and offers e-logistics as in Levy's description to its business customers. With regard to these definitions, e-logistics is a part of supply chain management in general, but not an obligatory part. Supply chain management may or may not include such e-enablement. However, in this paper, our goal is to investigate the situation when supply chain management does use the Internet either wholly or partially and in particular what advantages or disadvantages are conferred by e-logistics. If the supply chain business process relating to e-logistics is most natural that of order fulfillment, other processes that complete the picture are customer relationship management, customer service management, and demand management. These processes involve all of the major departments of a typical company which is those of quality, logistics, marketing and sales, production, R&D, and finance (National Research Council 2000). A common theme in works on supply chain management is the competitive advantage to be gained from a fully integrated supply chain. Integrating into a single supply chain is hailed as the deciding factor for companies that will now succeed or fail (Handfield & Nicolas 1999).

Introducing a line of bottled water Essay Example | Topics and Well Written Essays - 3000 words

Introducing a line of bottled water - Essay Example In order to differentiate within the market, the supplements would be developed so that the water taste was not changed, and through marketing to the segment of the population that is starting to experience minor ailments and issues that can be directly addressed through supplements. The segment would be the aging population that is 40 and over. Marketing will also have to be directed to a broader demographic through onsite marketing that is less specific to age. As the bottled water market has increased steadily since 1997, the potential for success is high. Introduction Bottled water has become a staple in Western society, a trend that stems from a variety of areas of concern. One of the reasons that bottled water has become a prominent resource for hydration is that the fitness industry has determined that a significant amount of water, usually defined by about 2 litres, per day is necessary for good health (World Health Organisation 2004: 486). Another reason that bottled water h as become more marketable in the last few decades is that public water, as in tap water, has come under attack for the purity and safety that it contains. As a result, a natural marriage between the health industry and bottled water has emerged in which diversification into the bottled water market makes sense for corporations that have health related products already in their product line. One company that has yet to develop bottled water is GlaxoSmithKline. Through the exploration of their current line of products and brands, along with an exploration of the overall market, the addition of a line of water to the GlaxoSmithKline product line would enhance the current product line as well as open up a new market. The brand name of the proposed new line of water will be called PURE with a supplemental line of text used to define which type of water is being offered. The line of bottled water would not simply be the one line of basic water, but in order to appeal to the chosen demogra phic, a line of water with supplements within them would increase the potential success of the line. Taking the example of waters such as Dasani by the Coke product line and Aquafina by the Pepsi product line, creating flavoured waters or water with minerals and supplements has shown to have success. The twist on this line of water is that all of the water will taste like water, but will have supplements that target the differing needs of those who are aging. GlaxoSmithKline Company Overview Formed in 2001 through a merger between GlaxoWelcome and SmithKline Beecham, the company holds its headquarters in Great Britain with most of its business being conducted in the United States. As a pharmaceutical leader, the company is a leader in respiratory, central nervous system research, diabetes and vaccines, with 2003 seeing pre-tax sales of more than 21.4 billion. Profits were approximately 6.3 billion with an investment

How will professional organizations play a role in your professional Assignment - 1

How will professional organizations play a role in your professional life - Assignment Example More powerful processors are used in the mobile phones, cameras to process the various types of signals, playing of multimedia. We think that fridges, gas cooker, iron, etc. devices will have much developed microprocessor to process various tasks. People’s desire to make all processes automatically done, force people to use various processors-integrated devices, for instance, processor in the microwave can decide how to heat products, and in the future processors will automatically cook dishes, almost without the people’s intervention. We should underline that professional organizations assist their members in finding their jobs, or offer them job listings and they help members to find their job. And I think that in my professional life it will be the start of my career. We know that after the study process we do not have enough experience to present good job and professional organization can help with mentoring.. And it can be considered as the cornerstone of our professional life, as professional organization can give the worker ability to gain experience from other much experienced workers from the same field. Professional organization can also offer professional development through the courses, publications, workshops, and they can have some special information available only for website members (Anderson, 2012). They can send necessary information to the worker to know new industry trends, and will help in dealing with them. We can also underline special annual conferences aimed on the networking. This is a good opportunity to mix with others workers who for long time work in field. Moreover, such conferences can be a job fair, where one can make contacts with the future boss (Anderson, 2012). Anderson, L. (n.d.). 5 Reasons Professional Organizations are Worth Joining. Retrieved February 23, 2015, from

Quarterly Earnings Forecasting Decisions by Family Firms

Quarterly Earnings Forecasting Decisions by Family Firms Quarterly Earnings Forecasting Decisions by Family Firms and the Market Reaction to Them Abstract We study the disclosure incentives for family firms by examining the characteristics of their quarterly earnings forecasts and analysts and investors responses to them. Forecasts offered before the fiscal quarter-end (guidance) by SP 500 family firms are generally more specific and timely than those offered by SP 500 non-family firms, particularly when they convey bad news or confirm analysts current expectations. Further, family firm guidance elicits a stronger response from both analysts and investors. While many of these differences largely disappear when the forecasts are offered after the quarter-end but before the earnings announcement itself (preannouncements), family firm preannouncements still tend to be more specific when they contain bad news. These more specific preannouncements also generate a significantly stronger response from analysts. Overall, our results suggest that large, visible family firms use manager-generated earnings forecasts to create a more transparent i nformation environment, and that these forecasts are likely to be most useful in reducing information asymmetry and agency costs when they are issued as guidance. Key Words: Management earnings forecasts, family firms, preannouncements, earnings warnings. Data Availability: Data are available from the sources listed in the text. Introduction. Family firms are generally defined as companies that are significantly influenced by founding family members or their descendants, through large shareholdings and/or operational control.[1] Anderson and Reeb (2003a, 2003b) report that family members hold approximately 18% of the equity of the family firms in the SP 500, on average, and control 45% of the CEO positions. In addition, family members often hold seats on the board of directors or are part of upper-level management in these firms (â€Å"Family Inc.†, Business Week, November 10, 2003). The structure inherent in these family firms gives rise to different agency problems than those in firms with much greater separation of ownership and control. Specifically, the family firm structure significantly limits the agency problems that arise from the separation of ownership and control (often referred to as Type I agency problems) while exacerbating those that arise in the conflict between controlling and non-controlling shareholders (often referred to as Type II agency problems, see Ali et al. 2007, Chen et al. 2007, Wang 2006 and Anderson and Reeb 2003a). It is well known that the second type of agency problem can be partially mitigated by frequent and transparent disclosure. However, it is also possible that reputational concerns may arise from the long-term nature of family members investment in their firm, mitigating this problem and reducing the need for more frequent and transparent disclosure (Wang 2006). The purpose of this paper is to add to our understanding of these competing incentives for differential disclosure by examining the characteristics of quarterly earnings forecasts issued by the management of family firms and the response of sell-side analysts and investors to them. Recent accounting research that examines mandatory financial disclosures by family firms suggests that reputational concerns alone may not be sufficient: Characteristics of family firms mandatory financial reports are consistent with their being used to mitigate the agency problem between controlling and non-controlling shareholders. More specifically, Ali et al. (2007) and Wang (2006) show that large family firms offer higher quality financial reports as evidenced by lower discretionary accruals, greater ability of earnings to predict cash flows and larger earnings response coefficients. In addition, Ali et al. (2007) find that family firms in the SP 500 are more likely to voluntarily issue earnings forec asts during periods of earnings declines. However, they also find that family firms are less forthcoming in their disclosures about corporate governance. In a paper that was written concurrently with ours, Chen et al. (2007) study the frequency of voluntary disclosures (earnings and non-earnings forecasts and conference calls) from a larger sample of firms that includes the SP 500, SP MidCap 400 and SP SmallCap 600 in the five years before the enactment of Regulation Fair Disclosure (Reg FD). They also find that family firms are more likely to issue bad-news earnings warnings but overall make fewer forward-looking disclosures than non-family firms, and conclude that their results are consistent with family owners having a longer investment horizon and better monitoring of management, characteristics that obviate the need for greater disclosure. This paper contributes to the growing literature on the disclosures of family firms by studying one of the most informative and common types of voluntary financial disclosures—the companys own forecasts of its quarterly earnings per share—and sell-side analysts and investors responses to them. More specifically, we examine the characteristics of these disclosures (forecast specificity, surprise and accuracy), and the impact they have on important market indicators—professional analysts earnings estimates and stock prices. Thus, our analysis is designed to provide additional evidence on the relation between ownership structure and the quality of the firms information environment and, in particular, complements the existing empirical evidence on the characteristics and informativenesss of mandatory financial disclosures made by family and non-family firms (Ali et al. 2007 and Wang 2006). As noted above, we focus on a particular type of voluntary disclosure, managements forecasts of quarterly earnings per share, and do so for two reasons. First, prior research indicates that these forecasts are highly value-relevant—and more value-relevant than management forecasts of annual earnings per share (Pownall et al. 1993, Baginski and Hassell 1997). As a result, we believe that the quarterly forecasts are particularly well-suited for examining the different incentives family and non-family firms face in their attempts to control Type I and II agency problems, respectively. For example, higher quality forecasting by family firms (in terms of their forecasts being more specific, timely and accurate) is consistent with such firms creating a more transparent information environment and reducing a potentially severe Type II agency problem. Second, we are able to use a non-stock-price measure of the news in these management forecasts in our empirical work, which allows us t o more effectively analyze the markets perception of the differential information content in the forecasts made by family and non-family firms.[2] We also separate our sample of forecasts into guidance (i.e., forecasts made prior to the end of the quarter) and preannouncements (i.e., forecasts made after the quarter ends but before earnings are released). We do this because the forecast horizon associated with preannouncements is very short, sometimes a matter of two or three weeks, and because much of the uncertainty regarding the forthcoming earnings number is resolved by the fiscal quarter end for most, if not all, firms, regardless of whether or not they are controlled by a family. Thus, the Type II agency problem in family firms, if it dominates the Type I agency problem, is more likely to be mitigated through the provision of guidance than preannouncements. This leads us to hypothesize that the characteristics of guidance, but not preannouncements, are systematically related t o family-firm status, and that analysts and investors will react differently to the guidance, but not to preannouncements, issued by family firms, holding all else constant.[3] We test our hypotheses on the quarterly earnings forecasts made between 1998 and 2006 by the family and non-family firms in the SP 500 index, as identified by Business Week (November 10, 2003) and contained in the First Call Company Issued Guidance (CIG) database. There are two aspects of our sample that should be highlighted. First, our sample firms are among the largest, most stable and most visible in the U.S. As a result, our results may not generalize to smaller, less visible family firms such as those included in Chen et al.s (2007) sample. Second, our sample period spans the implementation of Reg FD. Thus, we provide evidence that complements the pre-Reg-FD evidence in Chen et al. (2007) and the limited post-Reg-FD evidence in Ali et al. (2007). The results of our empirical tests generally indicate that the guidance provided by family firms is of higher quality than that provided by non-family firms. In particular, after controlling for other influencing factors, we find that the family firms in our sample provide significantly more specific guidance (in terms of forecast form and narrowness of forecast range) than non-family firms, especially when conveying bad news or offering confirmatory guidance. We also find that family firms use guidance to make smaller average adjustments to the markets estimate of the upcoming quarterly earnings than non-family firms, especially when conveying bad news. This is consistent with their being more timely in offering corrections to analysts estimates. More importantly, we find some evidence of a stronger and quicker response by analysts (as measured by the number of subsequent earnings estimate revisions and the speed with which they occur) to the guidance issued by family firms, and str ong evidence of a significantly greater investor response (as measured by announcement-period abnormal stock returns) to the guidance issued by family firms. These findings, taken together, indicate that guidance is more informative and more useful to the market when it is issued by a family firm. They are also consistent with family firms using guidance to create a more transparent information environment, which therefore, complements the finding of higher quality financial reporting by family firms in Ali et al (2007) and Wang (2006). Consistent with our expectations, we find little evidence of differences in the characteristics of preannouncements issued by family and non-family firms, although there is some (weak) evidence of family-firm preannouncements being more specific when they contain bad news.[4] Also consistent with our expectations, we find no evidence of a differential stock price response to preannouncements made by family and non-family firms, although we do find that analysts response more strongly to family-firm preannouncements, especially when they contain bad news. These results, when considered with the guidance results discussed above, suggest that family firms produce higher quality earnings forecasts than non-family firms, particularly when they are offered as guidance or contain bad news, and that their guidance is more informative and useful to investors and analysts. Thus, our paper provides evidence of family firms using management-generated earnings forecasts to create a more transpare nt information environment. Our paper contributes to two bodies of research: the growing literature on disclosures by family firms, as noted before, and the established literature on management forecasts. While our paper is most closely related to Ali et al. (2007), Chen et al. (2007) and Wang (2006), who examine the mandatory financial disclosures of family firms and the frequency of their voluntary disclosures, we also complement Anderson et al.s (2006) analysis of other dimensions of disclosure transparency. Anderson et al. (2006) find that family firms are significantly more opaque than non-family firms as measured by a summary statistic that captures the effects of trading volume, the bid-ask spread, analyst following and analyst forecast errors. Taken together, the evidence in Anderson et al. (2006) and our paper suggest that certain types of transparent disclosures appear to be better suited than others to mitigating the agency problem that arises between controlling and non-controlling owners. The literature on management forecasts is more mature and, as a result, guides much of the structure for our analysis. Consequently, we follow prior work by Ajinkya and Gift (1984), Baginski and Hassell (1990, 1997), Bamber and Cheon (1998), Baginski et al. (2002, 2004), Ajinkya et al. (2005) and others, in designing our tests. In a recent paper, Hirst et al. (2007) provide a review of this literature and propose a framework for continued research in this area. They observe that choices concerning the characteristics of management earnings forecasts are not yet well understood and suggest that additional work addressing this issue is needed. Our contribution to the literature on management forecasts is to analyze the differential impact of Type I and Type II agency problems on the characteristics of management earnings forecasts provided by family and non-family firms, including the time of their release, as well as the market and analyst reactions to them. Thus, we add to the initia l evidence on the underlying reasons for providing management forecasts in different forms and with different specificity—and on their impact of the stock prices of family and non-family firms. Finally, our results on confirmatory guidance support and extend the results in Clement et al. (2003). The rest of the paper is organized as follows. In Section 2, we review of the relevant literature and develop hypotheses. In Section 3, we describe our sample and data, and in Section 4, we present the empirical tests. We offer concluding remarks in Section 5. 2. Literature Review and Hypothesis Development Family firms are defined in the academic literature as firms in which founders or their descendants exercise control either because they are significant shareholders or because they are part of top management or the board of directors. Not only are family firms common in Europe and Asia (see, for example, LaPorta et al. 1999, Claessens et al, 2000, Gomez-Mejia et al. 2001 and Faccio and Lang 2002), they comprise approximately one-third of the SP 500 in the U.S. (Anderson and Reeb 2003a).[5] Further, family members ownership stakes are significant: Anderson and Reeb (2003a) report that in the SP 500, family members hold, on average, 18% of the voting shares in their companies. A large literature on family firms has recently developed in accounting and finance, much of it focused on the differences in agency problems that arise in family and non-family firms.[6] Of particular interest to us are the agency problems arising from (1) the separation of ownership and control, and (2) the conflict between controlling and non-controlling shareholders.[7] The papers that examine these conflicts generally argue that (1), referred to as the â€Å"Type I† agency problem in Ali et al. (2007), is less important for family firms because of the unusually close alignment of owners and management in those firms when compared to non-family firms (e.g., Ali et al. 2007, Chen et al. 2007, Wang (2006).[8] They also argue that the tight linkage between some owners and control in family firms exacerbates (2), referred to as the â€Å"Type II† agency problem in Ali et al. (2007), in which family members transfer wealth to themselves to the detriment of other sharehol ders. As is well known, such agency problems can be partially mitigated by frequent and transparent disclosure, suggesting that family firms are more likely to offer a variety of mandatory and voluntary disclosures whose implications are clearer to market participants.[9] In contrast, Wang (2006) suggests that family firms may not face a more severe Type II agency problem if the long-term nature of their investment is well understood by the market. In essence, he argues that long-term investors are less likely to exploit agency problems for short-term gain—thus, family firms may not need to resort to greater frequency or transparency of disclosures. Ali et al. (2007) and Wang (2006) empirically test these competing predictions by comparing aspects of the accounting disclosures made by family and non-family firms. Both find that earnings quality is higher for family firms, especially when a founder CEO is in place. Thus, both provide some evidence consistent with family firms mitigating their Type II agency problems—or responding to the demands of the users of financial statements—with higher quality disclosures. More specifically, Ali et al. (2007) document lower discretionary accruals and greater earnings persistence for SP 500 family firms compared to SP 500 non-family firms. In addition, they find that the association between earnings and stock returns is higher for the family firms. Similarly, Wang (2006) finds that SP 500 founding family firms have lower abnormal accruals, greater earnings informativeness and less persistence in transitory loss components in earnings. He extends this analysis by considering th e effect of the percentage of common stock owned by family members on the magnitude of the Type II agency problem. Interestingly, he finds that the relation is nonlinear: When founding family ownership is above (approximately) 60%, the quality of the earnings reported by non-family firms exceeds that of family firms. Ali et al. (2007) also provide some evidence inconsistent with family firms mitigating their more severe Type II agency problem through the use of disclosures: They observe that family firms are less forthcoming about their corporate governance practices and that when they employ a dual class share structure, earnings quality is lower relative to when they do not have such a structure. Another method for testing whether family firms mitigate the potentially more severe Type II agency costs—or respond to financial statement users demand for high quality accounting information—through greater frequency and transparency of disclosures is to examine the issuance of management earnings forecasts by family and non-family firms. Complicating this is the litigation argument proposed by Skinner (1994) and Kasznik and Lev (1995) which suggests that the use of earnings warnings will vary positively with the litigation risk that the firm faces, and inversely with the severity of the firms Type I agency problem (Ali et al. 2007). However, since the Type II agency problem is expected to be more severe and the Type I agency problem less severe in family firms (Ali et al. 2007), family firms would be expected to provide management forecasts to mitigate both types of agency problems, holding litigation risk constant. The relative severity of the Type II agency problem further suggests that family firms earnings forecasts will be of higher quality (i.e., more specific, timely and accurate), and that market participants (e.g., sell-side analysts and investors) will respond more strongly to them. Ali et al. (2007) provide initial evidence in favor of this hypothesis when they observe that family firms are more likely to provide earnings warnings (i.e., guidance that warns of a forthcoming earnings decline) than non-family firms. In a more recent paper, however, Chen et al. (2007) provide evidence that family firms make fewer voluntary disclosures than non-family firms. They collect ownership and founding family information from several sources to identify family firms in the SP 1500 and find that family firms are (1) 8.1% less likely to provide management forecasts of all kinds (i.e., annual and quarterly earnings, revenues, cash flows, etc.), and (2) less likely to hold conference calls as well. They also find, however, that family firms are more likely than non-family firms to issue bad-news earnings warnings. Chen et al. (2007) conclude that these results, when considered collectively, indicate that family firms owners prefer less disclosure because of their long investmen t horizon and effective monitoring of managers, but that their concern with reducing litigation costs results in an increased likelihood of bad news earnings warnings. In this paper, we hope to add to our understanding of the relative importance of the competing incentives studied in previous work by examining (1) the characteristics of management forecasts of quarterly earnings per share (both guidance, which is offered prior to the end of the quarter, and preannouncements, which are offered after quarter-end but before the actual earnings announcement) of family and non-family firms, and (2) the response of sell-side analysts and investors to those forecasts. In particular, we hope to add to our understanding of the disclosure choices of family firms by determining whether their own earnings forecasts are more specific, timely and accurate, consistent with family firms providing higher quality disclosures—and whether those forecasts are viewed as being of higher quality by market participants as measured by their response to the disclosure. We also separate our forecasts into guidance and preannouncements under the assumption that any fami ly-firm effect will be more likely to be observed in guidance because of the longer horizon over which the forecasts can be made. More specifically, in the case of preannouncements, there is a very short forecast horizon (e.g., a few weeks beyond the end of the quarter) and so we do not expect large differences in timeliness of the preannouncements between family and non-family firms. Further, because much of the uncertainty about the earnings numbers is resolved by quarter-end, differences in the specificity of preannouncements between family and non-family firms, if any, are likely to be small. Finally, motives to provide preannouncements are likely to be dominated by the litigation argument proposed by Skinner (1994) and Kasznik and Lev (1995).[10] If this is the case, differences in characteristics of voluntary earnings forecasts, and in market participants responses to them, are likely to be concentrated in guidance. As in prior research, we recognize that because of competing forces, whether the guidance of family firms is of higher quality is an empirical question. Thus, our formal hypotheses regarding guidance are non-directional, as in Chen et al. (2007) and Wang (2006): H1: The specificity, timeliness and content of earnings guidance is systematically related to whether the firm is classified as a family firm. H2: Sell-side analysts and investors responses to earnings guidance is systematically related to whether the issuing firm is classified as a family firm. 3. Sample and Data. Our sample is comprised of 4,130 management quarterly earnings guidance announcements issued between 1998 and 2006 by the family and non-family firms in the SP 500 as identified by Business Week in its November 10, 2003, issue. Business Week defines a family firm as â€Å"†¦any company where founders or descendants continue to hold positions in top management, on the board, or among the companys shareholders.† To identify family firms, Business Week relies on the methodology developed by Anderson and Reeb (2003a, 2003b) as well as their advice and the help of Spencer Stuart as they â€Å"†¦examined regulatory filings, company Web sites and corporate histories† to ensure significant family involvement in the company. (For details, see â€Å"Defining Family,† Business Week, November 10, 2003, p. 111.) Before proceeding, we want to highlight certain aspects of our sample. First, because the Business Week classification pertains to only SP 500 firms, the fi rms in our sample are among the largest, most stable and most profitable companies in the U.S. As a result, our findings might not extend to mid- or small-cap companies. Second, our reliance on the Business Week classification means that we do not form a new sample of family and non-family firms each year. However, as Ali et al. (2007) note, family firm status is sticky, and thus misclassifications due to changing firm status will most likely bias against our finding significant results. Third, Business Weeks classification scheme is designed to identify firms that are controlled by a family without relying on a single proxy for control, such as ownership share. As a result, it captures features of family firms, beyond simply having large blockholders, that are likely to exacerbate Type II agency problems. Fourth, by using Business Weeks classification, which is based on the â€Å"standard† developed by Anderson and Reeb, our results are more easily compared to many prior res ults. Finally, while we recognize that Business Week might not accurately classify every firm, both types of classification errors (i.e., misclassifying firms without significant family control as family firms, and misclassifying firms with significant family control as non-family firms) limit our ability to detect differences in the forecasts of family and non-family firms and therefore bias against our finding significant results. We form our sample by first gathering all forecasts of quarter-ahead earnings made between 1998 and 2006 by the SP 500 as of June 2003 from the First Call Company Issued Guidance (CIG) database. We lose 1,994 of the original 7,694 observations because of unavailability of (1) necessary Compustat and CRSP data, (2) actual earnings per share and other analyst forecast data from First Call, and (3) observations with multiple actual earnings per share numbers. After deleting stale forecasts (those made before the prior quarters earnings announcement date), we retain all â€Å"guidance† observations (forecasts made at the same time as or after the prior earnings announcement and at or before the quarter end, N = 4,332). We trim the sample to mitigate the effect of outliers as follows. First, we eliminate the top and bottom one-half percent of the management forecast errors in each sample, the top and bottom one-half percent of the forecast surprises in each sample, the top and bott om one-half percent of the three-day cumulative abnormal returns in each sample and finally, the top and bottom one-half percent of return volatility ratios in each sample—and retain the union of the remaining observations. (These variables are defined in the Appendix and will be discussed in detail later.) We then eliminate 62 firm quarter observations whose stock price is less than $5 as of the beginning of the quarter. This results in a final sample of 4,130 guidance announcements. One-hundred-and-forty six of the 177 family firms identified by Business Week (82.5%) provide guidance during our sample period as compared to 240 of the 323 non-family firms in the SP 500 (74.3%). [11] Before turning to the empirical analysis, we note for the reader that the management guidance we gather from the CIG database is not split-adjusted whereas the analysts estimates and reported earnings per share in the main First Call file are (further, they are rounded to the nearest penny). An I/B/E/S unadjusted data file is available but unfortunately, we would lose a significant number of observations if we were to use it. Consequently, to keep the sample size as large as possible and still allow for comparability, we split-adjust the management guidance from the CIG file using the split-adjustment procedures used for the analysts estimates and reported earnings per share in the First Call file.[12] 4. Empirical Analysis. 4.1. Univariate Analysis. We present descriptive statistics for the guidance announcements, firm-specific characteristics and variables relating to analysts and stock returns in Table 1. We also include the results of two-sample t-tests and Wilcoxon signed rank sum tests for each variable. As noted before, we provide a list of variables and their definitions in the Appendix. We begin with forecast characteristic metrics designed to help us understand the differences, if any, in the specificity, timeliness, frequency and content of the earnings forecasts offered by the management of family and non-family firms. We present descriptive statistics first for the form of the forecast (an indicator of specificity) as measured by Forecast Form. As is well known, forecasts in the CIG database take one of several forms, which we code in the following manner: If the forecast is a specific earnings per share number (a point forecast), it is coded as 4; if it is a range of possible earnings per share numbers (a range forecast), it is coded as 3; if it consists of a one-sided directional forecast (either a maximum or minimum forthcoming earnings per share number), it is coded as 2; and if it contains no quantitative information (a qualitative forecast), it is coded as 1.[13] Note that our coding scheme is designed so that a higher value of Forecast Form indicates a mo re specific forecast. To further examine forecast specificity, we focus next on Forecast Width for range forecasts, which measures the difference between the maximum and minimum earnings per share figures offered in the forecast. (A narrower width indicates a more specific forecast.) In later tests, we include point forecasts as forecasts with a width of zero. To examine forecast timeliness, we use Forecast Horizon which is the number of calendar days from the management forecast date until the end of the quarter. More days in the forecast horizon indicate more timely forecasts. Finally, we form Annual Frequency and Quarterly Frequency variables, which measure the number of annual and quarterly management forecasts for each of our sample firms in the CIG database from 1994 through 2006, scaled by the total number of possible forecasting years (for Annual Frequency) or quarters (for Quarterly Frequency) to date. The descriptive statistics and statistical tests for Forecast Form provide initial evidence consistent with family firms issuing significantly more specific guidance than non-family firms. In particular, Forecast Form has slightly higher numerical values, on average, for family firms (p = .028, using the Wilcoxon test).[14] To further explore the potential differences, we examine the frequency distributions of the forms that guidance takes, as presented in Figure 1. As is obvious from the figure, range forecasts are by far the most common form of guidance for both family and non-family firms, making up nearly two-thirds of all guidance in our sample. Further, both family and non-family firms offer approximately 89% of their guidance as point or range forecasts. However, family firms offer relatively more of the more specific point forecasts (28% versus 23% for non-family firms) and relatively fewer of the less specific range forecasts (61% versus 66% for non-family firms).[15] Conver sely, guidance in the form of qualitative statements or minimum/maximum earnings per share numbers is unusual in our sample, regardless of the type of firm examined. The small number of qualitative forecasts in our First Call sample is inconsistent with Hutton et al. (2003) and Miller (2002), who find a substantially larger number of such forecasts when hand-collecting their samples than are included in the First Call database. (Anilowski et al. 2006 also suggest that First Call is more likely to include quantitative forecasts than qualitative ones.) This suggests that our sample is most likely incomplete and most representative when only quantitative forecasts are considered. For these reasons and because many tests require that we restrict attention to point and range forecasts, we will generally focus our discussion on point and range forecasts only. As just noted, range forecasts are the most common type of guidance in our sample. While it is clear from Figure 1 that non-family firms issue more range forecasts as guidance than family firms, Table 1 indicates that those issued by family firms are significantly narrower, as measured by Forecast Width (p = .000 for both the Wilcoxon and the two-sample t tests). This finding, when considered with the preliminary evidence of greater usage of point forecasts by family firms, suggests that guidance issued by family firms is generally more specific than that issued by non-family firms, consistent with H1. The next two forecast c Quarterly Earnings Forecasting Decisions by Family Firms Quarterly Earnings Forecasting Decisions by Family Firms Quarterly Earnings Forecasting Decisions by Family Firms and the Market Reaction to Them Abstract We study the disclosure incentives for family firms by examining the characteristics of their quarterly earnings forecasts and analysts and investors responses to them. Forecasts offered before the fiscal quarter-end (guidance) by SP 500 family firms are generally more specific and timely than those offered by SP 500 non-family firms, particularly when they convey bad news or confirm analysts current expectations. Further, family firm guidance elicits a stronger response from both analysts and investors. While many of these differences largely disappear when the forecasts are offered after the quarter-end but before the earnings announcement itself (preannouncements), family firm preannouncements still tend to be more specific when they contain bad news. These more specific preannouncements also generate a significantly stronger response from analysts. Overall, our results suggest that large, visible family firms use manager-generated earnings forecasts to create a more transparent i nformation environment, and that these forecasts are likely to be most useful in reducing information asymmetry and agency costs when they are issued as guidance. Key Words: Management earnings forecasts, family firms, preannouncements, earnings warnings. Data Availability: Data are available from the sources listed in the text. Introduction. Family firms are generally defined as companies that are significantly influenced by founding family members or their descendants, through large shareholdings and/or operational control.[1] Anderson and Reeb (2003a, 2003b) report that family members hold approximately 18% of the equity of the family firms in the SP 500, on average, and control 45% of the CEO positions. In addition, family members often hold seats on the board of directors or are part of upper-level management in these firms (â€Å"Family Inc.†, Business Week, November 10, 2003). The structure inherent in these family firms gives rise to different agency problems than those in firms with much greater separation of ownership and control. Specifically, the family firm structure significantly limits the agency problems that arise from the separation of ownership and control (often referred to as Type I agency problems) while exacerbating those that arise in the conflict between controlling and non-controlling shareholders (often referred to as Type II agency problems, see Ali et al. 2007, Chen et al. 2007, Wang 2006 and Anderson and Reeb 2003a). It is well known that the second type of agency problem can be partially mitigated by frequent and transparent disclosure. However, it is also possible that reputational concerns may arise from the long-term nature of family members investment in their firm, mitigating this problem and reducing the need for more frequent and transparent disclosure (Wang 2006). The purpose of this paper is to add to our understanding of these competing incentives for differential disclosure by examining the characteristics of quarterly earnings forecasts issued by the management of family firms and the response of sell-side analysts and investors to them. Recent accounting research that examines mandatory financial disclosures by family firms suggests that reputational concerns alone may not be sufficient: Characteristics of family firms mandatory financial reports are consistent with their being used to mitigate the agency problem between controlling and non-controlling shareholders. More specifically, Ali et al. (2007) and Wang (2006) show that large family firms offer higher quality financial reports as evidenced by lower discretionary accruals, greater ability of earnings to predict cash flows and larger earnings response coefficients. In addition, Ali et al. (2007) find that family firms in the SP 500 are more likely to voluntarily issue earnings forec asts during periods of earnings declines. However, they also find that family firms are less forthcoming in their disclosures about corporate governance. In a paper that was written concurrently with ours, Chen et al. (2007) study the frequency of voluntary disclosures (earnings and non-earnings forecasts and conference calls) from a larger sample of firms that includes the SP 500, SP MidCap 400 and SP SmallCap 600 in the five years before the enactment of Regulation Fair Disclosure (Reg FD). They also find that family firms are more likely to issue bad-news earnings warnings but overall make fewer forward-looking disclosures than non-family firms, and conclude that their results are consistent with family owners having a longer investment horizon and better monitoring of management, characteristics that obviate the need for greater disclosure. This paper contributes to the growing literature on the disclosures of family firms by studying one of the most informative and common types of voluntary financial disclosures—the companys own forecasts of its quarterly earnings per share—and sell-side analysts and investors responses to them. More specifically, we examine the characteristics of these disclosures (forecast specificity, surprise and accuracy), and the impact they have on important market indicators—professional analysts earnings estimates and stock prices. Thus, our analysis is designed to provide additional evidence on the relation between ownership structure and the quality of the firms information environment and, in particular, complements the existing empirical evidence on the characteristics and informativenesss of mandatory financial disclosures made by family and non-family firms (Ali et al. 2007 and Wang 2006). As noted above, we focus on a particular type of voluntary disclosure, managements forecasts of quarterly earnings per share, and do so for two reasons. First, prior research indicates that these forecasts are highly value-relevant—and more value-relevant than management forecasts of annual earnings per share (Pownall et al. 1993, Baginski and Hassell 1997). As a result, we believe that the quarterly forecasts are particularly well-suited for examining the different incentives family and non-family firms face in their attempts to control Type I and II agency problems, respectively. For example, higher quality forecasting by family firms (in terms of their forecasts being more specific, timely and accurate) is consistent with such firms creating a more transparent information environment and reducing a potentially severe Type II agency problem. Second, we are able to use a non-stock-price measure of the news in these management forecasts in our empirical work, which allows us t o more effectively analyze the markets perception of the differential information content in the forecasts made by family and non-family firms.[2] We also separate our sample of forecasts into guidance (i.e., forecasts made prior to the end of the quarter) and preannouncements (i.e., forecasts made after the quarter ends but before earnings are released). We do this because the forecast horizon associated with preannouncements is very short, sometimes a matter of two or three weeks, and because much of the uncertainty regarding the forthcoming earnings number is resolved by the fiscal quarter end for most, if not all, firms, regardless of whether or not they are controlled by a family. Thus, the Type II agency problem in family firms, if it dominates the Type I agency problem, is more likely to be mitigated through the provision of guidance than preannouncements. This leads us to hypothesize that the characteristics of guidance, but not preannouncements, are systematically related t o family-firm status, and that analysts and investors will react differently to the guidance, but not to preannouncements, issued by family firms, holding all else constant.[3] We test our hypotheses on the quarterly earnings forecasts made between 1998 and 2006 by the family and non-family firms in the SP 500 index, as identified by Business Week (November 10, 2003) and contained in the First Call Company Issued Guidance (CIG) database. There are two aspects of our sample that should be highlighted. First, our sample firms are among the largest, most stable and most visible in the U.S. As a result, our results may not generalize to smaller, less visible family firms such as those included in Chen et al.s (2007) sample. Second, our sample period spans the implementation of Reg FD. Thus, we provide evidence that complements the pre-Reg-FD evidence in Chen et al. (2007) and the limited post-Reg-FD evidence in Ali et al. (2007). The results of our empirical tests generally indicate that the guidance provided by family firms is of higher quality than that provided by non-family firms. In particular, after controlling for other influencing factors, we find that the family firms in our sample provide significantly more specific guidance (in terms of forecast form and narrowness of forecast range) than non-family firms, especially when conveying bad news or offering confirmatory guidance. We also find that family firms use guidance to make smaller average adjustments to the markets estimate of the upcoming quarterly earnings than non-family firms, especially when conveying bad news. This is consistent with their being more timely in offering corrections to analysts estimates. More importantly, we find some evidence of a stronger and quicker response by analysts (as measured by the number of subsequent earnings estimate revisions and the speed with which they occur) to the guidance issued by family firms, and str ong evidence of a significantly greater investor response (as measured by announcement-period abnormal stock returns) to the guidance issued by family firms. These findings, taken together, indicate that guidance is more informative and more useful to the market when it is issued by a family firm. They are also consistent with family firms using guidance to create a more transparent information environment, which therefore, complements the finding of higher quality financial reporting by family firms in Ali et al (2007) and Wang (2006). Consistent with our expectations, we find little evidence of differences in the characteristics of preannouncements issued by family and non-family firms, although there is some (weak) evidence of family-firm preannouncements being more specific when they contain bad news.[4] Also consistent with our expectations, we find no evidence of a differential stock price response to preannouncements made by family and non-family firms, although we do find that analysts response more strongly to family-firm preannouncements, especially when they contain bad news. These results, when considered with the guidance results discussed above, suggest that family firms produce higher quality earnings forecasts than non-family firms, particularly when they are offered as guidance or contain bad news, and that their guidance is more informative and useful to investors and analysts. Thus, our paper provides evidence of family firms using management-generated earnings forecasts to create a more transpare nt information environment. Our paper contributes to two bodies of research: the growing literature on disclosures by family firms, as noted before, and the established literature on management forecasts. While our paper is most closely related to Ali et al. (2007), Chen et al. (2007) and Wang (2006), who examine the mandatory financial disclosures of family firms and the frequency of their voluntary disclosures, we also complement Anderson et al.s (2006) analysis of other dimensions of disclosure transparency. Anderson et al. (2006) find that family firms are significantly more opaque than non-family firms as measured by a summary statistic that captures the effects of trading volume, the bid-ask spread, analyst following and analyst forecast errors. Taken together, the evidence in Anderson et al. (2006) and our paper suggest that certain types of transparent disclosures appear to be better suited than others to mitigating the agency problem that arises between controlling and non-controlling owners. The literature on management forecasts is more mature and, as a result, guides much of the structure for our analysis. Consequently, we follow prior work by Ajinkya and Gift (1984), Baginski and Hassell (1990, 1997), Bamber and Cheon (1998), Baginski et al. (2002, 2004), Ajinkya et al. (2005) and others, in designing our tests. In a recent paper, Hirst et al. (2007) provide a review of this literature and propose a framework for continued research in this area. They observe that choices concerning the characteristics of management earnings forecasts are not yet well understood and suggest that additional work addressing this issue is needed. Our contribution to the literature on management forecasts is to analyze the differential impact of Type I and Type II agency problems on the characteristics of management earnings forecasts provided by family and non-family firms, including the time of their release, as well as the market and analyst reactions to them. Thus, we add to the initia l evidence on the underlying reasons for providing management forecasts in different forms and with different specificity—and on their impact of the stock prices of family and non-family firms. Finally, our results on confirmatory guidance support and extend the results in Clement et al. (2003). The rest of the paper is organized as follows. In Section 2, we review of the relevant literature and develop hypotheses. In Section 3, we describe our sample and data, and in Section 4, we present the empirical tests. We offer concluding remarks in Section 5. 2. Literature Review and Hypothesis Development Family firms are defined in the academic literature as firms in which founders or their descendants exercise control either because they are significant shareholders or because they are part of top management or the board of directors. Not only are family firms common in Europe and Asia (see, for example, LaPorta et al. 1999, Claessens et al, 2000, Gomez-Mejia et al. 2001 and Faccio and Lang 2002), they comprise approximately one-third of the SP 500 in the U.S. (Anderson and Reeb 2003a).[5] Further, family members ownership stakes are significant: Anderson and Reeb (2003a) report that in the SP 500, family members hold, on average, 18% of the voting shares in their companies. A large literature on family firms has recently developed in accounting and finance, much of it focused on the differences in agency problems that arise in family and non-family firms.[6] Of particular interest to us are the agency problems arising from (1) the separation of ownership and control, and (2) the conflict between controlling and non-controlling shareholders.[7] The papers that examine these conflicts generally argue that (1), referred to as the â€Å"Type I† agency problem in Ali et al. (2007), is less important for family firms because of the unusually close alignment of owners and management in those firms when compared to non-family firms (e.g., Ali et al. 2007, Chen et al. 2007, Wang (2006).[8] They also argue that the tight linkage between some owners and control in family firms exacerbates (2), referred to as the â€Å"Type II† agency problem in Ali et al. (2007), in which family members transfer wealth to themselves to the detriment of other sharehol ders. As is well known, such agency problems can be partially mitigated by frequent and transparent disclosure, suggesting that family firms are more likely to offer a variety of mandatory and voluntary disclosures whose implications are clearer to market participants.[9] In contrast, Wang (2006) suggests that family firms may not face a more severe Type II agency problem if the long-term nature of their investment is well understood by the market. In essence, he argues that long-term investors are less likely to exploit agency problems for short-term gain—thus, family firms may not need to resort to greater frequency or transparency of disclosures. Ali et al. (2007) and Wang (2006) empirically test these competing predictions by comparing aspects of the accounting disclosures made by family and non-family firms. Both find that earnings quality is higher for family firms, especially when a founder CEO is in place. Thus, both provide some evidence consistent with family firms mitigating their Type II agency problems—or responding to the demands of the users of financial statements—with higher quality disclosures. More specifically, Ali et al. (2007) document lower discretionary accruals and greater earnings persistence for SP 500 family firms compared to SP 500 non-family firms. In addition, they find that the association between earnings and stock returns is higher for the family firms. Similarly, Wang (2006) finds that SP 500 founding family firms have lower abnormal accruals, greater earnings informativeness and less persistence in transitory loss components in earnings. He extends this analysis by considering th e effect of the percentage of common stock owned by family members on the magnitude of the Type II agency problem. Interestingly, he finds that the relation is nonlinear: When founding family ownership is above (approximately) 60%, the quality of the earnings reported by non-family firms exceeds that of family firms. Ali et al. (2007) also provide some evidence inconsistent with family firms mitigating their more severe Type II agency problem through the use of disclosures: They observe that family firms are less forthcoming about their corporate governance practices and that when they employ a dual class share structure, earnings quality is lower relative to when they do not have such a structure. Another method for testing whether family firms mitigate the potentially more severe Type II agency costs—or respond to financial statement users demand for high quality accounting information—through greater frequency and transparency of disclosures is to examine the issuance of management earnings forecasts by family and non-family firms. Complicating this is the litigation argument proposed by Skinner (1994) and Kasznik and Lev (1995) which suggests that the use of earnings warnings will vary positively with the litigation risk that the firm faces, and inversely with the severity of the firms Type I agency problem (Ali et al. 2007). However, since the Type II agency problem is expected to be more severe and the Type I agency problem less severe in family firms (Ali et al. 2007), family firms would be expected to provide management forecasts to mitigate both types of agency problems, holding litigation risk constant. The relative severity of the Type II agency problem further suggests that family firms earnings forecasts will be of higher quality (i.e., more specific, timely and accurate), and that market participants (e.g., sell-side analysts and investors) will respond more strongly to them. Ali et al. (2007) provide initial evidence in favor of this hypothesis when they observe that family firms are more likely to provide earnings warnings (i.e., guidance that warns of a forthcoming earnings decline) than non-family firms. In a more recent paper, however, Chen et al. (2007) provide evidence that family firms make fewer voluntary disclosures than non-family firms. They collect ownership and founding family information from several sources to identify family firms in the SP 1500 and find that family firms are (1) 8.1% less likely to provide management forecasts of all kinds (i.e., annual and quarterly earnings, revenues, cash flows, etc.), and (2) less likely to hold conference calls as well. They also find, however, that family firms are more likely than non-family firms to issue bad-news earnings warnings. Chen et al. (2007) conclude that these results, when considered collectively, indicate that family firms owners prefer less disclosure because of their long investmen t horizon and effective monitoring of managers, but that their concern with reducing litigation costs results in an increased likelihood of bad news earnings warnings. In this paper, we hope to add to our understanding of the relative importance of the competing incentives studied in previous work by examining (1) the characteristics of management forecasts of quarterly earnings per share (both guidance, which is offered prior to the end of the quarter, and preannouncements, which are offered after quarter-end but before the actual earnings announcement) of family and non-family firms, and (2) the response of sell-side analysts and investors to those forecasts. In particular, we hope to add to our understanding of the disclosure choices of family firms by determining whether their own earnings forecasts are more specific, timely and accurate, consistent with family firms providing higher quality disclosures—and whether those forecasts are viewed as being of higher quality by market participants as measured by their response to the disclosure. We also separate our forecasts into guidance and preannouncements under the assumption that any fami ly-firm effect will be more likely to be observed in guidance because of the longer horizon over which the forecasts can be made. More specifically, in the case of preannouncements, there is a very short forecast horizon (e.g., a few weeks beyond the end of the quarter) and so we do not expect large differences in timeliness of the preannouncements between family and non-family firms. Further, because much of the uncertainty about the earnings numbers is resolved by quarter-end, differences in the specificity of preannouncements between family and non-family firms, if any, are likely to be small. Finally, motives to provide preannouncements are likely to be dominated by the litigation argument proposed by Skinner (1994) and Kasznik and Lev (1995).[10] If this is the case, differences in characteristics of voluntary earnings forecasts, and in market participants responses to them, are likely to be concentrated in guidance. As in prior research, we recognize that because of competing forces, whether the guidance of family firms is of higher quality is an empirical question. Thus, our formal hypotheses regarding guidance are non-directional, as in Chen et al. (2007) and Wang (2006): H1: The specificity, timeliness and content of earnings guidance is systematically related to whether the firm is classified as a family firm. H2: Sell-side analysts and investors responses to earnings guidance is systematically related to whether the issuing firm is classified as a family firm. 3. Sample and Data. Our sample is comprised of 4,130 management quarterly earnings guidance announcements issued between 1998 and 2006 by the family and non-family firms in the SP 500 as identified by Business Week in its November 10, 2003, issue. Business Week defines a family firm as â€Å"†¦any company where founders or descendants continue to hold positions in top management, on the board, or among the companys shareholders.† To identify family firms, Business Week relies on the methodology developed by Anderson and Reeb (2003a, 2003b) as well as their advice and the help of Spencer Stuart as they â€Å"†¦examined regulatory filings, company Web sites and corporate histories† to ensure significant family involvement in the company. (For details, see â€Å"Defining Family,† Business Week, November 10, 2003, p. 111.) Before proceeding, we want to highlight certain aspects of our sample. First, because the Business Week classification pertains to only SP 500 firms, the fi rms in our sample are among the largest, most stable and most profitable companies in the U.S. As a result, our findings might not extend to mid- or small-cap companies. Second, our reliance on the Business Week classification means that we do not form a new sample of family and non-family firms each year. However, as Ali et al. (2007) note, family firm status is sticky, and thus misclassifications due to changing firm status will most likely bias against our finding significant results. Third, Business Weeks classification scheme is designed to identify firms that are controlled by a family without relying on a single proxy for control, such as ownership share. As a result, it captures features of family firms, beyond simply having large blockholders, that are likely to exacerbate Type II agency problems. Fourth, by using Business Weeks classification, which is based on the â€Å"standard† developed by Anderson and Reeb, our results are more easily compared to many prior res ults. Finally, while we recognize that Business Week might not accurately classify every firm, both types of classification errors (i.e., misclassifying firms without significant family control as family firms, and misclassifying firms with significant family control as non-family firms) limit our ability to detect differences in the forecasts of family and non-family firms and therefore bias against our finding significant results. We form our sample by first gathering all forecasts of quarter-ahead earnings made between 1998 and 2006 by the SP 500 as of June 2003 from the First Call Company Issued Guidance (CIG) database. We lose 1,994 of the original 7,694 observations because of unavailability of (1) necessary Compustat and CRSP data, (2) actual earnings per share and other analyst forecast data from First Call, and (3) observations with multiple actual earnings per share numbers. After deleting stale forecasts (those made before the prior quarters earnings announcement date), we retain all â€Å"guidance† observations (forecasts made at the same time as or after the prior earnings announcement and at or before the quarter end, N = 4,332). We trim the sample to mitigate the effect of outliers as follows. First, we eliminate the top and bottom one-half percent of the management forecast errors in each sample, the top and bottom one-half percent of the forecast surprises in each sample, the top and bott om one-half percent of the three-day cumulative abnormal returns in each sample and finally, the top and bottom one-half percent of return volatility ratios in each sample—and retain the union of the remaining observations. (These variables are defined in the Appendix and will be discussed in detail later.) We then eliminate 62 firm quarter observations whose stock price is less than $5 as of the beginning of the quarter. This results in a final sample of 4,130 guidance announcements. One-hundred-and-forty six of the 177 family firms identified by Business Week (82.5%) provide guidance during our sample period as compared to 240 of the 323 non-family firms in the SP 500 (74.3%). [11] Before turning to the empirical analysis, we note for the reader that the management guidance we gather from the CIG database is not split-adjusted whereas the analysts estimates and reported earnings per share in the main First Call file are (further, they are rounded to the nearest penny). An I/B/E/S unadjusted data file is available but unfortunately, we would lose a significant number of observations if we were to use it. Consequently, to keep the sample size as large as possible and still allow for comparability, we split-adjust the management guidance from the CIG file using the split-adjustment procedures used for the analysts estimates and reported earnings per share in the First Call file.[12] 4. Empirical Analysis. 4.1. Univariate Analysis. We present descriptive statistics for the guidance announcements, firm-specific characteristics and variables relating to analysts and stock returns in Table 1. We also include the results of two-sample t-tests and Wilcoxon signed rank sum tests for each variable. As noted before, we provide a list of variables and their definitions in the Appendix. We begin with forecast characteristic metrics designed to help us understand the differences, if any, in the specificity, timeliness, frequency and content of the earnings forecasts offered by the management of family and non-family firms. We present descriptive statistics first for the form of the forecast (an indicator of specificity) as measured by Forecast Form. As is well known, forecasts in the CIG database take one of several forms, which we code in the following manner: If the forecast is a specific earnings per share number (a point forecast), it is coded as 4; if it is a range of possible earnings per share numbers (a range forecast), it is coded as 3; if it consists of a one-sided directional forecast (either a maximum or minimum forthcoming earnings per share number), it is coded as 2; and if it contains no quantitative information (a qualitative forecast), it is coded as 1.[13] Note that our coding scheme is designed so that a higher value of Forecast Form indicates a mo re specific forecast. To further examine forecast specificity, we focus next on Forecast Width for range forecasts, which measures the difference between the maximum and minimum earnings per share figures offered in the forecast. (A narrower width indicates a more specific forecast.) In later tests, we include point forecasts as forecasts with a width of zero. To examine forecast timeliness, we use Forecast Horizon which is the number of calendar days from the management forecast date until the end of the quarter. More days in the forecast horizon indicate more timely forecasts. Finally, we form Annual Frequency and Quarterly Frequency variables, which measure the number of annual and quarterly management forecasts for each of our sample firms in the CIG database from 1994 through 2006, scaled by the total number of possible forecasting years (for Annual Frequency) or quarters (for Quarterly Frequency) to date. The descriptive statistics and statistical tests for Forecast Form provide initial evidence consistent with family firms issuing significantly more specific guidance than non-family firms. In particular, Forecast Form has slightly higher numerical values, on average, for family firms (p = .028, using the Wilcoxon test).[14] To further explore the potential differences, we examine the frequency distributions of the forms that guidance takes, as presented in Figure 1. As is obvious from the figure, range forecasts are by far the most common form of guidance for both family and non-family firms, making up nearly two-thirds of all guidance in our sample. Further, both family and non-family firms offer approximately 89% of their guidance as point or range forecasts. However, family firms offer relatively more of the more specific point forecasts (28% versus 23% for non-family firms) and relatively fewer of the less specific range forecasts (61% versus 66% for non-family firms).[15] Conver sely, guidance in the form of qualitative statements or minimum/maximum earnings per share numbers is unusual in our sample, regardless of the type of firm examined. The small number of qualitative forecasts in our First Call sample is inconsistent with Hutton et al. (2003) and Miller (2002), who find a substantially larger number of such forecasts when hand-collecting their samples than are included in the First Call database. (Anilowski et al. 2006 also suggest that First Call is more likely to include quantitative forecasts than qualitative ones.) This suggests that our sample is most likely incomplete and most representative when only quantitative forecasts are considered. For these reasons and because many tests require that we restrict attention to point and range forecasts, we will generally focus our discussion on point and range forecasts only. As just noted, range forecasts are the most common type of guidance in our sample. While it is clear from Figure 1 that non-family firms issue more range forecasts as guidance than family firms, Table 1 indicates that those issued by family firms are significantly narrower, as measured by Forecast Width (p = .000 for both the Wilcoxon and the two-sample t tests). This finding, when considered with the preliminary evidence of greater usage of point forecasts by family firms, suggests that guidance issued by family firms is generally more specific than that issued by non-family firms, consistent with H1. The next two forecast c

Italian Mafia Essay -- History

Italian Mafia The Mafia was first developed in Sicily in feudal times to protect the estates of landlords who were out of town. The word Mafia, derived from the Sicilian word, Mafioso, means family. Today, Mafia is a name which describes a loose association of criminal groups. These groups can be bound together by blood, oath or sworn secrecy. Many people had considered the Sicilian Mafia as the most ruthless mobsters of the twentieth century. By the nineteenth century, the Mafia had become known as a network of criminal thugs that dominated the Sicilian countryside. Members of the Mafia were bound by Omerta. Omerta, an Italian word, stands for a strict code of conduct. The code include avoiding all contact or cooperation with authorities. In the beginning the Mafia had no centralized organization. It consisted of many small groups. Each of these groups was considered as a district. And, each of these districts, had its own form of government. The Mafia had gained their strong-arm by using scare tactics amongst the people. By using these terroristic methods against peasants who could vote, the Mafia used this upper hand in placing themselves into political offices. They would achieve this in several communities. Using this political power in their advantage, the Mafia was able to gain influence with police authorities and the ability to obtain legal access to weapons. Benito Mussolini was the premier-dictator of Italy from 1922 to 1943. He was the founder and leader of Italian Fascism. Mussolini, along with his Facets government, was able to successfully suppress the Mafia during the time of World War II. However, after the war ended in 1945, the Mafia emerged and ruled once again. Over the next thirty years, the Sicilian Mafia was not only able to gain control Sicily, but all of Italy as well. In the second half of the nineteenth century, America had the largest number of immigrants moving to the United States ever known. There is a recorded three million Irish, four million Italians, and four million Jews that immigrated to the United States during the later half of the nineteenth century. People immigrated for a number of reasons. Many of them dreamed of leaving behind their old worlds. Worlds of oppression, fear, and crime. Unfortunately, this dream was shattered for many of the immigrants. For those who migrated to Chicago, severa... ... the rest of his life in his mansion in Miami Beach, Florida. A great contribution to the Chicago Mafia died alone in 1947. In the early 1980's, the Italian government launched an anti-Mafia campaign throughout all of Italy. Not only did this lead to a number of arrests and trials, but it also was the reason for several assignations of key law-enforcement officials whom were in retaliation. For the past two decades, both America and Italy have been cracking down on the organized crime group known as the Mafia. Criminal activities concerning those involved in the Mafia have declined dramatically. The modern underworld crime of today consists of business men and women with a strong knowledge of computers. Old world ways such as killing, riots, and vendetta have been done away with. Today's "mobsters" are highly educated extortionists dressed in suites. The old ways of organized crime will never be the same again. The desire, need, brutality, wisdom, and style of what we know as the Italian Mafia only exists in books and movies. In my opinion, the time of the Prohibition was, and always will be the most recognizable time of the underworld because of the Italian Mafia.

Police, Civil Liability and the Law Essay

At the onset of the 20th century, police work can best be described as very authoritative and policemen or law enforcers were themselves considered the law. Criminality was low principally because of the relatively stable economy and the population density in cities and urban centers were a hundred time, or even more, than today. As symbol of authority, the police was then looked up to by the citizenry with great respect and even with admiration. Through the years, the public image of the policeman is suspect. In truth city police departments today already employ spokesmen or public relations officers to ensure the respectability of the service is protected and preserved. The changes in the concept of police work tremendously changed over the last century, or to be more specific the 25 years. The situation was brought about by the growing public conscious on human rights which is guaranteed no less by the United Nations. While before police training was focused on proper handling of firearms and marksmanships, traffic rules and regulations, today’s police officer should be conscious of every person’s human rights. Otherwise he or she may end up in court being sued for civil liability or damages. Changing Concept on the Police Over the years the police service has underwent some sort of an evolution. From a strong image of authority, the police has to some extent been compelled to accept the fact that their functions or source of power emanates from the taxpayers who wanted them to be their protectors instead of oppressors. The situation is quite complex. While they have the mandate to enforce or implement the laws, the police are being restricted by a string of guidelines better known in their lingo as the rules of engagement. They have to comply with the rules in the performance of their duties because failure to do so could mean suspension or worse dismissal from the service. Unlike before when for instance, a traffic police officer can simply issue a citation ticket to a motorist who violated a traffic law today’s system places the supposed violator on a position of strength. He or she can write on the citation ticket the words â€Å"under protest† to signify the intention to question the actuation of the traffic officer for flagging him or her for a supposed violation. The situation for policemen whose duties are to run after criminal elements or members of the underworld is even more difficult. Unlike before when they would simply pick up a suspected person and have him or her placed under interrogation or â€Å"tactical questioning,† today’s detective or police intelligence officer need to first gather substantial proofs or incontrovertible eyewitness accounts in order to be able to apply for a warrant of arrest from the court. Down for a supposed violation Because of the complex nature in today’s justice system, police work now requires them to be conscious of the civil or human rights of every citizen. Additionally, they also need to be more aware of the rules of court or run the risk of being rebuffed or they cases they brought up for prosecution or litigation may end up dismissed for either insufficiency of evidence or non-compliance to the rules in effecting or carrying out arrests and raids. The preponderance of diligence in the performances of police duties and responsibilities in the enforcement of the laws is so emphasized that police officers are restricted from conducting investigations or questioning without the presence of the suspect’s preferred or lawyer of his or her choice. Civil Liability of Abusive Members of the Police Department Today’s police officers are made by law liable for their actuations as a result of an alarming pattern of abuse they commit in the process of dispensing their duties. Perhaps because of media attention or coverage on police work, abuses have eventually been documented or difficult to deny as far as the police officer is concern. Every now and then, the public would see on television brutal police handling of suspected offenders. The abuses have become so frequent that the time has now come where victims of police abuse have to get back at them by suing for civil liability or damages. Perhaps, as society experiences new trends in law enforcement more laws to ensure that the power or authority vested in police officers are only used for the public good and not make the police as a threat to society itself. By making them civilly liable for high handedness in the performance of the laws, police officers will be kept on their toes. Guide to Civil Liability In view of the above positions, it is notable to discuss a book manual for police officers’ to consider in the performances of their duties and in relation to their civil liability and the law. In a book entitled â€Å"The Police Officer’s Guide to Civil Liability,† Franklin (1993) emphasized the need for law enforcers, police officers in particular, to adhere to a standard guide to enable them to abide by their principles and at the same time uphold the concept of civil liability. Franklin noted that due to the increased number of court cases hurled against police officers, there is also a mounting need to teach these law enforcers on the dynamics of civil law. This is because such training or learning should be innate among police officers and within their profession and in order for them to survive the field (Franklin, 1993). While the required knowledge on civil liability totally varies from their abilities and expertise which are essential to be alive in a fatal shooting incident, having proficiency about civil law may avert a devastating possibility or outcome which will ultimate affect the career of the police officer and which is definitely dreadful as any form of shoot-out or gun battle. Additionally, the monetary and emotional implications of a civil case are often than not surpass the physical suffering which is likened to a gun shot wound (Franklin, 1993). The book noted that as professionals, police officers are, in one way or the other, are engaged in a civil case. Franklin noted the stress it had inflicted on law enforcers and their respective police departments in general. However, police officers are still limited with civil law or civil liability trainings which may assist them in their court battles. It is unfortunate to note that a large amount of money which will be used in the court proceedings as well as many lives of police officers could be saved if only there is a provision of civil liability education or training. This is because such kind of knowledge created a better and well-prepared police officer who can react to any kind of police situation or effectively carry out his duties to people and the society. Through this training, there will also be a reduction in the possibilities of a defeat in the civil case, and most importantly, this is the fundamental determining factor for the efficiency and value of police officer and his civil liability training (Franklin, 1993). Conclusion An increased awareness on the need for police officers to learn and adhere to civil liability in reference to specific laws of the country is a positive effort to undertake. This is because such consciousness will allow police officers to carry out their obligations, in a legal or appropriate manner, without the hindrance of possible civil lawsuit. While there are members of the police force who are undeniably amiss in their profession, it is worthy to consider that this is not the general view of the police department. Additionally, any misconception about the police profession may be corrected in such a way that the police officers are portrayed as important members of the society who are bound to protect people, property and the society as a whole. Hence, it is just but fair to provide police officers trainings and related means which will enable them to appropriately respond to the security or safety requirements of the people. Ultimately, the concept and the need to uphold civil liability will serve as a reminder for police officers that their authority entails responsibility.