Elementary education effectiveness in Mississippi Essay

Mississippi consists of four-hundred and eighty-six thousand people living in poverty; ten percent of children belong to families that are not able to meet their needs (2005). Recent statistics show that those living in poverty are fifty-one percent African American and approximately forty-seven percent Caucasian (2005). Research has shown that the socioeconomic status of students influence the degree of success they will experience. (Donahue &Grigg, 2003) Mississippi has varying degrees of reading proficiency among school districts. In the 2003-2004 school year, six districts, consisting of one elementary school, five middle schools and one high school, were identified as â€Å"in need for improvement†, based on the reading and math proficiency of its students. For the purpose of this study, only schools reflecting a lack in reading proficiency will be discussed. The U. S. Secretary of Education, Margaret Spelling announced in a November 2005 press release, â€Å"Eighty percent of the fastest-growing jobs require at least some post secondary education. Yet far too many students are leaving high school unprepared for college†. Improved student achievement can provide students better preparation for college, thus closing the achievement gap. Low socioeconomic schools, although improving, are still behind the majority of middle-to-upper class schools in America (Donahue & Grigg, 2003). There are several factors to consider when looking at closing the achievement gap found in low socioeconomic schools. One factor is that â€Å"young, low-income and minority children are more likely to start school without having gained important school readiness skills, such as recognizing letters and counting† (2003). As Donahue and Grigg’s report showed, when students start school already behind others, they are likely to continue such patterns if not addressed early on. Existing studies demonstrate the problems researchers are having addressing literacy issues early on in a students academic career. Researches are trying to find appropriate strategies to combat the achievement gap with many variables which will be discussed further in detail, in the following study. Purpose of the Study The following is a detailed investigation into possible explanations of varying degrees of reading achievement found in Mississippi and what can be done to maintain a higher overall proficiency in reading among Mississippi students, while satisfying the requirements of the No Child Left Behind Act of 2001. Many schools have chosen to implement a â€Å"school-wide approach† to closing the achievement gap; however, when dealing with schools consisting primarily of low-income students, there are other factors to consider when choosing a strategy. The proposed study will focus on improving reading skills in high-poverty schools found in Mississippi by comparing different techniques widely used and creating a more targeted strategy for low-income students. When deciding on an appropriate strategy for improving reading comprehension there are a few factors one must consider. The following questions will outline the factors to be researched in this study. Research Questions 1. What impact does social economic status have on the achievement gaps found in the State of Mississippi? 2. What are the contributing factors found in Mississippi schools that are demonstrating low reading scores among economically disadvantaged students? 3. Are there high-poverty schools in Mississippi which demonstrate positive improvements in reading scores? What are the strategies used? 4. How does implementing Theory into Practice (TIP) encourage positive student achievement in disadvantaged schools? Hypothesis To affectively close low socioeconomic achievement gaps in reading, strong emphasis on establishing proficient reading ability should be made in elementary school. Nature of the Study The research conducted in this study will be an investigation of existing literature regarding techniques used in improving reading skills, exemplary schools demonstrating such techniques and finally, a suggested strategy to use when applying research to low socioeconomic schools with low reading proficiency found in Mississippi school districts. Significance of the Study The significance of this study is that by identifying factors contributing to the achievement gap found in low socioeconomic school districts, as well as investigating into existing programs that have had a positive influence on reading performance scores in other high-poverty schools is that, school administrators and policy makers will have a better basis in which to improve upon existing programs and interventions that would be more financially attainable than starting new programs. The high cost of starting new programs such as; creating new assessment strategies, providing more staff and researchers as well as other costly planning and implementing variables, often times are not practical for low-economic schools. While children of today are growing up in a world where data are being revealed at an alarming rate and knowledge is simply a click away, reading plays an increasingly crucial role in society (Topping & Paul, 1999). The ability to read is not only fundamental for understanding and mastery of every school subject students will encounter, but literacy also plays a critical and crucial role in students’ social and economic lives (Snow, Bums, & Griffin, 1998). As a result, no other factor will have a greater impact on the success of students in Mississippi than their ability to read. With such an emphasis placed on the importance of reading achievement, educational leaders must clearly articulate the expectation that all students can become successful readers, while providing the most effective strategies and opportunities for students to succeed in reading and adopt lifelong reading practices. (Okpala, et al. , 2001) Definitions of Terms Action Team for Partnership- This partnership is also known as a School Improvement Team or a School Council. Although the ATP members oversee the school’s partnership program, other teachers, parents, students, administrators, and community members also may lead family and community involvement activities (ATP website). Adequate Yearly Progress- AYP requires that schools hold the same high standards for all their students; regardless of racial or ethnic background, socioeconomic status and English proficiency Core Academic Subjects- These subjects include: English, language arts and reading, arts, civics, government and history, mathematics and science, foreign languages, as well as, economics and geography. Elementary School- a nonprofit institution which includes, public school, day or residential school and elementary charter schools which State law mandated elementary education. Family Literacy Services – The services provided to participants on a voluntary basis that foster a positive change in families. These changes include, providing families with interactive activities between parents and child concerning literacy, teaching parents to take an active role in their children’s education, teaching self-sufficiency by providing parental literacy training, and providing education to children which is age-appropriate and prepares them for school and life experiences. Highly Qualified (in reference to public elementary or secondary school teacher) – A highly qualified teacher will possess a State certification for teaching or holds a license to teach in a particular state due to passing the State exam and is employed in a teaching position after meeting all required testing, training and educational requirements satisfactory to the State, district and school regulations. Mentoring- A responsible elder who provides positive leadership and guidance to a child as a positive role model in that child’s life. A mentor mission is to help a child to one day become a responsible adult. Minority- a group of students which do not demonstrate the majority’s characteristics, such as socioeconomic status, ethnic background or other key characteristics. Other Staff- staff found within an institution such as personnel, guidance counselors, and administration and teachers aides. Limitations In her 2005 press release Secretary Spelling said, â€Å"we all hear a lot of stories about why schools are missing Adequate Yearly Progress, but we don’t hear much about how thousands of other schools are making it and closing the achievement gap†. This study is limited by location; its main concentration being primarily on Mississippi schools, programs and outcomes. The primary research method is investigating existing literature, as such; there is substantial literature on the failures of many schools trying to improve student achievement; however there is very little literature depicting success. One other limitation to consider is that this study focuses on reading proficiency; however; to get the most accurate depiction of a schools success is to consider all core academic subjects.

Racial Profiling Essay

A person should not be judged due to their appearance. Today skin color makes you a suspect in America. It makes you more likely to be stopped, more likely to be searched, and more likely to be arrested and imprisoned. When police officers stop or charge a person based on their race; that’s racial profiling. Racial profiling has been occurring around the nation for years. Statistics show that if a Caucasian man and an African American man are both driving a nice car and speeding at the same time; the police officer is most likely to stop the African-American man. Not only is racial profiling wrong, but is disrespectful to minorities, and should be illegal throughout America. Racial profiling should be illegal because it causes discomfort and humiliation to many minority citizens, lack of unity in the American people, and the possibility of real criminals getting away because he is not a minority thus becoming a threat to society. Racial profiling causes a huge discomfort and humiliation to many minority citizens. New Jersey officials admitted to racial profiling on April 20, 1999. The report showed that racial profiling practices in New Jersey are not just an insight. The report recognized the targeting of African American and Latino drivers to troopers who abused their positions by ignoring the rights of minorities. Police officers don’t understand how degrading and humiliating this can be. Yes racial profiling can be used by countries to fight crimes thus giving security to its citizens, but it also causes a discomfort to minorities. Additionally, the more police continue to arrest citizens based on their race, cultural background, and religion the more we lack unity in America. When police officers offend minorities by racial profiling, it makes the country divide even more. You would think that after the civil rights movement people would become as one; however, racial profiling only makes it worse. How can we unite as a country if we can not look past the surface? Racial profiling is a great divider among the people in America; if America can not look past its differences this problem will worsen, and then America, the land of the great, will fall. Don’t ask what the police can do to make the situation better-but what can we do to help the police make the  situation better! The Possibility of real criminals getting away is becoming a threat to society because police are overlooking the fact that he or she is not a minority. If a detective is given a description that does not include the ethnicity of the suspect, they automatically search for a suspect that has the ethical background of the African American, or Hispanic decent. This happens because African-Americans and Hispanics are known for causing the most crimes, which is why we need to stop the racial profiling. With that being said, this inevitably disregards all the possible suspects who are not of the minority decent. Even though racial profiling is used by police to narrow down their search for the possible suspects, minority citizens become more intensified with the fact that they are the ones being targeted and accused for such crimes that they did not commit. To conclude, racial profiling is a conflict all around America. We as citizens in America need to our best to stop racial profiling; I reiterate we need to try our best to stop racial profiling! I heard this quote once â€Å"United we stand, but divided we fall.† This quote should urge you to want to put an end to racial profiling. Racial profiling is something that may never stop in America. It is wrong and unjust. Still, it is something worth fighting for, for the many who suffer because of the problem and for this country in general. Everyone has different opinions on Racial Profiling, some people say there are benefits or others have negative impacts on racial profiling.

Women In the US Army Research Paper Example | Topics and Well Written Essays - 3000 words - 1

Women In the US Army - Research Paper Example Opposing the traditional socio-religious barriers to and prejudices that women are best suited for indoor activities due to their psychophysical fragility, women’s position in outdoor activities was reinforced by their participation in the Women’s Army Auxiliary Corp. Indeed the root of the Women’s Army Auxiliary Corp lies in the women’s unarmed services â€Å"with the Army under contract and as volunteers during World War I as communications specialists and dietitians† (Bellafiare 4). Subsequently, a bill regarding women’s inclusion into the US Army as regular personnel with equal pay, equal legal protection, disability benefits, pensions and medical care was proposed by Edith Nourse Rogers, the Congresswoman of Massachusetts. But Rogers’ propositions did not go unchallenged since â€Å"both the Army and the American public initially had difficulty accepting the concept of women in uniform† (Moore 34). Finally, Rogers’ c ommittee and the US Military authority came to a compromise regarding the women’s legal rights in the army and the Womens Army Auxiliary Corps (WAAC) became existent in 1942 by Public Law 554 () as a branch "for the purpose of making available to the national defense the knowledge, skill, and special training of the women of the nation." (Bellafaire 7). Later, the WAAC gained the full status of an army branch, being converted to Women’s Army Corp (WAC) in 1943. About 150,000 American women â€Å"served in the Womens Army Corps (WAC) during World War 11. Members of the WAC were the first women other than nurses to serve within the ranks of the United States Army† (Bellafiare 5). Though Rogers’s idea was to provide the women with full status of army personnel in the US Army, due to the novelty of the idea and social barriers and prejudice towards women’s participation in armed activities, the WAAC members did not have the full rights that their male counterpart had

Childrens Rights in Education Essay Example | Topics and Well Written Essays - 2500 words

Childrens Rights in Education - Essay Example Children are a symbol of the continuity of society, and our hope and faith that the world goes on. Though parents and guardians are often seen as role models for children to emulate in society, as they grow up to the realities of the world around them, it is no less important to recognize that children too must have a right to voice their feelings about how they feel, what they want and what they do not prefer in regard to physical, emotional, psychological, educational and mental development. Organizations like the UNICEF, OHCHR and others have promoted the cause of children’s rights through programs like Right to Voice, the Junior 8 Summit, the Children’s Climate Forum and the Right to Know Initiative, covering everything from global climate change to knowledge about AIDS and how to prevent HIV infections. They believe that involving children in these initiatives will not only make them more aware of these important issues but in time turn them into emerging leaders a nd developers in society. Invariably, children’s right to voice will have a visible impact on their right to education and vice versa. Discussion What does the right to voice mean for children? How can we address the rights to voice of the child to be heard? These and related questions will form the basis for this essay. Our children are our leaders of tomorrow and listening to them and giving them a voice in decisions impacting the future of their society will certainly reap dividends by making them aware and more responsible about these issues. It is also important to fight for the rights of the child in closed societies where they are suppressed and controlled through age old hierarchical traditions. The UK and Northern Ireland ratified the United Nations Convention for the Rights of the Child on 16 December 1991. This document summarizes no less than 42 tenets that must be followed by every country accepting it; furthermore there is also a responsibility to educate school s, teachers, parents and guardians on these matters (OHCHR, 1990, 1). According to Article 2 of the UN Convention on the Rights of the Child, it is expected that: â€Å"The child, for the full and harmonious development of his or her personality, should grow up in a family environment, in an atmosphere of happiness, love and understanding. The child should be fully prepared to live an individual life in society in the spirit of peace, dignity, tolerance, freedom, equality and solidarity† (UN Convention on the Rights of the Child, 1990, 1). Unfortunately, due to various social evils prevalent across different parts of the world, there are organized efforts to exploit children in various ways, ranging from child labour to slavery to prostitution. Children’s Rights Laws have been created to deal with cases involving juvenile delinquency, ensuring due process for children involved in the criminal justice system, allocating appropriate representation and effective rehabilit ative services, providing for the care and protection for children under State care and ensuring proper health care advocacy and education for all children regardless of their origin, race, gender, disabilities or abilities. The aim of child rights in education and in the community is meant to ensure a hopeful existence free of violence, exploitation, poverty and neglect as experienced in many underdeveloped nations. It is clear that all children regardless of where they are born in the world have a need for and should be provided access to basic education, health services and support systems that nurture love, hope and encouragement by society. Undoubtedly all these things are required in order for them to experience childhood to the fullest and to eventually develop into

BUYER BEHAVIOUR Essay Example | Topics and Well Written Essays - 2500 words

BUYER BEHAVIOUR - Essay Example to as consumer behaviour is an essential component of marketing because it helps in the determination of pricing incentives, mode of advertising and brand differentiation among others. This paper therefore seeks to identify and illustrate the concepts that facilitate understanding of buyer behaviour as well as evaluate the various models or theories of buyer behaviour with close association with the concept of neuroscience. Another area that will be looked at is the area of decision making process in consumption that gives rise to the various types of consumer purchases. To begin, buyer behaviour generally refers the process in which consumers take in order to make decisions on acquiring certain goods or services for their own use. Consumer buying behaviour is therefore a multi-staged process that involves the identification of a specific need and even goes beyond the consumption stage to an evaluation one. It is for this reason that consumers are likely or unlikely to consume one product as opposed to the other in cases where there is indifference between two products. The consumer buying process is a complex one because of the influences it relies on and the characteristics of human diversity that makes us act differently. Some research studies have also indicated that the buying behaviour can also be linked to neuroscience. It is therefore important to understand the process of consumer buying behaviour as shall be discussed in the following section. The consumer buying decision-making process model adopts a five stage interconnected process that illustrates how individuals or consumer groups will always conduct themselves before and after purchase of a product or a service (Riley 1). The first stage is the need identification and problem awareness stage. At this stage, an individual identifies a need within him or her that needs to be satisfied. The utilitarian theory has been associated with this stage of decision making. Since an individual identifies that

Americas Executive Document 9066 Assignment Example | Topics and Well Written Essays - 750 words

Americas Executive Document 9066 - Assignment Example In a few months, over 110,000 (over 65 percent) were relocated to the internment camps, which were constructed and dispersed in Arizona, California and other states in the western side. There was a special provision for those who were half cast; the American women married to Japanese men had an option to go to the internment camps with their husbands (Harrison). Question 3 The executive order 9066 was unconstitutional and violated several rights due to American citizens. Their right to religion was adversely violated. The practice of Buddhism was prohibited in the internment camps, and there was no placement of Buddhist clergies in the separate camps. The Shinto religion was restricted and Christianity proclaimed and encouraged in the internment camps. Their freedom of speech and press was also contravened with the banning of Japanese speaking in public and the prohibition of reading newspapers in the camp. The formal language they were expected to speak was English only in public me etings. Breaching their right to assemble, they abolished to do groupings or congregations. Their freedom to petition was not guaranteed, they were, therefore, unable to seek redress. They faced unreasonable seizures and searches. Their right to the indictment was also contravened. Many other rights and freedoms were abridged. Question 2 A multiplicity of issues led to the federal government’s intervention into civil rights. ... The exact time span for this movement is debatable but it is common knowledge that key events occurred between the 1950s and 1960s. In 1954, there was a ruling in the Supreme Court against racial segregation amongst students in publicly owned schools. Question 3 The year 1957 saw Arkansas’ governor in a bid to stop nine African American students from joining a high school. The sitting president that time ordered federal officials to enforce the court order. The black’s right to vote was protected by the civil rights act of 1957. The year 1960 saw President J. F. Kennedy intervening to ensure the safety of a group of citizens. These citizens were casualties of the segregation in interstate train and bus stations. Question 4 About ten percent of Mexican nationals live and work in the United States. Immigration policy has been an issue in Congress for a long time. One of the policies was to strengthen migration and border security control. This policy was aimed at deterrin g and preventing the levels of illegal migrations into the United States. Devised in 1995 and published in 2005, its implementation has been strategic and stepwise. It has included fencing, surveillance and strategically positioned personnel. Another policy was on changing the LPR and non-immigrant visa systems. There was also a policy to legalize certain unauthorized aliens. Many of these options would establish new mechanisms or pathways, with Mexicans being among the largest group of beneficiaries of most such proposals.  Ã‚  

Self evaluation Assignment Example | Topics and Well Written Essays - 1000 words

Self evaluation - Assignment Example In the Critique of Practical Reason (2012), the philosopher considers the categorical imperative as an â€Å"act in such a way that the maxim of your will can always simultaneously hold as a principle of a universal legislation.† Another formulation can be found in his work titled The Groundwork of the Metaphysic of Morals (2011): â€Å"You use humanity, whether in your own persona or in the person of any other, always at the same time as an end, never merely as a means.† Kant believed that the categorical imperative is an obligatory law. All people should follow it regardless of their nationality, wealth, etc. Universality and strict adherence were the two main characteristics of the categorical imperative. Compliance with the categorical imperative is the highest human duty. Despite the humanistic nature of this idea, it might be dangerous, because in some cases, blind adherence to this principle can lead to tragic consequences. In this regard, I am a supporter of con sequentialism in the form of the theory of utilitarianism. Utilitarianism is based on the â€Å"the claim that an act is morally right if and only if that act maximizes the good† (Sinnott-Armstrong, 2011). In other words, attention is paid to the consequences of human actions to a large number of people. I believe that utilitarianism can be used both in social processes, and in business and professional environment. The theory of utilitarianism received its main development in John Stuart Mill’s ideas. Mill considered morality in its connection with the human’s ultimate goal, aimed at satisfying all human desires (Wilson, 2007). Happiness presented in a form of benefit was seen by Mill as a long-term pleasure. However, utilitarianism protested against the theory of egoism, based on the idea that people should strive to meet only their personal desires. The admissibility of pleasure or benefit is determined by their level of

Application for a Job as an Advertiser Essay Example | Topics and Well Written Essays - 1750 words

Application for a Job as an Advertiser - Essay Example Most of all my academic credentials are an elaboration to claim my remarks. Just as clarified in my credentials, I have demonstrated to be in a deep touch with both oral and written language. Next, after an internal internship with my learning institution, I am convinced that I have accumulated adequate communication skills. This comes after I was awarded on merit for exemplary performance, by the information and communications technology department. Much to effect my career, I have mastered an open minded approach to tackling everyday issues, this has not only drawn creativity in me distinctively but has also equipped me with the ability of innovation. Given the nature of activities the profession entails, I am compelled to extend my capacity to flexibility. I can’t deny that I am often challenged with extreme working conditions. However, I have most often than not demonstrated good coping skills; so that I guarantee success in that which is expected of me. In any case, every one needs orientation in any field. Personally, I don’t believe in empty directions but rather issue-based resolutions; I am a man of action. To a minor extent, I have often compromised my interpersonal skills. For instance, when I strongly believe on my stand I am always driven into making it more stern thereby portraying rigidity. However much I may be right, this should never be part of professionalism. Fortunately, I am hopeful that after a series of intensive seminars and exposure to the job market, I will undoubtedly be in a position of utmost professionalism. My Curriculum Vitae and Attachment Letter. POST APPLIED FOR: 1. Personal Details SURNAME Bull INITIALS J. B. Permanent Address and Postcode: P.O BOX, 2298-764 Westminster, K-4 Street, Dapard Address for correspondence (if different): N/A Telephone No(s) Home: 11123647 Work: 111240032 Email Address Onomtpoei@hotmal.con Mobile: 0766224365 Are we able to contact you at work? By Phone: Yes / No= Yes By Email: Yes / No =Yes no Do you hold a current full car driving license? Yes / No= No 2.

Entrepreneur Essay Example for Free

Entrepreneur Essay Personality traits of an entrepreneur depend on number of factors. There have been various researches and studies in order to understand these factors and the relationship between these factors and entrepreneur personality traits and characteristics. Personality and behavioral factors, environmental factors, action factors, social and cultural factors and political and legal factors impact the personality and characteristics of entrepreneur (Bolton Thompson; 2000, Hayton, J C, Salvato, C and Zahra S A; 2004, Lumpkin, G.  T. Dess, G. G. ; 1996, Sandberg, William R. 1992). According to Robinson and Sexton (1994 as cited by Crant, 1996) from a sample of over 181,000 people culled from the 1980 U. S. Census indicated that education is positively related to entrepreneurship and self-employment. In another study conducted by Crant (1996) the research established relationship between the demographic factors like age, sex and family background and entrepreneurship. According to the results of these studies young people are more likely to get into entrepreneurship than people of old age, numbers of males aspiring for entrepreneurship was more than females and people with business family background are more likely to get into entrepreneurship than others. The family support in financial and psychological matters strengthens the efforts towards achieving his goals. Entrepreneur while using family finances for his business becomes more vigilant and careful to the risks and returns. Social and cultural set up is very important in entrepreneurship. According to Barney, Clark, Alvarez (2003 as cited in Hayton, Salvato and Zahra, 2004) â€Å"Furthermore, the kinship-ties that are unique to family firms are believed to have a positive effect upon entrepreneurial opportunity recognition. † In the same work of Hayton, Salvato and Zahra (2004) it is quoted that â€Å"Owner managers also understand that their family firms survival depends on their ability to enter new markets and revitalize existing operations in order to create new businesses (Ward, 1987). In the work of Covin and Miles, (1999) they mentioned the observations of Burgelman, Kosnik, and van den Pol (1988) which refers to the introduction of a new product, process, technology, system, technique, resource, or capability to the firm or its markets. According to Covin and Miles (1999) entrepreneurs can be characterized by their bypass strategies and product market pioneering strategies. While the level of aspirations is partly determined by the level of skills, it is also affected by the values and personality traits of the entrepreneur (Hollenbeck Whitener, 1988; March Simon, 1958). March Simon (1958) also postulated that environment (context) affects aspirations. (Harron and Sapienza, 1992) Harron and Sapienza, (1992) suggested a model which determines interaction between personal values and context and personality traits and context. Numbers of studies have been conducted to understand entrepreneur process and develop a conceptual frame work around it. Krueger and Brazeal (1994 as cited by Crant, 1996) studied entrepreneurial potential whereas Naffziger, Hornsby, and Kuratko (1994 as cited by Crant, 1996) studied entrepreneurial motivation. These studies have provided base to other studies conducted to develop conceptual framework and models of entrepreneurial personality traits and characteristics. As cited by Moon (1999) â€Å"Risk-taking here is a strict managerial term discussing the propensity for organizational change and innovative decision-making. † The interview revealed that Paul defines entrepreneurs with their risk taking opportunity exploiting abilities. This is one of the characteristics of personality of an entrepreneur. Paul’s statement support Moon (1999) view regarding risk taking and decision making behavior. Paul appears to be aggressive in his tone and enthusiastic about his work. His risk taking ability is backed by the calculative measures and market studies as he says â€Å"I see the risks that I take being very calculated and not designed to lose money†. Paul utilizes marketing tools for promotion and increase the visibility of his products. In his statement he says â€Å"we’re probably the biggest and we see ourselves as market leaders rather than followers†. He converted his hobby into his business. This was an area where he has knowledge as well as interest. He is a well educated person. He has gained experience prior to starting his own business. He gives importance to the support he receives from his social system; family and friends. He is persistence with his work, has good planning skills and organized in his work. He is quick in his responses and provides immediate feedback to any kind of change in market place or within their organization. His energy levels and enthusiasm are high. He is very independent and goal oriented. He has a vision and goal and he works in order to achieve his goals. He is very committed to his work. He takes personal initiatives to achieve his objectives. He is very competitive. This can be inferred from his statement that â€Å"we are probably the biggest and we see ourselves as market leaders rather than followers. † He constantly looks for market opportunities and goals.

An analysis of Critical Race Theory

An analysis of Critical Race Theory Critical Race Theory (CRT) was pioneered in the mid- 1970s, by who is considered to be the God Father of CRT, Mr. Derrick Bell, a professor at the New York University School of Law. He was not only angered by what he viewed as the slow progress of racial reform in the United States, but he also held that the gains brought about by the civil rights laws of the 1960s were being eroded in the 1970s ( Discoverthenetworks.org). Mr. Bell saw how people were being mistreated and saw the need for change. Not caring how people saw him or what the said about him, he continued to move forward towards progress and the conception of Critical Race Theory. According to Professor Bell and his fellow Critical Race theorists, existing legal structures are, like American society at large, racist in their very construction. Critical Race Theory suggests that to combat this institutional racism, oppressed racial groups have both the right and the duty to decide for themselves, which laws are valid and are worth observing. Critical Race Theory also promotes the use of storytelling narratives in law-review articles to better reflect the oral traditions of black experience (Discoverthenetworks.org). Traditions can only be shared by people via word of mouth, storytelling back in the day. Bell set precedence so that others to come after can be better prepared when using the CRT. In Bells original publication he states three major arguments in his analyses of racial pattern in American Law, the Constitutional Contradiction, the Interest Convergence Principle, and the Price of Racial Remedies. In The Constitutional Contradiction, Bell argues that the framers of the Constitution chose the rewards of property over justice. With regard to the Interest Convergence, he maintains that whites will promote racial advances for blacks only when they also promote white self-interest. Finally, in The Price of Racial Remedies, Bell argues that whites will not support civil rights policies that may threaten white social status. Each of his arguments sheds a different light on the traditional racial discourse (english.turkcebilgi.com). These arguments Bell stated were to make sure that everyone knew and was aware and what was ahead of them in this struggle. One of the most recent publications using the CRT theory is Talking about Race Using Critical Race Theory: Recent Trends In The Journal Of Marital And Family Therapy (2004). Laureal and McDowell state that: CRT is a useful lens that can inform MFT practice in education, research, and therapy. For example, educators can use CRT to critique Eurocentric MFT curricula, integrate marginalized voices in course readings, and engage students in critical discussions about racism and social justice. We believe CRT holds significant promise for MFT by critically considering multiple identities, acknowledging sources of dominant ideologies, committing to social justice, creating space for marginalized voices, and spanning boundaries to build interdisciplinary knowledge of racial relationships (p.92) Another recent publication, Exploring possibilities through critical race theory: Exemplary pedagogical practices for Indigenous students (2003), McDonald states in this publication: I examine the contribution that critical race theory (Ladson-Billings, 1998, 1999, 2000) can make to understandings of the experiences of Indigenous students in Australian schools, which continue to be a site of both struggle and possibility for Indigenous people. Recent government reports (Department of Education Science and Training, 2002; Yunupingu, 1995) have concluded that there have been considerable improvements in the educational status of Indigenous Australians since the introduction of the National Aboriginal and Torres Strait Islander Education Policy (Department of Employment Education and Training, 1989). However, inequities remain. These inequities are clearly evident in the area of secondary education. critical race theory should remind Australian researchers to draw on the specific experiential and subjugated knowledges of Indigenous Australians (Moreton-Robinson, 2000) expressed in academic scholarship, community discourses and in public expression through the arts t o examine the persistence of race and racism within Australian society, a persistence often denied in a society where a mania for formal equality contributes to the insidious denial of racism which infiltrates policy and political discourse (Jonas, 2002). These authors and publications give credit to the Critical Race Theory, for example with the Indigenous Students, because they are not treated equally with the non indigenous students. This can definitely be compared to Brown vs. Board of Education. CRT is concerned with the idea of inescapable and inherent racism. In the American legal system, as well as with the consistent application of racial subordination and discrimination in the practice of law, with the exception of interest-convergence issues, in which both the white majority and minorities profit from expansion of rights (as argued by Bell in Brown vs. Board of education and the Interest- Convergence Dilemma ( Harvard Law Review 1980) (retrieved from http://reachinformation.com/define/critical%20race%20theory.aspx). The fact that it is 2010 and there is still segregation in the world is a problem that should be an issue to every one, not just the indigenous people, because it is not fair to treat people differently just because they are not the same race as others. That is exactly what Mr. Bell and others fight for. The Journal of Marital and Family Therapy credits Critical Race Theory with: Therapists helping clients deal with individual acts of racism (Friedlander, 1999); encouraging clients of color to develop stories of strength and resistance (Killian, 2001; Milan Keiley, 2000); relying on the historic survival, resistance, and resilience of ancestors of color (Milan Keiley, 2000); openly discussing the history of race relationships and legal discrimination in the U.S, (Killian, 2001; Milan Keiley, 2000); using cultural genograms to uncover stories of strength and adversity (Milan Keiley, 2000).(McDonald p. 9). Being able to talk to someone and to express your concerns is a great outlet to have. The therapist needs to be well-informed and sensitive to the topic of race and racism as well, in order to help someone. This Critical Race Theory provides a foundational understanding to communication scholars in relation to the role race plays and its importance in societal issues. Scholars can take from history many examples of how race is depicted. Stories from people who are faced with the obstacle of racism will now have scholars have the chance to have their true story told, rights given and laws established. Other significant contributors to the critical race theory discourse from the 1980s to the present include Richard Delgado and Kimberlà © Williams Crenshaw. Delgado, in defense of Bells storytelling or narrative style, argues that people of color speak from an experience framed by racism. Delgado argues that the stories of people of color are born from a different frame of reference and therefore impart to them a voice that is different from the dominant culture of hegemonic whiteness and deserves to be heard. Critical race theorists believe that in order to appreciate the perspective of oppressed racial minorities, the voice of a particular contributor must be understood in terms of that individuals own narrative (www.english.turkcebilgi.com). Many people can not understand what African American people go through on a day to day basis. The same can be said for Jewish people, Arab people and other people who are not Caucasian. Our point of view, besides what is told to us through history, is all we have. Our voice often can only be expressed and explained through narratives. Kimberlà © Williams Crenshaw explains that the formal, legal embrace of equality was a major breakthrough in the challenge to social norm of white supremacy, but the removal of formal barriers, although symbolically significant to all and materially significant to some, will do little to alter the hierarchical relationship between blacks and whites ( Rossing, 2007) Yes there are laws in effect that can protect us from inequality. However, we have to take the opportunity, when it arrives and fight for what we believe. Other noteworthy contributors, in the legal field are Neil Gotanda, Cheryl I. Harris, Charles Lawrence III, Mari Matsuda, and Patricia J. Williams. Richard Delgado and Jean Stefancic, state similar themes when writing about CRT. According to http://www.absoluteastronomy.com/topics/Critical_race_theory 2003: A critique of liberalism Storytelling/counter storytelling and naming ones own reality Revisionist interpretations of American civil rights law and progress Applying insights from social science writing on race and racism to legal problems Structural determinism, how the structure of legal thought or culture influences its content The intersections of race, sex, and class Critical Race Theory has also been applied in education by one scholar Gloria Ladson-Billings. Critical race scholarship in education, has occurred in three waves. The first wave of studies emanated in the mid 1990s with the introduction of CRT to the field by Ladson-Billings and Tate. Parker and Solorzanos contributions followed soon thereafter. The second wave of scholarship occurred in the late 1990s and continued through about 2004. Younger scholars like Lynn, Duncan, and Yosso became key players. Dixson and Rousseau represent the third wave of new scholars who are attempting to re-introduce CRT to the field while creating stricter standards for how critical race theory in education is defined. Other noteworthy educators who have researched CRT are Laurence Parker, Daniel Solà ³rzano, William Tate, Yosso, Dixson, Rousseau, and Chapman (Tate 1997). Applications of the theory: Identify and analyze five studies that use this theory. Judge Alex Kozinski, United States Court of Appeals for the Ninth Circuit, writes Critical Race Theorists have constructed a philosophy which makes a valid exchange of ideas between the various disciplines unattainable. He writes, The radical multiculturalists views raise insuperable barriers to mutual understanding. Consider the Space Traders story. How does one have a meaningful dialogue with Derrick Bell? Because his thesis is utterly untestable, one quickly reaches a dead end after either accepting or rejecting his assertion that white Americans would cheerfully sell all blacks to the aliens. The story is also a poke in the eye of American Jews, particularly those who risked life and limb by actively participating in the civil rights protests of the 1960s. Bell clearly implies that this was done out of tawdry self-interest. Perhaps most galling is Bells insensitivity in making the symbol of Jewish hypocrisy the little girl who perished in the Holocaust as close to a saint as Jews have. A Jewish professor who invoked the name of Rosa Parks so derisively would be bitterly condemned and rightly so. (http://pediaview.com/openpedia/Critical_race_theory) Judge Kozinski, just states that fact the way CRT tries to be recognized, by way of story telling and narratives, does not give the theory and the speaker any substance because a persons word does not have much to any weight in the legal system. Judge Richard Posner of the United States Court of Appeals for the Seventh Circuit in Chicago has labeled critical race theorists and postmodernists the lunatic core of radical legal egalitarianism.' He writes, What is most arresting about critical race theory is thatit turns its back on the Western tradition of rational inquiry, forswearing analysis for narrative. Rather than marshal logical arguments and empirical data, critical race theorists tell stories fictional, science-fictional, quasi-fictional, autobiographical, anecdotal designed to expose the pervasive and debilitating racism of America today. By repudiating reasoned argumentation, the storytellers reinforce stereotypes about the intellectual capacities of nonwhites. (http://pediaview.com/openpedia/Critical_race_theory) Judge Posner suggests by his writings that anybody can tell a story and who knows what the truth could be. There is no proof that the narratives are real as they are telling their story, all we have to go by is our word. Another application of CRT has been associated to hate crime and hate speech legislation. In response to Justice Scalias  opinion in a paradigm hate speech   case, R.A.V. v. City of St. Paul (which addressed cross burning as an act of hate speech ), Mari Matsuda and Charles R. Lawrence III presented a critical race theory argument against Scalias opinion. While Scalia posits that speech is protected independent of content, Matsuda and Lawrence argue that historical and social context is paramount. When acts of speech are acts of intimidation and threaten violence, backed up by a historical force, then those words become a mechanism for social control and domination. Justice Scalia delivered the opinion of the Court, in which Chief Justice Rehnquist, Justice Kennedy, Justice Souter, and Justice Thomas joined. All 9 justices concurred in the judgment of the Court that citys ordinance was facially invalid under the First Amendment. (http://reachinformation.com/define/critical%20race%20theory.aspx) The symbolism of a burning cross, what it represents and the stories that follow, speaks volumes of what the intent is and because the Supreme Court was able to see that, and was able correctly, based on the history and the stories that were told, CRT was used to put that case of racism to history. The fourth application of the Critical Race Theory deals with how the community was able to take action when students were being treated unfairly. Larson (1997) presents an example of this phenomenon in a case study of White school administrators at a Midwestern high school. The administrators rigidly follow bureaucratic strategies of control by enacting disciplinary procedures against African American students despite growing evidence of racial tension due to outright prejudice by White teachers and tracking placements that stunted African American student progress and eventually caused the community to rise up and demand change (p.33). The school only feeds the problem of racism and unconsciously or not they are giving power to the majority students to act against them in anyway knowing no repercussions will be handed down. As parents they teach their children how to act, the race does not matter, but for a school to reinforce that attitude is outrageous. When communities rise up and demand change (Deyhle and Parker, p.33) and they are in one accord, the outcome will make a difference. The final application I would like to use is how Latino Immigrants were made to feel inferior. According to Ladson-Billings, the narrative that we are all immigrants blames Latino immigrants themselves for their marginalization by saying they do not work as hard as previous European immigrants. In this way, Ladson-Billings (in this volume) argues that CRT sees the official school curriculum as a culturally specific artifact designed to maintain a White supremacist master script(p. 36). Unfortunately, trying to make people inferior to another is what people in general do. One can say this started when white supremacist would talk down to people and in older times owned them as slaves. Some races of people now do that to make others seem better than others, when there is no need. Some can not stand for someone to be better than us. There is a need to TRY and break others down, just to make themselves feel better. The first criticism of the Critical Race Theory would be that, Critical Race theorists face the task of challenging deeply ingrained mental structures that categorize and define race to the disadvantage of blacks and other nonwhite groups' (Rossing p.6) Change is always hard to adjust to and when people are stuck in their ways, it is nearly impossible to get them to change their minds once it is already made up. Another criticism of CRT, many mainstream legal scholars of various ethnicities have criticized CRT for its use of narrative and storytelling. Judge Richard Posner   of the United States Court of Appeals for the Seventh Circuit in Chicago has labeled critical race theorists and postmodernists the lunatic core of radical legal egalitarianism' ( http://www.absoluteastronomy.com/topics/Critical_race_theory). Judge Posner is basically saying Critical Race Theorist are crazy people who try from a far-reaching radical group trying to bring social justice to others. A third criticism would be Critical Race Theory also analyzes and challenges the terms that we associate with societys changing definitions of reality and truth (Rossing p.9). Because this theory is based on the exact words from people, there is the thought that crosses the minds of all is who is judging and wonders if they are telling the truth or making this up. Once doubt has entered your mind you will continue to second guess the decision that has been made from that point on. Critical Race Theory is a movement that studies and attempts to transform the relationship between race and power by examining the role of race and racism within the foundations of modern culture. As far back as the principles of Enlightenment thought that form the basis for many modern views of equality and law; as a movement, it has moved beyond law and has now become common in the academic disciplines of ethnic studies, political science and education (http://reachinformation.com/define/critical%20race%20theory.aspx). People who would not like this theory are people who think that we have laws and we need to abide by those laws down to the meaning without many different interpretations. When in court some lawyers and judges may not allow any un-written theories or studies that are not documented by court, giving a reason of how do we know this person is telling the truth? In reality, people misuse the system to get what they can gain, so who is to say that they are not telling the truth? The CRT Theory is useful for being able to tell my side of the story of how I have been mistreated if anyway. For example, a co-worker who was not of African American descent, who felt he could talk down to me, and could try and make me feel inferior to him, by making inappropriate jokes and making unethical decisions. If I was to make a complaint my job would have me write up a statement and participate in a possible meeting detailing what happened and how I was offended. .

Factors Influencing Corporate Strategy: UK Supermarkets

Factors Influencing Corporate Strategy: UK Supermarkets Tesco Plc Corporate Strategy The definition of corporate strategy has changed over the years. In the past it was deemed to be a set of internal plans and policies designed to enable a business to succeed in the pursuit of its aims and objectives (Pettigrew et al 2002). Robert Grant (2004, p.7) in his study stated that the implementation of successful strategy could not happen until the business managers had appraised the available or required resources, have an in-depth knowledge of the competitive environment they operated within and the whole team had agreed upon the objectives. More recently, the understanding of corporate strategy has been extended to include external forces and thus it can rely upon the definition statement made by Collis and Montgomery (1997, p.5) which observes that: â€Å"Corporate strategy is the way a company creates value through the configuration and coordination of its multimarket activities.† The purpose of this paper is to promote further understanding of the factors that influence corporate strategy within a particularly competitive industry sector. For this purpose the supermarket retail sector has been chosen for analysis. To assess how these factors impact upon the market players, the Tesco organisation has been used a focus for a case study. The reasoning behind this particular choice is that Tesco Plc has maintained a position of industry dominance, despite strong competition from other players, including Asda and Sainsbury Retail Industry Supermarkets During the course of the past four or five decades the Supermarket has taken a progressively increasing share of the grocery retailing market, with their store size and low prices driving local and independent stores in increasing numbers. In 2005 the organisations had reached a position where collectively their revenue accounted for approaching two thirds of total UK grocery sales. in Supermarket sales now account for around nearly two thirds of total grocery sales in the UK and were having an increasing impact in other retail sectors. However, as can be seen from the breakdown of the supermarket sales in grocery products, there is a considerable amount of competition between the supermarket players (see table 1). Table 1: Supermarket grocery sales 2005 (Source: BBC News 2006 and company reports) As can be seen from the above Tesco’s leads the industry sector by a considerable margin in terms of percentage. Furthermore , despite the intensity of competition that is focused upon around a dozen competitors, in revenue terms Tesco’s sales are almost equivalent to the sum of their three closet rivals, which gives them a commanding lead in terms of the number of consumers that are attracted to their stores. Tesco operates a total of 3,262 stores internationally, including 1,988 located throughout the UK. Employing in excess of 450,000 people globally, the business has so far achieved a market leadership position in four other countries as well as the UK and is currently considering expanding its operations in the US. Similarly, in line with other retailing organisations, the business is expanding its home delivery and Internet presence through the development of its online retailing website. (www.tesco.com). As Hill and Jones (2007) identify in their research into the subject of strategic management, the key drivers change and the market players have to respond positively to these changes. The supermarket industry is no exception to this rule. Initially supermarket organisations were driven by the need to create a competitive advantage. In essence this is achieved when the business reaches a position â€Å" â€Å"whenever it outperforms its competitors† (Pettigrew et al 2002, p.55), but as Grant (2004) observes, ultimately it needs to build upon that advantage, thereby reducing the opportunities for others to compete. Grant (2004, p.30), Collis and Montgomery (1998, p.65) state that competitive advantage can be gained through cost or differentiation, either of which return greater value to the consumer. However, competitive advantage is also relevant to the business marketing process, where it is important for the organisation to â€Å"understand its consumers and the decision processes they go through (Kolter et al 2004, p.29). However, advantage in this area is also achieved by a better understanding than that of competitors Consumers also drive the industry as has been seen through recent years. Initially the consumer determinant was for lower prices, wide range of selection, convenience and to a lesser extent the ability to do a one-stop shop, hence the development of the supermarket and out of town hypermarket locations, where all the weekly shop could be performed at one time. They have achieved the objective on price through a strategy of low cost and strategy through a process of low cost and the offering of substitute products (Hill and Jones 2007), which as a side effect, has also enable d the businesses to achieve a level of power over suppliers that has forced such organisations to address their own internal issues in order to remain economically viable. However, more recently consumer demands have changed and the emphasis has now moved to other areas of importance. These include the need for quality, customer service and â€Å"organic† and environmentally friendly products. Similarly, w ith the advent of concerns regarding the natural environment supermarkets are having to respond to these changes as well. To address consumer issues human resource management has also become an important driver in the industry development. The majority of researchers believe that the manner by which a business manages their HR resources has a significant impact on strategy (Collis and Montgomery 1998, p.163) and (Grant 2004, p.144). Thus the supermarket organisations have devoted a considerable amount of effort to increasing motivation and satisfaction within their workforce. The more successful organisations, such as Tesco’s and Asda have created the appropriate style of leadership and team building that has helped them achieve success in this area (Pettigrew et al 2002, p.285). As Hills and Jones (2007) have identified, the better the abilities of management and leaders in dealing with HR management, the easier it is to get a corporate strategy accepted and implemented. Technological developments have also brought about a change in the supermarket retailing industry. By incorporating these within all aspects of the supply chain, such as using new software and Internet systems that enable a closer control of stock, this has â€Å"set the overall context of competition for all firms in the industry (Porter 21004, p.142). It has also enabled organisations such as Tesco’s to continue to maintain their position within the industry. As the supermarkets have increased size and market share, so there have found themselves being increasing subject to the constraints of external forces being exerted upon them for the political and legislative stakeholders(Porter 2004, p.56 and Collis and Montgomery 1998, p.68). For example, the competition commission has often stepped in during the past few years to halt development of new stores on the grounds that it would be detrimental to fair competition. Similarly, as a result of the increasing concerns being expressed regarding health and environmental issues, the supermarket has be driven to introduce new â€Å"health† and â€Å"organic† brands and, as part of the brand management process, to increase the level of product knowledge in respect of these issues that appears upon the packaging. Therefore, all of these external issues are now having to be borne in mind during the planning of the strategy process.(Pettigrew et al 2002, p.190). In essence, at present the critical success factors for the industry can be identified as relating to three specific areas. The first of these is the efficient management of its supply chain, where the effective performance of each part is important to the smooth running of the whole (Porter 2004, p.311). Secondly, the quality of its products and customer services and effective marketing of the brand is important in order for the business to maintain both its market position and competitive advantage. Thirdly, is the effectiveness of its change management strategy. In this later respect it is essential that there is a â€Å"continuous interaction between strategy formulation and strategy implementation in which strategy is constantly being adjusted and revised in light of experience† Grant (2004, p.17). All of these factors are important to the industry players in that there form the vital elements that enable the maintenance of the business main objective, which is to continue to add value for the business stakeholders (Hills and Jones, 2007). The structure of an organisation, how it manages its resources and the relationship that it builds with employees and customers are key elements in a business that is seeking success and profitability. The level to which each organisation can achieve the harmonisation of all these factors will determine both the competitive advantage and the position that the organisation holds with the industry. As will be shown in the following section, Tesco’s has been consistently achieving a position of successfully incorporating all of these elements into their corporate strategy. Tesco Case Study During the past five years, and before this period, Tesco’s have based the main thrust of their corporate strategy on Porter’s â€Å"cost leadership.† By concentrating upon ensuring that all aspects of the supply chain were cost driven, thereby lowering unit price, the business has been able to maintain its policy of reduce prices to the consumer whilst at the same time ensuring that it has the funds and ability to invest in the new technology needed to maintain this advantage (Porter 2004, p36). In terms of the former, this can be evidenced by the fact that, as one of the current advertising campaigns states, there are able to maintain a price advantage over all of their competitors across a wide range of their products. Even given that, partially because of the business cycle, which can be said to have reached a level of some maturity (Hills and Jones 2007), together with the constraints that have been placed upon the industry by political, regulatory and legislative forces, the same low cost strategy is being maintained as the Tesco’s organisation seeks to enter and make an impact upon other market segments, for example fashion, home products and finance. For example, the current range of prices throughout all of these non-core products are still promoted using the organisation’s brand marketing message of â€Å"every little helps,† which indicates that the consumer will receive the same approach to low prices as has been offered within the grocery retail segment of the business revenue. However, as will be noted from their website[1], the business has taken info account the other factors that are important to the cusses of corporate strategy. For example, the human resources management policies are prominent in terms of the employee importance to the business, as is the relationship that the business is maintaining within both its suppliers and consumers, mainly through the increasing use of technology. Another import element of Tesco’s success has been its ability to manage change. As Porter (2004, p.21) suggests, different stages of the business life cycle can bring about change, as can the movement of the consumer demands and aspirations (Collis and Montgomery 1998, p.3). Tesco’s has respond quickly top both of these areas of change rapidly and in an efficient manner (Porter 2004, p.71 and Grant 2004, p.382). In the former instance, as indicated, it has moved into other market segments, and in terms of the latter, it has introduced new brands, including those that concentrate upon the environmental and health issues being raised by consumers and to address the issue of quality, where it now includes a â€Å"Tesco’s finest† range. However all of these moves have been performed whilst still maintaining a dedication to the core business strategy of cost leadership. As can be seen from the following graph, during the course of the past five years, as witness to the success of the Tesco corporate strategy, the business has consistently outperformed the FTSE 100 and the shares of its nearest UK quoted rival Sainsbury. The only time there was any near convergence of the two supermarket chains share value was earlier this year, and this was because of potential bidders showing an interest in Sainsbury, not related to their performance. Conclusion As has been shown during the course of this research, Tesco’s have consistently led the UK supermarket retailing sector of the business during the course of the past few years. This has been achieved by the implementation and maintenance of a successful corporate strategy, which has enabled the business to maintain a competitive advantage despite strong competition from other industry players. In reality this success, which has been evidenced from the financial performance, has been achieved by their turning this strategy into a unique business culture, which as Hofstede et al (2004) has created a situation where the business is seen to have, has resulted in the:- â€Å"†¦the collective programming of the mind that distinguishes the members of the group or category of people from others† Anther major element of the organisation’s success is the effectiveness of the way in which they manage change, being able to respond appropriately and rapidly to anything that poses a threat to the business future. There is little doubt that as long as the management remain focus on these strategies, that the business will maintain its present marketplace position. References Collis, David J and Montgomery, Cynthia A (1998). Corporate Strategy: A resource Based Approach. McGraw Hill. US. BBC News (2006). Tesco’s market share still rising. Retrieved 19 November 2007 from http://news.bbc.co.uk/2/hi/business/4694974.stm Faulkner, David and Campbell, Andrew (2006). The Oxford Book of Strategy: A Strategy Overview and Competitive Strategy. New ed. Oxford University Press. Oxford, UK. Grant, Robert (2004). Contemporary Strategy Analysis. 5th Edition. Blackwell Publishers. Oxford, UK. Gregory, David (2005). Supermarkets and Standards. Presentation, UK. Retrieved 27 September 2007 from http://www.odi.org.uk/speeches/apgood/Agric_in_Africa_05/apgood_nov23/index.html Heavens, Andrew (2005). E-commerce soars by 88%. Times Online. Retrieved 25 September 2007 from http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article417278.ece Hill, C.W.L. Jones, G.R. (2007). Strategic Management Theory: An Integrated Approach. (7th ed) Houghton Mifflin. Boston, US. Hofstede, G. Hofstede, G.J.(2004). Cultures and Organizations: Software of the Mind. New York: McGraw-Hill. Kelly, Sean. (2005). Customer intelligence From Data to Dialogue. John Wiley Sons Ltd. Chichester, UK. Lucas, R. Lupton, B. Mathieson, H. (2007). Human Resources Management in an International Context. London: CIPD. Pettigrew, Andrew M. Thomas, Howard and Whittington, Richard (2002). The Handbook of Strategy and Management. Sage Publications Ltd. London, UK. Porter, Michael E (1985). Competitive Advantage. The Free Press. New York. US. Porter, Michael E (2004). Competitive Strategy: Techniques for Analysing Industries and Competitors. The Free Press. New ed. The Free Press. New York, US. Survey (2006). The UK’s Best Online Shopping Experience 2006. www.blastradius.com. Retrieved 26 September 2007 from http://www.blastradius.com/ukshopping2006.pdf Tesco (2007). Tesco at a glance. Retrieved 27 September from http://www.tescocorporate.com [1] http://www.tescocorporate.com/page.aspx?pointerid=3DB554FCAE344BD88EEEEFA63D71B831 Analysis of the Accrual Anomaly | Accounting Dissertation Analysis of the Accrual Anomaly | Accounting Dissertation Sloan (1996), in a determinative paper, added the accrual anomaly in the list of the market imperfections. Since then, academics have focused on the empirical investigation of the anomaly and the connection it has with other misspricing phenomena. The accrual anomaly is still at an embryonic stage and further research is needed to confirm the profitability of an accruals based strategy net of transaction costs. The current study investigates the accrual anomaly while taking into consideration a UK sample from 1991 to 2008. In addition, the predictive power of the Fama and French (1996) factors HML and SMB is being tested along with the industrial production growth, the dividend yield and the term structure of the interest rates. Chapter 1 Introduction Since the introduction of the random walk theory which formed the basis for the evolvement of the Efficient Market Hypothesis (EMH hereafter) proposed by Fama (1965), the financial literature has made many advances but a piece of the puzzle that is still missing is whether the EMH holds. Undoubtedly, the aforementioned debate can be considered as one of the most fruitful and fast progressing financial debates of the last two decades. The Efficient Market Hypothesis has met many challenges regardless of which of its three forms are being investigated. However, the weak form and semi strong hypothesis have been the most controversial. A literally vast collection of academic papers discuss, explore and argue for phenomena that seem to reject that the financial markets are efficient. The famous label of â€Å"anomaly† has taken several forms. Many well-known anomalies such as the contrarian investment, the post announcement drift, the accruals anomaly and many others are just the beginning of an endless trip. There is absolutely no doubt that many more are going to be introduced and evidence for the ability for the investors to earn abnormal returns will be documented. Recently, academics try to expand their investigation on whether these well-documented anomalies are actually profitable due to several limitations (transaction costs etc) and whether the anomalies are connected. Many papers are exploring the connection of the anomalies with each other proposing the existence of a â€Å"principal† misspricing that is documented into several forms. The current study tries to look into the anomaly that was initially documented by Sloan (1996) and has been labelled as the â€Å"accrual anomaly†. The accrual anomaly can be characterised as being at an embryonic stage if the basis for comparison is the amount of publications and the dimensions of the anomaly that light has been shed on. The facts for the accrual anomaly suggest the existence of the opportunity for investors to earn abnormal returns by taking advantage of simple publicly available information. On the other hand, accruals comprising an accounting figure have been approached from different points of view with consequences visible in the results of the academic papers. Furthermore, Stark et al (2009) challenge the actual profitability of the accrual anomaly by simply taking transaction costs into consideration. The present paper employs an accrual strategy for a sample comprising of UK firms during 1991-2008. The aim is to empirically investigate the profitability of such strategies during the whole data sample. The methodology for the calculation of accruals is largely based on the paper of Hardouvelis et al (2009). Stark et al (2009) propose that the positive excess returns of the accruals’ strategy are based on the profitability of small stock. In order to investigate the aforementioned claim, the current study employs an additional strategy by constructing intersecting portfolios based on accruals and size. Finally, five variables are being investigating at the second part of the study for their predictive power on the excess returns of the constructed portfolios. The monumental paper of Fama and French (1996) documented an impressive performance of two constructed variables (the returns of portfolios named HML and SMB). In addition, the dividend yield of the FTSE all share index, the industrial production growth and the term structure of the interest rates will be investigated as they are considered as potential candidates for the prediction of stock returns. Chapter 2 Literature review 2.1. Introduction During the last century the financial world has offered many substantial advances. From the Portfolio Theory of Markowitz (1952) to the development of the Capital Asset Pricing Model of Sharpe (1964) and Lintner (1965), and from the market Efficient Market Hypothesis (hereafter EMH), developed by Fama (1965), to the recent literature that challenges both the CAPM and the EMH, they all seem to be a chain reaction.   The financial academic world aims to give difficult but important answers on whether markets are efficient and on how investors should allocate their funds. During the last two decades, many researchers have documented that there exist strategies that challenge the claim of the supporters of the efficient and complete markets. In this chapter, the effort will be focused on reviewing the financial literature from the birth of the idea of the EMH until the recent publications that confirm, reject or challenge it. In a determinative paper, Fama (1970) defined efficient markets and categorised them according to the type of information used by investors. Since then, the finance literature has offered a plethora of studies that aim to test or prove whether markets are indeed efficient or not. Well known anomalies such as the post announcement drift, the value-growth anomaly or the accruals anomaly have been the theme of many articles ever since. 2.2. Review of the value-growth anomaly We consider as helpful to review the literature for the value growth-anomaly since it was one of the first anomalies to be investigated in such an extent. In addition, the research for the value-growth anomaly has yielded a largely productive debate on whether the documented returns are due to higher risk or other source of mispricing. Basu (1970) concluded that stocks with high Earnings to Price ratio tend to outperform stocks with low E/P. Lakonishok, Shleifer and Vishny (1994) documented that stocks that appear to have low price to a fundamental (book value, earnings, dividends etc) can outperform stocks with high price to a fundamental measure of value. Lakonishok, Shleifer and Vishny (1994) initiated a productive period that aimed to settle the dispute on the EMH and investigate the causes of such â€Å"anomalies†. Thus, the aforementioned researchers sparked the debate not only on the market efficiency hypothesis but also on what are the sources for these phenomena. Fama and French (1992) supported the idea that certain stocks outperform their counterparts due to the larger risk that the investors bear. Lakonishok, Shleifer and Vishny (1994) supported the idea that investors fail to correctly react to information that is available to them. The same idea was supported by many researchers such as Piotroski (2001). The latter also constructed a score in order to categorise stocks with high B/M that can yield positive abnormal returns (namely, the F Score). Additionally, the â€Å"market efficiency debate â€Å"drove behavioural finance to rise in popularity. The value-growth phenomenon has yielded many articles that aim to find evidence that a profitable strategy is feasible or trace the sources of these profits but, at the same time, the main approach adopted in each study varies significantly. Asness (1997) and Daniel and Titman (1999) examine the price momentum, while Lakonishok, Sougiannis and Chan (2001) examine the impact of the value of intangible assets on security returns. In addition, researchers have found evidence that the value-growth strategies tend to be successful worldwide, as their results suggest. To name a few, Chan, Hamao and Lakonishok (1991) focused on the Japanese market, Put and Veld (1995) based their research on France, Germany and the Netherlands and Gregory, Harris and Michou (2001) examined the UK stock market. It is worth mentioning that solely the evidence of such profitable strategies could be sufficient to draw the attention of practitioners, but academics are additionally interested in exploring the main cause of these arising opportunities as well as the relationship between the aforementioned phenomena (namely, the value growth, post announcement drift and the accrual anomaly). In general, two schools of thought have been developed: the one that supports the risk based explanation or, in other words, that stocks yield higher returns simply because they are riskier, and the one that supports that investors fail to recognise the correct signs included in the available information. 2.3. The accruals anomaly 2.3.1. Introduction of the accrual anomaly. Sloan (1996) documented that firms with high (low) accruals tend to earn negative (positive) returns in the following year. Based on this strategy, a profitable portfolio that has a long position on stocks with low accruals and short position on stocks with high accruals yields approximately 10% abnormal returns. According to Sloan (1996) investors tend to overreact to information on current earnings. Sloan’s (1996) seminar paper has been characterised as a productive work that initiated an interesting to follow debate during the last decade. It is worth noting that even the very recent literature on the accrual anomaly has not reached reconciling conclusion about the main causes of this particular phenomenon and about whether a trading strategy (net of transaction costs) based solely on the mispricing of accruals can be systematically profitable. At this point it is worth mentioning that the accruals have been found to be statistically significant and negative to predict future stock returns. On the other hand, there are papers that examine the accruals and its relations with the aggregate market. A simple example is the paper published by Hirshleifer, Hou and Teoh (2007), who aim to identify the relation of the accruals, if any, with the aggregate stock market. Their findings support that while the operating accruals have been found to be a statistical significant and a negative predictor of the stock returns, the relation with the market portfolio is strong and positive. They support that the sign of the accruals coefficient varies from industry to industry reaching a peek when the High Tech industry is taken into account (1.15), and taking a negative value for the Communication and Beer/Liquor industry. 2.3.2 Evidence for the international presence of the phenomenon. Researchers that investigated the accruals anomaly followed different approaches. At this point, it is worth noting that the evidence shows the accrual anomaly (although it was first found to be present in the US market) to exist worldwide. Leippold and Lohre (2008) examine the accrual anomaly within an international framework. The researchers document that the accrual anomaly is a fact for a plethora of markets. The contribution of the paper though, is the large and â€Å"complete† number of tests used, so that the possibility of pure randomness would be eliminated. Although, similar tests showed that momentum strategies can be profitable, recent methodologies used by the researchers and proposed by Romano and Wolf (2005) and Romano, Shaikh and Wolf (2008), suggest that the accruals anomaly can be partially â€Å"random†. It is noteworthy that the additional tests make the â€Å"anomaly† to fade out for almost all the samples apart from the markets of US, Australia and Denmark. Kaserer and Klingler (2008) examine how the over-reaction of the accrual information is connected with the accounting standards applied. The researchers constructed their sample by solely German firms and their findings document that the anomaly is present in Germany too. We should mention at this point that, interestingly, prior to 2000, that is prior to the adoption of the international accounting standards by Germany, the evidence did not support the existence of the accrual anomaly. However, during 2000-2002, Kaserer and Klingler (2008) found that the market overreacted to accrual information. Hence, the authors support the idea that an additional cause of the anomaly is the lack of legal mechanisms to enforce the preparation of the financial statements according to the international accounting standards which might gave the opportunity to the firms to â€Å"manipulate† their earnings. Another paper that focuses on the worldwide presence of the accruals mispricing is that of Rajgopal and Venkatachalam (2007). Rajgopal and Venkatachalam examined a total of 19 markets and found that the particular market anomaly exists in Australia, UK, Canada and the US. The authors’ primal goal was to identify the key drivers that can distinguish the markets where the anomaly was documented. Their evidence supports the idea that an accrual strategy is favoured in countries where there is a common law tradition, an extensive accrual accounting and a low concentration of firms’ ownership combined with weak shareholders’ rights. LaFond (2005) also considers the existence of the phenomenon within a global framework. The author’s findings support the notion that the accrual anomaly is present worldwide. In addition, LaFond argues that there is not a unique driving factor responsible for the phenomenon across the markets. It is worth noting that LaFond (2005) documented that this particular market imperfection is present in markets with diverse methodology of accrual accounting. Findings are against the idea that the accrual anomaly has any relation with the level of the shareholders protection or a common law tradition, as suggested by Rajgopal and Venkatachalam (2007). Finally, the author suggests that, if any, it is not the different method of accrual accounting (measurement issues) that favours or eliminates the accrual anomaly, but the accrual accounting itself. 2.3.3. Further Evidence for the roots of the accruals anomaly. Additionally, papers such as those of Thomas and Zang (2002) or Hribar (2000) decompose accruals into changes in different items (such as inventory, accounts payable etc). The findings catholically suggest that extreme changes in inventory affect returns the most. On the other hand, many articles connect the accruals with information used by investors, such as the behaviour of insiders or analysts, as the latter can be considered a major signal to the investors for a potential manipulation of the firms’ figures. In particular, Beneish and Vargus (2002) documented that firms with high accruals and significant insider selling have substantial negative returns.  Bradshaw (2001) and Barth and Hutton (2001) examine the analysts’ reports and their relation with the accruals anomaly. Their findings support that the analysts’ forecasting error tends to be larger for firms with high accruals, while analysts do not revise their forecasts when new information for accruals is available. Gu and Jain (2006) decompose accruals into changes in inventory, changes in accounts receivable and payable and depreciation expenses and try to identify the impact of the individual components to the anomaly. Consistent with Sloan (1996), Gu and Jain (2006) document that the accrual anomaly exists at the components level. The findings are important since Desai et al (2004) supported the connection of the accrual anomaly with a single variable (cash flows from operations). The researchers suggest that the results yielded by Desai et al (2004) were highly dependent on the methodology used and thus, suggested that the accruals anomaly is â€Å"alive and well†. Moreover, other articles try to confirm whether the anomaly is mainly caused by the wrong interpretation of the information contained in accruals. Ali et al. (2000), investigate whether the naà ¯ve investors’ hypothesis holds. Following the methodology introduced by Hand (1990) and Walther (1997), they found that for smaller firms, which are more likely to be followed by sophisticated investors, the relation between accruals and negative future returns is weaker compared to larger firms, which are followed by many analysts. Therefore, the researchers suggest that, if anything, the naà ¯ve investors’ hypothesis does not hold. In contrast to other market anomalies where findings suggest that the naà ¯ve investors hypothesis holds, the accruals anomaly is suggested as unique. Shi and Zhang (2007) investigate the earnings fixation hypothesis suggesting that the accruals anomaly is based on the investors â€Å"fixation† or â€Å"obsession† on earnings. Their primal hypothesis is that if investors are highly based on the reports about earnings and misprice the value-relevant earnings, then the returns should be dependent not only on the accruals but also on how the stock’s price changes according to reported earnings.  The researchers’ hypothesis is confirmed and finding support that an accrual strategy for firms whose stocks’ price highly fluctuates according to earnings yields a 37% annual return. Sawicki and Shrestha (2009) aim to examine two possible explanations for the accruals anomaly. Sloan (1996) proposed the fixation theory under which investors fixate on earnings and thus overvalue or undervalue information for accruals. Kothari et al. (2006) proposed the â€Å"agency theory of overvalued equity† according to which managers of overvalued firms try to prolong the period of this overvaluation which causes accruals to increase.  The paper uses the insider trading and other firm characteristics and tries to compare and contrast the two major explanations. Evidence produces bd Sawicki and Shrestha (2009) support the Kothari et al. (2006) explanation for the accrual anomaly. In a relatively different in motif paper, Wu and Zhang (2008) examine the role that the discount rates play in the accrual anomaly. They argue that if anything, the anomaly is not caused by irrationality from the investors’side but by the rationality of firms as it is proposed by the q-theory of investment. They argue that since the discount rates fall and more projects become profitable (which makes accruals to increase) future stock returns should decline. In other words, if the capital investment correctly adjusts to the current discount rates, the accruals should be negatively correlated with the future returns and positively correlated with the current returns. The evidence of Wu and Zhang (2008) support that the accruals are negatively correlated with the future stock returns but the contribution of the paper is in that they document that current stock returns are positively correlated with the accruals. 2.3.4. The relation of the accrual anomaly with other market imperfections. Many papers examine the relation between the accruals anomaly and other well-known anomalies such as the post announcement drift or the value-growth phenomenon. Desai et al. (2002), suggest that the â€Å"value-growth† anomaly and the accruals anomaly basically interact and conclude that the  ¨accruals strategy and the C/P reflect the same underlying phenomena†. Collins and Hribar (2000) suggest that there in no link between the accruals anomaly and the â€Å"PAD†, while Fairfield et al. (2001) support that the accruals anomaly is a sub-category of an anomaly caused by the mistaken interpretation of the information about growth by the investors. Cheng and Thomas (2006) examine the claim that the accrual anomaly is a part of a broader anomaly (and more specifically, the value-glamour anomaly). Prior literature suggested that the operating cash flows to price ratio subordinates accruals in explaining future stock returns (Deshai et al (2004)). Their evidence suggests that the Operating CF to price ratio does not subsume neither abnormal nor total accruals in future announcement returns. This particular result does not confirm the claim that the accrual anomaly is a part of a broad value-glamour anomaly. Atwood and Xie (2005) focus on the relation of the accrual anomaly and the mispricing of the special items first documented by Burgstahler, Jiambalvo and Shevlin (2002). Their hypothesis that the two phenomena are highly related is confirmed since the researchers found that special items and accruals are positively correlated. Additionally, further tests yielded results that suggest that the two imperfections are not distinct, while the special items have an impact on how the market misprices the accruals. Louis and Sun (2008) aim to assess the relation between the abnormal accrual anomaly and the post earnings announcement drift anomaly. The authors hypothesize that both anomalies are related to the management of the earnings and thus, they aim to find whether the two are closely connected. The findings are consistent with the primal hypothesis, as they found that â€Å"firms with large positive change of earnings that were least likely to have manipulated earning downwards† did not suffer from PEAD, while the same result was yielded for firms that had large negative change of earnings that were least likely to have managed their earnings upwards. As supported by many researchers the value-growth anomaly and accruals anomaly might be closely related or they might even be caused by the similar or even identical roots.  Fama and French (1996) support that the book to market factor captures the risk of default, while Khan (2008) suggests that in a similar pattern firms with low accruals have a larger possibility to bankrupt. Therefore, many researchers try to connect the two phenomena or to answer whether a strategy based on the accruals can offer more than what the value growth strategy offers. Hardouvelis, Papanastopoulos, Thomakos and Wang (2009) connect the two anomalies by assessing the profitability of interacting portfolios based on the accruals and value-growth measures. Their findings support that positive returns are obtainable and magnified when a long position is held for a portfolio with low accruals while combined with stocks that are characterised as high market to book. The difference of a risked-based explanation or an imperfection of the markets is considered to be a major debate, as it can challenge the market efficiency hypothesis. Many researchers, such as Fama and French (1996) noted that any potential profitable strategy is simply due to the higher risk that the investors have to bear by holding such portfolios. In a similar way, the profitable accruals strategies are considered as a compensation for a higher risk. Stocks that yield larger returns are compared or labelled as stocks of firms that are close to a financial distress. Khan (2000) aims to confirm or reject the risk-based explanation of the accruals anomaly. The researcher uses the ICAPM in order to test if the risk captured by the model can explain the anomaly first documented by Sloan (1996). It is worth noting that the descriptive statistics results for the sample used showed that firms that had low accruals also had high bankruptcy risk.  The contribution of the paper is that, by proposing a four factor model enhanced by recent asset pricing advances, it showed that a great portion of the mispricing that results in the accrual anomaly can be explained within a risk-based framework. Furthermore, Jeffrey Ng (2005) examines the risk based explanation for the accrual anomaly which proposes that accruals include information for financial distress. As proposed by many papers, the accrual anomaly is simply based on the fact that investors bare more risk and thus low accrual firms have positive abnormal returns. The researcher tries to examine how and if the abnormal returns of a portfolio which is short on low accruals stocks and long on high accrual firms changes when controlling for distress risk. Evidence supports that at least a part of the abnormal returns are a compensation for bearing additional risk. Finally, the results support that the big portion of the high abnormal returns of the accrual strategy used in the particular paper is due to stocks that have high distress risk. 2.3.5. The accruals anomaly and its relation with firms’ characteristics. A noteworthy part of the academic literature examines the existence of some key characteristics or drivers that are highly correlated with the accruals anomaly. Many researchers have published papers that aim to identify the impact of firm characteristics such as the size of the firm, characteristics that belong to the broader environment of the firms such as the accounting standards or the power of the minority shareholders. Zhang (2007) investigates whether the accrual anomaly varies cross-sectionally while being related with firms’ specific characteristics. The researcher primarily aims to explain which the main reason for the accrual anomaly is. As Zhang (2007) mentions, Sloan (1996) attributes the accrual anomaly to the overestimation of the persistence of accruals by investors, while Fairfield (2003) argues that the accrual anomaly is a â€Å"special case of a wider anomaly based on growth†. The evidence supports the researcher’s hypothesis that characteristics such as the covariance of the employee growth with the accruals have an impact on the future stock returns. Finally, Zhang (2007) documents that that accruals co-vary with investment in fixed assets and external financing. Louis, Robinson and Sbaraglia (2006) examine whether the non-disclosure of accruals information can have an impact on the accruals anomaly. The researchers, dividing their sample into firms that disclose accruals information on the earnings announcement and firms that do not, investigate whether there exists accruals’ mispricing. The evidence supports that for firms that disclose accruals information, the market manages to correctly understand the discretionary part of the change of the earnings. On the contrary, firms that do not disclose accruals information are found to experience â€Å"a correction† on their stock price. Chambers and Payne’s (2008) primal aim is to examine the relation of the accrual anomaly and the auditing quality. The researchers’ hypothesis is that the accruals mispricing is related with the quality of auditing.  Additionally, their findings support that the stock prices do not reflect the accruals persistence characterising the lower-quality audit firms. Finally, their empirical work finds that the returns are greater for the lower-quality audit portfolio of firms. Palmon, Sudit and Yezegel (2008) examine the relation of the accruals mispricing and the company size. Evidence shows that company size affects the returns and, as the researchers documented, the negative abnormal returns are mostly due to larger firms while the positive abnormal returns come from the relatively small firms. Particularly, as the strategy with the highest profits they found the one that had a short position in the largest-top-accrual decile and a long position in the smallest-low-accrual decile. Bjojraj, Sengupta and Zhang (2009) examine the introduction of the Sarbanes-Oxley Act and the FAS 146 and how these two changes affected the accrual anomaly. FAS 146 (liabilities are recognized only when they are incurred) reduced the company’s ability to â€Å"manipulate† earnings while the SOX aims to enhance the credibility of the financial statements. The evidence recognises a change on how the market conceives information about restructurings charges. The authors propose that a possible explanation is that before the introduction of SOX and the FAS 146, the market was reluctant due to the ability of the firms to manage earnings. Finally, Bjojraj, Sengupta and Zhang (2009) document that post to the FAS 146 and the SOX act, low accrual portfolios do not generate positive abnormal returns. 2.4. The applications of the accruals phenomenon and reasons why it is not arbitraged away. The importance of the analysis of the anomalies is substantial for two reasons. Firstly, the profitability of a costless strategy challenges the EMH, especially if the strategy is based on bearing no additional risk. Secondly, managers’ incentives to manipulate the financial statements and consequently the accruals would be obvious if a profitable strategy based on such widely available information existed. Chen and Cheng (2002) find that the managers’ incentive to record abnormal accruals is highly correlated with the accrual anomaly. The hypothesis of the researchers, which their findings support, was that the investors fail to detect when the managers aim to record abnormal accruals and that may contribute to the accruals anomaly. Richardson’s (2000) main objective is to examine whether the information contained in the accruals is utilized by short sellers. As the researcher mentions, previous articles such as that of Teoh and Wong (1999) found that sell side analysts were unable to correctly â€Å"exploit† the information contained in accruals for future returns. Richardson suggests that short sellers are considered as sophisticated enough to utilize the accruals information. Findings confirm previous work, such as that of Sloan (2000), who suggests that even short sellers do not correctly utilize the information contained into accruals. Ali, Chen, Yao and Yu (2007) examine whether and how equity funds benefit from the accrual anomaly by taking long position into low accruals firms. The researchers aim to identify how exposed are the equity firms to such a well known anomaly and what characteristics these funds share. By constructing a measure called â€Å"accruals investing measure† (AIM), they try to document the portion of the low accruals firms into the actively managed funds. The evidence shows that generally funds are not widely exposed to low accruals firms but when they do so, they have an average of 2.83% annual return. It is worth noting that the annual return is net of transaction costs. Finally, the side-effects of high volatility in returns and in fund flows of the equity funds that are partially based on the accrual anomaly might be the reason behind the reluctance of the managers. Soares and Stark (2009) used UK firms to test whether a profitable accrual strategy is feasible net of transactions costs. Their findings support that indeed the accrual anomaly is present in the UK market. The authors suggest that for such a strategy to be profitable, someone is required to trade on firms with small market capitalization. They also suggest that although the accruals’ mispricing seems to exist also in the UK, the transaction costs limit the profits to such an extent that the accrual anomaly could be difficult characterised as a challenge to the semi strong form of the efficient market hypothesis. Finally, we should not neglect to mention two papers that discourse on why the markets do not simply correct the accruals anomaly. According to the classical theory, markets are so imperfect that can produce the incentive to the market to correct the â€Å"anomalies† at any point of time. Mashruwala, Rajgopal and Shevlin (2006) examined the transactions costs and the idiosyncratic risk as possible reasons of why the accrual anomaly is not arbitraged away. The researchers aimed to investigate why the market does not correct the anomaly, but also to identify whether the low accruals firms are riskier. The paper poses the question of what stops the informed investors from taking long positions into profitable stocks according to the accrual anomaly so that they can arbitrage it away. The paper examines the practical difficulty of finding substitutes so that the risk can be minimized and its relation with the accrual anomaly. Additionally, the paper investigates the transaction co sts and findings support that according to the accrual anomaly, the profitable stocks tend to be the ones with low stock prices and low trading volume. Lev and Nissim (2004) focus on the persistence of the accr