Bpo Attrition- the Problem and Its Solution Essay

Human Resources In Indian Business Process Outsourcing Organizations- Attrition. Is there any solution? Business Process Outsourcing (BPO) is likely to be the next big thing for services in this decade. The industry is very diverse, with several sub-segments, each displaying its own unique characteristics. The BPO players need to be excellent in every facet of operations as the market is highly competitive at every level and re-defining itself every day. Being a People-Centric industry what are the people issues that, the HR will have to handle? What are the challenges faced by HR in dealing with them? HI Before this, one needs to gain an understanding about BPO’s and what businesses are Indian companies doing in this segment? BPO is based on the premise that whatever competencies are not very important for an organization   (not their core competencies); outsource or ask somebody else who is adept at doing it, to do it for the organization. In this way the organization can concentrate on its core competencies and not worry about on trivial issues, which are not strategic in nature. But these days we even find organizations outsourcing their core competencies or the core business aspects to BPO’s to gain the advantage of cost cutting and quality issues. Typically, BPO would include call centers, problem solving in insurance sector to other sophisticated activities like research and other back office dealings. India has the advantage of low cost, highly qualified English speaking labour, thus most of the BPO ventures in India are call centers, although of late, companies are entering into high-end areas like research. But for sometime at least we can assume that most of the companies would be doing the call center kind of business. Most of these kinds of jobs get done in the night in India to account for the 12-hour time lag between US and India. Over a period of time the biological rhythm of the employee changes, causing various kind of disorders like indigestion, fatigue, headaches etc. so the health of the employee is a major concern for the HR, more so because most of them are graduates in their early twenties. In addition the jobs are monotonous, often nerve wracking. So it is a challenge for HR to adequately rotate the jobs of employees and provide them with enough time to refresh, so that they are able to deliver service of highest quality. Although many companies are targeting fresh graduates, they are not able to retain them. Attrition continues to be high 35%. HR has to ensure that a proper career path is chalked out so that graduates increasingly see this area as a potential career for them. Clients in US, UK and other European Countries are very quality conscious and as increasingly complex jobs get outsourced, it becomes important that HR ensures right quality people are selected and the right quality of training is provided to them. This ensures that later they do not face embarrassing time from their clients. There has been enormous requirement in this sector for manpower and huge salaries are up for taking. The times are good for this industry, but one has to keep in mind that this industry is still in its way to figure out in the growth stage. One cannot predict the future so easily and the sour experience of software companies is still fresh in minds. So a little bit of caution is to be exercised in this matter and proper trends have to be forecast by the HR to ensure that they do not go the software way when ultimately the industry stabilizes. Attrition †¦ A major problem rocking the Industry. Some Facts to Ponder about†¦ * 95% companies in the industry have Attrition problems * The small-sized and medium-sized companies loose more people * Turnover rates are as high as 30% in some reputed BPO’s and over all around 35% in the Industry. Employees move to smaller companies for exciting opportunities and greater identity and move to large companies for defined roles, clearer career paths and better HR systems. Loyalty towards their employer or towards the organization has slowly seems to have disappeared. Executives know that fast-moving markets require fast-moving organizations that are continually refresh ed with new talent, and they have become quite adept to outside hiring. Even companies are quite comfortable with bringing in talent; they remain distinctly uncomfortable about seeing talent leave. The competition to headhunt employees with good performance ratings of other organizations is an open ploy. The mediators (so called Consultants) make this job easy for the organizations by gaining the data bases of employees and they lure the employees by offering huge pay packages finally making them to move from their job. One of the biggest assets of the BPO Industry is manpower. So, the biggest challenge in this industry is to attract and retain knowledgeable manpower. Today, BPO companies are facing a shortage of knowledge workers because the rate at which they lose employees is almost ouble the rate at which they hire. A major proportion of the turnover issue is attributed to the movement of manpower to the Companies who lure them by offering either better pay or higher designation. The average stay of an employee in bpo companies has dropped to one year. In such a scenario where companies are fighting to combat global business competition, and struggling to survive, employee turnover comes as a double blow. And the issue of managing employee separation often gets ignored. Just because a business is dependent on Communication skills, for instance, doesn’t mean that it has to go to great lengths to retain its employees. If there’s a large pool of people with good communication skills available, it might want to focus on recruitment rather than retention. Moreover, since new hires have lower salaries than long-term employees, the company is able to keep a lid on compensation levels. Cooperating with competitors is another way of dealing with retention. Because of the intensity of talent-war, companies instinctively view retention and recruitment as competitive exercises. But history shows that cooperation, even among competitors, can be one of the most effective ways of dealing with talent shortages. A New concept called Anti Poaching agreement between BPO organizations is on the Move. According to this agreement, the parties getting in to the agreement will share their employee databases with each other and so will restrain employees to shift in to each other companies. Lets hope that this works good for the BPO’s. Frequent job-hopping of employees is not good for any one, neither for the company nor for the employee in terms of Growth.

The Golden Lily Chapter 14

â€Å"OH, LORD,† I SAID. â€Å"What's wrong?† asked Brayden. â€Å"Is everything okay?† â€Å"Hard to say.† I put the phone back in my purse. â€Å"I hate to do this, but I have to go take care of something outside. I'll be back as quickly as I can.† â€Å"Do you want me to go with you?† I hesitated. â€Å"No, it's okay.† I had no idea what to expect out there. It was best if Brayden wasn't subjected to it. â€Å"I'll hurry.† â€Å"Sydney, wait.† Brayden caught hold of my arm. â€Å"This†¦ this is the song you requested, isn't it?† The one we'd been dancing to had just ended, and a new one was on – or, well, an old one. It was about thirty years old. I sighed. â€Å"Yes. It is. I'll be fast, I promise.† The temperature outside was pleasant, warm but not oppressively so. We were allegedly due for a rare bit of rain. As I walked toward the parking lot, some of Wolfe's lessons came back to me. Check your surroundings. Watch for people lurking near cars. Stay in the light. Make sure to – â€Å"Adrian!† All reasonable thoughts vanished from my head. Adrian was lying on my car. I ran over to Latte as fast as the dress would allow me. â€Å"What are you doing?† I demanded. â€Å"Get off of there!† I automatically checked for dents and scratches. Adding insult to injury, Adrian was actually smoking as he lay on the hood and stared up at the sky. Clouds were moving in, but a half-moon could occasionally be seen. â€Å"Relax, Sage. I won't leave a scratch. Really, this is surprisingly comfortable for a family car. I would've expected – † He turned his head toward me and froze. I had never seen him so still – or so quiet. His shock was so thorough and intense that he actually dropped his cigarette. â€Å"Ahh,† I cried, springing forward, lest the burning cigarette damage the car. It landed harmlessly on the asphalt, and I quickly stamped it out. â€Å"For the last time, will you get off of there?† Adrian slowly sat up, eyes wide. He slid off the hood and didn't seem to leave any marks. Obviously, I'd have to check it later. â€Å"Sage,† he said. â€Å"What are you wearing?† I sighed and stared down at the dress. â€Å"I know. It's red. Don't start. I'm tired of hearing about it.† â€Å"Funny,† he said. â€Å"I don't think I could ever get tired of looking at it.† Those words drew me up short, and a rush of heat went through me. What did he mean? Was I so outlandish-looking that he couldn't stop staring at the crazy spectacle? Surely†¦ surely he wasn't implying that I was pretty†¦ I promptly got back on track, reminding myself that I needed to think about the guy inside, not out here. â€Å"Adrian, I'm on a date. Why are you here? On my car?† â€Å"Sorry to interrupt, Sage. I wouldn't have been on your car if they'd let me into the dance,† he said. A little of his earlier awe had faded, and he relaxed into a more typical Adrian pose, leaning back against Latte. At least he was standing and less likely to do damage. â€Å"Yeah. They generally frown on letting twenty-something guys into high school events. What did you want?† â€Å"To talk to you.† I waited for him to elaborate, but the only response I received was a brief flash of lightning above. It was Saturday, and I'd been around campus all day, during which he could've easily called. He'd known the dance was tonight. Then, inhaling the smell of alcohol that hung in the air around him, I knew nothing he did should really surprise me tonight. â€Å"Why couldn't it have been tomorrow?† I asked. â€Å"Did you really have to come here tonight and – † I frowned and looked around. â€Å"How did you even get here?† â€Å"I took the bus,† he said, almost proudly. â€Å"A lot easier getting here than to Carlton.† Carlton College was where he took art classes, and without his own transportation, he'd come to rely heavily on mass transit – something he'd never done before in his life. I'd been hoping Sonya or Dimitri had dropped him off – meaning they'd pick him up again. But of course that wouldn't happen. Neither one of them would have brought a drunken Adrian here. â€Å"So I guess I have to take you home then,† I said. â€Å"Hey, I got myself here. I'll get myself home.† He started to take out a cigarette, and I gave him a stern headshake. â€Å"Don't,† I said sharply. With a shrug, he put the pack away. â€Å"And I have to take you home. It's going to storm soon. I'm not going to make you walk in the rain.† Another flash of lightning emphasized my words, and a faint breeze stirred the fabric of my dress. â€Å"Hey,† he said, â€Å"I don't want to be an incon – â€Å" â€Å"Sydney?† Brayden came striding across the parking lot. â€Å"Everything okay?† No, not really. â€Å"I'm going to have to leave for a little bit,† I said. â€Å"I have to give my brother a ride home. Will you be okay waiting? It shouldn't be that long.† I felt bad even suggesting it. Brayden didn't really know anyone at my school. â€Å"Maybe you could find Trey?† â€Å"Sure,† said Brayden uncertainly. â€Å"Or I can come with you.† â€Å"No,† I said quickly, not wanting him and drunken Adrian in the car. â€Å"Just go back and have fun.† â€Å"Nice toga,† Adrian told Brayden. â€Å"It's a chiton,† said Brayden. â€Å"It's Greek.† â€Å"Right. I forgot that was tonight's theme.† Adrian gave Brayden an appraising look, glanced over at me, and then turned back to Brayden. â€Å"So. What do you think of our girl's ensemble tonight? Pretty amazing, huh? Like Cinderella. Or maybe a Greek Cinderella.† â€Å"There's really not much about it that's truly Greek,† said Brayden. I winced. I knew he didn't mean to be insensitive, but his words stung a little. â€Å"The dress is historically inaccurate. I mean it's a very nice dress, but the jewelry's anachronistic, and the fabric's nothing that ancient Greek women would have had. Certainly not that color either.† â€Å"What about those other Greek women?† asked Adrian. â€Å"The flashy smart ones.† His forehead wrinkled, as though it were taking every ounce of his brain to come up with the word he wanted. And, to my astonishment, he did. â€Å"The hetaerae.† I honestly hadn't believed he'd retained anything from our conversation in San Diego. I tried not to smile. â€Å"The hetaerae?† Brayden was even more astonished than I was. He gave me a scrutinizing look. â€Å"Yes†¦ yes. I suppose – if such materials were hypothetically possible in that era – that this is something you'd expect to see find on a hetaera instead of the average Greek matron.† â€Å"And they were prostitutes, right?† asked Adrian. â€Å"These hetaerae?† â€Å"Some were,† agreed Brayden. â€Å"Not all. I think the usual term is courtesan.† Adrian was completely deadpan. â€Å"So. You're saying my sister's dressed like a prostitute.† Brayden eyed my dress. â€Å"Well, yes, if we're still speaking in hypothetical – â€Å" â€Å"You know what?† I interrupted. â€Å"We need to go. It's going to rain any minute now. I'll take Adrian home and meet you back here, okay?† I refused to let Adrian continue to play whatever game he had going to torment Brayden – and, by extension, me. â€Å"I'll text you when I'm on my way back.† â€Å"Sure,† said Brayden, not looking very sure at all. He left, and I started to get into the car until I noticed Adrian trying – and failing – to open the passenger side door. With a sigh, I walked over and opened it for him. â€Å"You're drunker than I thought,† I said. â€Å"And I thought you were pretty drunk.† He managed to get his body into the seat, and I returned to my own side just as raindrops splashed on my windshield. â€Å"Too drunk for Jailbait to feel,† he said. â€Å"The bond's numb. She can have an Adrian-free night.† â€Å"That was very thoughtful of you,† I said. â€Å"Though I'm guessing that's not the real reason you were hitting the bottle. Or why you came here. As far as I can tell, all you've accomplished is to mess with Brayden.† â€Å"He called you a prostitute.† â€Å"He did not! You baited him into that.† Adrian ran a hand through his hair and leaned against the window, watching the rapidly unfolding storm outside. â€Å"Doesn't matter. I've decided I don't like him.† â€Å"Because he's too smart?† I said. I remembered Jill and Eddie's earlier comments. â€Å"And unmemorable?† â€Å"Nah. I just think you can do better.† â€Å"How?† Adrian had no answer, and I had to ignore him for a bit as my attention shifted to the road. Storms, while infrequent, could come up fast and furious in Palm Springs. Flash floods weren't uncommon, and the rain was now pouring down in sheets, making visibility difficult. Fortunately, Adrian didn't live that far away. That was a double blessing because, when we were a couple blocks from his apartment, he said: â€Å"I don't feel so well.† â€Å"No,† I moaned. â€Å"Please, please do not get sick in my car. We're almost there.† A minute or so later, I pulled up at the curb outside his building. â€Å"Out. Now.† He obeyed, and I followed with an umbrella for myself. Glancing over at me as we walked to the building, he asked, â€Å"We live in a desert, and you keep an umbrella in your car?† â€Å"Of course I do. Why wouldn't I?† He dropped his keys, and I picked them up, figuring I'd have an easier time unlocking the door. I flipped on the nearest light switch – and nothing happened. We stood there for a moment, together in the darkness, neither of us moving. â€Å"I have candles in the kitchen,† said Adrian, finally taking a few staggering steps in that direction. â€Å"I'll light some.† â€Å"No,† I ordered, having visions of the entire building going down in flames. â€Å"Lie on the couch. Or throw up in the bathroom. I'll take care of the candles.† He opted for the couch, apparently not as sick as he'd feared. Meanwhile, I found the candles – atrocious air freshening ones that smelled like fake pine. Still, they cast light, and I brought a lit one over to him, along with a glass of water. â€Å"Here. Drink this.† He took the glass and managed to sit up long enough to get a few sips. Then, he handed the glass back and collapsed against the couch, draping one arm over his eyes. I pulled up a nearby chair and sat down. The pine candles cast fragile, flickering light between us. â€Å"Thanks, Sage.† â€Å"Are you going to be okay if I leave?† I asked. â€Å"I'm sure the power will be on by morning.† He didn't answer my question. Instead, he said, â€Å"You know, I don't just drink to get drunk. I mean, that's part of it, yeah. A big part of it. But sometimes, alcohol's all that keeps me clearheaded.† â€Å"That doesn't make sense. Here,† I prompted, handing the water back to him. As I did, I cast a quick look at my cell phone's clock, anxious about Brayden. â€Å"Drink some more.† Adrian complied and then continued speaking, arm back over his eyes. â€Å"Do you know what it's like to feel like something's eating away at your mind?† I'd been about to tell him I needed to leave, but his words left me cold. I remembered Jill saying something similar when she was telling me about him and spirit. â€Å"No,† I said honestly. â€Å"I don't know what it's like†¦ but to me, well, it's pretty much one of the most terrifying things I can imagine. My mind, it†¦ it's who I am. I think I'd rather suffer any other injury in the world than have my mind tampered with.† I couldn't leave Adrian right now. I just couldn't. I texted to Brayden: Going to be a little longer than I thought. â€Å"It is terrifying,† said Adrian. â€Å"And weird, for lack of a better word. And part of you knows†¦ well, part of you knows something's not right. That your thinking's not right. But what do you about that? All we can go on is what we think, how we see the world. If you can't trust your own mind, what can you trust? What other people tell you?† â€Å"I don't know,† I said, for lack of a better answer. His words struck me as I thought how much of my life had been guided by the edicts of others. â€Å"Rose once told me about this poem she'd read. There was this line, ‘If your eyes weren't open, you wouldn't know the difference between dreaming and waking.' You know what I'm afraid of? That someday, even with my eyes open, I still won't know.† â€Å"Oh, Adrian, no.† I felt my heart breaking and sat down on the floor near the couch. â€Å"That won't happen.† He sighed. â€Å"At least with the alcohol†¦ it quiets the spirit and then I know if things seem weird, it's probably because I'm drunk. It's not a great reason, but it's a reason, you know? At least you actually have a reason instead of not trusting yourself.† Brayden texted back: How much longer? Irritated, I answered back: Fifteen minutes. I looked back up at Adrian. His face was still covered, though the candlelight did a fair job of illuminating the clean lines of his profile. â€Å"Is that†¦ is that why you drank tonight? Is spirit bothering you? I mean†¦ you seemed to be doing so well the other day†¦Ã¢â‚¬  He exhaled deeply. â€Å"No. Spirit's okay†¦ in as much as it ever is. I actually got drunk tonight because†¦ well, it was the only way I could bring myself to talk to you.† â€Å"We talk all the time.† â€Å"I need to know something, Sage.† He uncovered his face to look at me, and I suddenly realized how close I was sitting. For a moment, I almost didn't pay attention to his words. The flickering dance of shadow and light gave his already good looks a haunting beauty. â€Å"Did you get Lissa to talk to my dad?† â€Å"What? Oh. That. Hang on one second.† Picking up my cell phone, I texted Brayden again: Better make that thirty minutes. â€Å"I know someone got her to do it,† Adrian continued. â€Å"I mean, Lissa likes me, but she's got a lot going on. She wouldn't have just thought one day, ‘Oh, hey. I should call Nathan Ivashkov and tell him how awesome his son is.' You got her to do it.† â€Å"I've actually never talked to her,† I said. I didn't regret my actions at all but felt weird at being called out on them. â€Å"But I, uh, may have asked Sonya and Dimitri to talk to her on your behalf.† â€Å"And then she talked to my old man.† â€Å"Something like that.† â€Å"I knew it,† he said. I couldn't gauge his tone, if it was upset or relieved. â€Å"I knew someone had to have prompted her, and somehow I knew it was you. No one else would have done it for me. Not sure what Lissa told him, but man, she must have really won him over. He was crazy impressed. He's sending me money for a car. And upping my allowance back to reasonable levels.† â€Å"That's a good thing,† I said. â€Å"Isn't it?† My phone flashed with another text from Brayden. The dance will nearly be over by then. â€Å"But why?† Adrian asked. He sat down on the floor beside me. There was an almost distraught look to him. He leaned closer to me and then seemed shocked as he realized what he was doing. He leaned back a little – but only a little. â€Å"Why would you do that? Why would you do that for me?† Before I could answer, another text came in. Will you even be back in time? I couldn't help be annoyed that he wasn't more understanding. Without thinking, I typed back: Maybe you should just leave now. I'll call you tomorrow. Sorry. I flipped the phone over so I wouldn't see any other messages. I looked back at Adrian, who was watching me intently. â€Å"I did it because he wasn't fair to you. Because you deserve credit for what you've done. Because he needs to realize you aren't the person he's always thought you were. He needs to see you for who you really are, not for all the ideas and preconceptions he's built up around you.† The power in Adrian's gaze was so strong that I kept talking. I was nervous about meeting that stare in silence. Also, part of me was afraid that if I pondered my own words too hard, I'd discover they were just as much about my own father and me as Adrian and his. â€Å"It should have been enough for you to tell him who you are – to show him who you are – but he wouldn't listen. I don't like the idea of using others to do things we can do ourselves, but this seemed like the only option.† â€Å"Well,† Adrian said at last. â€Å"I guess it worked. Thank you.† â€Å"Did he tell you how to get in touch with your mother?† â€Å"No. His pride in me apparently didn't go that far.† â€Å"I can probably find out where she is,† I said. â€Å"Or†¦ or Dimitri could, I'm sure. Like you said before, they must let letters in.† He almost smiled. â€Å"There you go again. Why? Why do you keep helping me?† There were a million answers on my lips, everything from It's the right thing to do to I don't know. Instead, I said, â€Å"Because I want to.† This time, I got a true smile from him, but there was something dark and introspective about it. He shifted closer to me again. â€Å"Because you feel bad for this crazy guy?† â€Å"You aren't going to go crazy,† I said firmly. â€Å"You're stronger than you think. The next time you feel that way, find something to focus on, to remind you of who you are.† â€Å"Like what? Got some magic object in mind?† â€Å"Doesn't have to be magic,† I said. I racked my brain. â€Å"Here.† I unfastened the golden cross necklace. â€Å"This has always been good for me. Maybe it'll help you.† I set it in his hand, but he caught hold of mine before I could pull back. â€Å"What is it?† he asked. He looked more closely. â€Å"Wait†¦ I've seen this. You wear this all the time.† â€Å"I bought it a long time ago, in Germany.† He was still holding my hand as he studied the cross. â€Å"No frills. No flourishes. No secret etched symbols.† â€Å"That's why I like it,† I told him. â€Å"It doesn't need embellishment. A lot of the old Alchemist beliefs focused on purity and simplicity. That's what this is. Maybe it'll help you have clarity of mind.† He had been staring at the cross, but now he lifted his gaze to meet mine. Some emotion I couldn't quite read played over his features. It was almost like he'd just discovered something, something troubling to him. He took a deep breath and, his hand still holding mine, pulled me toward him. His green eyes were dark in the candlelight but somehow just as enthralling. His fingers tightened on mine, and I felt warmth spread throughout me. â€Å"Sage – â€Å" The power suddenly came back on, flooding the room with light. Apparently, with no concern for electrical bills, he'd left all the lights on when he went out earlier. The spell was broken, and both of us winced at the sudden brightness. Adrian sprang back from me, leaving the cross in my hand. â€Å"Don't you have a dance or a curfew or something?† he asked abruptly, not looking at me. â€Å"I don't want to keep you. Hell, I shouldn't have bothered you at all. Sorry. I assume that was Aiden texting you?† â€Å"Brayden,† I said, standing up. â€Å"And it's okay. He left, and I'm just going to go back to Amberwood now.† â€Å"Sorry,† he repeated, moving toward the door with me. â€Å"Sorry I ruined your night.† â€Å"This?† I nearly laughed, thinking of all the crazy things I contended with in my life. â€Å"No. It'd take a lot more to ruin my night than this.† I started to take a few steps and then paused. â€Å"Adrian?† He finally looked directly at me, once again nearly knocking me over with his gaze. â€Å"Yeah?† â€Å"Next time†¦ next time you want to talk to me about something – anything – you don't have to drink to work up the courage. Just tell me.† â€Å"Easier said than done.† â€Å"Not really.† I tried for the door again, and this time, he stopped me, resting a hand on my shoulder. â€Å"Sage?† I turned. â€Å"Yeah?† â€Å"Do you know why I don't like him? Brayden?† I was so astonished he'd gotten the name right that I couldn't voice any answers, though several came to mind. â€Å"Because of what he said.† â€Å"What part?† Seeing as Brayden had said many things, in great detail, it wasn't entirely clear which Adrian was referring to. â€Å"‘Historically inaccurate.†Ã¢â‚¬Ëœ Adrian gestured at me with his other hand, the one not on my shoulder. â€Å"Who the hell looks at you and says ‘historically inaccurate'?† â€Å"Well,† I said. â€Å"Technically it is.† â€Å"He shouldn't have said that.† I shifted, knowing I should move away†¦ but I didn't. â€Å"Look, it's just his way.† â€Å"He shouldn't have said that,† repeated Adrian, eerily serious. He leaned his face toward mine. â€Å"I don't care if he's not the emotional type or the complimentary type or what. No one can look at you in this dress, in all that fire and gold, and start talking about anachronisms. If I were him, I would have said, ‘You are the most beautiful creature I have ever seen walking this earth.'† My breath caught, both at the words and the way he said them. I felt strange inside. I didn't know what to think, except that I needed to get out of there, away from Adrian, away from what I didn't understand. I broke from him and was surprised to find myself shaking. â€Å"You're still drunk,† I said, putting my hand on the door knob. He tilted his head to the side, still watching me in that same, disconcerting way. â€Å"Some things are true, drunk or sober. You should know that. You deal in facts all the time.† â€Å"Yeah, but this isn't – † I couldn't argue with him looking at me like that. â€Å"I have to go. Wait†¦ you didn't take the cross.† I held it out to him. He shook his head. â€Å"Keep it. I think I've got something else to help center my life.† The Golden Lily: A Bloodlines Novel

Sensory Perceptions Essay Example | Topics and Well Written Essays - 500 words - 10

Sensory Perceptions - Essay Example icist point of view, sense perceptions are reliable as an individual explores with his senses and obtains with them an image or audio-visual aspect of something experienced for real so that the frequent encounter of it under constant pattern eventually materializes a theory that whatever is sensed connects to logic. Secondly, it is reasonable to believe that sensory evaluation can be treated to bear accuracy for even if cognition is pertained to as a separate process, by itself, it would not achieve a worthy product of thought that comes with definite shape, color, sound, or measurable dimension if not through a man’s perceptual capacity. In a way or another, details transmitted along the senses greatly aid the course of thinking when the image formed is translated to common knowledge which constitutes a basis of truth out of being initially sensed. Sensory information may be judged as inaccurate, nevertheless, on occasions when limitations to perceptive abilities are taken into account as in the event an object of interest is way beyond grasp in terms of distance or size that renders it invisible via the naked eye. At this point, rationalizing over the matter becomes the sole means of learning or seeking the truth regarding an alleged existence of things which the senses otherwise fail to concretize. Since qualitative description cannot be perceived at the optimum in this case, then the inaccuracy of sensory information may be compensated for by an inductive method of reasoning, for instance, which entails a purely cognitive approach. One of the factors bearing impact upon the accuracy of sensory data is in reference to the number of observations that have been covered prior to the approval of results. This normally goes with the potential of comparing and contrasting the sensory data received from which to infer that an efficient comparative act equivalently generates the same degree of accuracy on information yielded through the senses. The state of mental

Jews of Germany and Austria-Hungary, 1780-Present Assignment

Jews of Germany and Austria-Hungary, 1780-Present - Assignment Example He came to Berlin in 1743 and taught himself many languages such as German, English, French and Latin, and read other writings by philosophers in order to enlighten himself. He translated the Torah into German and this book was used to teach the German language to the German Jews. They were taught how to read and write in German. Moses began enlightening the German Jews but upheld his Jewish heritage. He encouraged the Jews to speak both German and Hebrew. However, some Jewish believers were against his ideas and considered it profane to learn anything else apart from Hebrew. Several Jewish education institutions were founded from 1778 to 1815 to instruct the German Jews in general science and scripture in German. With time, the Jews changed their thinking which was mainly centered on their religion into an enlightened culture focused on man. Once they learnt German, the Jews started following the ways of the Germans .The Jewish and German culture became more integrated and some Jews completely adopted German culture (Volkov 254). In 1782, a new law was enacted by Emperor Joseph II of Austria. This law was called the Edict of Tolerance and it aimed to fully integrate Jews into German life. They were granted access to education and training for jobs. The law also abolished all documents written in Jewish and decreed the use of German language only. The Jews were also required to use German surnames and drop the Jewish ones. German states followed the example of Austria and in 1812, the Prussian King, Frederick William enacted his Edict and many Prussian Jews were given rights of citizenship and change of names (Hertz 108). Goethe’s concepts of Bildung and Kultur were promoted through literally salons in the 1780s and 1790s. The literary salons were mainly apolitical meetings. Rahel Levin started the most prominent salon in 1791. This woman did not uphold her Jewish identity and supported the

Journal Entry, topic novel 'The Feast of Love-by Charles Baxter' Essay

Journal Entry, topic novel 'The Feast of Love-by Charles Baxter' - Essay Example Some couples feel love is best expressed by living a traditional lifestyle. Society’s concept of love begins with a perfect family consisting of two parents, children, a white picket fence and a dog. Mothers and Fathers stay together, raising their children. Some couples lives this way happily. The Feast of Love depicts a couple who took this approach. The Ginsbergs raised three children, bought a house and were content to spend their golden years with each other. Both of the Ginsbergs are also Jewish. Even thought they aren’t practicing Jews, their heritage plays a big role in making them fit together. This idea of love fit them. When couples cannot agree on love, divorce becomes the answer. Bradley, the Ginsbergs’ neighbor, was not married once, but twice. Bradley married his first wife with the belief that love was between a man and a woman. He never dreamed that Kathryn would leave him for another woman. Kathryn thought if she married Bradley, he would love her the way she needed. When she realized that Bradley couldn’t love her enough, that no man could, Kathryn started noticing women. Kathryn found her love could exist with another woman. Some lovers believe commitment is not a necessary part of love. Bradley’s second wife, Diana, felt this way. She had a long running affair with a married man named David. When she met Bradley and started dating him, Diana felt no need to give David up. She even saw David after she had accepted Bradley’s proposal. Although Diana avoided David during the couple of months she was married, she never totally put him out of her mind. Though David was still married after her divorce, Diana went right back to him. Marriage was not sacred to her. Being with the person she loved was more important than a piece of paper. Marriage is not a part of love for some people. After Bradley’s two marriages failed, he didn’t really want to go down

Entrepreneurship and Innovation Essay Example | Topics and Well Written Essays - 2500 words - 1

Entrepreneurship and Innovation - Essay Example (comscore.com/press_events). There has been a surge in smart phone ownership, with growth particularly strong over the last year, up by 81 per cent from 7.2 million users in May 2009 to 12.8 million in May 2010. In June 2010, over a quarter of people in the UK (26.5 per cent) said they had a smart phone; more than double the number two years previously (media.ofcom.org.uk). This data can be used to imply that the Smart Phone would have wide acceptability in the market. One of the important assumptions which we can make here is that the growth in the market will make smart phone more affordable majority of people in the United Kingdom, their proliferation will increase and also lead to a surge in the contents of the mobile and data consumption. A new report regarding the geography of smart phones indicates that the shipment of smart phones in the first quarter of the year was 55.2 million with the growth hitting 67% year-on-year. (microscope.co.uk). It is assumed further that it provi des a substantial opportunity for different people in the mobile ecosystem – from operators and manufacturers to publishers and advertisers – who adapt to this dynamic market. ... On 7th May, 2009, a long-awaited recommendation on the mobile termination rates to reduce termination charges was adapted by EU by the end of 2012. (berr.gov.uk). On 1st April, 2010, a statement with a further consultation was issued to the mobile number porting process in which the porting time took one day (berr.gov.uk). The standard Value Added Tax rate is 17.5%, however, it will be increased to 20% in January 2011 (hmrc.gov.uk). The call tariffs indicate that calls may be charged by any residential or business package selected as the Charge Costing Package (telecom-tarriffs.co.uk). This implies that the market for mobile phone users is likely to be damaged as the call rates may rise because of the increases in tariffs mentioned above. Apart from that, the mobile operator companies are likely to introduce new packages to attract more consumers. This would directly have an impact on Vertigo as the demand for cell phones would rise pertaining to offers and packages introduced by Ope rators (Gruber, 2005). PART B 1. Financial Budget and Forecast for 3 year (Apple iphone; Assumed) The sales forecast is assumed on the basis of iPhone units sold by Apple in the past year when it was launched. As reported by O2, Vodaphone, Tesco and Apple’s management, iPhones were set to reach 2.5 million units. Furthermore, 10.7 million units were sold throughout Europe and 11 million units are expected to be sold in the year 2010 therefore, these figures are assumed to be the UK’s share in the latter. (ipodrepublic.com; Wordpress.com). Prices are kept constant however; they are adjusted with an expected inflation rate of 4%. The Annexure at the end of this

MOCK TRIAL ASSIGNMENT Essay Example | Topics and Well Written Essays - 1250 words

MOCK TRIAL ASSIGNMENT - Essay Example Several questions must be addressed so that the plaintiff is assured of a fair case in the courts. The background of the jurors is important to note when selecting the potential ones for representation (Walter and James). Firstly, the level of education is of paramount importance. Of pivotal value also is the number of members in the family as well as spouses. This activity of asking such questions tries to investigate any prejudices that may be hidden which could lead to the negation of a fair trial. For instance a jury could have been a victim of such a case in the past hence this aspect may lead to ultimate bias directed towards the defendant thus spoiling the relevance of the case under question. On the other hand, the defendant should likewise exercise caution in the selection of the jury to safeguard the rights bestowed in him. The reason behind such undertaking is to prevent unfair circumstances that hamper administration of justice to the aggrieved parties. For example, the d efendant in this case must ask about the family members of the potential juror since it can be so coincidental that one of the parties to which he has a relationship leads in a certain insurance company and so on. This could pose challenges because the potential juror may sway favoritism towards the defendant hence no instance of justice would be encountered. The jury out to exhibit dire competence at all costs as well as professionalism to the parties, the defendant and the plaintiff. 2.0 Opening Statement for the Defendants As the case before us exhibits, there is a lot of negligence on the part of the plaintiff. From the instructions given by the manufacturer, 1-4B has largely been used in the manufacture products in the household platform yet for it to turn dangerous in its GHB form; large amounts have to be ingested in very high quantities (Andrew). Notably, production of Princess Beads doesn’t use high levels of this element thus this renders the plaintiff’s clai m baseless. Additionally, we expressed our responsibility by giving reliable warning information concerning the product hence the plaintiff negligently dismissed this aspect. To this respect, we can’t be liable for the inconveniences neither the eventual death of the plaintiff’s son, Joey Davis. Specifically, Princess Beads has been positioned strategically in the market to target children of older age than that of Joey; we can never be bound by any law to follow each person purchasing Princess Beads to make sure it’s used appropriately. Thus, it’s my view, that of the entire company that the plaintiff was responsible for the death of her son by not advising the caregivers to adhere to the instructions directed by the manufacturer. They ought to have played their supervisory role in the manner expected to prevent such unfortunate occurrences. If I was a member of the panel of the jury, I would elect an eloquent person to deliver the opening statement. The person should possess a convincing capacity with powerful elaboration skills so as to make sure that the points are delivered to the judges in a sequential and orderly manner which is both convincing and reliable (Hamid). The ultimate efficiency with which the same is done therefore adds value to this case and will hence build a strong defense that in not easy to surpass. By so doing therefore, the foregoing will add bonus points and also give a bearing to the

What is the future for Business Intelligence Explore developments in Essay

What is the future for Business Intelligence Explore developments in BI on organisations, Industry and society in general - Essay Example 244). It is also applicable in the determining the actions of business competitors and the impact of their action. The business intelligence growth is facilitate by the emergence of data warehouse in form of a repository, the increased performance of the soft and the hard wares and advance in the information cleaning approaches. It finds use mainly in industries (Negash, 2004, p.177) Business intelligence has dynamic advancement of its complexity over-time, just like the information technology. The dynamism of the business intelligence is induced by various factors. These factors include the advance in technology, business needs such as real time information and data. Some changes also unravel better alternatives of carrying out specific tasks. The future of business intelligence lies in four main areas (TuÃ… £Ã„Æ', Zara, Orzan, Purcarea, and Orzan, 2014, p. 1). There is constant need for the business intelligence to expand and develop to cope up with the future demands of the business. Key areas that influence the future of business intelligence include (Watson, 2009, p. 492). Scalability refers to the ability of a business intelligence system to handle more volumes and much complex information. The business intelligence of the future must be able to handle such ever increasing the information of the system. There is need of a business intelligent that support large number of concurrent users, has the capacity to handle more complicated queries and preserves information without degradation of its system. The scalablity of business is majorly influenced by the recent concurrent advancement in various hardware and sophisticated database software development that incapacitate the business intelligence system to handle large scale of information. As the future of the information management expands so is the scalability of the business intelligence system (Watson, 2009, p.492). There urgent need to make business intelligence pervasive in the all business

Animal Testing is Wrong Essay Example for Free

Animal Testing is Wrong Essay Animal testing is cruel and inhuman! It is morally wrong to toture animals for our own benefit. Over 3 million animals have been tormented all in the name of research. It has been found that only 5-25% of side effects caused by medicines are accurately predicted. This leads me to wonder what is actually being gained by animal experimentation. It’s bad science! The Food and Drug Administration reported that 92 out of every 100 drugs that pass animal tests fail on humans, making it wasteful. In recent years there has been the recognition that animals rarely serve as good models for the human body. Animal experiments prolong the suffering of people waiting for effective cures by misleading experimenters and squandering precious money, time, and resources that could have been spent on human-relevant research. In the name of science, animal experiments globally are around 100 million experiments each year. Cats, dogs, rabbits, mice and other animals, no different to those we have as pets, are used in experiments. Animals are force-fed harmful substances, infected with lethal viruses, subjected to brain damage, heart attacks, stokes, cancers and ultimately killed. Several cosmetic tests commonly performed on mice, rats, rabbits, and guinea pigs include:skin and eye irritation tests where chemicals are rubbed on shaved skin or dripped into the eyes without any pain relief. repeated force-feeding studies that last weeks or months, to look for signs of general illness or specific health hazards. widely condemned â€Å"lethal dose† tests, where animals are forced to swallow large amounts of a test chemical to determine what dose causes death. The fact that animals are used to study pain, depression, anxiety, and to test pain-killing drugs for human use, demonstrates that scientists recognize that animals are capable of suffering in many ways just like humans, but these sentient animals are unable to give their consent to participate in research. The fact that animals can suffer and experience pain is sufficient reason to refrain on moral grounds from harming them. Beyond pain, there is also persuasive evidence that animals, in particular mammals and birds, have thoughts, intentions, and memories. This means they can be harmed by confinement, frustration, fear, isolation, and loss of life experiences unavoidable for animals confined in Laboratories and used in experiments. The measurement of stress hormones, and presence of ulcers, immune suppression, abnormal behavior and brain dysfunction in laboratory animals, provide further evidence that animals commonly used in labs do suffer pain and distress. Some people claim that because animals do not have duties or responsibilities in the way humans do, they are not deserving of the same protection. However, some humans have no responsibilities or duties, such as babies, the mentally ill, or very infirm, yet they are not stripped of their rights in this way. Indeed, such individuals are usually considered more deserving of protection, not less. Others argue that the potential benefit to human society justifies experiments on animals. However this argument is a slippery slope, as this reasoning would also justify experiments on a few non-consenting humans for the ultimate benefit of human society a clearly unethical scenario. â€Å"If we didn’t use animals, we’d have to test new drugs on people. † The fact is that we already do test new drugs on people. No matter how many animal tests are undertaken, someone will always be the first human to be tested on. Because animal tests are so unreliable, they make those human trials all the more risky. What I have to wonder is why do we test on animals, or feel the need to have people volunteer for something potential dangerous with its unknown side effects when we have child molesters, rapists, and murderers in prison who are catered to three meals a day? I believe we should enact instead of animal testing, (which has been proven to be highly ineffective) testing on convicted criminals on death row, or prisoners looking to cut down some time in exchange for experimentation and observation.

Ohio State University Essay Example for Free

Ohio State University Essay Cynthia Ozick is a daughter to Celia Regelsion and William Ozick who was born on 17th April, 1928 in New York. She has a strong educational background. She is a BA degree holder from the university of New York and Masters degree (MA) holder from Ohio State University. She is a respectable and an outstanding writer who has written several fictions and essays and particularly on the life of Jewish Americans. Some of her works such as the novel entitled ‘Heir to the Glimmering world’ that was released in 2004 made her to become popular in the world especially in the United Kingdom. Ozick has achieved many awards due to her unmatched writing skills for example she won the 1986’s Rea Award for the short story writer. She was also on the limelight in 2005 when she won the Man Booker International award. As if this was not enough, she won herself the PEN award in honor of her excellent short story writing skills. Her writing career did not occur to her overnight in fact there are some historical factors that motivated and shaped her life to what she is now. This research paper is going to delve deeper into Cynthia Ozick’s historical background and try to establish the exact factors that influenced her to become a writer of her caliber. The paper will also give brief background information of her life and then conclude with a quick summary of the main points that have been discussed. In the very last page of this paper is a list of all the resources that have been consulted while conducting this research and are properly formatted in accordance with MLA formatting style. Cynthia Ozick was a second born in her family and her father owned a drugstore where Cynthia would assist him in delivering prescriptions. She hailed from a family that greatly valued education and that is why she ended following the path she took, wring novels, poems and plays. Her father was a great Jewish scholar while her uncle was a renown Hebrew poet whose work was widely read. It is her uncle who for the first time introduced her in the field of literature thereby laying the foundation of her future career. (Rothstein) She attended school at a time when anti-Semitism was on the highest degree. She first experienced it while she was schooling at Pelham Bay section where she would receive anti Semitic slurs and attacks especially when Christmas carols were sung in class for she would not sing along as it was her principle. (Jiffynotes. com) She never gave up with school life instead she read books of her older brothers and would get others from a mobile library that passed by their drugstore. Her life took a new dimension when she joined high school at Hunter College where she found the situation being different from that in primary school life in that her education excellence was respected and greatly appreciated something that paved way for her to pursue higher education in 1949 at New York University and later to join Ohio State University for her Master’s program. (Fallon, E. 320-22) Generally speaking, though her life was good at home it was not the same in public. It was in accordance with Jewish culture that young children in America be taken for religious instructions and Cynthia Ozick was no exception. She experienced her first childhood pain at the age of five and half when her grandmother took her for those classes at Yiddish only to be disappointed by the Rabbi who refused to accept the girl arguing that there was no need to educate females. â€Å"Take her home, a girl does not have to study’ (Lowin) Rabbi had no idea whom she was sending away because the girl was bright. Though she was sent away, her grandmother never gave up in fact she took her again the next morning and she was accepted. Rabbi later discovered that the girl was a quick learner and through Rabbi Cynthia came to learn Yiddish knowledge. The experience of her being sent away from school by Rabbi who believed that girls were dispensable to be educated motivated Cynthia in one way or the other. She says that her feminism cropped up due to this treatment. (Lowin J.) Another thing that motivated her to write novels was the memories of how she was treated at school in Bronx. Though the girl was intelligent there are other things that made her feel inadequate, ‘While Ozick describes the Pelham Bay section of the Bronx as a lovely place she found it ‘brutally’ difficult to be a Jew there she remembers having stones thrown at her and being called a Christ-killer as she ran past the two churches in her neighborhood† (Lowin J). she recalls how she was treated so many years down the line something she confirms in her novel, The Cannibal Galaxy which where she describes her life in school that she was suffering like a little worm in school perhaps because she was an immigrant child left under the hands of a teacher who cared less about her life. According to Fallon (323), though Cynthia would not relate well with other children at school there was another option and a better one, books. After school she would burry her head in books that she got from a mobile library that passed by their drugstore once in a week. She says that the mobile librarians would take their cup of coffee at Park View Pharmacy after they were through with their work and she would pick two big books and magazines which transferred her completely to another world, a world different from what she experienced in school, a world of books where no one would interfere with her life. It could be said that harassment she experienced at school was a blessing in disguise because it made her to study more thereby increasing her level of intelligence. She was motivated to spend more of her time reading as she could not relate well with other students who would even criticize and throw stones at her while passing by them. (Fallon 324) The books she received from the traveling library magically transformed her life from that of a doltish schoolgirl to a reader and a prominent writer. She started by going through fairly tails and ended up being a renown novelist. The other motivational force came from her uncle Abraham Regelson, a poet who was admired for his outstanding composing and writing skills. She says that Regelson paved a way for her to follow what she refers to as a strange career. She says, â€Å"It seemed quite natural to belong to the secular Id of literature† (Lowin). She attributed her career choice to her gender arguing that if she was born a boy may be she would have pursue something else instead of what she did. She felt more motivated when she joined high school at Hunter College, Manhattan. The school atmosphere was different from that of the primary school. Here it was academic excellence that made one to be recognized and for the simple reason that she was extremely bright, she felt like she was part of the big elite group. She clearly describes those feelings in her short story book â€Å"An Education. † After she successfully completed her high school education, she proceeded to the University of New York for her BA degree and after that joined Ohio state university for her Masters degree where she wrote her thesis ‘Parable in the Later Novels of Henry James’. In her peace of work entitled, According to Lowin, the lesson of the Master Cynthia Ozick explains how she was influenced by the work of Henry James such that she became a worshipper of literature. She says, â€Å"A worshipper who had to choose between human entanglement, real life and exclusive devotion to art, chooses art. She chose art over life, she says to her eternal regret† (Lowin). Her definition in work of art was confirmed when she directed all her efforts to what she referred to as ‘High Art’ and she embarked on writing philosophical novels such as Mercy, Pity, Peace and Love (MPPL). After that she stopped writing novels and committing herself to other pieces of work like writing Jewish literature. She also got culturally transformed and became what could be termed as Jewish autodidact (Rothstein, M. ). Later, she would further be influenced by the work of Heinrich Graetz – History of the Jews and thereby she took another dimension as far as writing was concerned. She started writing more about Jews and came to be referred to as a Jewish writer. She wrote many poems with Jewish themes and also published another piece of work entitled the Pagan Rabbi in 1966 which made her very popular as it was widely read. It is from this time that her character in the field of writing started to shine internationally. She won several awards and her stories were chosen as the best in the yearly American Short Stories. She also won the Faultner Award and the National Book Award plus other dozen grants and awards that were only coveted by many not mentioning the several honorary degrees she was warded by various universities. (Associated Press) Though she was not a direct victim of the Jewish Holocaust, she would recall how Jews were killed by deadly gas by the ruthless Nazis and particularly in Germany. These memories have also become another motivating force behind her career as a Jewish writer because she has spent a great deal of time and energy writing about what was happening during that time. In conclusion it can be said that Cynthia Ozick’s career was to a large extent shaped by anti-Semitism attacks she met at school. The fact that other students were isolating her and openly criticized opened another door for her. She found solace in books which she received from a mobile library that passed by their drug store. Again having come from a family with people who valued education, she got motivated to study harder than others. Later was later influenced by the work of Regelson and Heinrich Graetz. Again the memories of how the Jews were treated during the First World War reawakened her conscience something that made her to switch to a Jewish leader. Works Cited: Associated Press. Author Cynthia Ozick wins to lifetime achievement awards. Times Record News. April 24, 2008. Accessed at http://www. timesrecordnews. com/news/2008/apr/24/author-cynthia-ozick-wins-2- lifetime-achievement-a/? printer=1/ Lowin, J. Cynthia Ozick. Jewish Virtual Library. 1928. Available at http://www. jewishvirtuallibrary. org/jsource/biography/Ozick. html Fallon, E. A Readers Companion to the Short Story in English Society for the Study of the Short Story. Greenwood Publishing Group, 2001 Jiffy notes . com. Cynthia Ozick. Thomson Gale, 2006. Available at http://www. jiffynotes. com/a_study_guides/book_notes/ssfs_0000_0022_0/ssfs_0 000_0022_0_00022. html Rothstein, M. Cynthia Ozicks Rabbinical Approach to Literature. New York Times. March 25, 1987. Available at http://query. nytimes. com/gst/fullpage. html? res=9B0DE5D91330F936A15750C0 A961948260sec=spon=pagewanted=all

Issues of SME Entrepreneurs and Investment Aspects

Issues of SME Entrepreneurs and Investment Aspects Introduction Start-Up Entrepreneurs who wish to transform their business dreams into reality will one way or another reach out for the external finance. Many new entrepreneurial start-up businesses do not obtain start-up financing (Gruber, 2004; Mason Harrison, 2004b). Private individual investors with a high net worth, known as business angels, represent the largest source of start-up financing for new entrepreneurial businesses (Aernoudt, 2005a). Establishment of new businesses is vital to the development and growth of the countrys economy (Reynolds et al., 2003). Since the first publication on a business angel was published by (Wetel, 1981), many authors have researched on the informal investment market and studied closely monitoring business angels characteristics, investment criteria and issues related to an investment. According to (Masons Harrison, 2000), it is cited that over the past generations many researches have been carried out in different countries and compared with each other. This dissertation will discuss about the mind of an investor and how they operate in terms of investing their financial assets in a start-up business they believe in succeeding. The main reason is to broaden our understanding of investment aspects of a business angel and how an entrepreneur should respond to it. To find out information sources on business start-ups, refer (Appendix 1). Problem Discussions Many business entrepreneurs do not have the luxury of initial capital thats needed to start-up a new business as it requires a vast amount of finance equity (Clarke, 2005; Sohl, 2006). How do entrepreneurs find the initial capital and which investor will trust the business ideas and fund the company? What is the difference between a good investment and a poor decision? What are the requirements of a business angel? These are the main issues SME business starters go through in the initial stages of a business (Wiltbank Boeker, 2007). The answers for all these issues vary depending on several criteria. For example, it could vary due to the type of the business the entrepreneur wish to start, the capacity of the risk involved, the return of investment period and especially the preference of the entrepreneur working alone or with the influence of the investor (Kaplan Schoar, 2005). The dissertation tries to reach active business angels view points on the issues of SME entrepreneurs and investment aspects. The researcher is confident that this thesis will benefit both the business angels and entrepreneurs. Introduction Of The Research Subjects According to a survey conducted by the (EIRO), the governments Bolton Committee in its 1971 report clarified that there is no single definition to explain Small to medium enterprises because of the wide diversity of businesses that operate in the United Kingdom. The report also explained that small to medium business varies according to the type of sector it operates. However section 249 of the Companies act of 1985 affirms that a small company will have to attribute at least two of the following characteristics; Turnover less than GBP 2.8 million Total balance sheet less than GBP 1.4 million Employees less than 50 And a medium sized entrepreneur should operate under the following regulations; Turnover less than GBP 11.2 million Total balance sheet less than GBP 5.6 million Employees less than 250 However in real practice, business functions that operate under small to medium terms, take on a range of working definitions depending on their business objectives (Leedy Ormfod, 2001). EIRO European Industrial Relations Observatory Formal And Informal Venture Capitalists Venture Capital is also known as risk investment (Langberg, 2004). Risk investment is invested as shares and the financier expects a superior â€Å"rate of return to recompense for the amount of risk invested (Kelly Hay, 2003). There are 2 main types of venture financing in the UK and they are; formal venture capitalists (large financial institutions) and informal venture capitalists (wealthy private investors commonly known as business angels). The UK Formal Venture capitalism began in the 18th century (Harding Bosma, 2007). During that time Entrepreneurs found affluent individuals to get support for their new businesses. This informal tradition of funding eventually formed a business trade by a number of venture capital firms created by many wealthy. Currently there are over 120 venture capital establishments in the UK, which fund billions of cash annually to the UK SME market (Frielinghaus et al., 2005). Informal venture capitalists are mainly recognized as Business Angels who are wealthy individuals with a high class reputation of managing well run businesses (Masson Harrison, 2004). As investors business angels bare a larger risk than venture capital firms as they have to be liable for the loss of the investment incase the business they invest lose out. On the other hand venture capital firms have many investors who can be hand in hand to one another in a bad situation (Masson Harrison, 2004). Business angels are more common in UK where they tend to invest more on SME businesses where banks and venture capital firms decide not to, which will be further discussed under evidence analysis (Madill et al., 2005). Business angels tend to be get more closer to the entrepreneur with a higher level of involvement in the firms operations, which shows that their choice of target firms are somewhat different than venture capital firms requirements and business angels investment decisions are made solely on the basis of the relationship between the entrepreneur and the investor (Masson Harrison, 2002). Although entrepreneurs could use formal informal investors at different stages in the business as shown in the (figure 1), it shows where business angels are needed where we will further discuss later on (Aernoudt, R., 1999). Figure 1: Financial sources and their involving stages Source: (VENTURE CAPITAL, 1999, VOL. 1, NO. 2, 187 – 195) Objectives Understand a business angel, an entrepreneur and their relationship in a SME start-up businesses in UK Identify detailed requirements of business angels when it comes to an investment Determine how different countries cultures undertake investments Literature Review This literature review is concerned about the academic groundwork of the research objectives which inquires about investment categories business angels tend to invest in a small to medium sized business sector. It also looks at how different authors have elucidated about the investment natures of different countries like New Zealand, Denmark, Sweden etc. In order to give a clear structure of this academic review, it will be categorized into subsections to converse different authors views about the research objectives. First the review will discuss about the academic Theories of investments. Then it looks at Business angels and entrepreneurs in the UK. Finally the review will investigate different countries nature of investments in their own markets. 2.1 Theories of Investment There are several investment theories defined and compared by many authors. This thesis mainly focuses on informal investors who wish to invest on SME start-up businesses. Although Stock market related investment theories are irrelevant for our objectives it will be impolite to ignore discussing all investment theories. Therefore lets investigate the theories and in the later chapters discuss the practical concepts (evidence) used currently by successful investors. Among the following theories, Efficient Market Theory will be related to investment in stock listed companies and â€Å"principal-agent, prisoners dilemma framework resource based theory† will be about business angels investing in SME businesses. 2.1.1 Efficient Market Theory (EMT) According to (Burton Malkiel, 1973), the stock values that show in the stock market almost define where the company is in its territory and how well it performs compared to its competitors. He suggests that stock prices may not always be accurate but it can be correct most of the time. On the other hand few business managers disagree, explaining that there companys values are priced unfairly and stock prices do not accurately replicate the performance of their companies (Burton Malkiel, 1973). The following discussion will communicate what efficient market theory is about and explore the arguments against it. According to (Michael Firth, 1975), it is stated that there were many academic researches carried out to monitor the share price behavior by investment advisory firms and investors to obtain profitable investment strategies. What is EMT or EMH? (Burton Malkiel, 1973) explained that Efficient Market Theory (EMT) is also known as Efficient Market Hypothesis (EMH) on a more technical term. This theory is a method of defining how stock values behave the way they do in terms of investment decisions. (Eugene Fama, 1965) later categorized EMH into three sub assumptions and they are as follows; 1. Weak form (EMH) This method assumes that current stock values replicate all past information about the specific company such as performance measurements, returns etc. By analyzing the stocks price chart, it can help the investors verify as to what the future holds for the companys stock values (Eugene Fama, 1965). 2. Semi strong (EMH) The assumption built on this method is that all the publicly available information and historical information replicates the values of a companys stock prices in the market. So the investors could gain more knowledge and confidence through a companys financial statements and recent developments. It will enable the investors to judge the company future performance (Eugene Fama, 1965). 3. Strong form (EMH) This method expressed that, other than publicly available information, the investors get an inside look into the company which largely reflects the stock value (Eugene Fama, 1965). Principal Agent Theory In general terms Principal Agent theory is defined as a business management framework to observe the behavior between employer contractor or employer employees (Spence and Zeckhauser, 1971; Ross, 1973). So here this theory can be applied to the business angel entrepreneur relationship and discuss its implication on the investment process (Jenson and Meckling, 1976; Harris and Raviv, 1978). In the corporate business, the principal (Business angel) usually appoints the agent (manager) or else make sure the entrepreneur works according to the principals ideas in the business (Jenson and Meckling, 1976). The principal usually make sure that the agents business intentions are as similar to him/her (www.financemind.com). In other words, the principal wishes to make sure that the business runs well and succeed the way he/she believes best (Eisenhardt, 1989). But on the other hand, over an informational advantage the agent could think otherwise for the business. This is where the problem of shared risks arises as (Eisenhardt, 1989) explains, where the Investor (principal) and the agent (manager) could end up having different opinions towards the business. The agency theory is widely used in venture capitalism (Bruton, Fried Hisrich, 2000a). Having conflicts due to differences in interests, it is essential to minimize these risks as (Bruton, Fried Hisrich, 2000b) agrees with Eisenhardt. To reduce these risks investors make sure that they actively monitor the companies they invest and build a better and close relationship with each other (Busenitz, Fiet Moesel, 2004). According to (Sweeting Wong, 1997), using a principal agent theory to evaluate a business angel investment is not highly recommended anymore. It is much better to have a mutually agreed relationship. The agency theory shows that money motivates both the principal and the agent (Busenitz, Fiet Moesel, 2004). But financial motivations or economic factors do not relate business angels relationship with the entrepreneur in this theory (Wijbenga et al., 2003). Prisoners Dilemma Framework (PDF) This is yet another theory that can be used in an investment study. In this framework there can be either a conflict or a development between the two parties involved (Cable Shane, 1997). In this theory, both parties can either go in their separate interests and gain a certain pay off or co-operate with each other and achieve a higher pay off (Bruton, Fried Hisrich, 2000). The prisoners dilemma framework promises better fitting for the business angels and the entrepreneurs because it does not presume a hierarchical relationship between the two parties (Bruton, Fried Hisrich, 2000; Cable Shane, 1997). Still the PDF theory only focuses on the investor – entrepreneur relationship and not any of the business angel investment activities or impacts. It concludes that the theory is not suitable enough to define a business angel entrepreneur relationship (Cable Shane, 1997). Resource Based Theory The resource based theory has many influences on the entrepreneurship. Business angels can contribute many resources other than cash it self. According to Freear, Sohl and Wetzet (2002), angel investors can contribute five types of resources to an entrepreneur: Human, physical, social, organizational financial. Human capital can be taken as angel investors contribution of business knowledge, skills and business experience to the firm (Erikson Nerdrum, 2001a). Social capital can be gained when business angels provide their business contacts (Angel networks). By this, the entrepreneur has the opportunity to meet other investors and extend the funding possibilities to the business. Physical resources can be machines or factories and organizational capital can be described as the influence and advice the investors can give for the business for an example making the business improve on its experience (Erikson Nerdrum, 2001b). Financial capital consists of the funding provided in the beginning of the start-up phase (Cassar, 2003). By far this presumed to be the best suited theory to define a relationship between a Business angel and an Entrepreneur where all aspects are covered (Rose, 2005). Summary Of Theories Looking back at the efficient market theory, Agency theory, Prisoners dilemma framework and Resource based theory; it seems to be that the â€Å"Resource based theory† is the most suitable theoretical framework for the Business angel investments. However the Resource based theory has to be amended with few assumptions: Human capital should be taken as the (knowledge, skills business experience) investors contribute with (Ardichvili et al. (2002). Although we discussed the above theories, many researchers have described and tried to apply other similar theories to the investor investee relationship [Example: Procedural Justice (Busenitz, Fiet Moesel, 2004), learning and knowledge-based view (De Clercq Sapienza, 2002), resource exchange theory (Gomez-Mejia, Balkin Welbourne, 1990)]. All the investment theories have a common characteristic that have only a few relevant investment features in them to the investor-investee concept. To make it applicable for the Business angels and entrepreneurs all these theories should have few amendments and adaptations (Sapienza, Manigart Vermeir, 1996). Small And Medium Enterprise (SME) William Kendall, the Chief Executive of Whole Earth Ltd stated, â€Å"SME business is a fantastic place to work. You have to think innovatively to be an entrepreneur. Its thrilling and its enjoyable.† According to (European Industrial Relations Observatory) there is no general definition for SME. But the (Governments Bolton Committee, 1971) cited that the characteristic of a SME firm is a self-sufficient business being owned by a single owner with a small market share. The report also stated that the size of the SME changes in different industries. Although it is hard to give one specific definition for SMEs, it can be measured and classified by numbers (employees revenue rates). The defining measurements are as follows: Definitions: (The Department for Business, Enterprise and Regulatory Reform – BERR, UK) has defined SME with 3 types of measurements and those are based on amount of employees: Micro firms: 0-9 employees; Small firms: 0-49 employees and Medium firms: 50-249. The (European Commission) changed the definition of the SME to increase the partnerships and innovations. The definition which took affect on 2005 is: â€Å" A Micro, Small and Medium-sized enterprise (SME) is made up of firms which employ less than 250 employees and have yearly revenue less than 50 million euro†. Importance Of SME In The Uk The country has raised the level of growth productivity in the last era reducing the competition gap between other countries like US, France Germany (BERR, 2008). Currently UK is reacting well to the global prospects and challenges. The growth of the SME market increases each year promising to boost the economy of the country. According to (European Business Angels Network (2007) Dissemination Report on the Potential for Business Angels Investment and Networks in Europe), the employment and annual revenue contribution of the SME industry as a whole is more than 50 percent of the total. The UK government provides necessary support for people to step up and start their innovative business to increase the competition level of the country (www.berr.gov.uk). The Entrepreneur Earlier it was discussed that previously recognized agency theories explains that the investor, ensuring a healthy relationship is highly regarded as a successful investment aspect in an investment (Kelly Hay, 2003). Therefore exploring more about what authors have studied about entrepreneurs and investors is vital. The difference between a formal venture capitalist and a business angel is that a venture capitalist invests looking at the company and its ability to perform (Schramm, 2004). On the other hand the business angel focuses mostly on the entrepreneur to make sure there can be a good business relationship (Mark and Robinson 2000, p138). The entrepreneur is the only key to get the funding needed for a start-up business. As an entrepreneur, it is vital to gain the investors trust and confidence in the business idea. According to (Osnabrugge Robinson 2000, p123), it is cited that during a business start-up there is a high percentage of entrepreneurs failing to make good management decisions in the initial stages. It is very sensible for an entrepreneur to seek a business angel as they pay special interest on the business they invest in with all their resources including non-financial contributions. It could help fill all the management weaknesses of an initial stage of the business and sav e huge amounts of consulting and managerial costs (Mason and Stark, 2004). Entrepreneur Evaluation (Osnabrugge Robinson, 2000) had explained that entrepreneurs should be aware that the investor not only pays attention on the business proposition but also the entrepreneur himself to ensure the safety, confidence, enthusiasm and the ability to depend on the entrepreneur. Trust is something investors work hard to find in an entrepreneur, because they invest large amounts of financial resources on a person they met in a short period of time (Osnabrugge Robinson 2000, p125). According to a study conducted by Stedler and Peters; entrepreneurs capability to convince the business angel to invest is very important and showed that 81% of business angels has expressed that a positive first impression established in the first meeting as important (Stedler and Peters, 2000). When it comes to angel investment decisions being made, business angels need to ensure that the entrepreneur should be a proficient manager (Gerald and Joel, 2000). Loyalty, leadership, reliability and personality are important characteristics that angel investors look into when they evaluate entrepreneurs. An entrepreneur should be able to have those qualities to gain an influence of the investor (Aernoudt 1999 Sappa 2006). The characteristics that separate a good ownership from a poor is, that if the entrepreneur is able to establish trust and leadership skills with confidence and make the employees follow him/her (Micah Baldwin 2007). Investors find it comforting to know that the entrepreneurs have invested partly on the business before seeking external investment. This gives the investor the idea that the entrepreneur has given all the effort in the involvement of the process and that the financial value of the business is appreciated (Osnabrugge Robinson 2000, p127). According to (Sappa 2006), business angels take lots of time and effort into finding out background information on the entrepreneur to ensure that the owner has the right expertise to manage the business he proposes. (Haines and Riding 1998) corroborates furthermore by adding that the entrepreneur sharing his/her previous business experiences and being much more practical about the business brings more information and confidence to the investor. Finally all the above characteristics that were discussed are very important for a new start-up entrepreneur to influence investments from professional business angels. Business Angels As we have gone through the theories of business angels it is important to know who business angels are in the minds of researchers. A business angel is a highly prosperous individual who can be a business person and willing to invest part of his/hers finance on a promising entrepreneur who has a potential to succeed (Isakssin 2000, Helle 2004). According to (Harrison Manson, 1999), there are three eras of business angel researches conducted in the investment business: First era of business angel research was conducted by United States of America in early 1980s. Authors like; (Landstrom, 1993) from Sweden and (Harrison Manson, 1992) from United Kingdom repeated the same work by giving out similar results. In this era it was solely concentrated on business angels thoughts, activities and characteristics (Freear, Sohl Wetzel, 2002). Second era enabled researchers to go deep into business angels by investigating their post investment involvements. Theory building up and applying for business angels began in this era. Although there were theories built for business angels, it wasnt developed enough to be completely suitable for the activities of angel investors (Connolly et al., 2006). Third era will be the era about the future researches of business angels. There were many faults in the previous researches done and they need to be taken in a new direction to make sure the researches investigated will produce good results (Arenius Minniti, 2005). This would finally make us understand the minds of business angels and match the Business angel – Entrepreneur relationship under changing economy, culture competition (Connolly, OGorman Bogue, 2006). By the help of (Harrison Mason) Swedish researchers like (Sorheim 2005) will enable to investigate on the changing environment of Business angels. This also mean that the theories being found in the previous eras could finally be developed enough to apply on the business angels current investment methods and get positive results (Gompers Lerner, 2007). Characteristics Of Business Angels Almost all the business angels who actively invest on new businesses have few common characteristics. They all have the main motive to increase the potential of their financial capital (Duxbary, Haines Riding 1996). But (Landstrom 1993, Osnabrugge and Robinson 2000) explained that all business angels should not be profiled in a similar way because cultures and person to person could make them different to each others ways in terms of making a personal investment decision. Although there could be many differences between business angels, (Osnabrugge and Robinson, 2000) also stated that there are general motives behind all business angels when it comes to a certain result they expect out of an investment. When Venture capitalists and business angels are taken together it is wide clear that Business angels are individuals who prefer to invest less financial capital than of the formal investors who invest large amounts. Business angels also prefer to invest their money mainly on initial stages of a business (Osnabrugge and Robinson 2000). When it comes to formal investors, they are selective in industries they invest on depending on a lot of information and research. But the Business angels invest on the entrepreneur regardless of what industry sector the business idea would succeed on. They do little research on the industry but heavy research on the entrepreneur they expect to build a trust worthy relationship, because they depend on the entrepreneur mu ch more than the venture capitalists that only rely on the market and the performance of the company (Osnabrugge and Robinson 2000, p63). Furthermore a research conducted in the Norwegian angel market and studies conducted in the US have identified several angel categories. There could be cultural and economical differences among countries like (UK, Sweden Singapore) but angel investors do have likely investment standards in those countries (Landstrom 1993). (Freeny, Haines Riding 1998) explained that the markets which business angels are currently active are where they are wiling to invest more on. There could be many differences in Business angels personalities and points of views of the whole investment process. There are studies that showed the â€Å"most regular business angel†. It is stated that the age, where successful individuals decide to invest their money on a business is when they get to their 50s. This shows that it is almost a retirement phase from a business point of view. This can be confirmed by a research carried out in Germany where it stated that 95% of BAs were male individuals, 56% were directors or owners of their businesses and 17% were individuals who were in the director board on other organizations (Stedler Peters, 2003). Even (Osnabrugge and Robinson 2000, p156) supported Stedler and Peters by explaining that the individuals were in director posts and had good business experiences before they decide to move on into personal investments. Most business angels involve themselves heavily during the initial stages of start-up businesses. They wish to invest near to their homes to make sure of convenience. And Business angels are well educated, wealthy beyond a certain average and expect to have a good life with their feet up on a desk holding a glass of wine, which we all hope to achieve one fine day (Freeny, Haines Riding 1998). Although this thesis aims to look at the characteristics of UK business angels, it was clear by all previous studies that there are common statistics about their decisions and behaviors. This tells us that, UK angel investors too are not far from what was described before in the theories. Still it is important to point out few common characteristics of UK business angels; Common Characteristics Of UK Business Angels According to (Ardichvili et al., 2002), Business angels in the UK have been or still are active business owners. They invest in more similar markets to what they are operating in, which saves them a lot of time trying to understand the market and the operations. Like all business angels, UK investors are highly motivated by the return of their investments and the effort (non financial motives) they have put in to the start-up business. They do enjoy being a part of a new business hoping to succeed for the better part of the community and the country (Landstrom 1993). Furthermore UK business angels prefers and makes sure they invest on new businesses that they could visit regularly, which means they invest in promising firms which will locate geographically near to where they reside (Ardichvili et al., 2002). BAs would rather invest in firms within their residing area, than investing in a location where they find it hard to meet the entrepreneur even though it would double their investments (Harrison, Mason Robson, 2003). Most British angels prefer their entrepreneurs operate within 100 miles of their homes although investors who invested on technological businesses are willing to travel long distances (www.bbaa.org.uk). According to Mason, British angels mostly prefer to invest on small businesses during its initial stages where it is not too late to put in not just their finance sources but their advice and experience to get things on the right track. This, in a way gives them satisfaction of being a part of a promising business (Mason, 2002). After going through the common characteristics of British Angel Investors, it is quite clear that there isnt a major difference compared with the international countries like Sweden and Denmark which will be discussed later. We discussed about Business angels and it is vital to know the categories of their investments. Investment Aspects Of A Business Angel One of the objectives of this thesis is to find out how Business angels in UK and other similar countries decide to invest on a certain investment they find it promising. An investor looking for good reasons to decide on an investment is known as Investment Aspects or Investment Criteria (Landstrom, 1993). It is a way of evaluating the business and the entrepreneur to ensure the security and the profitability of the business proposal. According to the venture capitalism and angel investment comparison carried out by (Osnabrugge Robinson 2000), it revealed that although there were similarities among their attributes in their investment standards there were a certain amount of dissimilarities which makes business angels favorites for a new start up business. For an example, venture capitalists are prepared to invest almost in all stages of a business and therefore they look into all the past and probable financial records of the company. On the other hand the business angels much prefer to invest on a start-up phase of a new business where past financial experiences are not so important to them (Osnabrugge Robinson 2000). Most business angels give similar priorities to investment aspects, when it comes to making a decision. With much researches conducted over the past years (Osnabrugge Robinson 2000) has come up with a selected summary that illustrates the criteria of an investment. The following (Table 1) of twenty-five selective factors are prioritized by well known angel investors; Priority order Priority factors for an investment 1 passion of the industrialist 2 Dependability of the industrialist 3 Sales prospective of the product 4 proficiency of the industrialist 5 Entrepreneur(s) first impression 6 Development prospective of the market 7 Quality of the product 8 Benefits Issues of SME Entrepreneurs and Investment Aspects Issues of SME Entrepreneurs and Investment Aspects Introduction Start-Up Entrepreneurs who wish to transform their business dreams into reality will one way or another reach out for the external finance. Many new entrepreneurial start-up businesses do not obtain start-up financing (Gruber, 2004; Mason Harrison, 2004b). Private individual investors with a high net worth, known as business angels, represent the largest source of start-up financing for new entrepreneurial businesses (Aernoudt, 2005a). Establishment of new businesses is vital to the development and growth of the countrys economy (Reynolds et al., 2003). Since the first publication on a business angel was published by (Wetel, 1981), many authors have researched on the informal investment market and studied closely monitoring business angels characteristics, investment criteria and issues related to an investment. According to (Masons Harrison, 2000), it is cited that over the past generations many researches have been carried out in different countries and compared with each other. This dissertation will discuss about the mind of an investor and how they operate in terms of investing their financial assets in a start-up business they believe in succeeding. The main reason is to broaden our understanding of investment aspects of a business angel and how an entrepreneur should respond to it. To find out information sources on business start-ups, refer (Appendix 1). Problem Discussions Many business entrepreneurs do not have the luxury of initial capital thats needed to start-up a new business as it requires a vast amount of finance equity (Clarke, 2005; Sohl, 2006). How do entrepreneurs find the initial capital and which investor will trust the business ideas and fund the company? What is the difference between a good investment and a poor decision? What are the requirements of a business angel? These are the main issues SME business starters go through in the initial stages of a business (Wiltbank Boeker, 2007). The answers for all these issues vary depending on several criteria. For example, it could vary due to the type of the business the entrepreneur wish to start, the capacity of the risk involved, the return of investment period and especially the preference of the entrepreneur working alone or with the influence of the investor (Kaplan Schoar, 2005). The dissertation tries to reach active business angels view points on the issues of SME entrepreneurs and investment aspects. The researcher is confident that this thesis will benefit both the business angels and entrepreneurs. Introduction Of The Research Subjects According to a survey conducted by the (EIRO), the governments Bolton Committee in its 1971 report clarified that there is no single definition to explain Small to medium enterprises because of the wide diversity of businesses that operate in the United Kingdom. The report also explained that small to medium business varies according to the type of sector it operates. However section 249 of the Companies act of 1985 affirms that a small company will have to attribute at least two of the following characteristics; Turnover less than GBP 2.8 million Total balance sheet less than GBP 1.4 million Employees less than 50 And a medium sized entrepreneur should operate under the following regulations; Turnover less than GBP 11.2 million Total balance sheet less than GBP 5.6 million Employees less than 250 However in real practice, business functions that operate under small to medium terms, take on a range of working definitions depending on their business objectives (Leedy Ormfod, 2001). EIRO European Industrial Relations Observatory Formal And Informal Venture Capitalists Venture Capital is also known as risk investment (Langberg, 2004). Risk investment is invested as shares and the financier expects a superior â€Å"rate of return to recompense for the amount of risk invested (Kelly Hay, 2003). There are 2 main types of venture financing in the UK and they are; formal venture capitalists (large financial institutions) and informal venture capitalists (wealthy private investors commonly known as business angels). The UK Formal Venture capitalism began in the 18th century (Harding Bosma, 2007). During that time Entrepreneurs found affluent individuals to get support for their new businesses. This informal tradition of funding eventually formed a business trade by a number of venture capital firms created by many wealthy. Currently there are over 120 venture capital establishments in the UK, which fund billions of cash annually to the UK SME market (Frielinghaus et al., 2005). Informal venture capitalists are mainly recognized as Business Angels who are wealthy individuals with a high class reputation of managing well run businesses (Masson Harrison, 2004). As investors business angels bare a larger risk than venture capital firms as they have to be liable for the loss of the investment incase the business they invest lose out. On the other hand venture capital firms have many investors who can be hand in hand to one another in a bad situation (Masson Harrison, 2004). Business angels are more common in UK where they tend to invest more on SME businesses where banks and venture capital firms decide not to, which will be further discussed under evidence analysis (Madill et al., 2005). Business angels tend to be get more closer to the entrepreneur with a higher level of involvement in the firms operations, which shows that their choice of target firms are somewhat different than venture capital firms requirements and business angels investment decisions are made solely on the basis of the relationship between the entrepreneur and the investor (Masson Harrison, 2002). Although entrepreneurs could use formal informal investors at different stages in the business as shown in the (figure 1), it shows where business angels are needed where we will further discuss later on (Aernoudt, R., 1999). Figure 1: Financial sources and their involving stages Source: (VENTURE CAPITAL, 1999, VOL. 1, NO. 2, 187 – 195) Objectives Understand a business angel, an entrepreneur and their relationship in a SME start-up businesses in UK Identify detailed requirements of business angels when it comes to an investment Determine how different countries cultures undertake investments Literature Review This literature review is concerned about the academic groundwork of the research objectives which inquires about investment categories business angels tend to invest in a small to medium sized business sector. It also looks at how different authors have elucidated about the investment natures of different countries like New Zealand, Denmark, Sweden etc. In order to give a clear structure of this academic review, it will be categorized into subsections to converse different authors views about the research objectives. First the review will discuss about the academic Theories of investments. Then it looks at Business angels and entrepreneurs in the UK. Finally the review will investigate different countries nature of investments in their own markets. 2.1 Theories of Investment There are several investment theories defined and compared by many authors. This thesis mainly focuses on informal investors who wish to invest on SME start-up businesses. Although Stock market related investment theories are irrelevant for our objectives it will be impolite to ignore discussing all investment theories. Therefore lets investigate the theories and in the later chapters discuss the practical concepts (evidence) used currently by successful investors. Among the following theories, Efficient Market Theory will be related to investment in stock listed companies and â€Å"principal-agent, prisoners dilemma framework resource based theory† will be about business angels investing in SME businesses. 2.1.1 Efficient Market Theory (EMT) According to (Burton Malkiel, 1973), the stock values that show in the stock market almost define where the company is in its territory and how well it performs compared to its competitors. He suggests that stock prices may not always be accurate but it can be correct most of the time. On the other hand few business managers disagree, explaining that there companys values are priced unfairly and stock prices do not accurately replicate the performance of their companies (Burton Malkiel, 1973). The following discussion will communicate what efficient market theory is about and explore the arguments against it. According to (Michael Firth, 1975), it is stated that there were many academic researches carried out to monitor the share price behavior by investment advisory firms and investors to obtain profitable investment strategies. What is EMT or EMH? (Burton Malkiel, 1973) explained that Efficient Market Theory (EMT) is also known as Efficient Market Hypothesis (EMH) on a more technical term. This theory is a method of defining how stock values behave the way they do in terms of investment decisions. (Eugene Fama, 1965) later categorized EMH into three sub assumptions and they are as follows; 1. Weak form (EMH) This method assumes that current stock values replicate all past information about the specific company such as performance measurements, returns etc. By analyzing the stocks price chart, it can help the investors verify as to what the future holds for the companys stock values (Eugene Fama, 1965). 2. Semi strong (EMH) The assumption built on this method is that all the publicly available information and historical information replicates the values of a companys stock prices in the market. So the investors could gain more knowledge and confidence through a companys financial statements and recent developments. It will enable the investors to judge the company future performance (Eugene Fama, 1965). 3. Strong form (EMH) This method expressed that, other than publicly available information, the investors get an inside look into the company which largely reflects the stock value (Eugene Fama, 1965). Principal Agent Theory In general terms Principal Agent theory is defined as a business management framework to observe the behavior between employer contractor or employer employees (Spence and Zeckhauser, 1971; Ross, 1973). So here this theory can be applied to the business angel entrepreneur relationship and discuss its implication on the investment process (Jenson and Meckling, 1976; Harris and Raviv, 1978). In the corporate business, the principal (Business angel) usually appoints the agent (manager) or else make sure the entrepreneur works according to the principals ideas in the business (Jenson and Meckling, 1976). The principal usually make sure that the agents business intentions are as similar to him/her (www.financemind.com). In other words, the principal wishes to make sure that the business runs well and succeed the way he/she believes best (Eisenhardt, 1989). But on the other hand, over an informational advantage the agent could think otherwise for the business. This is where the problem of shared risks arises as (Eisenhardt, 1989) explains, where the Investor (principal) and the agent (manager) could end up having different opinions towards the business. The agency theory is widely used in venture capitalism (Bruton, Fried Hisrich, 2000a). Having conflicts due to differences in interests, it is essential to minimize these risks as (Bruton, Fried Hisrich, 2000b) agrees with Eisenhardt. To reduce these risks investors make sure that they actively monitor the companies they invest and build a better and close relationship with each other (Busenitz, Fiet Moesel, 2004). According to (Sweeting Wong, 1997), using a principal agent theory to evaluate a business angel investment is not highly recommended anymore. It is much better to have a mutually agreed relationship. The agency theory shows that money motivates both the principal and the agent (Busenitz, Fiet Moesel, 2004). But financial motivations or economic factors do not relate business angels relationship with the entrepreneur in this theory (Wijbenga et al., 2003). Prisoners Dilemma Framework (PDF) This is yet another theory that can be used in an investment study. In this framework there can be either a conflict or a development between the two parties involved (Cable Shane, 1997). In this theory, both parties can either go in their separate interests and gain a certain pay off or co-operate with each other and achieve a higher pay off (Bruton, Fried Hisrich, 2000). The prisoners dilemma framework promises better fitting for the business angels and the entrepreneurs because it does not presume a hierarchical relationship between the two parties (Bruton, Fried Hisrich, 2000; Cable Shane, 1997). Still the PDF theory only focuses on the investor – entrepreneur relationship and not any of the business angel investment activities or impacts. It concludes that the theory is not suitable enough to define a business angel entrepreneur relationship (Cable Shane, 1997). Resource Based Theory The resource based theory has many influences on the entrepreneurship. Business angels can contribute many resources other than cash it self. According to Freear, Sohl and Wetzet (2002), angel investors can contribute five types of resources to an entrepreneur: Human, physical, social, organizational financial. Human capital can be taken as angel investors contribution of business knowledge, skills and business experience to the firm (Erikson Nerdrum, 2001a). Social capital can be gained when business angels provide their business contacts (Angel networks). By this, the entrepreneur has the opportunity to meet other investors and extend the funding possibilities to the business. Physical resources can be machines or factories and organizational capital can be described as the influence and advice the investors can give for the business for an example making the business improve on its experience (Erikson Nerdrum, 2001b). Financial capital consists of the funding provided in the beginning of the start-up phase (Cassar, 2003). By far this presumed to be the best suited theory to define a relationship between a Business angel and an Entrepreneur where all aspects are covered (Rose, 2005). Summary Of Theories Looking back at the efficient market theory, Agency theory, Prisoners dilemma framework and Resource based theory; it seems to be that the â€Å"Resource based theory† is the most suitable theoretical framework for the Business angel investments. However the Resource based theory has to be amended with few assumptions: Human capital should be taken as the (knowledge, skills business experience) investors contribute with (Ardichvili et al. (2002). Although we discussed the above theories, many researchers have described and tried to apply other similar theories to the investor investee relationship [Example: Procedural Justice (Busenitz, Fiet Moesel, 2004), learning and knowledge-based view (De Clercq Sapienza, 2002), resource exchange theory (Gomez-Mejia, Balkin Welbourne, 1990)]. All the investment theories have a common characteristic that have only a few relevant investment features in them to the investor-investee concept. To make it applicable for the Business angels and entrepreneurs all these theories should have few amendments and adaptations (Sapienza, Manigart Vermeir, 1996). Small And Medium Enterprise (SME) William Kendall, the Chief Executive of Whole Earth Ltd stated, â€Å"SME business is a fantastic place to work. You have to think innovatively to be an entrepreneur. Its thrilling and its enjoyable.† According to (European Industrial Relations Observatory) there is no general definition for SME. But the (Governments Bolton Committee, 1971) cited that the characteristic of a SME firm is a self-sufficient business being owned by a single owner with a small market share. The report also stated that the size of the SME changes in different industries. Although it is hard to give one specific definition for SMEs, it can be measured and classified by numbers (employees revenue rates). The defining measurements are as follows: Definitions: (The Department for Business, Enterprise and Regulatory Reform – BERR, UK) has defined SME with 3 types of measurements and those are based on amount of employees: Micro firms: 0-9 employees; Small firms: 0-49 employees and Medium firms: 50-249. The (European Commission) changed the definition of the SME to increase the partnerships and innovations. The definition which took affect on 2005 is: â€Å" A Micro, Small and Medium-sized enterprise (SME) is made up of firms which employ less than 250 employees and have yearly revenue less than 50 million euro†. Importance Of SME In The Uk The country has raised the level of growth productivity in the last era reducing the competition gap between other countries like US, France Germany (BERR, 2008). Currently UK is reacting well to the global prospects and challenges. The growth of the SME market increases each year promising to boost the economy of the country. According to (European Business Angels Network (2007) Dissemination Report on the Potential for Business Angels Investment and Networks in Europe), the employment and annual revenue contribution of the SME industry as a whole is more than 50 percent of the total. The UK government provides necessary support for people to step up and start their innovative business to increase the competition level of the country (www.berr.gov.uk). The Entrepreneur Earlier it was discussed that previously recognized agency theories explains that the investor, ensuring a healthy relationship is highly regarded as a successful investment aspect in an investment (Kelly Hay, 2003). Therefore exploring more about what authors have studied about entrepreneurs and investors is vital. The difference between a formal venture capitalist and a business angel is that a venture capitalist invests looking at the company and its ability to perform (Schramm, 2004). On the other hand the business angel focuses mostly on the entrepreneur to make sure there can be a good business relationship (Mark and Robinson 2000, p138). The entrepreneur is the only key to get the funding needed for a start-up business. As an entrepreneur, it is vital to gain the investors trust and confidence in the business idea. According to (Osnabrugge Robinson 2000, p123), it is cited that during a business start-up there is a high percentage of entrepreneurs failing to make good management decisions in the initial stages. It is very sensible for an entrepreneur to seek a business angel as they pay special interest on the business they invest in with all their resources including non-financial contributions. It could help fill all the management weaknesses of an initial stage of the business and sav e huge amounts of consulting and managerial costs (Mason and Stark, 2004). Entrepreneur Evaluation (Osnabrugge Robinson, 2000) had explained that entrepreneurs should be aware that the investor not only pays attention on the business proposition but also the entrepreneur himself to ensure the safety, confidence, enthusiasm and the ability to depend on the entrepreneur. Trust is something investors work hard to find in an entrepreneur, because they invest large amounts of financial resources on a person they met in a short period of time (Osnabrugge Robinson 2000, p125). According to a study conducted by Stedler and Peters; entrepreneurs capability to convince the business angel to invest is very important and showed that 81% of business angels has expressed that a positive first impression established in the first meeting as important (Stedler and Peters, 2000). When it comes to angel investment decisions being made, business angels need to ensure that the entrepreneur should be a proficient manager (Gerald and Joel, 2000). Loyalty, leadership, reliability and personality are important characteristics that angel investors look into when they evaluate entrepreneurs. An entrepreneur should be able to have those qualities to gain an influence of the investor (Aernoudt 1999 Sappa 2006). The characteristics that separate a good ownership from a poor is, that if the entrepreneur is able to establish trust and leadership skills with confidence and make the employees follow him/her (Micah Baldwin 2007). Investors find it comforting to know that the entrepreneurs have invested partly on the business before seeking external investment. This gives the investor the idea that the entrepreneur has given all the effort in the involvement of the process and that the financial value of the business is appreciated (Osnabrugge Robinson 2000, p127). According to (Sappa 2006), business angels take lots of time and effort into finding out background information on the entrepreneur to ensure that the owner has the right expertise to manage the business he proposes. (Haines and Riding 1998) corroborates furthermore by adding that the entrepreneur sharing his/her previous business experiences and being much more practical about the business brings more information and confidence to the investor. Finally all the above characteristics that were discussed are very important for a new start-up entrepreneur to influence investments from professional business angels. Business Angels As we have gone through the theories of business angels it is important to know who business angels are in the minds of researchers. A business angel is a highly prosperous individual who can be a business person and willing to invest part of his/hers finance on a promising entrepreneur who has a potential to succeed (Isakssin 2000, Helle 2004). According to (Harrison Manson, 1999), there are three eras of business angel researches conducted in the investment business: First era of business angel research was conducted by United States of America in early 1980s. Authors like; (Landstrom, 1993) from Sweden and (Harrison Manson, 1992) from United Kingdom repeated the same work by giving out similar results. In this era it was solely concentrated on business angels thoughts, activities and characteristics (Freear, Sohl Wetzel, 2002). Second era enabled researchers to go deep into business angels by investigating their post investment involvements. Theory building up and applying for business angels began in this era. Although there were theories built for business angels, it wasnt developed enough to be completely suitable for the activities of angel investors (Connolly et al., 2006). Third era will be the era about the future researches of business angels. There were many faults in the previous researches done and they need to be taken in a new direction to make sure the researches investigated will produce good results (Arenius Minniti, 2005). This would finally make us understand the minds of business angels and match the Business angel – Entrepreneur relationship under changing economy, culture competition (Connolly, OGorman Bogue, 2006). By the help of (Harrison Mason) Swedish researchers like (Sorheim 2005) will enable to investigate on the changing environment of Business angels. This also mean that the theories being found in the previous eras could finally be developed enough to apply on the business angels current investment methods and get positive results (Gompers Lerner, 2007). Characteristics Of Business Angels Almost all the business angels who actively invest on new businesses have few common characteristics. They all have the main motive to increase the potential of their financial capital (Duxbary, Haines Riding 1996). But (Landstrom 1993, Osnabrugge and Robinson 2000) explained that all business angels should not be profiled in a similar way because cultures and person to person could make them different to each others ways in terms of making a personal investment decision. Although there could be many differences between business angels, (Osnabrugge and Robinson, 2000) also stated that there are general motives behind all business angels when it comes to a certain result they expect out of an investment. When Venture capitalists and business angels are taken together it is wide clear that Business angels are individuals who prefer to invest less financial capital than of the formal investors who invest large amounts. Business angels also prefer to invest their money mainly on initial stages of a business (Osnabrugge and Robinson 2000). When it comes to formal investors, they are selective in industries they invest on depending on a lot of information and research. But the Business angels invest on the entrepreneur regardless of what industry sector the business idea would succeed on. They do little research on the industry but heavy research on the entrepreneur they expect to build a trust worthy relationship, because they depend on the entrepreneur mu ch more than the venture capitalists that only rely on the market and the performance of the company (Osnabrugge and Robinson 2000, p63). Furthermore a research conducted in the Norwegian angel market and studies conducted in the US have identified several angel categories. There could be cultural and economical differences among countries like (UK, Sweden Singapore) but angel investors do have likely investment standards in those countries (Landstrom 1993). (Freeny, Haines Riding 1998) explained that the markets which business angels are currently active are where they are wiling to invest more on. There could be many differences in Business angels personalities and points of views of the whole investment process. There are studies that showed the â€Å"most regular business angel†. It is stated that the age, where successful individuals decide to invest their money on a business is when they get to their 50s. This shows that it is almost a retirement phase from a business point of view. This can be confirmed by a research carried out in Germany where it stated that 95% of BAs were male individuals, 56% were directors or owners of their businesses and 17% were individuals who were in the director board on other organizations (Stedler Peters, 2003). Even (Osnabrugge and Robinson 2000, p156) supported Stedler and Peters by explaining that the individuals were in director posts and had good business experiences before they decide to move on into personal investments. Most business angels involve themselves heavily during the initial stages of start-up businesses. They wish to invest near to their homes to make sure of convenience. And Business angels are well educated, wealthy beyond a certain average and expect to have a good life with their feet up on a desk holding a glass of wine, which we all hope to achieve one fine day (Freeny, Haines Riding 1998). Although this thesis aims to look at the characteristics of UK business angels, it was clear by all previous studies that there are common statistics about their decisions and behaviors. This tells us that, UK angel investors too are not far from what was described before in the theories. Still it is important to point out few common characteristics of UK business angels; Common Characteristics Of UK Business Angels According to (Ardichvili et al., 2002), Business angels in the UK have been or still are active business owners. They invest in more similar markets to what they are operating in, which saves them a lot of time trying to understand the market and the operations. Like all business angels, UK investors are highly motivated by the return of their investments and the effort (non financial motives) they have put in to the start-up business. They do enjoy being a part of a new business hoping to succeed for the better part of the community and the country (Landstrom 1993). Furthermore UK business angels prefers and makes sure they invest on new businesses that they could visit regularly, which means they invest in promising firms which will locate geographically near to where they reside (Ardichvili et al., 2002). BAs would rather invest in firms within their residing area, than investing in a location where they find it hard to meet the entrepreneur even though it would double their investments (Harrison, Mason Robson, 2003). Most British angels prefer their entrepreneurs operate within 100 miles of their homes although investors who invested on technological businesses are willing to travel long distances (www.bbaa.org.uk). According to Mason, British angels mostly prefer to invest on small businesses during its initial stages where it is not too late to put in not just their finance sources but their advice and experience to get things on the right track. This, in a way gives them satisfaction of being a part of a promising business (Mason, 2002). After going through the common characteristics of British Angel Investors, it is quite clear that there isnt a major difference compared with the international countries like Sweden and Denmark which will be discussed later. We discussed about Business angels and it is vital to know the categories of their investments. Investment Aspects Of A Business Angel One of the objectives of this thesis is to find out how Business angels in UK and other similar countries decide to invest on a certain investment they find it promising. An investor looking for good reasons to decide on an investment is known as Investment Aspects or Investment Criteria (Landstrom, 1993). It is a way of evaluating the business and the entrepreneur to ensure the security and the profitability of the business proposal. According to the venture capitalism and angel investment comparison carried out by (Osnabrugge Robinson 2000), it revealed that although there were similarities among their attributes in their investment standards there were a certain amount of dissimilarities which makes business angels favorites for a new start up business. For an example, venture capitalists are prepared to invest almost in all stages of a business and therefore they look into all the past and probable financial records of the company. On the other hand the business angels much prefer to invest on a start-up phase of a new business where past financial experiences are not so important to them (Osnabrugge Robinson 2000). Most business angels give similar priorities to investment aspects, when it comes to making a decision. With much researches conducted over the past years (Osnabrugge Robinson 2000) has come up with a selected summary that illustrates the criteria of an investment. The following (Table 1) of twenty-five selective factors are prioritized by well known angel investors; Priority order Priority factors for an investment 1 passion of the industrialist 2 Dependability of the industrialist 3 Sales prospective of the product 4 proficiency of the industrialist 5 Entrepreneur(s) first impression 6 Development prospective of the market 7 Quality of the product 8 Benefits