The Importance of Audit Independence

The Importance of Audit Independence1. IntroductionAs the confound wayment of the modern business, analyse is playing a more than than and more all-important(a) role to construe the trueness of the financial forge-up and attend to cut across users to take on proper stopping points. Consequently, it is in truth important for exami study accountors to remain license in frame and intelligence when conducting an take farm animal based on a public limited comp whatever. To expound this topic clearly, the essay is divided into the adjacent parts Firstly, it makes a literature review of take stock license and cogitate the viewpoint into four categories secondly, it introduces the definition of study independency in form and mind and stated the important of both of them separately Finally, it analyzes why it is important to remain canvas independency from approximately(prenominal) angles such as shareholders, creditors, government, operators and new(prenominal) stakeholders.2. Literature reviewWhen it comes to the audit independency, many scholars come conducted systematic question in this topic. Some scholars pointed out that auditor has two kinds of independence- torso and mind, pretermit of the former one whitethorn shake the publics confidence on independence and lead to fill conflicts, and lack of the last mentioned one means auditors misplace their professional ethics and this is very dangerous (Carmichael Swieringa, 1968). Salehi have emphasized that the cornerstone for the auditing profession is audit independence. The auditors picture is suspect without independence and the thirdly parties compute that there is no need for extraneous auditors without independence (Salehi, 2009).Due to exceedingly publicized audit failures, the topic of auditor independence has gained increasing vigilance from academics, regulators, and practitioners around the world in recent years (Hope Langli, 2008). Under the circumstance of m any extravagantly profile companies fraud cases exposure such as Enron, Adelphia, WorldCom, the immensity of audit independence to improve corporate governance is getting more and more attention (Rezaee. 2003).As the no-audit function has become a more and more important lucrative business for CFA firms, audit independence is somewhat sourd, which make it even more polar to go on audit independence for auditors (Gul, Tsui Dhaliwal, 2006).Besides, Bou-Raad G. emphasized the signifi hatfulce of audit importance from the tax -added prospect. upcountry auditors are non just a traditional audit for lapse but also a valuable access to assisting handlers to execute the physical objects of the organization. In other words, corporate management benefits from audit spirit (Bou-Raad. 2000).From the literature above, the importance of audit independence prat be categorized into four reasons Firstly, audit independence can hold the public confidence and invalidate interest conf licts Secondly, audit independence can help auditors to provide spirited fibre financial circulate and avoid scandals like Enron bomb Thirdly, the development of no-audit services make it more difficult but more important to maintain audit independence Lastly, audit independence can improve the quality of audit and it can assist managers to make strategy formulations.3. The introduction of audit independence in body and mindWhen it comes to remaining independence in body, it can be also called physical independence, outdoor(a) independence or surface independence. Auditors should take the role of independence auditors on front of the third parties. And it is the direct evidence for the public judging the independence of auditors. Once field of study users think that auditors have some current or potential race that constipations the independence with the consignor such as employment, business partner, family or relatives and so on, it depart definitely decrease the audit fu nction as they probably do not depend on those reports so more (Law, 2010). Auditors should have no specific relationships with entity, and they mustnt hold equity stakes of the entity and should not be on the senior mark of it. In order to avoid misunderstanding and enhance the trust, auditor must avoid or derogate this threat to a level which is acceptable. Independence in mind is secure to improve and the public can only infer the independence of auditors from the body like relationships with the entity and other stakeholders. Actually, even if auditors maintain independence in mind, as long as the public think they take sides with the entity or any other parties, no matter how precise the audit result is it is useless.As for remaining independence in mind, it demands that there is no stake amidst auditor and the consigner intrinsically. In the whole auditing process, auditor should keep an artless attitude that makes a professional decision and never succumbs to any extern al pressure. It comes up with higher requirement for auditors mindset. They are required to be neutral, objective and fact-based.Actually, those two concepts are different but integrative. They reflect both external and internal sides. Only remaining independence in body and mind can make sure the auditing result persuasive. Also, the function and value of conducting audit can be realized.4. The importance of remaining audit independenceStakeholders make delivery decisions by taking advantage of reports. Whether those reports are related and genuine are questions. Audit can help to solve this problem. However, auditor fails to follow through the duty if they cannot remain independence in the conducting process. On one hand, report users provide doubt this kind of dependence if they thought auditor and consigner belong to the same party. On the other hand, when auditor cannot keep an truthful mindset, the auditing opinion probably gets defame. For example, auditor fails to fin d out the instruction is cooked and issues incompetent opinion. This result is easy to subvert related report users for decision fashioning. They whitethorn bear loss because of depending on this audit opinion. As the smear varies from Stakeholder to Stakeholder, the chase analysis in the importance to remain independence in body and mind is based on different Stakeholders.4.1 The importance of audit independence for the shareholdersShareholders are the direct beneficiary of companies and they bequeath get more bonuses if the companies engross successfully. Consequently, shareholders have high demand for audit independence. Actually, when the company is in low-d receive operation, controlling shareholders are not willing to public the truth, and then bear the interest of minority shareholders. Controlling shareholders dont have the incentive to employ high independence auditors, and this phenomenon is called Entrenchment Effect (Fan Wong, 2002).As the shareholders right s eparates from the management right, owners do not involve into the daily management to the company. They employ faculty to cash in ones chips their company and enjoy the lettuces. Usually, shareholders care ofttimes about the profit cogency, efficiency, going solicitude, and solvency and so on. Those indexes reflect how well manager operates the company. Also, shareholders can assess managers performance tally to the information. Generally speaking, they obtain the information from the reports prepared by managers. However, the report may involve fraudulence because it is manager who makes those reports. It has the possibility that managers cook the report so as to cover up their mistakes, bad performance and other point where they fail to fulfill their responsibility. At this time, auditors work helps answer the question that how much report users can depend on the report information. But if auditor is otiose to keep independence, it probably arouses the doubt to audit opi nion from report users. Obviously, audit loses the value under this watch. Without unbiased and objective audit opinion, report users are unable to acquire useful information to know the companys condition and assess managers performance. Once shareholders lose control to the company, this business mechanism will definitely go disorder as managers probably make their own benefits by taking advantage of shareholders resource and power and regardless of the boundary from regulation and law (Agbejule, 2009). In the end, the company probably goes to liquidation or bankruptcy.4.2 The importance of audit independence for creditorNowadays, debtor-creditor relationshipis very common and necessary. Debtors unavoidableness to loan in order to expend production or develop new market, and creditors want to obtain interest using their spare money. And what the creditors concern most is the debtors ability to pay for the debt. The debtors financial reports can offer some information such as so me ratios which can reveal the debt give ability. And if the company has a bad financial result, creditors can consider trade in a loan ahead of the expiry day to insure their money is safe. However, those reports are made by the debtor. Therefore, creditors may raise the doubt whether there exists the possibility that debtor offer false information to memorise money or conceal the fact that they have no ability to pay that money back. At this time, auditors work can eliminate or alleviate this doubt. However, audit cant work out if auditor were unable to remain independence when conducting the audit. Creditors are likely to make a wrong decision due to the failed audit opinion. When creditor lends money to unqualified debtor, it probably bears a lot of bad accounts and toxic asset as consequence (Siddiqui, 2002). Consequently, audit independence which can help to provide true financial reports is very crucial to creditors.4.3 The importance of audit independence to governmentAs a company operates within one country, it uses the infrastructure construction and investment surroundings offered by the government. It should take on tax responsibility. The financial statement provided by companies is the evidence for government to decide whether levy or not and how many to levy. For example, business tax is based on the gross income of the company which can be found on the income statement. And the income tax is based on the profit also from income statement. If company cooks the financial reports in order to save tax cost, the government will be suffered directly. Therefore, government will conduct audit in case of tax evasion.Moreover, lacking of audit independence would influence government indirectly. If auditors provided fake financial reports, the pubic will be suffered. They will have less confidence on the trueness of the operation of the company, and the stakeholders will feel betrayed. If their interests are impaired, conflicts would emerge, and it i s bad for the stability of the society. That is why the government create the 2002 Sarbanes-Oxley Act after the Enron Bomb.4.4 The importance of audit independence for operator more people may misunderstand that auditor is enemy to operator referring to manager in this essay and the existence of audit is a stone in the way. This idea is partial and shallow. The role of audit plays is to increase the dependence to the information and check whether the whole business activities are in accordance with the regulation. To some degree, it serves to obtain superior management (Shih, 2006). Sometimes, auditors will come up with solutions to the be management problems. For example, the internal control has leak which may incur situation where damages the whole benefits of company. Going details, the design of regulation may give a chance for embezzlement. Or auditor finds out some staff goes against regulation. Cases like that should call managers attention for better management. If audito r cannot keep independence when conducting audit, it will pose the threat to the company such as damage the company benefits. For example, the auditor is a brother to the cashier. When this auditor conducts audit to cash, he cant remain independence or his independence has been affected. He may conceal the fact if the cashier had some guilt and issues unqualified opinion (Fadzil, 2005). Because of this opinion, managers cant notice this threat. It may have a bad impression on their working performance and company development.4.5 The importance of audit independence for the other stakeholdersThe existence of a company has to bear many responsibilities. Therefore, the stakeholders can never be limited to the above mention. When a company becomes a listed company namely a public limited company, it has to fulfill more duties to the society and accept more supervision from the public. It raises fund by stock shares. Its public investors sell or buy the shares in the stock exchange, and their decision usually relies in the financial reports. However, those reports perhaps cannot reflect the financial position and income condition. Audit opinion is very important in their decision making process. If auditor could not remain independence, the audit opinion will mislead the users. Investors will lose money if they invested a loss company. For example, the collapse of Enron results from the history firm Andersen failed to remain independence. In the end, the share price cannot reflect the value of the company (Abbott, 2000). Stock market will go wrong and the economy will fall apart.5. ConclusionsThe most important responsibility for auditors is to provide high quality financial report which can help report users to make right decisions. The authenticity and reliability of the financial report is very crucial because it directly decides the strategies of stakeholders. The trueness of financial report which is also the quality of audit is decided by two factors profes sional competence of auditors and audit independence, and the latter is more important. Audit failures caused by lack of audit independence have led to many companies fraud cases. Audit independence is also the need of shareholders, creditors, government, operators and other stakeholders. All in all, it is really important for auditors to remain independence in body and mind when conducting an audit.

Buddhism As A Path To Enlightenment

Buddhism As A Path To EnlightenmentBuddhism is not roughly God or Gods, it does not supply a theory virtually what may happen in the after flavour, nor does it express views most creation it is base in the world of daily living. Most religions get deep a priori primeations they argon built upon, and most concourse within such religions have faith that the theory is true. Buddhism does not address theories it does not agree or disagree with any religion, but rather acknowledges religion as a delegacy to live in a positive mode. Buddhism is about informative the person, regaining the compassion and cognition inside, thus resulting in freedom from suffering. Buddhism is about living a vitality of peaceful serenity. Originating in a share near India over two-thousand long time ago, Buddhism is becoming a religion that is venerable and practiced worldwide.Buddhist spirituality is viewed as something from within, an innate goodness in all human beings that has been lost ca n now be found through practice and meditation. Buddhists must motivate themselves, and rely on their take efforts, not those of a charismatic leader. If followers of the Buddha began to revere the man, they would deform disconcert from their task impeding spiritual progress. Mark W. Muesse, a professor of unearthly studies, reveals, Buddhist spirituality promotes a form of life that provides an antidote to the stresses of groundbreaking living. As a counter consign to the haste and hurry, the noise and confusion of this world, Buddhism prescribes a life of quietness and tranquility, a life of contemplation and gentle awareness. (Muesse, 2002). Buddhists may have come from a variety of religions for example, Christian, Jewish, Hindu, Muslim, and Atheism. To find true wisdom and compassion is to see the world as it really is, and live life without being the center of the whole. To be successful, Buddhism learnes a person to actively practice, and put to work to channel the min dset of self-centeredness into unitary and only(a) of compassion. Buddhism originated in India around the 6th or fourth centuries BCE, and is found on the teachings of also referred to as the Buddha. (Muesse, 2002).Siddharthas transit to find truth, spirituality, and learn how to solve the problems of suffering, led him to extensive meditations. Over a period of about seven years, he endured exhaustion and starvation patch experimenting with various meditations searching for enlightenment, but made no progress. On the sceptre of death due to fatigue, he finally rested, had a nutritious meal, and hence decided to meditate again until he found the answer to suffering. As the sky began to lighten following day, he too felt illuminated, happy, and amend after seven years of searching, Siddhartha reached the bow of enlightenment. He accordingly realised that in order to become enlightened, he must keep himself hygienic so his mind would be fit. He set forth to teach others, regardless of caste, his enlightenment, the method of the Four Noble faithfulnesss and the Eightfold Path. Siddhartha traveled from metropolis to city teaching the importance of not losing ones self by allowing passions to consume, but rather exist without indulging in self-serving cravings, leaving one free to be happy. (Simpkins Simpkins, 2000). (Armstrong, 2001).The Four Noble Truths of Buddhism and the Eightfold Path are the starting points for all Buddhist variations. This doctrine is Buddhas (Siddharthas) diagnosis and prescription for treating human suffering and finding true happiness. (Simpkins Simpkins, 2000).Noble Truth one lifespan Is Suffering. Birth is suffering, illness is suffering, aging is suffering, and death is suffering. When a person looks at life realistically, it is full of fleeting happiness followed by inevitable sorrow, the years go by faster, and faster, it is a no-exit path to death. Even when things seem to be at their best, it is not completely sa tisfying. masses have come to motivation more and more from life and that is the core of the problem, egocentric desire. This is Buddhas diagnosis. (Simpkins Simpkins, 2000).Noble Truth two The Root of Suffering. Egocentric desires are the root of suffering the selfish grasping after pleasures and evasion of pain. Self-centered yearnings can never sincerely be fulfilled, leaving behind feelings of irritation, frustration, and even anger. Anger is one of the main reasons for causing distress to others it also provide cause suffering within. People constantly engage in actions that cause anguish, either directly or indirectly. (Simpkins Simpkins, 2000).Noble Truth three You Can End Suffering. Knowing that handout beyond suffering is possible through internal transformation is the point of this truth. Suffering and the causes of suffering are dependant on a persons state of mind, therefore, by changing the way one perceives the world mentally, also changes the nitty-gritty of s uffering incurred. (Simpkins Simpkins, 2000).Noble Truth four The Eightfold Path. This is the prescription, a way of life to find freedom from suffering. People can end their suffering and dilemmas by controlling the body and mind in a positive manner to service of process others instead of doing them harm, and by creating mental wisdom. at a time this renewal is complete, a person can enjoy the state of Nirvana, free of problems. This is the path booster cable to the mental transformation, and cessation of suffering.The Eightfold Path is a guide meant to help people work out their difficulties, become liberated from suffering, and come crosswise happiness. recompense Views is the first quantity on this path to discover happiness. Once a person understands what is wrong and becomes familiarized with the transformation process, gaining the knowledge of what allow imply to be accomplished in order to achieve success, they will be pointed in the right direction. Right Intentio n is the second step. A person has to feel this is really what they want to do, and be willing to confirm this commitment along their journey. Dedication to this endeavor is necessary to become successful. The terzetto step is Right Speech, meaning a person needs to listen to what is said, how it was said, and why it was said. Curbing the use of oppose intonations, and derogatory remarks will bring to the positivity inside instead of nourishing the negativity inside. Awareness and introspection can help a person communicate in a more positive, harmonious way. Right Conduct is the fourth step, encouraging a person to be aware of their motives, as well as their conduct. Upon self-observation, a person may become aware of unconscious actions that incur negativity. then(prenominal) reflect on those negative actions, discover the motivation, and work towards positive actions. The ordinal step on the path to enlightenment is Right Livelihood. Most people spend the majority of their lives working find inner peace in a positive occupation. A person working in a negative environment acquires negative feelings. These negative feelings can become overwhelming, and then aimed in the direction of others, in turn causing suffering. Right parkway is the sixth step. By exerting positive effort, a person will experience to notice positive changes within their life. Right effort also means to pace ones self do not over examine every(prenominal) word said or action taken, as this can become disturbing over a short period of time. The seventh step is Right Thought. This step lends confidence in taming the mind. Thoughts, feelings, and sensations are erratic, and short-lived. Simpkins explained this simply, The concrete mavin people have of themselves is merely a series of experiences that seem to proceed together into one. In reality, the ego is nothing more than this series of experiences. (Simpkins Simpkins, 2000, p.56). Right Concentration is the final step on the Eightfold Path to enlightenment. In this step, a person pulls together the skills learned from each of the previous go and places them into the practice of meditation. Meditation, concentrated awareness, allows a person to see through the illusions, beholding the world as it really is, a direct perception. (Simpkins Simpkins, 2000).All religions moderate meditations in with their faith in one form or another(prenominal) such as prayer, reciting mantras, all the way to induced states wherein visions are seen, gibberish is spoken in the language of tongues, or voices are heard, which are usually the deities, spirits, or other supernatural beings for that particular religion. Buddhist meditations are different. Francis narrative points out, The Christian who has seen Jesus, or the Hindu who has conversed with Bhagavan Krishna may be quite at hush up that he has fulfilled the purpose of his religious life, but the Buddhist who sees a vision of the Buddha knows by that very fact that he has only succeeded in objectifying a concept in his own mind. (Story, 1995-2010). Buddhists embrace two diaphanous types of meditation dhyana, meditation that clears the mind, and prajna, meditation that fills the mind. Usually these two meditations are performed together. several(prenominal) variations of Buddhist meditations exist today, some methods are for developing mindfulness and concentration, in time others localize on breathing and visualizations. Meditation enhances awareness, and by being aware, one becomes wise. Meditation also calms the mind, allowing a person to feel at ease while reflecting upon life with positive focus. The discipline that Buddhist meditations establishes in a person can be applied to life situations it teaches clear idea without bias, and concentration so the mind will be able focus intently on any given situation.Buddhism is a religion based on real life without theorizing about things that can never be solidified. It is a religion th at holds no bias toward any other religion, nor do many other religions hold a bias for Buddhism. The doctrines within Buddhism urges the need for humanity to become humane again, to let go of selfish desires, negative intentions, and be thoughtful of all. Experiences, and a persons reactions to them, create the ambience of the path of life a person leads. Buddhism is the embodiment of peaceful existence in a world that has become wrought with despair and suffering.

Cross Cultural Management A study on Cadbury and Kraft Merger

compensate Cultural Management A study on Cadbury and kraft unionIn the current era of globalization with the advancement in the technology, colloquy and the channels to access the external caper world the crop of trading has changed drastically. Corporate personnel and application professionals are making sound terminations and are developing efficient strategies to sustain their competitive advantage in the market. many a(prenominal) new vigilance disciplines like IT centering, corporate governance, coalitions acquisition, work continuity management and such new principles are becoming prominent. There are several(a) reasons that are pointed out by the corporate unfluctuatings which are behind these management concerns. They accommodate cost cutting measures through economies of scale, global expansion, risk reduction, in effect(p) and efficient management practices and so on.Merger Acquisition is one of the effective ways to perpetrate to gain market share an d to expand the business. They answer in global expansion, cutting costs, new know leadge and expertise acquisition, assignment of niche areas across the global market, extension of customer base, accessing new technologies and many. traffic with the integration of two similar or different companies, it also involves certain(p) difficulties and issues to handle. Although companies are pursuing MA aggressively, it is found that 60-80% of them are financial failures regarding their exploit in the stock markets or obtaining high profits (Salame, 2006). Through this study, I tried to understand the various management issues and concerns mixed in the merger acquisition process with the help of Cadbury and kraft merger.kraft paper-Cadbury MergerThe Kraft putsch of Cadbury did not happen in a simple routine manner. It touch various management issues which had proved this event likely to shape afterlife state-supported policy towards acquisitions and corporate governance.The initi al steps towards this strategic finality of getting Cadbury started in the year 2007 on 3rd October when Cadburys Somerdale pulverisation plans that inform its to shut down the factory with a loss of 500 ancestrys and to invest the production in the Bourneville Plant of Birmingham to the new plant in Poland. In the year 2009 on September 7th, Irene Rosenfeld, Chairman and chief executive officer of Kraft say that Kraft would be in a position to continue the Somerdale factorys trading operations without closing the plant and thus preserving United Kingdoms manufacturing jobs.But this statement give by the Kraft was not taken as granted by the Cadbury workforce before the takeover. The National Officer of the Unite the Union, which is a exercise body of Cadbury workforce, Jennie Formby compared Kraft statement with the line there is no fondness on the bones at all saying that there is no real intention of Kraft to come and save the jobs.Finally in the year 2010 on 19th of January, Cadbury announced the bid offer do by Kraft to its shareholders and the takeover is finally concluded on second of February, 2010. But to the shock of the domain and the stakeholders, Kraft, after a week of its stop of the takeover, announced that it would not be capable enough to maintain the Somerdale factory open and would like to approve the decision do by the Cadburys senior management to discontinue its operation. This decision do by Kraft flat after the takeover led towards unfavorable judgment. Marc Firestone, Executive President of Kraft Industries Inc. and Irene Rosenfield, CEO asserted their decision saying that before making a public statement Kraft was not aware of various factors like the sexual structure of building, products of Cadbury in that facility, status of machinery and others (Mergers, acquisitions and takeovers, 2010 )In this dramatic way, the whole process of acquisition of Cadbury by Kraft has been done making it an event that john shape the future endeavors of public towards takeovers, acquisitions and corporate governance.Inside Story of Cadbury and Kraft before TakeoverCadbury has faced many ups and downs throughout its journey peculiarly under the visionary leadership of Todd Stitzer. Todd Stitzer working successfully for 20 geezerhood for Cadbury Schweppes has played a key role as a restrain the best mind behind the acquisitions of soft drinks industries made by Cadbury in US. He was afterward appointed as the chief strategy officer by John Sunderland to the confectionary side to achieve the similar success. The then competitors in the chocolates and sweets industry were the international companies Nestle, Mars, Kraft, Wrigley, Ferrero and Hershey. Stitzer say that acquisitions alone would not solve the problems of Cadbury. He said that the revenue growth model has to be revitalized to gain in the financial achievement. Stitzer had developed many strategies, took some visionary steps and led Cadbury gai n the business world with his strategic thinking. Stitzer and his management team aimed at the global domination in the Confectionary world, while the stakeholders were much worried more or less the financial performance. Overall with all his visionary leadership abilities and strategic decision making capabilities, Cadbury Schweppes split into pure confectionary leader Cadbury. Nelson Peltz, founder of the hedge blood Trian Fund Management also had his own role in the business of Cadbury.Irene Rosenfield, CEO, Kraft Food Industries Inc. had a keen interest in the confectionary business and proposed an offer to buy Cadbury to Carr, Chairman of Cadbury after Sunderland. Carr without consulting the stakeholders had refused the offer but Peltz who becalm owned the shares in the Cadbury with discussion and negotiation with Kraft finally made Cadbury lose its independence in January 2010.Impact of the MergerCadbury-Kraft merger which involved a high dramatic and strategic process as d iscussed in a higher place has got its own pros and cons. Before analyzing the performance after a year later the takeover, there are certain agreements on which the takeover is being implemented. These include aspects like the brand name of Cadbury would be continued previous loyaltys, allowance arrangements would be honored and such, for at least two years.Regarding the business performance, the unite business has achieved profitable results despite of the difficult sparing climate outside. It had ameliorate the sales by 13% compared to 2009 and also has sold 300 one thousand million bars more comparatively. They improved and modified the corporate structure so as to combine the Cadburys successful chocolate history with the Krafts brand heritage. The unite systematic approach would create value and would help in economic and internal growth (Kraft Foods completes Cadbury takeover, 2010 ). There is high capital investment, support and commitment seen in the Cadburys RD sites so as to improve the combined business performance and the products.As we know, every coin has two sides every decision would have pros and cons. As discussed above, the withdrawal made by Irene Rosenfield regarding the Somerdale factory led to the criticism from the workforce. Similar reaction is seen even after the takeover with many employees departing from the Cadbury. Kraft is trying to improve the relationship with local authorities so as to increase the employment opportunities. Due to the change in the working culture, a feeling of fear is seen among the employees to express their views and opinions. Kraft says Cadbury being a firm of values and heritage we try to combine our efforts in bringing job satisfaction to employees and to outperform the market as well. (Update on progress made since Kraft Foods acquired Cadbury, 2011)To conclude, Kraft taking over Cadbury is not just acquiring an excellent company but establishing a strong connection with the public so it has to w ork hard to prove and show the combined benefits of Cadbury and Kraft Foods.

Strategy vs Structure in Strategic Management

outline vs loving system in strategical counselingStrategic analysis dodge versus Structure for International Competitiveness worldThe scheme organize blood, that was previously considered reciprocal, is now recognized as beingness considerably more than Gordian, and there is some agreement that social organization bottom and does keep a profound impact on strategy done its direct effect on the strategical conclusion qualification plow (Bourgeois Astley, 1979 Burgelman, 1983 Fredrickson, 1986). In ensureing the role of strategy and structure in planetary backup, one must understand that what has essentially changed is the context within which commerce operations take place. The soundly begined and complex associations among structure and strategy in classical studies of firms ar also central to interrogation in world-wide business sector, precisely the nature of business has changed, and so gain the relationships. As such, field of orbits have aris en over the lift out(p) way for multinational firms, direct in global marketplaces, to best align their strategy and structure to take cargon legion(predicate) distinct markets, whilst maintaining a global identity. This paper looks at the study of business strategy and structure over time, highlighting how the relationships have changed, the implications for organisational demeanor, and how firms tolerate alter their demeanor to best gain competitive vantage in international markets.International Strategies blood strategy refers to how firms compete in an diligence or market (Varadarajan and Clark 1994 pram and Ruekert 1987). The two historically dominant frame bets of business strategy be the Miles and Snow (1978) computer simulation, which cautiones on in executeed rate of product-market change, and the usher (1980) model, which focuses on guests and competitors. Miles and Snow (1978) developed a comprehensive framework that addresses the substitute ways that o rganisations define and betterment their product-market domains and construct structures and processes to achieve competitive prefer in those domains. Miles and Snow identify four archetypes of how firms address these issues prospectors continuously get to locate and exploit new product and market opportunities, defenders attempt to cast off a portion of the total market to bring out a stable square off of products and clients, analyzers occupy an in bournediate position by conservatively fol turn aways prospectors into new product-market domains while protecting a stable set of products and customers, and reactors do non have a consistent response to the entrepreneurial problem.In contrast, Porter (1980) proposes that business strategy should be look ated as a product of how the firm creates customer value compared with its competitors, and how it defines its scope of market coverage. pusher and Ruekert (1987) observed that though each of these strategy typologies has in herent strengths, i.e., Porters external focus and Miles and Snows internal focus, each is also limited. To address this, Walker and Ruekert proposed a crown of thorns model that synthesizes the two foci in a typology that consists of prospectors, low- price defenders, and differentiated defenders. However, although Walker and Ruekerts article has been frequently cited in the marketing and management literature, the distinctions among low-cost defenders and differentiated defenders have only recently been geted in trial-and-error analysis (Slater and Olson, 2001).Following on from these initial developments, over the cultivation few years enquiryers have quite successfully addressed and explicated the respective(a) forms of international strategy, and these forms are generally well accepted in the literature. there is now considerable agreement among international business scholars that most firms embarking upon or undertaking international business operations are cognizant o f the counterpart pressures of global integration and local responsiveness. To this end, the integration-responsiveness framework suggested by Prahalad and Doz (1987) has provided a invaluable theoretical tool to better understand international strategic behaviours of firms. more than recently, we have seen many successful applications of globally integrated strategies (Parente, 2003 Parente Kotabe, 2003). According to yap (2003), global companies have developed more sophisticated and flexible versions of international strategies and organisational processes, which successfully embraced globalization.Organisational StructuresOrganisational structure refers to an organisations internal pattern of relationships (Finley, 2000). Structure has been characterized by a number of dimensions and illustrated by using a commixture of types, like functional or divisional (Fredrickson 1986), however, there are ternary dimensions of structure centralization, formalization, and complexity , which have received more attention than any others ( chela, 1982 Fry Slocum, 1984). Each of these dimensions appears to have great implications for strategy and strategic conclusion making, and are dominant characteristics of the well known geomorphological types (Fredrickson, 1986). Centralization refers to the degree to which the proficient to make decisions and evaluate activities is concentrated (Fry Slocum, 1984 Hall, 1977). A high train of centralization is the most obvious way to hold and coordinate organisation decision making, but places significant cognitive demands on those managers who retain authority (Fredrickson, 1986). Mintzberg (1979) has discussed this issue by suggesting that an individual does not have the cognitive capacity or knowledge that is needed to understand all the decisions that face a complex organisation.The degree of formalization specifies the extent to which an organisation uses rules and procedures to prescribe behaviour (Hage Aiken, 19 69 Hall, 1977). Therefore, formalization has significant consequences for organisational members because it specifies how, where, and by whom tasks are to be performed (Fredrickson, 1986). A high level of formalization has the benefit of eliminating role ambiguity, but it also limits members decision making discretion. Complexity refers to the condition of being composed of many, usually, though not necessarily, interrelated parts. Hall (1977) suggests that there are three sources of complexity crosswise and unsloped differentiation, and spatial dispersion. Therefore, an organisation that simultaneously has numerous levels, broad spans of control, and multiple geographical locations would be considered as highly complex (Fredrickson, 1986).The Interaction Between scheme and StructureWhilst strategy and structure have been studied in closing off for a great many years, and are now comparatively well understood, what is less understood is the international role of organisational structure and its relationship with international strategy (Finley, 2000). International strategies are the forms and types of actions firms follow to fulfil their long term business objectives. Organisations involved in international business activities usually have two major forces impinging on them. One is the need to standardize products on a global basis, and the other is to respond to local province or local market demands. International strategies may be characterized in different ways, and the integration-responsiveness framework developed by Prahalad and Doz (1987) has extended the conceptualization of diligence pressures to incorporate generic strategic responses. The framework suggests that organisations develop their strategies and structures based on the emphasis they place on either one or both forces.At the most basic level, organisational structures are established to coordinate work that has been divided into smaller tasks. Mintzberg (1981, p. 104) noted, How tha t coordination is achievedby whom and with whatdictates what the organisation entrust look like. Walker and Ruekert (1987) bring forward hypothesized that firms that follow different generic business strategies adopt different structural designs. Vorhies and Morgan (2003) studied the relationships among marketing organisation structure, business strategy, and performance in the truckage industry. Both of these studies demonstrated that different marketing organisation characteristics are more or less appropriate for different business strategies. The forms of structures typically delimit by formalization, centralization, and specialization, which as Walker and Ruekert (1987 p. 27) noted seem particularly heavy in shaping an organisations or departments performance, are also applicable in different ways to different strategies and geographic factors.For example, in studying the development of Americas dominant industrial organisations, Chandler (1962) observed that major increas es in unit volume, geographic dispersion, and vertical and horizontal integration were eventually followed by changes in structural form. Several studies following Chandlers work confirmed an association between these two variables, in that structure generally followed strategy (Fouraker Stopford, 1968 Rumelt, 1974). In spite of the wide fiesta acceptance of the structure follows strategy relationship, there is a significant proboscis of literature that suggests that structure has a significant and major effect on strategy (Fredrickson, 1986). arbour, for example, characterized structure broadly as the context within which decisions are made, and observed that structure may motivate or impede strategic activity (1970, p. 67). This view is also supported by other researchers who question that structure constrains, or in another set of circumstances, enables, strategic prime(prenominal) (Bobbitt Ford, 1980 Duncan, 1979 Hedberg, Nystrom Starbuck, 1976).To understand why it is l ogical for strategic action to be affected by structure, one must understand the relationship between decision making and structure (Fredrickson, 1986). bump into and Simon (1958) addressed this critical aspect of the relationship by suggesting that an organisations structure imposes boundaries of rationality that accommodate members cognitive limitations. By delimiting responsibilities and communication channels, structure allows organisations to achieve organisationally rational outcomes despite their cognitive limitations (Simon, 1976). Structure also allows management to control the decision making environs and facilitate the processing of information (Fredrickson, 1986). The structure-strategy relationship is well explained by Bower when he states that when management chooses a particular organisational form, it is providing not only a framework for current operations but also the channels along which strategic information will flow (1970, p. 287). As a result, the relations hips between business strategy and organisational structure become massively complex when considered in the international context, and thus require organisations to strategically examine their fundamental behaviours in order to best align their strategy and structure, without becoming lost in the complexity.Strategic Organisational BehaviourOrganisational behaviour refers to organisational members work-related activities (Ouchi 1977 Robbins 2002) and, according to Snell (1992), management attempts to influence organisational behaviour with the use of control systems. manage is any process that helps align employees actions with the firms interests (Snell 1992 Tannenbaum 1968). Control theory (Snell 1992) identifies three major categories of control mechanisms behavioral control (e.g., establishing and monitoring of sets of actions), output control (e.g., goal im boot outment measures), and input control (e.g., training). When applied within an organisational context, control the ory posits that management attempts to direct employee behaviour to enhance the probability of desired outcomes. As Snell notes (p. 292), Advocates of the behavioural perspective posit that different strategies require different behaviours. Snell also notes that this view of the link between strategy and behaviour is useful because it provides a advance explanation of why behaviour should be linked to strategy and because it posits a testable set of behaviours.As a result, strategic behaviours have the potential difference to create superior performance through enhancing the execution of business strategy and identifying the relevant organisational structure (Slater and Narver 1995). There are four behaviours which are all claimed to passport potential competitive benefit to firms. These are customer- orient behaviours (Deshpand, Farley, and Webster 1993), competitor-oriented behaviours (Armstrong and Collopy 1996), regeneration-oriented behaviours (Hurley and Hult 1998), and i nternal/cost-oriented behaviours (Porter 1980). It is important to understand that these strategic behaviours are not mutually exclusive and that it is common for firms to control in multiple sets of behaviours simultaneously (Slater and Narver 1995). Furthermore, different combinations of emphases will likely prove more or less beneficial for firms that adopt different business strategies.Customer-Oriented BehavioursFirms with a strong customer orientation course pursue competitive prefer by placing the highest priority on the creation and maintenance of customer value. As such, these firms engage in the organisation wide development of and responsiveness to information about the expressed and unexpressed needs of both current and potential customers (Deshpand, Farley, and Webster 1993). Because of the constantly refined market-sensing and customer-relating capabilities of the customer-oriented firm, it should develop strategies and a structure to anticipate customer need explo itation and to respond through the development of new customer value-focused capabilities and the addition of valuable products and go (Day 1994).Competitor-Oriented BehavioursA different perspective on competitive advantage is simply to beat the competition (Day 1994). This orientation places a priority on the in-depth assessment of a set of targeted competitors, focusing on targeted competitors goals, strategies, offerings, resources, and capabilities (Porter 1980) and on the organisation wide dissemination of the information generated from this assessment. The result is that managers develop competitor-oriented objectives rather than economic or customer-oriented objectives (Armstrong and Collopy 1996). The behavioural goal of the firm is to match, if not exceed, competitors strengths, both in strategy and structure.Innovation-Oriented BehavioursAnother perspective is that firms build and reincarnate competitive advantage through radical or discontinuous innovations. An innovat ion orientation indicates that the firm not only is open to new ideas but also proactively pursues these ideas (Hurley and Hult 1998) in both its technical and administrative domains An innovation orientation encourages risk taking and enhances the likelihood of developing radically new products. March (1991) argues that firms must be aware of the possibility that an innovation orientation may not allow for the follow-through that is necessary to reap the benefits of earlier innovations fully, unless their strategy and structure are aligned with both the generation and utilisation of innovation. knowledgeable/Cost-Oriented BehavioursPorter (1980) argues that there are two basic sources of competitive advantage. The get-go is the differentiation advantage that a firm derives from the customer-, competitor-, or innovation-oriented behaviours. The second is the cost advantage that a firm derives from internal orientation and structure, with internally oriented firms pursuing efficienc y in all parts of their value string (Porter 1985). They attempt to reduce costs in primary activities, such as logistics, operations, and sales and marketing, and also attempt to reduce costs in support activities, such as procurement, research and development, and administrative functions. These firms pursue operational excellence, through their strategy and structure, that they can translate into higher sales through lower prices or higher margins. Whereas experimentation is the trademark of firms with an innovation orientation, exploitation is the hallmark of internally oriented firms (March 1991).ConclusionInternational business has produced some fantastically competitive and complicated markets, with numerous potential problems for organisations, but also numerous opportunities for firms that can best adapt to their marketplace. However, such is the level of complexity in these markets, that firms who try to engineer specific, rigid strategies and structures will likely find themselves left(p) behind by the latest shift in the market or technology. As a result, firms competing in international markets would be best rede to focus on the organisational behaviour, or behaviours, that best match their capabilities, and let these behaviours commence their strategy and structure to provide the most sustainable competitive advantage possible. Unfortunately, there is currently a paucity of available academic yard on the most relevant behaviours for firms to best secure competitive advantage under the myriad market conditions, and this should be a find orbit for future research, as it may soon become a strategic issue of significant importance.Equally, organisational behaviour as a field of study is vastly complex, with ongoing debates between theorists around organistic versus mechanical structures, the role of teams, and the best styles of leadership needed in an organisation. In particular, organisational behaviour tends to suggest that organistic stru ctures will be required in uncertain, rapidly changing markets, however mechanistic structures will be required in markets where the pace of technological developments is gradual (Burns and Stalker, 1961). Thus, more research is needed into the consequences of an organisation in a relatively fast moving market making strategic organisational behaviour choices which would be better facilitated by a more hierarchical, mechanistic structure.Similar research would be recommended into the roles of leaders, and teams within organisations, in implementing and driving these behaviours forward. However, regardless of the need for go on research, it is clear that firms can no longer merely define a strategy, focus strongly on it, and expect their strategic focus to procure success. Likewise, in the international business world, firms should no longer focus on having a well defined structure, regardless of whether it is organistic or mechanistic. Instead, a key recommendation of the strateg ic organisational behaviour approach is that firms should concentrate on best aligning themselves to the most appropriate behaviour for their industry. In manufacturing, this is likely to be more internal, or cost oriented, in technology it will tend to be primarily innovation oriented and in professional services a strong customer, or client, orientation would be best. However, it is vital that firms do not neglect the other behaviours those that are not their primary focus, as these remain important, and can help maintain a balance approach to strategy and structure, offering sustained competitive advantage in international markets.ReferencesArmstrong, J. S. and Collopy, F. (1996) Competitor Orientation sets of Objectives and Information on Managerial Decisions and Profitability. ledger of commercialiseing Research, Vol. 33, May Issue, p. 188.Bobbitt, H. R. and Ford, J.D. (1980) Decision maker choice as a determinant of organisation structure. academy of circumspection Review , Vol. 5, p. 13.Bourgeois, L. J. and Astley, W. G. (1979) A strategic model of organisational conduct and performance. International Studies of Management and Organisation, Vol. 6, Issue 3, p. 40.Bower, J. L. (1970) Managing the resource allocation process. Cambridge, MA Harvard University Press.Burgelman, R. A. (1983) A model of the interaction of strategic behaviour, corporate con-text, and the concept of strategy. Academy of Management Review, Vol. 8 p. 61.Burns, T. and Stalker, G (1961) The Management of Innovation. London Tavi-stock.Chandler, A. D. (1962) Strategy and structure Chapters in the history of the American industrial enterprise. Cambridge, MA MIT Press.Deshpand, R. Farley, J. and Webster Jr. F. E. (1993) unified Culture, Customer Orientation, and Innovativeness in Japanese Firms A Quadrad Analysis. diary of Marketing , Vol. 57, January Issue, p. 23.Day, G. S. (1994) The Capabilities of Market-Driven Organisations. diary of Marketing, Vol. 58, October Issue, p. 37. Duncan, R. (1979) What is the right structure? Decision tree analysis provides the answer. Organisation Dynamics, Vol. 7, p. 59.Finley, P. (2000) Strategic Management. Prentice Hall.Fouraker, L. E. and Stopford, J. M. (1968) Organisation structure and the multi-national strategy. Administrative acquaintance Quarterly Vol. 13, p. 47.Fredrickson, J. W. (1986) The strategic decision process and the organisational structure. Academy of Management Review Vol. 11, Issue 2, p. 280.Fry, L. W. and Slocum, J. W. (1984) engine room structure, and workgroup effectiveness A test of a contingency model. Academy of Management Journal Vol. 27, p. 221.Fry, L. W. (1982) Technology-structure research Three critical issues. Academy of Management Journal, Vol. 25, p. 532.Hage, J. and Aiken, M. (1969) Routing technology, social structure and organisational goals. Administrative Science Quarterly, Vol. 14, p. 368.Hall, R. H. (1977) Organisations Structures and processes. Englewood Cliffs, NJ Prentice- H all.Hedberg, B. L. T. Nystrom, P.C. and Starbuck, W. (1976) Camping on seesaws Prescriptions for a self-designing organisation. Administrative Science Quarterly, Vol. 21, p. 41.Hurley, R. F. and Hult, G. T. M. (1998) Innovation, Market Orientation, and Organisational Learning An Integration and Empirical Examination. Journal of Marketing Vol. 62, July Issue, p. 42.March, J. G. (1991) Exploration and Exploitation in Organisational Learning. Organisation Science, Vol. 2, Issue 1, p. 71.March, J. G. and Simon, H. A. (1958) Organisations. unexampled York, NY Wiley.Miles, R. E. and Snow, C. C. (1978) Organisational, Strategy, Structure, and Process. sore York McGraw-Hill.Mintzberg, H. (1981) Organisation Design Fashion or Fit? Harvard Business Review, Vol. 59, Issue 1, p. 103.Mintzberg, H. (1979) The structuring of organisations. Englewood Cliffs, NJ Prentice-Hall.Ouchi, W. G. (1977) The Relationship Between Organisational Structure and Organisational Control. Administrative Science Qu arterly, Vol. 20, Issue 1, p. 95.Parente, R. (2003) Strategic modularization in the Brazilian automobile industry An empirical analysis of its antecedents and performance implications. Doctoral Dissertation, Temple University, August 2003.Parente, R. and Kotabe, M. (2003) Strategic modularization, evolution of sourcing strategies, and performance implications. Proceedings Academy of International Business Monterey, CA.Porter, M. E. (1980) Competitive Strategy. innovative York The Free Press.Prahalad, C. K. and Doz, Y. L. (1987) The multinational mission. New York, NY Free Press.Robbins, S. P. (2002), Organisational Behavior, 10th ed. Upper tear River, NJ Prentice Hall.Rumelt, R. P. (1974) Strategy, structure and economic performance. Cambridge, MA Harvard University Press.Simon, H. A. (1976) Administrative behaviour (third edition). New York, NY Free Press.Slater, S. and Narver, J. (1993) Product-Market Strategy and Performance An Analysis of the Miles and Snow Strategy Types Euro pean Journal of Marketing, Vol. 27, Issue 10, p. 33.Slater, S. and Olson, E. M. (2000) Strategy Type and Performance The ascertain of Sales Force Management Strategic Management Journal, Vol. 21, Issue 8, p. 813.Snell, S. (1992) Control Theory in Strategic Human Resource Management The Mediating Effect of Administrative Information. Academy of Management Journal, Vol. 35, Issue 2, p. 292.Tannenbaum, A. S. (1968) Control in Organisations. New York McGraw-Hill.Walker, O. C. and Ruekert, R. W. (1987) Marketings Role in the Implementation of Business Strategies A Critical Review and Conceptual Framework. Journal of Marketing, Vol. 51, July Issue, p. 15.Varadarajan, P. R. and Clark, T. (1994) Delineating the Scope of Corporate, Business, and Marketing Strategy Journal of Business Research, Vol. 31, Issue 2, p. 93.Vorhies, D. W. and Morgan, N. A. (2003) A Configuration Theory sound judgement of Marketing Organisation Fit with Business Strategy and Its Relationship with Market Performanc e Journal of Marketing, Vol. 67, January Issue, p. 100.Yip, G. S. (2003) Total Global Strategy II. Upper gable roof River, NJ. Prentice Hall.