Effect of Internal Controls on Financial Performance Essay

Over the past decade, Africa and other developing regions have been in the midst of tremendous changes. Market liberalization and governmental decentralization policies have interfaced with globalization and urbanization trends to dramatically transform social, political, economic and cultural lives. In this context of rapid change, SME operations can no longer remain behind serving only to meet sustenance income for their owners. SMEs engagements have to become a dynamic and integral part of the market economy. The identification of factors that determine new venture performance such as survival, growth or profitability has been one of the most central fields of entrepreneurship research (Sarasvathy, 2004). A multitude of research papers has focused on exploring various variables and their impact on performance (Bamford et al., 2004). However, in order to be able to analyze and model the performance of new ventures and SMEs, the complexity and dynamism they are facing as well as the fact that they may not be a homogenous group but significantly different in regard to many characteristics (Gartner et al., 1989) have to be taken into account. In line with the above, there have been challenging debates all over the world on the role played by Small and Medium Enterprises (SMEs) towards economic development. Therefore, a vast literature on the growth and performance of SMEs has been developed over the years. Small and Medium Enterprises (SMEs) have had a privileged treatment in the development literature, particularly over the last two decades. Hardly any arguments are put forward against SMEs, even if development policies do not necessarily favour them and economic programs, voluntarily or not, often continue to result in large capital investment. Arguments for SMEs come from almost all corners of the development literature programs, particularly in the less developed countries (LDCs), tend to emphasise the role of SMEs, even if practical results differ from the rhetoric. (Carlos Nuno Castel-Branco. May, 2003) Therefore, SMEs seem to be an accepted wisdom within the development debate. It is believed that growth in SMEs should have a positive effect on the living conditions of the people, their income level, housing, utilities. Castel-Branco (2003), in a study, revealed that this is not always true because areas where SMEs are performing so well attracts public attention and many competitors begin to troop into the area. This subsequently leads to over congestion with its associated problems of which accommodation is not an exception. The structure of SMEs in Ghana as perhaps one of the main engines of growth can be viewed as rural and urban enterprises. For urban enterprises, they can either be planned or unplanned. The planned-urban enterprises are characterized by paid employees with registered offices whereas unplanned-urban enterprises are mostly confined to the home, open space, temporal wooden structures, and employment therein is family or apprentices oriented. In the recent pursuit of economic progress, Ghana as a developing country has generally come to recognize that the SME sector may well be the main driving force for growth, due to its entrepreneurial resources and employment opportunities. Nevertheless, the existing attempts to explore empirically the roles played by SME in the economic development of a nation are still somewhat ambiguous. This can be attributed, more or less, to the fact that when examining economic progress per se, economists have tended to ignore the industrial structure of the economy and the impact this can have on such development. The ambiguity of the role of SMEs has therefore necessitated the need for a study to be conducted to access the actual impact of the proliferation of SMEs on the inhabitants of the Medina community. 1.2 Problem Statement The small business sector is recognized as an integral component of economic development and a crucial element in the effort to lift countries out of poverty (Wolfenson, 2001). The dynamic role of small and medium enterprises (SMEs) in developing countries as engines through which the growth objectives of developing countries can be achieved has long been recognized. The growth of small scale businesses in Ghana so rapid, that it is now seen as a daily affair. Many Potential owners of SMEs move to areas where the feel they can succeed to set them up there. More so, many factors may contribute to the movement of people to settle at certain geographical areas. It is believed that the factors that influence migration include the need for peaceful and violent free environment, the need for fertile business locations, the desire for privacy, government policy and a host of others. Specifically, with reference to the above, the Medina municipality of the Greater Accra region has experienced a noticeable growth and increase in the number movements into the area and for that matter SMEs increase in the last few years. It is important to mention that some research studies have been conducted to determine the real impact of migrations on host societies. In line with the above, this study sorts to assess the nature of SMEs in Medina with respect to the involvement of men and women, the main sources funds for them, the main objectives and challenges faced by SMEs in Medina, reasons the explosion of SMEs in Medina and the scio-economic impacts of this growth of SMEs in Medina. 1.3 Objectives: 1.3.1 Main Objective The main objective of this study is to assess the general impact of the plorefication of SMEs in Medina on the Medina municipality of the Greater Accra region. 1.3.2 Specific Objectives 1. To assess the nature and forms of SMEs in Medina and the relative involvement of women and men. 2. To identify the main objectives and challenges of SMEs in Medina and to rank them in order of importance. 3. Assess the main sources of capital for SMEs in Medina. 4. To assess the status of SMEs in Medina with regard to business registration, savings, record keeping and business account holding. 5. To determine the factors that account for the emergence of small scale businesses in the Medina community 6. To assess the socio-economic impacts of the growth of SMEs in Medina 1.4 Research Questions The study shall provide answers to the following research questions: 1. What is the nature of SME operation in Medina and the relative involvement of women and men? 2. What are the main objectives and challenges of SMEs in Medina and which are ranked more importance? 3. What are the main sources of capital for SMEs in Medina? 4. What are the status of SMEs in Medina with regard to business registration, savings, record keeping and business account holding? 5. What factors have accounted for the emergence of small scale businesses in the Medina community? 6. What are the socio-economic impacts of the growth of SMEs in Medina? 1.5 Justification of the Study It is difficult to analyze the performance, nature of operation and behavior of the SME sector in Ghana due to the lack of comprehensive data on them and their activities. The sector is not classified into sub-sectors and the last industrial survey was conducted in 1995 but covered only medium and large-scale industries. In respect of this, the justification of this study rests on the fact that, study will help provide information on the nature of SMEs in Medina with respect to the involvement of men and women, the main sources funds for them, the main objectives and challenges faced by SMEs in Medina, reasons the explosion of SMEs in Medina and the socio-economic impacts of this growth of SMEs in Medina. Furthermore, the study while provide vital information policy makers of the Medina municipality and all other stakeholders of the Medina community. Finally the study while produce information to will add on to existing literature for further studies in this area. 1.6 Scope and Limitations of the Study Due to time and resource constrains, this study is restricted particularly to the Medina community. The study focuses on the factors that account for the growth of SMEs in Medina and the socio-economic impacts of this change on the people of Medina among others. The study is limited in scope because it fails to cover the entire population of Ghana. The findings of this study may therefore lack generalizability as far as other communities in Ghana are concern. 1.7 Organization of the Study Chapter 1 deals with the background of the study, the problem statement, objectives of the study, justification of the study and organization of the study. Chapter 2 reviews both theoretical and empirical literatures on SMEs in general, in Ghana among others. Chapter 3 introduces the study area and describes the methodologies used to analyze the problems stated. It includes the methods used for data collection, and procedure for data analysis. Chapter 4 is devoted to presentation and discussion of results. Summary statistics of the variables used in the study are presented and discussed. Chapter 5 winds up this study drawing conclusions, their policy implications. Suggestions for future research based on the findings are made. CHAPTER TWO 2.0 LITERATURE REVIEW 2.1 Introduction This chapter reviews works on small and medium enterprises in the world, Africa and Ghana. The state of SMEs in Ghana is reviewed here. Also, Works on performance and determinants of performance of SMEs are captured. Furthermore, a section of this chapter assesses the various methods of measuring performance of SMEs which while help open up the understanding of the state of SMEs in Medina. Finally, this chapter closes with some migration theories to help facilitate the comprehension of the factors that actually account for human migration, in this case migration to Medina. 2.2 Definitions and Concepts of SMEs There is no single, uniformly acceptable, definition of a small firm (Storey, 1994). Firms differ in their levels of capitalization, sales and employment. Hence, definitions that employ measures of size (number of employees, turnover, profitability, net worth, etc.) when applied to one sector could lead to all firms being classified as small, while the same size definition when applied to a different sector could lead to a different result. The first attempt to overcome this definition problem was by the Bolton Committee (1971) when they formulated an â€Å"economic† and a â€Å"statistical† definition. Under the economic definition, a firm is regarded as small if it meets the following three criteria: i. It has a relatively small share of their market place; ii. It is managed by owners or part owners in a personalized way, and not through the medium of a formalized management structure; iii. It is independent, in the sense of not forming part of a large enterprise. The Committee also devised a â€Å"statistical† definition to be used in three main areas: a. Quantifying the size of the small firm sector and its contribution to GDP, employment, exports, etc.; b. Comparing the extent to which the small firm sector’s economic contribution has changed over time; c. Applying the statistical definition in a cross-country comparison of the small firms’ economic contribution. Thus, the Bolton Committee employed different definitions of the small firm to different sectors. 2.2.1 Criticism of the Bolton Committee’s â€Å"Economic† Definition of SMEs A number of weaknesses were identified with the Bolton Committee’s â€Å"economic† and `statistical’ definitions. First, the economic definition which states that a small business is managed by its owners or part owners in a personalized way, and not through the medium of a formal management structure, is incompatible with its statistical definition of small manufacturing firms which could have up to 200 employees. As firm size increases, owners no longer make principal decisions but devolve responsibility to a team of managers. For example, it is unlikely for a firm with hundred employees to be managed in a personalized way, suggesting that the `economic’ and `statistical’ definitions are incompatible. Another shortcoming of the Bolton Committee’s economic definition is that it considers small firms to be operating in a perfectly competitive market. However, the idea of perfect competition may not apply here; many small firms occupy `niches’ and provide a highly specialized service or product in a geographically isolated area and do not perceive any clear competition (Wynarczyk et al, 1993; Storey, 1994). Alternatively, Wynarczyk et al (1993) identified the characteristics of the small firm other than size. They argued that there are three ways of differentiating between small and large firms. The small firm has to deal with: (a) Uncertainty associated with being a price taker; (b) Limited customer and product base; (c) Uncertainty associated with greater diversity of objectives as compared with large firms. As Storey (1994) stated, there are three key distinguishing features between large and small firms. Firstly, the greater external uncertainty of the environment in which the small firm operates and the greater internal consistency of its motivations and actions. Secondly, they have a different role in innovation. Small firms are able to produce something marginally different, in terms of product or service, which differs from the standardized product or service provided by large firms. A third area of distinction between small and large firms is the greater likelihood of evolution and change in the smaller firm; small firms that become large undergo a number of stage changes. 2.2.2 Criticism of the Bolton Committee’s â€Å"Statistical† Definition of SMEs (i) No single definition or criteria was used for â€Å"smallness†, (number of employees, turnover, ownership and assets were used instead) (ii) Three different upper limits of turnover were specified for the different sectors and two different upper limits were identified for number of employees. (iii) Comparing monetary units over time requires construction of index numbers to take account of price changes. Moreover, currency fluctuations make international comparison more difficult. (iv) The definition considered the small firm sector to be homogeneous; however, firms may grow from small to medium and in some cases to large. It was against this background that the European Commission (EC) coined the term `Small and Medium Enterprises (SME)’. The SME sector is made up of three components: (i) Firms with 0 to 9 employees – micro enterprises (ii) 10 to 99 employees – small enterprises (iii) 100 to 499 employees – medium enterprises. Thus, the SME sector is comprised of enterprises, which employ less than 500 workers. In effect, the EC definitions are based solely on employment rather than a multiplicity of criteria. Secondly, the use of 100 employees as the small firm’s upper limit is more appropriate given the increase in productivity over the last two decades (Storey, 1994). Finally, the EC definition did not assume the SME group is homogenous, that is, the definition makes a distinction between micro, small, and medium-sized enterprises. However, the EC definition is too all embracing for a number of countries. Researchers would have to use definitions for small firms that are more appropriate to their particular `target’ group (an operational definition). It must be emphasized that debates on definitions turn out to be sterile unless size is a factor that influences performance. For instance, the relationship between size and performance matters when assessing the impact of a credit programme o n a targeted group (also refer to Storey, 1994). 2.2.3 Alternative Definitions of SMEs World Bank since 1976 – Firms with fixed assets (excluding land) less than US$ 250,000 in value are Small Scale Enterprises. Grindle et al (1988) – Small scale enterprises are firms with less than or equal to 25 permanent members and with fixed assets (excludingland) worth up to US$ 50,000. USAID in the 1990s – Firms with less than 50 employees and at least half the output is sold (also refer to Mead, 1984). UNIDO’s Definition for Developing Countries: Large – firms with 100+ workers Medium – firms with 20 – 99 workers Small – firms with 5 – 19 workers Micro – firms with < 5 workers UNIDO’s Definition for Industrialized Countries: Large – firms with 500+ workers Medium – firms with 100 – 499 workers Small – firms with ≠¤99 workers From the various definitions above, it can be said that there is no unique definition for a small and medium scale enterprise thus, an operational definition is required. 2.2.4 Definitions SMEs in Ghana Small Scale enterprises have been variously defined, but the most commonly used criterion is the number of employees of the enterprise. In applying this definition, confusion often arises in respect of the arbitrariness and cut off points used by the various official sources. As contained in its Industrial Statistics, The Ghana Statistical Service (GSS) considers firms with less than 10 employees as Small Scale Enterprises and their counterparts with more than 10 employees as Medium and Large-Sized Enterprises. Ironically, The GSS in its national accounts considered companies with up to 9 employees as Small and Medium Enterprises (Kayanula and Quartey, 2000). An alternate criterion used in defining small and medium enterprises is the value of fixed assets in the organization. However, the National Board of Small Scale Industries (NBSSI) in Ghana applies both the `fixed asset and number of employees’ criteria. It defines a Small Scale Enterprise as one with not more than 9 workers, has plant and machinery (excluding land, buildings and vehicles) not exceeding 10 million Cedis (US$ 9506, using 1994 exchange rate) (Kayanula and Quartey, 2000). The Ghana Enterprise Development Commission (GEDC) on the other hand uses a 10 million Cedis upper limit definition for plant and machinery. A point of caution is that the process of valuing fixed assets in itself poses a problem. Secondly, the continuous depreciation in the exchange rate often makes such definitions out-dated (Kayanula and Quartey, 2000). Steel and Webster (1990), Osei et al (1993) in defining Small Scale Enterprises in Ghana used an employment cut off point of 30 employees to indicate Small Scale Enterprises. The latter however dis-aggregated small scale enterprises into 3 categories: (i) micro -employing less than 6 people; (ii) very small, those employing 6-9 people; (iii) small -between 10 and 29 employees. 2.3 Why Small and Medium Scale Enterprises? The choice of small and medium scale enterprises within the industrial sector for this study is based on the following propositions (Kayanula and Quartey, 2000). (a) Large Scale Industry (i) Have not been an engine of growth and a good provider of employment; (ii) Already receive enormous support through general trade, finance, tax policy and direct subsidies; (b) Small and Medium Scale Enterprises (i) Mobilize funds which otherwise would have been idle; (ii) Have been recognized as a seed-bed for indigenous entrepreneurship; (iii) Are labour intensive, employing more labour per unit of capital than large enterprises; (iv) Promote indigenous technological know-how; (vii) Are able to compete (but behind protective barriers); (viii) Use mainly local resources, thus have less foreign exchange requirements; (ix) Cater for the needs of the poor and; (x) Adapt easily to customer requirements (flexible specialization), (Kayanula and Quartey, 2000). 2.4.0 The Role and Characteristics of SMEs 2.4.1 Role of SMEs in Developing Countries Small-scale rural and urban enterprises have been one of the major areas of concern to many policy makers in an attempt to accelerate the rate of growth in low income countries. These enterprises have been recognized as the engines through which the growth objectives of developing countries can be achieved. They are potential sources of employment and income in many developing countries. It is estimated that SMEs employ 22% of the adult population in developing countries (Daniels & Ngwira, 1992; Daniels & Fisseha, 1993; Fisseha, 1992; Fisseha & McPherson, 1991; Gallagher & Robson, 1995). However, some authors have contended that the job creating impact of small scale enterprises is a statistical flaw; it does not take into account offsetting factors that make the net impact more modest (Biggs, Grindle & Snodgrass, 1988). It is argued that increases in employment of Small and Medium Enterprises are not always associated with increases in productivity. Nevertheless, the important role performed by these enterprises cannot be overlooked. Small firms have some advantages over their large-scale competitors. They are able to adapt more easily to market conditions given their broadly skilled technologies. However, narrowing the analysis down to developing countries raises the following puzzle: Do small-scale enterprises have a dynamic economic role? Due to their flexible nature, SMEs are able to withstand adverse economic conditions. They are more labour intensive than larger firms and therefore, have lower capital costs associated with job creation (Anheier & Seibel, 1987; Liedholm & Mead, 1987; Schmitz, 1995). Small-scale enterprises (SSEs) perform useful roles in ensuring income stability, growth and employment. Since SMEs are labour intensive, they are more likely to succeed in smaller urban centres and rural areas, where they can contribute to the more even distribution of economic activity in a region and can help to slow the flow of migration to large cities. Because of their regional dispersion and their labour intensity, it is argued that small-scale production units can promote a more equitable distribution of income than large firms. They also improve the efficiency of domestic markets and make productive use of scarce resources, thus, facilitating long term economic growth. 2.4.2 Characteristics of SMEs in Ghana A distinguishing feature of SMEs from larger firms is that the latter have direct access to international and local capital markets whereas the former are excluded because of the higher intermediation costs of smaller projects. In addition, SMEs face the same fixed cost as Large Scale Enterprises (LSEs) in complying with regulations but have limited capacity to market products abroad. SMEs in Ghana can be categorised into urban and rural enterprises. The former can be sub-divided into `organised’ and `unorganised’ enterprises. The organised ones tend to have paid employees with a registered office whereas the unorganised category is mainly made up of artisans who work in open spaces, temporary wooden structures, or at home and employ little or in some cases no salaried workers. They rely mostly on family members or apprentices. Rural enterprises are largely made up of family groups, individual artisans, women engaged in food production of local crops. The major activities within this sector include:- soap and detergents, fabrics, clothing and tailoring, textile and leather, village blacksmiths, tin-smithing, ceramics, timber and mining, beverages, food processing, bakeries, wood furniture, electronic assembly, agro processing, chemical based products and mechanics ( Liedholm & Mead, 1987; Osei et al, 1993, World Bank, 1992). It is interesting to note that small-scale enterprises make better use of scarce resources than large-scale enterprises. Research in Ghana and many other countries have shown that capital productivity is often higher in SMEs than is the case with LSEs (Steel, 1977). The reason for this is not difficult to see, SMEs are labour intensive with very small amount of capital invested. Thus, they tend to witness high capital productivity, which is an economically sound investment. Thus, it has been argued that promoting the SME sector in developing countries will create more employment opportunities, lead to a more equitable distribution of income, and will ensure increased productivity with better technology (Steel & Webster, 1990). 2.5 SME Approaches There are several approaches or theories to entrepreneurship and small and medium enterprises. For the purpose of this study, the research team will dwell on three major theories. These include: venture opportunity, Agency Theory and Theory of Equity Funds 2.5.1 The Venture Opportunity The venture opportunity school of thought focuses on the opportunity aspect of venture development. The search for idea sources, the development of concepts; and the implementation of venture opportunities are the important interest areas for this school. Creativity and market awareness are viewed as essential. Additionally, according to this school of thought, developing the right idea at the right time for the right market niche is the key to entrepreneurial success. Major proponents include: N Krueger 1993, Long W. & McMullan 1984. Another development from this school of thought is what is described by McMullan (1984) as â€Å"corridor principle’’. This principle outlines that, giving prior attention to new pathways or opportunities as they arise and implementing the necessary steps for action are key factors in business development. The maxim that â€Å"preparation meeting opportunity, equals â€Å"luck† underlines this corridor principle. Proponents of this school of thought believe that proper preparation in the interdisciplinary business segments will enhance the ability to recognise good venture opportunities. Comparing the study with the above theory, the question that arises is: What are the factors or opportunities that have led to the proliferation of small and medium scale enterprises in Medina Township? Is it due to a particular market niche, creativity or market awareness? If so, then what socio-economic impact do they have on the people of Medina Township? 2.5.2 Agency Theory Agency theory deals with the people who own a business enterprise and all others who have interests in it, for example managers, banks, creditors, family members, and employees. The agency theory postulates that the day to day running of a business enterprise is carried out by managers as agents who have been engaged by the owners of the business as principals who are also known as shareholders. The theory is on the notion of the principle of ‘two-sided transactions’ which holds that any financial transactions involves two parties, both acting in their own best interests, but with different expectations. Major proponents of this theory include: Eisenhardt 1989, Emery et al.1991 and JH Davis – 1997. These Proponents of agency theory assume that agents will always have a personal interest which conflicts the interest of the principal. This is usually referred to as the Agency problem. 2.5.3 Theory of Equity Funds Equity is also known as owners’ equity, capital, or net worth. Costand et al (1990) suggests that ‘larger firms will use greater levels of debt financing than small firms. This implies that larger firms will rely relatively less on equity financing than do smaller firms’. According to the pecking order framework, the small enterprises have two problems when it comes to equity funding [McMahon et al. (1993, pp153)]: 1) Small enterprises usually do not have the option of issuing additional equity to the public. 2) Owner-managers are strongly averse to any dilution of their ownership interest and control. This way they are unlike the managers of large concerns who usually have only a limited degree of control and limited, if any, ownership interest, and are therefore prepared to recognize a broader range of funding options. Modern financial management is not the ultimate answer to every whim and caprice. However, it could be argued that there is some food for thought for SMEs concerning every concept. For example Access to Capital is really eye-opener for SMEs in Ghana to carve their way into sustaining their growth. 2.6 Policies for Promoting SMEs in Ghana Small-scale enterprise promotion in Ghana was not impressive in the 1960s. Dr. Nkrumah (President of the First Republic) in his modernization efforts emphasized state participation but did not encourage the domestic indigenous sector. The local entrepreneurship was seen as a potential political threat. To worsen the situation, the deterioration in the Balance of Payments in the 1980s and the overvaluation of the exchange rate led to reduce capacity utilization in the import dependent large-scale sector. Rising inflation and falling real wages also forced many formal sector employees into secondary self-employment in an attempt to earn a decent income. As the economy declined, large-scale manufacturing employment stagnated (Kayanula and Quartey, 2000). According to Steel and Webster (1991), small scale and self-employment grew by 2.9% per annum (ten times as many jobs as large scale employment) but their activities accounted for only a third of the value added. It was in the light of the above that the government of Ghana started promoting small-scale enterprises. They were viewed as the mechanism through which a transition from state-led economy to a private oriented developmental strategy could be achieved. Thus the SME sector’s role was re-defined to include the following (Kayanula and Quartey, 2000): (i) Assisting the state in reducing its involvement in direct production (ii) Absorbing labour from the state sector, given the relatively labour intensive nature of small scale enterprises, and; (iii) Developing indigenous entrepreneurial and managerial skills needed for sustained industrialization. 2.6.1 Government and Institutional Support to SMEs To enable the sector perform its role effectively, the following technical, institutional and financial supports were put in place by government. (i) Government Government, in an attempt to strengthen the response of the private sector to economic reforms undertook a number of measures in 1992. Prominent among them is the setting up of the Private Sector Advisory Group and the abolition of the Manufacturing Industries Act, 1971 (Act 356) that repealed a number of price control laws, and The Investment Code of 1985 (PNDC Law 116), which seeks to promote joint ventures between foreign and local investors. In addition to the above, a Legislative Instrument on Immigrant Quota, which grants automatic immigrant quota for investors, has been enacted. Besides, certain Technology Transfer Regulations have been introduced. Government also provided equipment leasing, an alternative and flexible source of long term financing of plant and equipment for enterprises that cannot afford their own. A Mutual Credit Guarantee Scheme was also set up for entrepreneurs who have inadequate or no collateral and has limited access to bank credit. To complement these efforts, a Rural Finance Project aimed at providing long-term credit to small-scale farmers and artisans was set up. In 1997, government proposed the establishment of an Export Development and Investment Fund (EDIF), operational under the Exim Guarantee Company Scheme of the Bank of Ghana. This was in aid of industrial and export services within the first quarter of 1998. To further improve the industrial sector, according to the 1998 Budget Statement, specific attention was to be given to the following industries for support in accessing the EDIF for rehabilitation and retooling: Textiles/Garments; Wood and Wood Processing; Food and Food Processing and Packaging. It was also highlighted that government would support industries with export potential to overcome any supply-based difficulty by accessing EDIF and rationalize the tariff regime in a bid to improve their export competitiveness. In addition, a special monitoring mechanism has been developed at the Ministry of Trade and Industries. In a bid to improve trade and investment, particularly in the industrial sector, trade and investment facilitating measures were put in place. Visas for all categories of investors and tourists were issued on arrival at the ports of entry while the Customs Excise and Preventive Service at the ports were made proactive, operating 7-days a week. The government continued supporting programmes aimed at skills training, registration and placement of job seekers, training and re-training of redeployees. This resulted in a 5% rise in enrolment in the various training institutes such as The National Vocational and Training Institute (NVTI), Opportunity Industrialization Centres (OIC), etc. As at the end of 1997, 65,830 out of 72,000 redeployees who were re-trained under master craftsmen have been provided with tools and have become self-employed. (ii) Institutions The idea of SME promotion has been in existence since 1970 though very little was done at the time. Key institutions were set up to assist SMEs and prominent among them was The Office of Business Promotion, now the present Ghana Enterprise Development Commission (GEDC). It aims at assisting Ghanaian businessmen to enter into fields where foreigners mainly operated but which became available to Ghanaians after the ‘Alliance Compliance Order’ in 1970. GEDC also had packages for strengthening small-scale industry in general, both technically and financially. The Economic Recovery Programme instituted in 1983 has broadened the institutional support for SMEs. The National Board for Small Scale Industries (NBSSI) has been established within the then Ministry of Industry, Science and Technology now (Ministry of Science and Technology) to address the needs of small businesses. The NBSSI established an Entrepreneurial Development Programme, intended to train and assist persons with entrepreneurial abilities into self-employment. In 1987, the industrial sector also witnessed the coming into operation of the Ghana Appropriate Technology Industrial Service (GRATIS). It was to supervise the operations of Intermediate Technology Transfer Units (ITTUs) in the country. GRATIS aims at upgrading small scale industrial concerns by transferring appropriate technology to small scale and informal industries at the grass root level. ITTUs in the regions are intended to develop the engineering abilities of small scale manufacturing and service industries engaged in vehicle repairs and other related trades. They are also to address the needs of non-engineering industries. So far, 6 ITTUs have been set up in Cape Coast, Ho, Kumasi, Sunyani, Tamale and Tema. (iii) Financial Assistance Access to credit has been one of the main bottlenecks to SME development. Most SMEs lack the necessary collateral to obtain bank loans. To address this issue, the Central Bank of Ghana has established a credit guarantee scheme to underwrite loans made by Commercial Banks to small-scale enterprises. Unfortunately, the scheme did not work out as expected. It was against this background that the Bank of Ghana obtained a US$ 28 million credit from the International Development Association (IDA) of the World Bank for the establishment of a Fund for Small and Medium Enterprises Development (FUSMED). Under the Programme of Action to Mitigate the Social Cost of Adjustment (PAMSCAD), a revolving fund of US$ 2 million was set aside to assist SMEs. This aspect is too scanty in the midst of the abundant information, especially with reference to Ghana. 2.7 Gender and Small Business Performance Until more recently gender differences in small business performance remained largely unaddressed by social scientists (Greene, Hart, Gatewood, Brush, & Carter, 2003). The majority of studies either disregarded gender as a variable of interest or excluded female subjects from their design (Du Rietz & Henrekson, 2000). However, it is generally accepted that male and female owner-managers behave differently and that these behavioral differences influence their performance (Brush, 1992), but these differences have been recognized but not fully explained (Brush & Hisrich 2000). A comparison of performance of male and female owner-managers in Java, Indonesia showed that female-owned businesses tend to be less oriented towards growth compared to male-owned businesses (Singh, Reynolds, & Muhammad, 2001). Boden & Nucci (2000) investigated start-ups in the retail and service industries and found that the mean survival rate for male owned businesses was four to six percent higher than for female owned businesses. Loscocco, Robinson, Hall & Allen (1991) in their study of small businesses in the New England region of the USA found that both sales volume and income levels were lower for female- than for male-owned businesses. In a longitudinal study of 298 small firms in the United Kingdom (UK), of which 67 were female owned, Johnson & Storey (1994) observed that whilst female owner-managers had more stable enterprises than their male counterparts, on average the sales turnover for female owners were lower than for male owners. Brush (1992) suggests that women perform less on quantitative financial measures such as jobs created, sales turnover and profitability because they pursue intrinsic goals such as independence, and the flexibility to combine family and work commitments rather than financial gain. In contrast to the above findings, Du Rietz and Henrekson (2000) reported that female-owned businesses were just as successful as their male counterparts when size and sector are controlled. In his study of small and medium firms in Australia, Watson (2002), after controlling for the effect of industry sector, age of the business, and the number of days of operation, also reported no significant differences in performance between the male- controlled and female-controlled firms.

Write-up Essay Example | Topics and Well Written Essays - 250 words

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Describing and explaining the picture attached Essay

Describing and explaining the picture attached - Essay Example There are rough expressions of colors, and a feeling comes that one of the colors has been ripped off at many a places, giving the feel of an old, worn-out painting. The overall look of the painting appears to be flat because the artist has not used vivid colors to distinguish one object from another. The proportion of the size of all objects is regular. Although there is not a clear message in the painting, yet I feel that there is a very deep note, keeping in view the murkiness of the white and black color that rules the painting. There is a sense of gloominess; and, the mother seems sad, but the presence of her baby is a spark of life. The painter has tried to reinforce the truth of life, which is a combination of sadness and happiness, or of dark and light shadows in life. Sadness rules in the painting, as the mother is not able to cope with the stressful moments of her life; while, joy is also there in the form of a

The History of Religion and Religious Conflict Essay

The History of Religion and Religious Conflict - Essay Example In this light, religion can have many positive influences, it can uplift the soul, spur on artistic production, and cause people to lead more driven, purposeful lives. On the other hand, however, religion has also shown that it can be a destructive force on many different occasions. In his work, â€Å"The Art of Happiness,† the Dali Lama makes many claims about religion, but seems to fundamentally believe that religion has always been a positive influence on the world, saying, for instance, that â€Å"all world religions have, of course, provided tremendous benefit for millions of human beings throughout many centuries past† (Dali Lama, 296). When considering this claim, it is easy to oscillate drastically to one side or other of this argument. Someone seeking to defend religion would point at the acts of Mother Theresa, to the charity of religious organizations, and to the benefits that organized religion can give to people personally, such as peace and comfort. Detrac tors from religion, however, can point to the attacks of Sept. 11, or the Crusades, and decry religion as a destructive force that causes hatred and violence throughout world history. Neither of these answers are fully correct, however. Rather, religion often does not make a significant amount of difference in and of itself. Religious actions, either positive or negative, are often results of complex societal interactions rather than religious fervor: so the Dali Lama is incorrect, as I believe that religion has not been a consistently positive nor negative influence on the progress of world history. One of the first things that must be understood in this discussion is the relationship between religion and spirituality. Though these are very closely linked ideas, â€Å"the Dali Lama distinguishes between spirituality and religion† (294). This is because spirituality and religion happen on very differ planes – spirituality is a personal, though often sometimes communal thing, that has to do fundamentally with belief in the underlying structures of the world, and one’s place within them. Religion, though resting on spirituality, is a very different thing. It is a structured organization that codifies beliefs and practices, almost like creating rules and laws for spirituality. This difference is important because many of the impulses often attributed to religion may in fact be spiritual. Altruism, for instance, is often one of the things most lauded about religious people and institutions. But there are obviously many people who are altruistic without being religious – they do good out of a fundamental belief that it is good to do so, which is much more akin to spirituality than religion, while there are also certainly religious people and institutions that are far from being altruistic. So when analyzing the impact that religion has had on the world, one must isolate the religious side – the order and structure of beliefs and a ctions, from the spiritual side. Upon parsing the actions of a religion or religious institution from the actions based on spirituality, one might be immediately drawn to condemning religion whole-heartedly. Religions and their institutions have been guilty of many grave sins that immediately spring to mind. Current, organized Islamic leaders have called for terrorist attacks and Martyrdom, and the Westboro Baptist Church’s â€Å"God Hates Fags† campaign has disgusted people worldwide, many churches in the United States were associated with hate crimes against blacks during and before the civil rights

Finance in the Hospitality Indusry Assignment Example | Topics and Well Written Essays - 2000 words

Finance in the Hospitality Indusry - Assignment Example Suppliers offer credit by supplying goods that do not require an immediate payment. However, a good number of suppliers provide a credit to individuals that have developed an established track record. A majority of retailers are presently offering various products on credit, such as equipments, via a financial institution. In addition, an individual can obtain a loan and other financial products such as an overdraft facility and asset financing via various financial institutions. Financial institutions range from banks to credit unions. In relation to an internal equity, an individual can finance a firm by the help of saved funds or ploughed back profits. An internal equity is majorly employed by various individuals that are seeking to start a business or running an established business. An internal equity is cheap since an individual is not expected to pay fees for borrowing money (Robinson, 2009). The other method of financing a firm is via an external equity, which includes friend s, government, venture capitalist, stock market and private investors among others. A government may provide financing to a new or existing business. Venture capitalists are large institutions that provide a large amount of money for a potential or existing firm. However, venture capitalists are characterized by the need to have a large share of a firm to effect management about the firm’s operations. ... However, this approach is associated with a number of flaws given that a majority of markets are characterized by various inefficiencies. As a result, an individual can easily fall short of raising a required level of capital. Given that the William’s family is required to raise more than sterling pounds 62,000 to take over The Enchanted Valley B&B, the family should consider approaching the London Stock Exchange since it is more efficient than other stock markets in the world. This would give the family a chance to raise an adequate capital due to favorable qualities of the firms, such as a strategic location and executive finishing. The family should also approach various private investors. The family should, however, ensure that the investors do not seek more than 50% of the company’s share. These methods are appropriate for the Williams family to raise the required level of capital without risking transferring the power of making the firm’s management decisio ns. Sources of the Firm’s Generating Income The firm generates an income from a number of services and products. The key products that offer an income include food and beverages which amounted to $135,000 (selling revenues). Having resulted in a cost of $45,000 and allowance of $5,000, the firm experienced a gross profit of $85,000. The other income was generated by rooms’ rental which amounted to $600. Other services such as parking contributed to a significant profit of $3100. This means that beverages and food contributed to 95.83% (85,000/88,700*100%) of the total gross profit. On the other hand, rooms’ rental contributed to 0.068% of the gross income (600/88,500*100%).

Sex Offenders has to be related to criminal justice Essay

Sex Offenders has to be related to criminal justice - Essay Example An attempt will be made to establish the extent to which criminal justice can be leveled against sexual offenders. A conclusion summarizing the main points discussed in the essay will be given at the end of the essay. In order to get a clear understanding about the topic, it is imperative to begin by defining the term sexual offence. A sex offence can be loosely defined as abuse of another person which mainly involves deriving sexual pleasure from that person without consent. For instance, research has shown that rape within marriage, which has not always been recognized as a crime, is a growing area of concern in American criminal justice, and many laws have been enacted during the past few decades to deter it. â€Å"Similarly even though UCR/NIBRS Program statistics officially report only the rape or attempted rape of females, some states statutes criminalize the rape. In 2007, for example, sixth-grade Wilmington, Delaware, science teacher Rachel L. Holt, a 34-year-old divorcee, w as sentenced to 10 years in prison after pleading guilty to second-degree rape. She had initially been charged with 28 counts of first-degree rape---which prosecutors said was based on the number of times she had had sex with a 13 year-old male student whom she had supplied with alcohol and let drive her car,† ( Frank Schmalleger, p. 49). ... ibes certain norms of conduct that bind all members of the state upon which it has a jurisdiction to punish a person who transgresses against these norms. As far as criminal law is concerned, the state is there to act against the defendant and criminal justice is seen as an effective tool of dealing with particular acts by the members of the society that are considered to be in violation of the prescribed norms. For partners to engage in sexual activities, there must be common understanding between them and they should first reach an agreement so that no one will feel betrayed or abused. It can be noted that there are many different forms of sexual offences and these range from rape, fondling, juvenile prostitution and sexual exploitation through child pornography. Basically, rape and child sexual abuse are more rampant forms of sexual offenses during the contemporary period. A closer look at the trends of sexual offences reveals that rape cases are on the rise in different states an d these often take different forms but all the same, this will constitute a criminal offence. A crime involving sexual abuse without consent is in violation of the societal norms and values which are protected under the public law. Criminal justice has to be effected in such scenarios. Cases involving rape within marriages have significantly gained prominence during the contemporary period especially in the US as noted above. This type of offence used to be treated lightly but some of the sexual aggression displayed to another partner can be classified as a criminal offense. Indeed, married people form the union out of love and common understanding but in some cases, when it comes to the subject of conjugal rights, there may be no common understanding between the married partners. If a

Salt Sugar Fat dialectical journal Essay Example for Free

Salt Sugar Fat dialectical journal Essay Responses (interact with the text through analysis, predictions, evaluation, and connections, but don’t just summarize) 1. â€Å"On this count, most of the men in the room could rest easy. They had personal trainers, gym memberships, and enough nutritional awareness to avoid diets that were heavy in the foods they manufactured† (11). This just confirms a horrible truth: the food companies are very much aware of the lack of nutritional value in their products, yet they continue to sell them to the less informed public. While Moss says the business men are able to â€Å"rest easy† when it comes to their weight, I find it difficult to believe that all the people in the room can â€Å"rest easy† morally. Do they realize that they are taking advantage of people who do not know any better than to eat what is placed in front of them at their local grocery stores? How can the middle and lower classes possibly resist the delicacies wrapped so artfully in packaging specifically designed to grab their attention? It’s like taking candy from a baby. Only in this scenario, the food giants are feeding the baby candy. The baby would represent the denizens of America, although I’m sure there are literal babies out there who are being affected by the obesity crisis. I find it upsetting to think that while America is being diagnosed with heart disease, diabetes, high blood pressure, and cancer (just to name a few illnesses caused by a poor diet) the individuals responsible are out with t heir personal trainers, rewarded for the increase of diseases by receiving an increase in their income. 2. â€Å"Even gout, an exceedingly painful and rare form of arthritis once dubbed ‘the rich man’s disease’ for its associations with gluttony now afflicted eight million Americans† (18). I was intrigued by this disease because of its dubbed name. Food was a resource that was not necessarily easy to come by until this past century. To get a lot of food you needed to have a lot of money. That is why gluttony and wealth went hand in hand, meaning you had to be pretty well off to get gout. Now food is not scarce. The typical American has some kind of grocery store or supermarket within a few miles of their home. That, and the addition of fast food, has made obesity a much easier feat then it was back when people actually hunted for their meat. In my freshman year, I took AP human geography. One of the units we spent a lot of time on was food. I learned that in today’s American society the lower classes are actually becoming more overweight than the  up per class because of the highly processed fatty foods being made available for extremely low prices. When a pound of apples costs about two dollars and barely fills you up whereas McDonald’s boasts a dollar menu with actual meals, it is easy to see why gout isn’t associated with just the affluent anymore. People will sacrifice their health for the least expensive option. 3. â€Å"With limited funds from the government, the center had begun soliciting monies from food companies, keeping them apprised of research that would interest them† (41). What I took from this quote is that the research centers are corrupt. They are basically taking bribes from the food giants to conduct specific studies that will give sugar and other ingredients some positive publicity. This is the food industry trying to keep consumers in the dark about what they are really eating so that they continue to buy. I had assumed food companies went to great lengths to keep the true nature of their ingredients and processes hidden, but I never would have guessed that they could sway a research center. I guess money really does control the world. 4. â€Å"The most recent data, from 2006 to 2008, shows that obesity among kids aged six to eleven jumped from 15 to 20 percent† (46). I have an eight-year-old brother who is overweight. It’s easy to look at the statistics for obesity until it affects someone you know—especially a child. You think it would be easy to prevent that from happening. Just make him run outside with his friends more or don’t let him eat so much right? It isn’t that simple. The playdate dynamic has shifted from making forts and riding scooters up and down the street to sitting indoors playing games on various devices. The rise in technology correlates with the rise in obesity. In a society where it is considered normal for elementary school students to own an iPad, it is easy to see how the rates jumped up from 15 to 20 percent in a two year span. How can childhood obesity be controlled? The way I see it, it can’t. The last thing any parent wants to do is strip their child of their innocence by making them conscious of their weight. You can’t simply take away one kid’s Nintendo either because then he is left out of the group. Adults must choose the path for their offspring. Which is the worst option, a physically unfit child or an alienated one? 5. â€Å"Its most rabid devotees proudly call themselves Peppers, belong to a club called the 10-2-4—so named for one of the early advertising campaigns, which encouraged people to drink three Dr Peppers a day, at ten, two, and four o’clock—and  make pilgrimages to Waco, Texas, where a pharmacist at Morrison’s Old Corner Drug Store invented the drink in 1885† (48). After reading this I couldn’t help but draw parallels between Peppers and Muslims. Both groups were built around the worship of one element. For the 10-2-4 this item is Dr Pepper, while Muslims worship their god Allah. Islam and the 10-2-4 also both have a destination where followers are encouraged or required to make a pilgrimage to. Peppers are invited to visit Waco, Texas where their beloved soft drink was first created, and Muslims must complete the Hajj as one of their five pillars of faith. Another similarity between the assemblages is their daily rituals. In the Islamic re ligion people must pray five times a day (Salat). The Peppers try to enjoy their favorite soda three times a day at specific times of the day. I find it interesting that a fan club made for a carbonated beverage could have anything in common with a religion that has been practiced for over millennia. The power of sugar does not cease to amaze me. 6. â€Å"†¦a mega-brand that epitomized the American culture, but one that was also in grave danger of falling behind: Jell-O pudding† (68). Moss makes a bold statement when he says that Jell-O â€Å"epitomized the American culture†. How exactly does Jell-O, one food brand among millions, embody the land of the free? Jell-O has never been anything special to me. It is interesting in structure but overall very artificial. Perhaps that is exactly what Moss is trying to convey about the ways of this country. Americans celebrate the superficial. We worship movie stars, models, and other glamorous aspects of life. While it looks appealing, in reality there is no real substance to it. It is a synthetic snack that still leaves you feeling empty inside. 7. â€Å"And when he went to see his boss, the section head of desserts, Clausi was told that the rules have been changed, public fears be dammed† (70). What prompted this sudden shift of opinion on chemical additives? One minute artificial ingredients are bad, and now it is suddenly okay for food to be made of unpronounceable components. Despite the public’s wariness of synthetic concoctions, the food industry decides to barrel ahead anyway. The risk paid off though, that is the depressing part. Instead of fighting against this artificial snack, America embraced it. And if the consumers are consuming, it is no wonder the food companies didn’t stop there. This quote signifies the beginning of the end of natural foods.