Saturday, January 11, 2020

Nau company

Ana Innovating for Social Consciousness By Alex Claws Can a for-profit enterprise succeed if its main innovation is valuing social consciousness as much as shareholder returns? The question is particularly relevant in a time of high gas prices and a growing sense that our current consumption of natural resources is simply unsustainable. The founders of Ana, a fledgling retail outerwear company, believed the answer to this question to be a resounding mimes. Built with an unprecedented level of environmental, social, and human-rights unconsciousness, by April 2008 Ana was an underground success on the West Coast, opening five stores and a website selling critically acclaimed clothing collections. Then, at the beginning of May, Nan's board of directors voted to shut down the company. Viewed through Insight's lenses, Nan's promise becomes clear-?along with the perils that led to its downfall. Ana had a reasonable business model built around a well-defined Job-to-be-done. But as will beco me clear, Ana didn't follow an emergent strategy.And Nan's management discovered that a business model that looks good on paper doesn't always translate into immediate profits. Ultimately, a lack of careful execution and a push for quick expansion doomed Nan's first incarnation. But the story of Ana is still unfolding. Ana 2. 0 is currently underway, and that venture appears to have a better chance of success. The Launch Ana (Maori for â€Å"welcome†) began with the dream of Eric Reynolds, an outdoor enthusiast entrepreneur, co-founder (in 1974) of outerwear brand Marmot, and subscriber to the belief that a single individual can have an impact on the world.In the summer of 2003, Reynolds conceived of Ana, a sustainable clothing company that would donate a significant portion of its revenue to nonprofit organizations. Specifically, Reynolds envisioned customers presented with a unique question at point-of-sale: â€Å"To which organization should ‘my five percent' go? â €  By giving five percent of its revenue to nonprofits, Ana would break new ground. (For comparison, the most generous corporations give away one percent of revenue, with the average corporation giving less than . 05 percent. ) In the summer of 2004, Reynolds began recruiting a management team.In 2005, he hired a number of individuals away from Patagonia, a firm commonly considered a leader in outerwear, social consciousness, ND charitable giving. Chris Van Dyke (son of actor Dick Van Dyke), an ex-Nikkei employee 1 and ex-Patagonia vice president of branding and marketing, was hired as CEO. Mark Calibrating, a successful Patagonia designer, Joined Ana as lead designer. Patagonians director of marketing, Ian Yells, Joined as vice president of marketing. Nan's commitment to sustainability framed the constraints within which Calibrating worked as he designed Nan's clothing collection.Calibrating avoided any materials that weren't renewable or recyclable while seeking a balance betwe en performance, sustainability, and style. As a result, nearly all of the 30 fabrics utilized in Nan's clothing collection were custom materials developed specifically for Ana. The fabrics -?made from corn, recycled plastic bottles, 100 percent organic wool, and recycled synthetics-?set a new standard for sustainability. Nan's clothing creation process led to a number of innovations, including the elimination of solvent-based adhesives.The efforts of Calibrating and his team were rewarded-?Nan's first collection received critical praise from such disparate sources as Men's Vogue and Rock and Ice magazines. One downside: The fabric choices greatly constrained the range of colors possible, resulting in mostly drab hues. Nan's custom fabrics also required that customers pay a substantial premium for their clothing, but Nan's management team did not see this as a problem for its target customer segments: the affluent â€Å"multidimensional outdoor athlete,† the â€Å"new activis t,† and â€Å"creative. The Ana team expected that their customers' passion for sustainability would overcome any price resistance. Nan's commitment to sustainability was enforced as carefully in its stores as in its clothing. The company eschewed traditional 4,000-square-foot retail stores for a 2,000-square-foot â€Å"Webfoot† concept. The store spaces were long and narrow, designed purposefully with limited space for inventory that would be restocked twice weekly. Ana also offered customers a 10 percent discount and free shipping if they were willing to try clothing in the store, and then purchase it online.Assembled from a modular, prefabricated design, each store featured energy-saving lighting and leveraged materials such as reclaimed timber, toxin-free fiberboard, and recycled resin (for mannequins). Customers were offered a choice of 12 carefully selected environmental, social, and humanitarian nonprofit organizations, and five percent of the purchase price was donated to the chosen group. Nan's values extended to its real estate leasing strategy as well-?Ana only leased store space that was LED-certified (LED certification indicates environmental- and health-consciousness standards).The company also set a minimum age limit for the workers at its overseas material suppliers. Nan's principles included the constraint that the highest-paid worker within the company could only earn a maximum of 12 mimes the lowest-paid employee's salary. Finally, Ana did not invest in marketing or public relations beyond a series of websites, choosing instead to rely on word-of- mouth, a more â€Å"sustainable† form of marketing in the eyes of Yells and his team.While Ana managed to be remarkably consistent in the infusion of its values into its processes, one of the key factors in its eventual downfall was that the company had a difficult time securing financing. At least one investor's legal counsel balked at a contract clause that placed the â€Å" needs of society' equal to the â€Å"needs of shareholders,† but Ana held firm. 2 Nan's business plan called for it to earn more than $250 million in revenue in 2010 and to achieve profitability in 2009 or 2010, figures based on opening four stores in 2007, 20 stores in 2008, and 150 stores by 2010.To build the necessary momentum toward these goals, Ana needed at least $51 million in funding. By the end of 2006, Ana had raised $24 million, largely from â€Å"super angels,† individual investors who included the chairman of Seagate Technology, Steve Lucid, and Stephen Gomez, Nan's chairman and a former Nikkei corporate vice president. Despite the fact that Ana had only reached half of its funding goal, the first Ana store penned in Boulder, Colorado, in January 2007, with three more successful store openings following during the year in Adulating, Oregon; Chicago; and Bellevue, Washington.Ana completed its first year of operation in 2007 with 92 employees, four clothing collections, and four stores. In March 2008, Ana donated $223,000 to its 12 nonprofit organizations, implying 2007 sales of around $4. 5 million. In mid-April, Ana opened its fifth store in Los Angels. In late April 2008, despite raising an additional $10 million in funding, Ana announced that it would scale back its store- peeing plans to a total of five in 2008, down from an already-reduced projection of 10.Finally, on May 1, Nan's board of directors voted to â€Å"wind down its business operations,† citing â€Å"insurmountable financial obstacles. † All inventory was liquidated at 50 percent off and the stores were closed. Post-mortem interviews with Nan's executives suggest that the company was approximately $5 million to $10 million short of the funds needed to sustain its operations and open additional stores towards its goal of profitability.In the days following the decision, many customers commented on Nan's blob, expressing sadness, frustration, and anger and questioning why Ana had failed. Ana: The Post-Mortem Looking at Ana through Insight's business model innovation framework and a number of Insight lenses offers insight into how Ana developed such a devoted following as well as how the management team might have been able to ensure a brighter future for their company. Insight believes that business model innovation is one of the most powerful ways for organizations to achieve new growth.By carefully adjusting business model components-?the customer value proposition (the offering itself), the profit system (how the company creates value for itself), key resources (the critical things required to deliver on the value proposition), and key processes (how the company organizes and acts to deliver on the value proposition) -?organizations can build the type of competitive advantage necessary to create truly transformation growth. Nan's business model looked good-?on paper, at least.But Nan's impatient push for profits made it hard to re ally validate whether the business model would in fact work, and shut all opportunities for learning. Ana pulled the customer value proposition lever expertly. The company created potently positive solutions to a number of emotional, social, and functional Jobs-to- be-done. The sustainability of Nan's operations and products set a new standard of satisfaction for the emotional Job â€Å"Feel good about 3 the environmental and social consciousness of my clothing. Nan's clothing also satisfied the social Job â€Å"Convey to others that I prioritize the sustainability of my clothing over its color and flash. † And, as lauded by Rock and Ice magazine, Nan's clothing also satisfied myriad functional Jobs related to comfort and technical performance. Since its sustainable materials carried up to a 20-percent price premium over more commercially available materials, Ana had to pass the premium along to customers.But Nan's management team was correct in assuming that the high qualit y and the redeeming social and environmental value of its clothing Justified that premium in the eyes of customers -?as long as the economy was robust enough that sufficient customers could afford it. And Ana broke new ground with its â€Å"Webfoot† stores by implementing a retail business model that required lower capital and operational expenditures than a traditional retail store model. But there was a significant downside to Nan's profit-system choices.Insight recommends that new ventures â€Å"be patient for growth, impatient for profit. † Nan's management expected the company to have 150 stores in operation by 2010, but did not expect profitability until 2009 at the earliest. Growth was thus essential to profitability, creating a significant risk of failure if the company could not reach its early-stage funding goals. Insight also recommends that new ventures pursue an emergent strategy, to take small steps by conducting inexpensive tests of its key assumptions a bout the new racket.When the test results are in, the venture can analyze the results, adjust its strategy accordingly, and then conduct additional tests. This careful approach helps new ventures optimize for success while avoiding huge, potentially fatal resource commitments. In Nan's case, an emergent strategy might have enabled the firm to consume its funding more slowly while developing an optimal strategy. Instead, the team decided to go straight to launching full Webfoot's rather than testing the clothing line in a department store or opening a single, test-store concept.The root cause for the failure of Ana 1. 0 seems to have been that Nan's business strategy and some of its business model decisions proved questionable. By following a more careful, emergent strategy and by focusing on profitability before growth, Nan's executives might have been able to strike a better balance between vision and execution. Ana 2. 0: On June 24, 2008, Nan's fortunes turned around. Horny Toad A ctivities, a Santa Barbara-based lifestyle clothing company, stepped in to buy Nan's assets with the goal of re-launching a modified version of Ana by late summer. While â€Å"Ana 2. † Is gust beginning to emerge, early signs suggest that the re-launch will follow a strategy more closely aligned to that which Insight would recommend for success. Horny Toad creates and sells men's and women's lifestyle and outerwear clothing. Horny Toad's tagging, â€Å"every day is an adventure,† introduces a humorous, irreverent, socially-conscious approach that lies at the core of everything the company does. Indeed, Horny Toad and Ana have much in common. Horny Toad's stated commitment to â€Å"lightening its environmental footprint† and to 4 supporting both the community and organizations that improve the world immediately suggest synergies.Much as Ana showcased the organizations chosen for customer contributions, the Horny Toad website highlights its support for causes rang ing from helping adults with developmental disabilities to supporting clean energy, with a wide range of other environmental and community-activist organizations in between. However, in contrast to Nan's commitment to sell its clothing solely through a growing number of its own stores, Horny Toad has only two stores and sells its clothing in a wide variety of online and brick-and-mortar retailers. In addition to a store inFreeport, Maine, Horny Toad runs the â€Å"Lizard Lounge† in Portland, Oregon, complete with music, wireless access, coffee, and ping-pong. Horny Toad clothing has been lauded for its hip funkiness by print publications and blobs alike. Recognizing the similarities between Ana and Horny Toad, Horny Toad felt that it would support its motto â€Å"do well by doing good† by purchasing Nan's assets and hiring its leadership to help re-launch the clothing line. In addition to providing financial support, Horny Toad will sell Ana clothing in the Lizard Loun ge and, in a break from Nan's original treated, through other retailers as well.And, with Horny Toad's support, a percentage of Ana sales will continue to go to worthy non-profits. According to Nan's â€Å"Thought Kitchen† blob, shortly after the relationship was finalized Ana leadership began working to resurrect relationships with company partners and to put together a Fall/Holiday clothing collection in time for October availability. While the Ana clothing line will continue to deliver on the â€Å"Beauty, Performance, and Sustainability' commitment through the use of environmentally friendly and socially conscious trials and methods, a quote from Nan's website gets to the heart of why Ana 2. May very well succeed while 1. 0 failed: â€Å"As we move forward with the re-launch of Ana, you'll definitely recognize us, but we intend to do some things differently†¦ We're going to start small and grow the business organically in relationship to the demand for our product. We'll continue to sell our product at Ana. Com, but we're also going to partner with select retailers who share our common goals. We will not be operating our own retail stores, at least not in the near term†¦ So stay tuned. We're coming back. Smaller and a little wiser, our ambitions tempered a bit by the experience, but our passions most definitely intact. Ana 2. G's strategy will most likely enable the brand to focus more closely on identifying the product, marketing, and channel mix that appeals most to customers, without worrying about the pressures of rapid expansion. Particularly in a new venture, vision and passion tempered by patience and pragmatism is the way to go. This approach is also particularly appropriate in these tough economic times. Satisfying social and emotional Jobs-to-be-done around environmental friendliness ND social consciousness may be enough to earn significant premiums for clothing in a strong economy.However, during an economic downturn, financia l reality frequently wins out as consumers prioritize value over the satisfaction of some social and emotional Jobs. 5 For example, since the economy began to sour, Whole Foods Market has seen some of its consumers move their food spending to more budget-friendly alternatives. Whole Foods has responded by shifting its marketing strategy from a focus on quality and environmental friendliness to an emphasis on discounts, store brands, and reduce value as it attempts to keep its customers.Even if Ana 1. 0 had received enough funding earlier in 2008 to continue operations, economic conditions would likely have pushed the enterprise to the breaking point, as has happened with many other fledgling clothing boutiques. When Ana 1. 0 launched, its management team made an impressive commitment to the company's values, taking steps such as tracing the wool used in its clothing back to the sheep to ensure that they were well-treated and implementing a â€Å"sustainable† word-of-mouth mar keting strategy.To launch the new Ana, it is clear that the team as had to compromise on some of its values, such as the control provided by company-owned storefronts, a grassroots-only marketing effort, and potentially the level of contribution to nonprofits. In the end, however, the Ana 2. 0 strategy, with the help of Horny Toad, may be the key to enabling the company's sustainable operation. Making their operations as sustainable as their values will help ensure that Ana is able to be a force for good in the world for a long time to come. For more information: http://www. Ana. Com/coming-this-fall. HTML (Accessed 8/29/08, 1 :41 pm) http:// www. Gibbousness. Com/CGI-bin/magma/article. Pl? Articled=30412; http:// gratifiers. Com/content/fullest/? Acid=50781 6 Innovator's Insight In Need of an Innovation Fill-up By Stephen Hunker Recent news that Consulship's will be selling all 600 of its U. S. Service stations for $800 million comes as little surprise. Oil companies are facing ext raordinarily attractive investment opportunities in exploration and production, and the service station business has been tightly squeezed between rising wholesale costs, inability to pass along those cost increases, and falling demand as driving declines.Clearly the station's buyer-?closely held Peterson Fuel-?sees it differently. We do too. In our view, Peterson Fuel is buying cheap assets with lots of innovation headroom. While â€Å"stick to your knitting† is a popular business maxim, it is of course common to find diversified businesses. There are several reasons diversification can make sense: ; If the new business can share costs and customers with the core business-? in this case, owning both enterprises can provide scale economies, improve distribution, create a better buying experience, and other advantages.This is why many European parameters have service stations outside their doors, for example. ; If the new business provides a useful hedge against a core with vo latile returns but a need for consistent investment. This explains why many pharmaceutical firms own over-the-counter consumer healthcare brands. ; By diversifying, a firm can hold on to a seemingly unrelated business because it sees substantial headroom for growth and a right to triumph in that arena. This is one reason News Corporation bought Namespace. Historically, oil companies owned service stations for each of these reasons.The end nonuser drove demand, and having direct access to that consumer allowed firms to exercise some control over demand levels while also gaining precise information about what products were demanded where. Profits from service stations could offset volatility in exploration and production. Also, the advent of convenience stores at service stations created a new high-margin business. Each of these Justifications for integration now seems threatened by changes such as improved information technology, more efficient capital markets, and communication of t he service station experience.With supermarket-owned service stations now coming to the United States, oil companies face new competitors who may even sell gasoline at a loss in order to drive traffic into their stores. In the I-J, pressure from supermarkets is a factor leading to the net closure of 600 service stations per year. The service station business is looking much less attractive than it used to. So, what might Peterson Fuel be thinking? We imagine two major Justifications for the investment. First, if oil prices decline, the profit margins on service stations may rise, and Peterson will have bought valuable assets for a song.Second, there may be much more innovation headroom in this business than oil companies have traditionally assumed. For instance, Fullness Media International offers local news, weather, and sports on screens at pumps at a few hundred stations. Fullness pays the retailer and shows ads to this highly captive audience. Shell is experimenting with fuel pu mps that are activated simply by a swipe of a fingerprint. Dutch inventors have created a robotic arm that finds a car's fuel cap, unscrews it, and automatically pumps gas. Regional fuel retailer Sheets differentiates itself through premium coffee and made- o-order sandwiches.Another retailer, Valier, is piloting 5,000-square-foot convenience stores with fully nonwhite of the space dedicated to fresh food and other perishables. Oil companies would be well-served by thinking through how well the jobs of their customers are getting done, and whether they can De-commoditized the service station business through new propositions or re-definition of the competitive set. Looking through this lens, we can imagine how a mother could prefer a certain service station because it offers very fast, targeted entertainment for bored children n the back seat, or how a senior might prefer one with very brightly lit displays.The advent of electric- and fuel-cell-powered vehicles opens further possibi lities for using service station real estate in new ways. Look at how Best Buy reconciled what an electronics retailer could be, and how it escaped industry communication in the process. While Wall-Mart and others cut prices ruthlessly, Best Buy rolled out Geek Squad-?a service tightly integrated with its retailing business that addressed a wide swath of unsatisfied Jobs its customers faced post-sale. It also became a place to try new videotapes. The store is even trying to become a hub for musicians buying electric guitars and other gear.In the process, the company increased revenue 92 percent over five years, almost entirely through internally generated growth. It turned out that electronics retailing wasn't a commodity business at all. Sometimes a dog business is Just a dog business. MM spun off its floppy disk and magnetic tape business in 1996, and that turned out to be a smart move. But we find it hard to believe that there is little room for profitable innovation in a retail business that hundreds of millions consumers have to visit on a regular basis.When the finance people come knocking, looking to sell downtrodden assets and invest the proceeds in high-flying businesses, lock the doors for a bit. The business may indeed have few prospects. On the other hand, it may support the core business in many oblique but important ways, and it may have far more innovation headroom left to exploit. – â€Å"Consulship's Will Sell Its Company-owned Service Stations†, by Brett Clayton, Houston Chronicle, August 27, 2008 (http://www. Chronic. Com/disk/story. Ml/business/energy/5969574. HTML) 8 â€Å"Finding the Right Job for your Product†, by Clayton Christensen, Scott Anthony, Gerald Brewster and Denies Meetinghouse, Sloan Management Review, Spring 2007 (http://www. Insight. Com/innovation_resources/research. HTML? Id=167) 9 Innovators' Update A Good Start for Amazon AMP Amazon's digital music store keeps sailing on the winds of industry change s Insight #98 from October 2007, â€Å"Handicapping Amazon's Low-Cost Music Store,† suggested that Amazon might find the results of its then newly launched music download store disappointing. What has happened since?By Renee Hopkins Callahan When Amazon launched its Amazon AMP online music download store in September 007, we were skeptical. At the time, Apple had sold more than 100 million pods and tunes had a lock on the online music market. Amazon AMP planned to sell music free of Digital Rights Management (DORM) protection-?a limited supply, since at the time only one of the four major music labels had agreed to make its music available without DORM protection. Amazon AMP seemed unlikely to succeed with a business model focused on undercutting tunes on price, selling songs for 89 cents instead of 99 cents.We were right that the low-cost strategy would not put much of a dent in the popularity of Tunes. Yet circumstances in the year since its launch have helped Amazon refine its strategy and offer a preview of possible success. According to NYPD Group research released in late July, tunes remains on top of the music retail pack. It is the largest music retailer in the world and it sells at least 90 percent of digital downloads in the U. S. However, the same research showed that Amazon AMP has grown to be the fourth-largest retailer of music in the U. S. , behind tunes, Walter, and Best Buy.That puts Amazon AMP in second place for online music download sales. And while here's still a huge gap in volume between tunes and Amazon AMP-?with Amazon's share of the market in single digits-?Amazon is in the game. However, Amazon hasn't accomplished that by stealing tunes customers. Russ Cropping, an entertainment industry analyst for NYPD, said in an April 2008 report that only about 10 percent of Amazon AMP customers used to be tunes users, with the other 90 percent likely to be people who had been using other services or were new to digital downloading.Amazon AMP attracts young adults age 18 to 25, while tunes' strongest demographic is teens age 13 to 17, another April 2008 study said. Amazon has likely benefited from winds of change blowing in the music industry. A number of analysts have speculated that the industry sees Amazon as an ally in an effort to break Apple's dominance in digital music. It would seem counterintuitive that the music industry would want to bypass its richest retail channel. But some of Apple's practices cut profits for the major labels.In late August, the Wall Street Journal reported on a growing trend in the music business: labels deliberately withholding some of their music from tunes. The article cites several cases in which albums were either not made available on Tunes or were pulled. Why? While consumers strongly prefer purchasing music by song, music label executives, managers and even some artists dislike the tunes policy that requires that music be made available by the song as well 10 as by the album, because profit margins for single-song sales aren't nearly as good as the margins for album sales.Meanwhile, Amazon AMP lets labels sell music the way they want to. If a label wishes to make an artist's work available only by the album, Amazon AMP allows it. Some of the music that the labels have been withholding from tunes is ending up on Amazon AMP. The DORM issue has worked to Amazon's benefit as well. Apple's tunes has historically sold Deteriorated downloads. Such encoding means that songs downloaded on tunes cannot be played on other AMP devices. Apple has worked to persuade the major labels to drop DORM, though it still seeks to keep tunes the only source of song downloads for the pod.At the time that Amazon AMP launched, only MIME, one of the four major music labels, had announced it would drop DORM protection on its music. By early January 2008, a few months after Amazon AMP launched, the three other major labels-universal Music Group, Warner Music Group, and Sony BMW- dro pped DORM. That meant their music could be made available on Amazon AMP, which does not use DORM, and which features free software that delivers a customer's AMP file directly to their tunes library.Meanwhile, according to a May 30 Macdonald magazine story, â€Å"Sony, Universal, and Warner continue to withhold the unencumbered tracks from Apple, choosing instead to back tuner's rivals. † Amazon may have more surprises up its virtual sleeve. In late July, Fortune magazine reported that Amazon was in talks with Namespace about becoming the social networking giant's download store partner hen it rolls out its highly anticipated Joint venture with Universal, Warner Music and Sony BMW in September.If the deal goes through, it puts Amazon in a good position to continue nipping at Apple's heels. According to the Fortune report, Namespace plans to let its 120 million users stream entire songs before downloading them. That potentially changes the convenience trade-off for the Namespa ce customers in Amazon's favor, because they would be able to buy a song and get it into their computer's music manager, even tunes, with one click using Amazon's software. Those who wanted to use tunes would have to leave Namespace and physically go to Tunes to accomplish the same end.Clearly, we underestimated the desire of other companies to develop a reasonable Number Two to Apple, a position that Amazon AMP seems to have grown into in the last year. If Amazon can figure out more ways to capitalize on its toehold position in the digital music business,

Friday, January 3, 2020

Problem, Aims And Plan Of Study - Free Essay Example

Sample details Pages: 30 Words: 8982 Downloads: 7 Date added: 2017/06/26 Category Statistics Essay Did you like this example? Introductory orientation Truancy is about learners who have not been attending school regularly as required by the school, parents and even the authorities. Truant behavior is a problem for the individual, the family, the school and society in general. Free and compulsory education is recognized as a basic entitlement under international standards, including the United Nations Universal Declaration of Human Rights (1948), the Convention of the Rights of the Child (1989) and the European Convention on Human Rights (1950). With the right to free education and the obligation corresponding to this right observed and enforced through a national emphasis on school attendance, The National Statistic Office (Malta) states that in the 2004/2005 scholastic year the figure for school absenteeism accounted for 7.7% of the total number of school days in the reference period or an overall absence rate of 9.2 absent days per pupil that for boys being 10.0 days per pupil and for girls 8.4 days per pupil. As a teacher this makes me fretful about students missing school as this can be associated with subsequent emotional and psychosocial problems in early adulthood and is a predictor of multiple problems (Fogelman Hibbert, 1990). Don’t waste time! Our writers will create an original "Problem, Aims And Plan Of Study" essay for you Create order Truancy may have both short and long term effects on society. There is evidence that truancy is linked to delinquent behaviour and juvenile crime (Collins, 1998; Reid, 1999). According to Jones (1996), Absenteeism is a sign of trouble that often leads to lower academic skills and grades, delinquency, and dropouts. Studies have shown that high school dropouts are twice as likely to be unemployed and on welfare, and overall, tend to be facing a more difficult life than their graduating counterparts. Jones (1996; p.128), All members who form part of any educational institution cannot allow these students to give up on themselves. We as a modern, fast developing society, we cannot afford to let them surrender. It is clearly far less expensive to educate them than pay for a lifetime of welfare and all of the deprivations that welfare represents. These are ominous issues, which imply that the number of students who skip school is rising and that school absenteeism is a new generations behaviour that is today a dramatic social phenomenon. This proposal drafts the intent to investigate and explore realities of how truancy manifests with Maltese youth and also explore the psychosocial world of truants in Maltese schools. Problem Analysis The Pre-Scientific Problem awareness As a supply teacher for these past five years, I have witnessed incidences of truancy in the period 2006 to 2009. One of the common truancy reducation measures used was to lock the school gates during lessons and breaks and open them after school hours (my personal exsperience). Despite the limited impact on truancy reducation, the approach of locking gates is still common and evident in some secondary schools. I found locked gates while visiting some of the schools. Gangsters, to control late coming and to stop learners from dodging classes, locked gates to prevent trespassing, sepecially. Exploring the problem Incidence and nature of truancy Malta Since 1946 education has been compulsory for all children between six to fourteen years and extended to the age of 16 by the Education Act (Malta) of 1971. Maltese law imposes a duty on parents to ensure that their children of compulsory school age receive appropriate education, whether through attendance at a state or independent school. If they fail to do so, without any reasonable excuse and if found guilty, they are liable to a fine not exceeding in previous currency one Maltese Lira (equivalent to à ¢Ã¢â‚¬Å¡Ã‚ ¬2.33) for each day during which the offence continues, unless the parent fails to give a good and sufficient explanation within three days from the date he or she receives a notice from the Director of Education (Malta Education Act 1988). From January 2001 up to December 2002 there were 8,903 arraignments before the local tribunals in connection with school absenteeism (Grech, 2002). This figure represents only the number of students who were absent from school without a valid reason on more than three occasions in the time frame of a month. It is a known fact that there are a number of students that systematically plan three days off from school each month, just for the sake that they use their monthly absence allowance and knowing that in this way their parents would not receive a citation. Surveys show that the overall absence rate between 25th September 2000 to 31st March 2001 stood at 10.5 days per pupil (NSO Malta, 2001). This figure reveals an increase of 5.2% over 1999/2000 scholastic year (NSO Malta, 2001). Thus it shows that during this period, 657,604 pupil days were lost to absenteeism and authorised absence due to sickness. Indeed, the Clark Report (2005) shows concern for the increase in unauthorised absenteeism with parental consent, particularly in state secondary schools which cater, in the main, for a student population coming from a working- class background. Family problems, psychological problems, illnesses, school phobia and bullying have, significantly, been indicated by the Clark focus group to be the topmost reasons contributing to school avoidance. Some Overseas Countries Most of the research conducted abroad seems to provide information regarding the nature and extent of truancy in secondary schools. Results of a study conducted at a school in London from 1985 to 1987 revealed that 70% of the sampled pupils admitted truanting during the three-year period (Stoll, 1990:22). In the study that involved nine secondary schools, 66% of the 765 fifth year pupils admitted truanting (ibid). Figures on truancy in 150 English secondary schools revealed that 31% of pupils in years 10 and 11 admitted that they played truant or skipped lessons (OKeefe Stoll, 1995:12). Gray and Jesson (1990:25) report about the major national survey results of truancy in English secondary schools. According to this study, 23% of all fifth year pupils were involved in truant behavior and they were less likely to stay on in full-time education. Furthermore, schools facing serious problems of truancy tend to be in the inner city rather than in other areas (ibid). on the other hand, Collins (1998:26) reports that absentee rates vary between schools in the London Education Authority. Munn and Johnstone (1992:4) found that out of a sample of 50 Scottish secondary schools, 18% of the pupils (11% in June and 7% in November) were classified as truants and were mostly form the senior years. These figures exclude truants within the school day, as 14 schools reported that they did not keep period attendance records (ibid). Truancy has long been a subject for research in various parts of the USA. According to Nelson (1972:98), 64% of the 591 students surveyed identified themselves as class truants. Learners habitually play truant each day in Los Angeles, Pittsburg and Milwaukee (Black, 1996:33). Bos, Ruiters and Visscher (1992:393) found that the average rate of truancy in 36 schools in the four Dutch cities studied was 4.4% and that truancy increased with the level of the class in almost all schools. Some researchers further indicate that truancy does not necessarily mean missing the whole day of school but found that I could be in the form of missing a part of a day or particular lesson (Kilpartick, 1998:31; Reid, 1999:91). In a study conducted by Malan in South Africa (1972:144), 2,738 out of 69,908 pupils were identified by their teachers as truants. Masithela (Masithela, 1992:33) observed that learners tend to miss lessons during the first and second periods, as well as during the last give periods. The tendency of missing certain lessons towards the end of the school day shows that some form of hidden truancy is prevalent and that pupils can be marked present in the register but fail to attend all lessons (ibid:45). On the other hand, they may come late and be marked absent or be somewhere on the school premises not attending certain lessons or periods, but still be marked as being present on the class resisters. Factors associated with truancy Malta Truancy is about learners who have not been attending school regularly as required by the school, parents and even the authorities. Tyerman (1968) defines the term truant as the child who is absent from school purely on his or her own initiative. Gabb (1994) includes in his definition of truant, that a child who is absent with leave given by his or her parents, or who are actually kept at home by the parents. Hersov (cited in Gabb, 1994) goes still further, dividing from truants, school phobics and school refusers. King (2001) furthermore defines school refusal/school phobics as a difficulty to attend school due to emotional distress, especially anxiety and depression. Fenech (1991) (in an unpublished research) defines absenteeism as being away from lessons for any period of time and for reasons not considered as legitimate, with or without the parents knowledge (p.3). She goes on to include physical presence without any attention being given to a lesson in progress [as well as] masked or selective truancy (ibid., p.3). Fenech (ad. lib.) refers to the latter as skiving off specific lessons or disappearance after registration (p.3) remarking that a number of sources consider absenteeism and truancy synonymous. Sultana (1997), like Fenech (1991), defines absenteeism as staying away from school for reasons not justified by the law (p. 355). However, she goes on to include other less overt ways (ibid., p 355) such as what Willis (1977) calls participating in informal mobility (ibid., p. 355). This includes not entering the class for lesson, intentionally staying in another class, leaving the class without permission, or staying in class without bothering to follow the lesson. Studies conducted abroad When seen from a psychological viewpoint, truancy may be symptomatic of learns who are insecure and have low academic achievement levels and low self-esteem. Lewis (1995:37) states that attendance difficulties my broadly result from a combination of pull and push factors. Pull factors are personal and social aspects that pull a learner out of school. The pull factors may be related to the psychological indices mentioned by Reid (2002:11), such as maladjustment, a lower general level of self-esteem and academic self concept, anxiety and lower career aspirations. Factors that push learners away from school include academic and classroom aspects such as inapproachability of the teaching staff, incomprehensible teaching style and inappropriate classroom management. Other factors relating to the school and the classroom include bullying, the curriculum, boring lessons (Reid, 1999:91), teachers humiliating remarks (Porteus, Clacherty, Mdiya, Pelo, Matsai, Qwabe and Donald 2000:11), poor record-keeping and school organization (Bimler Kirkland, 2001:90; Coldman, 1995:29). According to Pappas (1996:1), truancy is often symptomatic of family dysfunction, since the parents of truants tend to be permissive, undisciplined and unavailable. Some authors believe that truancy is associated with a poor socio-economic background, including poverty, poor housing and unemployment (Bell, Rosen and Dynlacht, 1994:204; Tyerman, 1958:222). Some researchers state that there is a link between truancy and delinquent behavior (Collins, 1998:38; Brown, 1998:298-299; Reid, 1999:25). Truancy differentiated from school phobia There is a need to distinguish between truancy and school phobia. The concept school phobia describes a learner who is unwilling to attend school and stays at home with the knowledge of parents (Wicks and Nelson, 2000:123). A learners problem often stats with a vague complaint or reluctance to attend school and progresses to total refusal to go to school. Blagg (1992:121) asserts that school phobia may be induced by fear-arousing aspects of school, such as fear of failure caused by anxiety about meeting the standards. Fear may also be related to worries about the health and welfare of parents (Blagg, 1992:123). In the other hand, a learner who plays truant misses the whole school day or lessons without the knowledge of parents or caregivers. Furthermore, a truant tends to be involved in various forms of anti social behavior (Blagg, 1992:121). Milner and Blyth (1999:18) acknowledge the difficulties involved in studying the prevalence and pattern of truancy and in comparing current and past school attendance or absence. The difficulties are partly compounded by the variations in the definition of truancy itself (Boyd, 1999:22; Gabb, 1997:2) and the multifaceted nature of truancy (Edward and Malcolm, 2001:1; Reid, 1999:17). The problems associated with studies on truancy should, however, not prevent further research from being conducted. Solutions should be found, or the cause at least eliminated, because truancy is regarded as a serious problem with socio-economic implications. A preliminary review of the literature reveals that truancy is a major problem form schools and society and a most powerful predictor of juvenile delinquent behavior (Van Petegem, 1994:272; Wiehe, 2000). Reid (2002:2) maintains that the amount of money spent on truancy reduction initiatives proves the extent of truancy. Statement of the problem Data on the extent and nature of truancy in schools are often based on information obtained from class registers. This information may be inadequate or almost incomplete and limits the understanding of the phenomenon, thus making it difficult to develop appropriate intervention strategies. More insight on how truancy manifests is needed to provide a base on which to suggest, plan and develop effective intervention strategies. Therefore, further research is needed to enable education officials, schools, parents and other professionals to manage learners with attendance difficulties more efficiently. This study serves to bridge the information gap regarding the nature of truancy and to provide a picture of the life world of truants in Secondary Schools. Aims of the Research The General Aim The aim would be to describe truancy in general as stated in the literature and to conduct an empirical study in order to determine how truancy behaviour manifests in secondary schools and what the life world of truants looks likes. The findings can then be used to inform and guide future practice. The Specific aim The aim of the study would be to gather information that will be used to guide the school (college) community namely the SMT, form teachers, subject teachers, guidance teachers and school councillors, youth workers in school and other stakeholders to help in the interventional approaches and procedures that can be used for reducing truancy. In order to realise the above aims, the following questions are set to direct the research: What is the extent and degree of truancy in terms of the frequency and number of learns involved? What are the patterns, type or nature of truancy? Where do truants go when not at school or in class? What measures are used to monitor and manage truancy? Research Method The study will comprise two methods, namely, a literature study and an empirical investigation. A study of the literature will derive information on studies about poor school attendance and procedures employed to mange or reduce truancy from books, research articles, journals and other resources. A quantitative research design will be used in the empirical investigation. This investigation aims to gather data by means of a questionnaire that will be given to learns in Form 1 and Form 2 in eight randomly selected schools, , incorporating two Junior Lyceums, two Area Secondary and two Church schools. A qualitative research design will be used with guidance teachers, counselors, youth workers, form teachers, Assistant Head of Schools and Heads of School currently working in schools. A focus group and interviews with Heads will help me to investigate what the School community is doing to combat truancy. Such data will be advantageous in that they are the most adequate [tool] to capture how a person thinks of a particular domain (Goldsmiths Collage, n.d.). More over since a face to face rapport with the interviewee, it is induced to continue questioning the subject in order to confirm the hypothesis about his or her beliefs, seeking appraise any underlying meaning in the process. Demarcation of research Due to time constraints, the preset research is confined to then 8 randomly selected secondary schools in Malta. A list of all secondary schools was compiled to allow for the random selection of 8 schools, which will form part of this study. This sample was mainl cohosen on the basis of cost implicaitons and accessibility. Explanation of concepts In this section a number of concepts that are relevant to this research are defined. Truancy Reids (1999:1) asserts that the term truancy is often misused and can be applied both generically and with a local meaning. In the different parts of Great Britain, truancy is known as dodging, skipping off, mitching, skiving, bunking off and going missing, respectively. Whitney (1994:49) defines truancy as absence that has not been authorized by the school and where leave has not been given or approved. Another definition provided by Collins (1998:2), who states that truancy is about pupils who have been registed with a school but identified as not attending school when the law says they should. This definition includes absences from a particular lesson or lessons, known as post-registation truancy (Gabbs, 1994:5; Stoll, 1990:23). Clark Report (2005) identify as truancy when a student is voluntarily absent or not attending school without their parents permission and often, awareness (Anglicare, Werribee Family Services 2000). Truancy is defined as unjustifiable or unexplained absence from school with attempts by the student to conceal the absenteeism. Usually the child avoids home when not at school and the parents are often unaware of the childs absence (Rollings, King, Tonge, Luk, Heyne, Ramsdell, Burdett Martin, 1999). The concept blanket truancy refers to absence from the whole school day, which is usually reflected on the class register, while post-registration truancy occurs when the learner is marked present but fails to turn up at a lesson or lessons (Stoll, 1990:23). In this research, the term truancy is broadly defined as unauthorized absence from school. The definition is adopted with the assumption that absence with the knowledge and permission of the school and parents or guardians does not constitute truancy. Since the study seeks to explore the type of truancy as manifested at secondary schools, both concepts of truancy (blanket and post-registration) are relevant and will be investigated. A Truant A truant is a child aged 6 17 years old who absents himself or herself form school without a legitimate reason and without permission of his or her parents or the school official (Schaefer and Millman, 1981: 335). For the purpose of this research, a truant refers to a learner who, after being registered at a school, absents himself or herself from school or lessons without a legitimate reson or permission from parents or the school official. The traditional or typical truant: Traditional truants tend to be isolated that come from an unsupportive home background, possibly with a tendency to be shy. It is likely that they will have a low self-concept, be introverted and be the citim of their social circumstances. The psychological truant: could be the school phobic (school refusal) case but more othen than this psychological truant miss school for psychological related factors such as illness, opsychomatric complaints, laziness, a fear of attending scholl for any reason (such as dislike of a teacher, a lesson, an impending confrontation or fear of bullying.) The Institutional truant: Institutional truants are more likely to indulge in on the spur of the moment absences from lessons and to be selective about days or lessons to miss. Secondary School A school that admits or registers and educates learners in Form 1 Form 5 is known as a secondary school. Life World In this research, the term life world refers to the psychological context this is made up of elements such as interpersonal aspects, the family, school and the broader community. According to this definition, the life world involves the personal and external world of the learner. The personal word refers to intrinsic factors. The external word is made up of the broader educational systems, the home environment and the community where the child spends his time when not at school. Relevant intervention strategies would be easier to suggest if the contextual issues related to the phenomenon under investigations are understood. Research Program The research comprises give chapters, as follows: CHAPTER 1 In this chapter, the background information in the seriousness and implication of truancy are discussed. The chapter also includes an analysis of the problem, the problem statement, aims of the study, description of the research method and definition of the concepts. CHAPTER 2 Chapter 2 entails a review of the literature on types of truancy and the causes of truancy or contributing factors in different countries, including in Malta. Different approaches that the various countries and schools use to manage truancy will also be discussed. CHAPTER 3 This chapter deals with research designs and methods. A discussion of the research problem, the aim of the empirical investigation, the research tool used in the study and the selection of the sample will be included. Details of the compilation and administration of questionnaires as well as an analysis of data will be presented. CHAPTER 4 In this chapter, the results of questionnaires will be presented. The results will be analyzed to find answers to the research questions. CHAPTER 5 The chapter entails a summary of the research finding, conclusions and recommendations. A summary of the results from the literature study and the limitation of the study will be included. Conclusion This chapter focuses on the background and analysis of the problem, as well as the aims of the study. An attempt will be made to explain the research method used, relevant concepts and planned programmes of the research. The next chapter will contain the review of the literature on the types of truancy, factors contributing to truancy behavior, the rate and extent of truancy and the strategies used to manage truancy. CHAPTER 2 TYPES OF TRUANCY, CAUSAL FACTORS AND APPROACHES USED IN THE MANAGEMENT AND REDUCTION OF TRUANCY Introduction According to Tyerman (1958:217), truancy has been a problem to all concerned with education since 1870s. Approximately 750 children were charged for truancy in England and Wales in 1954 (ibid: 220). This figure could have been an underestimation as it was based on learners who were referred to courts, and therefore represented mainly incorrigible truants (ibid). Furthermore, the figure gives a general picture of truanting children in one country only and without an indication whether it was absence from certain lessons or whole school day absence. Truancy is currently a problem in communities. In Clarks report concern was expressed about truancy among school children. Data presented in this report indicates that non-attendance exists, and has become an issue of increasing concern for schools, educational and student welfare organizations. Non-attendances viewed as being among one of the key problems facing some schools. There is increasing concern for the seemingly large number of ch ildren and young people, who are, for a range of reasons, missing out on the benefits of education and possibly on a better future (Dr. L. Galea, The Times 9th February, 2005). Non-attendance can be the beginning of countless problems for students who regularly miss out on school (Heyne, King, Tonge, Rollings, Pritchard Young,1999). The extent and nature of truancy are best understood in terms of whether it implies absence for the whole day or during a particular lesson. This chapter deals with how blanket and post-registration truancy manifest, the causal factors and various measures of reducing truancy in secondary schools. Blanket Truancy Perspectives in various countries England and Wales Normab (2001:49) states that 50,000 children play truant on a normal school day in England. The number of truants increases steadily with age and most truants are found at secondary school (ibid). This confirms past research findings about the existence of truancy in secondary school in some parts of England. Gray and Jesson (1990:25) gathered information on the incidence of truancy from the youth cohort survey of England and Wales. The result of their survey shows that 6% of final-year secondary school learners reported to have played truant for several days or weeks at a time. Malcolm, Wilson, Davidson and Kirk (2003:50) state as follows: In 1999, the Audit Commission noted that at least 40,000 of the 400,000 learners absent from school are truanting. Scotland In a study done at 50 Scottish secondary schools, it was found that 30% to 33% of learners had been playing truant at least once in the survey week (Munn and Johnston, 1992:38). These schools were requested to provide both the overall attendance rate and the numbers of learners (ibid). Australia Haddon (1996:110), citing a comprehensive study conducted in Victorian secondary schools in Australia, states that 40% to 60% of learners of compulsory school age reported that they engaged in truancy. Cohen and Ryan (1998:12) state that about 10,000 learners in Tasmania play truant at least one day a week. The Netherlands The research done at 36 schools in four Dutch cities indicates that the average level of truancy at all schools was 4.4% (Bos, Ruiters and Visscher, 1992:393). The average percentage of allowed absence was 4.7%, therefore suggesting that learners in most schools are just as often absent with a valid reason as without one. United States of America It appears that truancy is a problem in American schools, although at varying levels. According to Black (1996:33), approximately 2,500 and 4,000 learners play truant on a daily basis in Pittsburg and Mulwaukee, repectively, while 300,000 of the 1.6 million students in Los Angeles are habitual truants. This shows that some learners stay absent without permission every day and that a day never goes by with a recording of 100% attendance. Truancy is so much of a concern that the Department of Education has prepared a manual that gives schools some guidelines on how to reduce it (United States Department of Education, 1996). Malta From January 2001 up to December 2002 there were 8,903 arraignments before local tribunals in connection with school absenteeism (Grech, 2002). This figure represents only the number of students who were absent from school without a valid reason on more than three occasions in the space of a month. It is a known fact that there are a number of pupils that systematically take three days off from school each month just for the sake that they use up their monthly absence allowance and knowing that in this way their parents would not receive a citation. Survey results issued by the National Statistics Office Malta on December 16, 2002 showed that overall absence rate from schools between September 25, 2000 and March 31, 20001, stood at 10.5 days per pupil. That included both absenteeism and authorized absence (such as those due to sickness). During this period, 657,604 pupil days were list to absenteeism, accounting for 8.9 per cent of the total pupil days. This reveals an increase of 5. 2 per cent over the 1999/2000 scholastic year. Absences in government schools stood at 19.12 days per pupil whereas that of government dependent (church schools) and independent private schools was 5.76 days per pupil. The rate of truancy in terms of gender Some of the overseas researchers state that there is no difference in the levels of truancy reported for males and females (Gray and Jesson, 1990:26; Haddon, 1996: 110; Smith, M., 1996:226; Stoll, 1994:36; Whitney, 1994: 59). Recent research on truancy in the seven local education authorities reports that the numbers of learners in secondary school admitting truancy was almost equal for boys and girls (Malcolm et al., 2003:31). Coldman (1995:68) also states that the variation that exists in truancy levels of males and females is slight. It is, therefore, apparent that some research are in agreement with regard to the truancy levels of male and females learners. Earlier research that was conducted in South Africa suggests that more males than females tend to play truant Coldman (1995:68) warns against making assumptions and generalisations about the existence of gender differnce in truancy levels. He argues that observed findings might result from the fact that some schools have more males than females, particularly when one is dealing with a large sample. What the above studies suggest about truancy levels of males and females is that the difference might be slight, if it does exist. Furthermore, observed diffrenences may be incfluenced by other variables, such as the enrolled number of male and female learners in a sample. Truancy rate according to the geographical location of the school Serious truancy is said to be more prevalent in inner-city secondary schools in England (Gray and Jesson, 1990:36; Stoll, 1990:23). Munn and Johnstone (1992:4) also found that the Scottish school with the highest percentage of unauthorized absence was all in the inner city. Coldman (1995:69) asserts that claims that truancy is a problem mainly experienced in inner city schools are disputable, since another survey showed that the truancy level is high even in the suburban, rural and industrial areas of England. It may therefore be purely speculation, without much supporting evidence, to suggest that inner-city school experience higher levels of truancy. Hard evidence needs to be gathered, where possible, in order to verify the claim that inner-city experience higher rates of truancy. According to some researchers, truancy levels also appear to differ from school to school, since they may be more prevalent in schools than in others (Blackm 1996:33; Bos et al., 1992:385; Gray and Jesson, 1990:26; OKeefe and Stoll, 1995:12). It is therefore apparent that the levels of truancy seem to vary from country to country, and in some cases, also in terms of geographical locations within a city or town. The literature indicates that blanket truancy is common in many secondary school and that, in some cases, learners play truant on a daily basis. The levels of blanket truancy can also vary according to regional locations within the same country. In the next section, the evidence regarding the level of post-registration truancy drawn from the literature will be discussed. Post-registration Truancy Very little information is given in the literature about national trends of post-registration truancy in countries where research on truancy was conducted. Most of the studies conducted in the United Kingdom, Australia, the United States and some parts of Europe mainly appear to be either school-based or done on a small scale. The Extent of post registration truancy Gary and Jesson (1990:26) report that about 10% of the final-year secondary school learners in England admitted that they played truant during particular lessons. On the other hand, 6% of the learners were involved in blanket truancy, meaning that the rate of post-registration truancy was higher. Stoll (1990:23) conducted research at nine secondary schools and found that the rate of post-resgistration truancy was high at one the schools. Smith, M. (1996:228) also found that the post-registration truancy figure was high in the 12 Hertfordshire school that took part in the research, even though attendance levels appeared to be good. According to Stokes and Walton (1999:88), 20% of the 1,379 learners in Grade 9 to 11 at five schools in Leeds admitted that they engaged in poast registration truancy. When are learners likely to stay away from lessons? According to Coldman (1995:31), about 15% of all truants go absent after registration and thoses learners do not all miss the same lessons. Kilpatrick (1998:31) found that the absence rate increased rapidly during the day and was highest during the afternoon. It is therefore apparent that learners are more likely to leave after being marked present in the register, and to skip some of the afternoon lessons. This research shows that learners may attend all morning lessons but decide not to return to class after recess. How often do learners engage in post registration truancy? Coldman (1995:31) asserts that truants miss lessons several times per week. Most learners commonly use the term bunk when they refer to playying truant. At times, the word skipping is used instead when learners are absent from school or lessons without permission. Learners can therfore bunk certain lessons more than once per week. Some learners can be classified as occasiohal truants in the sense that they bunk class aout ibce every two weeks or choose a different class each time Kilpatrick (1998:31). There is also an opinion that truancy could start with a small number of missed lessons and escalte rapidly (Pasternicki, 1993:33). Research done at one secondary school in Austrialia shows that an improvement in attendance as shown in classs registers may be a change to post-registration truancy (Kilpatrick, 1998:33). This means that, if the registers does not indicate records of attendance during lessons, learners who engage in post registration truancy will be marked present as if they were in class for the whole school day. Learners may then come to school on a regular basis, but miss some lessons without being marked absent. One would then look at the register and think that attendance has improved when it has, in fact, changed to post registration truancy. What is evident thus far is that post registration truancy can easily develop into blanket truancy if it is not easily identified and appropriately managed and that when a register shows marked improvedment in attendance it m ay in fact be indicative of hidden truancy. Which lessons are most learners likely to skip? There are various ways of determining the lessons most learners are likely to skip. Some knowledge of the extent of truancy per subject is derived from research questions which asked learners to state their most favorite and least favorite school subject (Smith, M, 1996:231). Sometimes educators returns on discrepancies between the daily attendance sheet and actual in-class attendance are used (Kilpartrick, 1998:29). On the other hand, Bos et al. (1992:383) asked educators to complete a standard form to record the actual as well as the expected number of learners present per subject during lessons and used these data to calculate truancy percentages. Survey results collected from eight schools in London, Liverpool and Manchester between 1985 and 1994 reveal that Mathematics and Science are lessons that are most frequently missed by both male and female learners (Le Riche, 1995:19). In a study conducted by Smith, M. (1996:231), Mathematics was considered the least popular subject and, in fact, ranked first among the most unpopular subjects. Mathematics and English were least favoured by learners in some schools in Leeds (Stoke Walton 1999:90). Recent research conducted in some secondary schools within the London Education Authority (LEA) indicated that learners play truant during certain lessons. However, the sampled subjects often make no mention of the particular school subject or lessons missed. For instance, Malcolm et al. (2003:33) state that learners skip lessons, but only gave the following answer by a learner: Sometime when Im at school I go to the first lesson but dont go the second and third, if its boring and friends are leading me on at the time. What the above quote suggests is that it may be difficult to determine particular subjects that learners are most likely to skip because learners also succumb to the influence of friends and boredom and may not always skip the same lesson. Research shows that secondary-school learns in South Africa do engage in truant behaviour occasionally, and sometimes on a regular basis (Brown, 1998:298), although no figures appear to be reported about the real extent of post-registration truancy. The information cited in this section of the literature review indicates that some secondary-school learners engage in post-registration truancy. It has also been found that post-registration truancy may go undetected or unrecognized, since truants do not all miss the same lessons (Coldman, 1995:31; Stokes Walton, 1999:90). Post-registration truancy might even be higher than it is assumed to be. The data further show that learners are selective in the sense that they choose to skip some lessons for various reasons, which will be elaborated upon later in the next section. Given the complexity of the way in which truant behaviour can manifest, it may be reasonable to suggest that attendance rates indicated in a class register should be viewed with caution, particularly when it comes to post-registration absence. Do learners engage in both types of truancy? Some researchers stat that post-registration truancy is more common (Coldman, 1995:30; OKeefe and Stoll, 1995:11; Stokes and Walton 1999:90; Whitney, 1994:59), although many truants engage in both types (Milner and Blyth, 1999:18). According to an earlier study of English secondary schools, 26% of the students admitted to their engagement in post-registration truancy, while 14% said they engaged in both types of truancy (Stoll, 1995:36). There is therefore an indication that a certain number of learners engage in both types of truancy in some schools. Where do learners go when not at school or attending lessons? In order to understand and manage the phenomenon of truancy better, the authorities need to know where truants spend their time when not attending school or lessons. Learners appear to engage in various activities while truanting. It was found that some watch television at home while not at school (Le Riche, 1995:25), and either remain in the school building or leave the school premises altogether when not attending lessons. According to Stokes and Walton (1999:89), 25% of the learners report that they went to their own homes or friends homes, while 45% kept their destinations secret by choosing the other category. Given the figures mentioned above, it is possible that more learners spend time in homes watching television than assumed; some go to local shops or town while others engage in activities they will not easily disclose. Research information collected from a group of schools indicates that existence of various types of truancy. Perhaps it would be possible to get some objective information about the destinations of truants from other classmates of friends instead of posing direct questions to those who admit to have played truant. It is evident that explaining the nature of truant behaviour is complex exercise particularly when it comes to post-registration absence. What can be said about the phenomenon of truancy with reference to the literature is that learners can miss the whole school day or certain lessons and classes, or both. Further, skipping the whole school day or class could be occasional, thus concealing the extent of the problem. The extent of both blanket and post-registration truancy is further hidden when class registration is inappropriately done when period or lesson attendance records are not kept. Perspectives on factors that contribute to truancy Many perspectives on factors that make learners play truant are based on images and certain assumptions researchers have about the learner. Carlen, Gleeson and Wardhaugh (1992:85) identified four of those perspectives. Each of them focuses on some researches theories about the main cause of truancy, as discussed in the section below. Personality aspects According to this perspective, truancy relates to variously identified personality aspects of the learner (Carlen et al., 1992:85). Personality is defined as the individuals psychological, physical and spiritual characteristics that determine his behaviour in contexts in which he finds himself (Meyer and Viljoen, 2003:11). Therefore, the contributing causes of truancy are intrinsic and located with the learner. Some of the personal attributes if truanting learners that have identified in the literature are the following: Anxiety and fear In a South African study aimed at predicting truancy, Nel (1975: 125) found that truants tend to be more anxious and experience more stress related to frustration than non truants. It appears that this study is consistent with research finding where High School Personality Questions (HSPQ) test results revealed that truants are more sensitive and emotionally less stable than non truants (Malan, 1972: 147). This further confirms earlier research conducted among truants in England, which shooed that truants tend to be insecure and anxious (Tyerman, 1958:223). The concept of anxiety is often associated with psychoanalytical theory. According to the psychoanalytical theory of Freud, reality anxiety is fear about the actual dangers in the environment (Meyer and Viljoen, 2003:61). In terms of this theory, truancy can be regarded as a response that a learner adopts in an effort to avoid a potentially anxiety provoking situation or event. A learners fear of a threatening situation at school makes him play truant. Truancy is therefore a flight response or defense mechanism. According to Gillis (1992:13), young people tend to use defense mechanisms when dealing with awkward situations, some of which are discussed in the next sections. Poor social skills Poor social skills and a lack of confidence are also factors that contribute to truancy (Edward and Malcolm 2001:2). Lewis (1995:37) asserts that boredom, isolation and lack of friends may be pull factors that pull a learner off school. As stated in the previous chapter, pull factors are personal aspects within the learners, which may include shyness, a tendency to become easily distracted or bored, and perhaps an inability to make friends. It appears that an inability to cope with the demands of making friends triggers a strong impulse to escape from the anxiety provoking situation, thus leading to truancy. This means that some learners respond to a socially challenging or emotionally threatening situation at school by playing truant. Another school-based factor concerns bullying. Child psychologist, Lisa Padovani (2005) graphically sums up bullying as follows: Bullying is the willful, conscious desire to hurt, threaten or frighten someone. It can be a single attack on a person by an individual or a group or may be a longstanding campaign. Verbal abuse, taunting, threatening looks, emotional badgering, physical attack and sexual harassment are all forms of direct bully. Bullying may also be indirect; for instance being ignored socially or the spreading of malicious gossip. Bullying therefore is not simply a conflict between children but a case of an imbalance of power. It is an unfair match between bullies who are physically, verbally or socially stronger than victims who are generally unable to defend themselves in the actual situation (p. 26). The Clark Report (2005) reveals that this phenomenon happened when teachers were not around to observe (p. 29), and the reporting such incidents entailed further retaliation by the aggressor. Fenech ties the issue to alternative cultures which clash with the mainstream culture of the school (Bezzina, Camilleri Grima, Purchase and Sultant, 2002, p. 25), consequently constantly landing bullies in trouble with teachers and administration. Finding of Azzopardi and Bondin (1991) and Cassar (1997) reveal that students did not mince their words in admitting that they attended school merely to meet friends and have fun. They rebelled against stringent school rules, and consequently engaged in deviant acts like playing truant, drinking alcohol and smoking on the school premises, as well as bullying (Fenech, 1992). Low Self-esteem Research indicates that certain personality traits, including lower levels of self-esteem, make some learners more prone to absenteeism than their peers Reids (2002:11). However, research conducted by Sommer and Nigel (1991:389) failed to show a link between truancy and low self esteem and to some extent confirmed results obtained earlier in South Africa, where truants studied by Malan (1972:147) tended to be more assertive and dominant than the population. Cicourel and Kituse (cited in Gabb, 1994) look to the structure of relationship within school between teachers and pupils, how these progressively erode the self esteem of working class pupils and produce feelings of inferiority that, again, lead to delinquent behaviour. Ramsay (1983) claims that knowledge is being used as a form of social control. Behind the faÃÆ' §ade of mathematics and English, he argues there is said to be a hidden curriculum to keep working class children in their places. Anti-social behaviour Truancy is mentioned as one of the behaviours that are associated with conduct disorder (Sue, Sue and Sue, 1997:482). Conduct disorder is a diagnostic label used to describe children and adolescents who display a persistent and repetitive pattern of antisocial behaviours that violate the rights of others (ibid). Antisocial behaviours that an individual with conduct disorder displays include defying authorities, lying, fighting, cruelty to animals and people, as well as truant behaviour. Reid (1999:77) asserts that research shows that feelings of alienation from school and higher levels of anti-social behaviour are some of the characteristics displayed by many truants. This suggests that anti social behaviours make some learners more vulnerable to social alienation, in that an individual is likely to be rejected if his behaviour is socially inappropriate, and if he is disruptive. Therefore, a well behaved learner can easily make friends and suffer little isolation, and is more likely to cope with the stresses of schooling. The inability to cope with stresses of schooling, personality problems and social isolation are some of the factors that are identified as driving learners to play truant (Bimler and Kirkland, 2001:91). Scholastic failure Truants tend to perform poorly in examinations. Gray and Jesson (1990:26) state that, in England, secondary-school learners who admitted that they have once engaged in serious levels of truancy were likely to report low levels of exam performance. Learning problems Reid (2002:12) reports that regualr non-attendees are found among learners whose numerancy and literacy scores are two or more years behind their peers in primary school. According to Le Ritchie (1988:78), a lack of academic success creates a sense of frustration and a constant fear of failure. It appears that learners who experinece difficulty with schoolwork often play truant in an attempt to evade frustration. In some cases, learners may have begun to experience difficulty with schoolwork while still at primary school. An inability to cope with academic expectations and demands can contribute to truancy in secondary schools. Truancy appears to be a response to frustration and anxiety associated with difficult lessons. In many instances, lesson difficulty contributes more to post-registration truancy than blanket truancy (Hallam and Roaf, 1995:18; Kilpatrick, 1998:30). According to Smith, M. (1996:229), 80% of learners in a study conducted at twelve secondary schools Cognitive style It is not enough to assume that learners have difficulty with schoolwork and play truant as a result, without investigating how investigating how they learn and process infrormation. Research information on cognitive style provides us with insight into how some truants learn. Cognitive style is defined as a consistent and typical manner in which an individual organises and processes information (Riding and Read, 1996:81). There are two basic dimensions of cignitive style, namely the Wholistic-Analytical style, which indicates an individuals preference for processing information either as a whole or in parts, and the Verbal Imagery style, which shows a tendency to repesent information during thinking either verbally or in mental images (Rayner and Riding, 1996 :447). Rayner and Riding (1996 :447) conducted research on learners who have a condition that is known as school refusal. Learners who have such a condition refuse to attend school but stay at home when not in school, complain about headaches, stomach pains or nausea and show signs of anxiety and depression (Egger, Costello and Angold, 2003:1). In addition, such children tend to be complaint and well behaved, and, unliketruants, they stay at home with the parents; knowledge. Some children tend to di splay characteristics of both school refusal and trauncy (Egger et al., 2003:1). Rayner and Riding (1996:447) undertooik a study on learners with school refusal and found that they also have a well-established history of truancy. The study revealed that these learners tend to process information holisticfally (ibid: 449). This reseach therefore indicates that the congnitive styles of many truants tend to differ from those of learners who are not ruants. Furthermore, an implication of the study is that if educators fail to accommodate the differnet cognitive styles in their teaching, escapist behaviour in the form of truancy is likely to occur. Poor habits arising form initially legitimate reason School factors There is a theory that proposes that truancy is caused by various aspects of the school (Carlen et al., 1992:86). This theory explains truancy as a response to an inadequate education system. It appears that this theory is based on the perception that the schools and the education system in general are lacking, and thus force some learners to reject the very education that is thought to give them a better future. Proponents and supporters of this perspective would therefore argue that what is happening in the schools and the education system in general is what actually makes learners became truants. Inadequacies could be those located in the physical enviromnet, the school climate in terms of the learing and teaching atmosphere and the curriculum, if it is seen asw being irrelevant and not accommodating diversity. The perceived inadequacies in the school might alienate some learners and thus make them freel excluded annd became truants. It is also possible that some learners may have certain attitudes towards aspects of the school such as the buildings, particular subject and educators. Learners may als perceive their value system as contradictory to the values espoused by the national curriculum and thus find that curruculum irrelevant. These contradicting values and attitudes towards the school can create a sense of disaffection that manifests in the form of truancy in some learners. The various factors within the school that most reswearchers have identifed as contributing to truancy are discussed in the next section. Dilapidated school buildings and poor facilities School size movement between classes during lesson changes classroom management Bullying Reid (1999) states that school refuters are sometimes pupils who have been threatened or bullied and are afraid to return to school [bullied victims] prefer to give other reasons for their absence to their parents and/or school rather than face the consequences of reporting the bullies (Pace, 2004, p. 6). On the other hand, children may be so worried about tensions at home (ibid., p. 6) that they feign being bullied at school in an effort to draw attention upon themselves, in the hope of thwarting any unpleasant family plans that are rendering them anxious. Child psychologist, Lisa Padovani (2205) graphically sums up bullying as follows: Bullying is the wilful, conscious desire to hurt, threaten or frighten someone. It can be a single attack on a person by an individual or a group or may be a longstanding campaign. Verbal abuse, taunting, threatening looks, emotional badgering, physical attack and sexual harrassment are all forms of direct bulling. Bullying may also be indrect ; for instance being ignored socially or the spreading of malicious gossip. Bullying therefore is not simply a conflict between bullies who are physically, verbally or socially stronger than victims who are generally unable to defend themselves in the actual situation (p.26). The Clark Report (2005) reveals that this phenomenon happened when teachers were not around to observe (p.29) and that reporting such incidents entailed further retaliation by the aggressor. Fenech ties the issue to alternative culures which clash with the mainstream culuter of the school (Bezzina, Cammilleri, Grima, Purchase and Sultana, 2002, p.25), consequently constangly landing bullies in trouble with teachers and administration. Findings of Azzopardi and Bondin (1991), and Cassar (1997) reveal that students did not mince their words in admitting that they attended school merely to meet friends and have fun. They rebelled against stringent school rules and consequently engaged in deviant acts like playing truant, drinking alohol and smoking on the school premises, as well as bullying (Fenech, 1992). Educator learner relationship Teaching or instructional approach Family and other social factors Socio- economic status of parents Marital Status of parents poor parental involvement and supervision Peer influence Violence and drug use Approaches used in the management and reducation of truancy Personality Aspects Tutoring and mentor systems Counselling and therapy Truanting learners who show signs of having emotional problems relating to poor social skills receive individual and or group therapy (Dais, 1999:2; Harworth and Bardsley, 1999:163). According to MacIidowie (1999:122), attendance increased by 7% in two schools in Kent when the Education Welfare Officers intervention mesures included councelling sessions. Edward and Malcom (2002:2) assert that a learning eviroment that provides support for emotional and social needs is likely to raise the achievement of learners who are at risk of playing truant. The effect of this kind of support is evident in a study of a project at Swanley School, where MacIldowie (1999:123) reports that the attendance pattern of eight of the 12 learners improved significantly as a result of regualr support. It appears that individuals are likely to benefit from sessions where they listen to others with similar experiences and problmes. For instance, the Attendance Officer at Calhoun Intermediate School District re ports that the dropout rate decreased by 10% to 2% when students became involved in the Absence Addict Programme, a support group that is modelled after Alcoholics Anonymous (Rocho, 2003:2). The School It is important to mention that strategies and initiatives that are used at the level of the individual learners also impact on the school in general. The approaches that are discussed in this section mainly address issues pertaining to reducing the impact ofr school factors as a step towrds the management of truancy. Data collected by Chircop (1997) shows that rather than the students or their families, it is the school which is to blame (Sultana, 1997 p.357). Quoting Corrigan (1979), Willis (1977) and Reid (1985), she declares that students absent themselves from school so as to Shelter themselves from what they consider to be an unpleasant experience to challenge the value of schooling itself, and/or to repond to pressures arising from their particular situation as classed and gendered beings and to which the school is insensitive (ibid., p357). The majority of disaffected students she interviewed attributed their non -a ttendance to the labelling processes prevalent in the Maltesed education system which encourages intra and inter school streaming. Selection ipso facto becames an important function of schooling, [and failure, in turn, became inevitable,] since they are required by the system (Sultana, 1997, p. 359). This gives rise to the lowering of teachers expectations and a vicious circle sets in. Eventually, demoralised students end up accepting the powerful labels used by teachers and think of themselces as [failures,] ignorant and incompetent (ibid., p.358). Bencini (2002) claims that children are being forced to sit through a syllabus which is not suited for their personalities: Instead of adapting our schools to students, we are trying to force students to adapt to our schools. WE need to provide students with things they enjoy doing (Zammit, 2003, p.7). Using reinforcement and reward systems Using a variety of intructional approaches Effective monitoring, registration and recording of attendance Welcome back to school Student Welfare In Service training Inter-departmenal cooperation and government intiatives Actung fast on Leraner absence Ordinances Attandeance or truancy officers Prosecuting parents Awareness campaigns Whole-school development Conclusion CHAPTER 3: RESEARCH DESIGN Introduction The purpose of the study is to investigate the phenomenon of truancy and then to characterize the nature and associated factors, to ensure appropriate management thereof. It is envisaged that, with more insight, effective intervention strategies can be implemented. Furthermore, secondary -education decision -makers may take results into account when school-attendance policies are reviewed. The review of the literature presented in the preceding chapters reveals that secondary school learners continue to play truant and miss the educational opportunities provided by compulsory school regulations. Learners who play limit their own chances of acquiring the necessary skills to prepare themselves for future employment. We also looked at the different types of truancy , casual factors and various approaches that have been used to reduce truancy. This chapter describes the way the empirical study is planned and conducted, and will focus on the following aspects: The general and specific research problems and hypotheses The research method

Thursday, December 26, 2019

Legality And The Morality Of Insider Trading Finance Essay - Free Essay Example

Sample details Pages: 6 Words: 1841 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Is insider trading ethical? Is insider trading illegal? Insider Trading phenomena is controversial and is bringing a lot of discussion around itself. Some of the opponents claim that its both not ethical and legal to use information, which is not putted into public knowledge, while other opponents argue that insider trading increases market efficiency and does not any hurt to anybody. During this paper I will try to bring topic closer to the reader by providing the reasoning of both parties involved in discussion. What Insider Trading states for? Who is an insider trader? It is hard to define insider trading due to complexity of the topic, however the most common definition stands for: Insider trading is illegal when transactions like buying or selling stocks, bounds or other securities are based on information that is not available to the general public. In other words, the inside information which is used by inside traders to influence their decisions before publishing this information to public knowledge, thus giving them an edge in making the best deals, whether to buy or to sell. This competitive advantage according to the law is illegal and according to some scholar it unethical. Insider informer can take any forms. One can be a member of a company and has stock in the company, and finds out that your company is going publicly bankrupt the next day. Or, quite the opposite, if a business was to be buying out a major competitor, knowing that information before it was publicly announced would also be insider information. Paying someone to be a n informant from a company is also considered as insider information and again is illegal. Insider traders are usually defined as companys officers, directors and any beneficial owners of more than ten percent of the companys equity securities. However, American law is not limiting anti insider trading law only to these people. In the understanding of this law, any person who trades shares based on material non-public information in violation of some duty of trust. This duty may be imputed; for example, in many jurisdictions, in cases of where a corporate insider tips a friend about non-public information likely to have an effect on the companys share price, the duty the corporate insider owes the company is now imputed to the friend and the friend violates a duty to the company if he or she trades on the basis of this information. Don’t waste time! Our writers will create an original "Legality And The Morality Of Insider Trading Finance Essay" essay for you Create order Insider trading legal aspects. Insider trading was not always illegal. First regulation in the USA appeared only in 1929 when the USA Congress passed the laws limiting insider-trading acts, and created the Securities and Exchange Commission to enhance market oversight. Since that time much of the development of insider trading law has resulted from court decisions. Nevertheless there is still a legal dilemma about insider trading as for example: the law prohibits these insiders from trading on this information until the information is made public. But even then the definition of what is made public may not be what one thinks. Lets assume that a person working for a company on a proposed merger with another company happens to mention it to a friend who works for a newspaper or news broadcaster who then publishes the information. Has it then become public such that everyone is now free to trade in the securities? No. There are also strict interpretations on this subject. The information has become public when the company officially publishes the information by filing it officially with the appropriate authorities, meaning the Ministry of Finance. The other alternative is for the company, itself, to arrange its publication in two public media such as newspapers, TV broadcasts, etc. Even then, individual has to wait until 12 hours after it is made public. America has been a pioneer in criminalizing insider trading, but nowadays regulations, which prohibit this phenomenon, are present in law legislation in most of the countries all over the word. As example: In the UK, the relevant laws are the Criminal Justice Act 1993 Part V Schedule 1 and the Financial Services and Markets Act 2000, which defines an offence of Market Abuse.  [1]  Just like in American law, it is also illegal to fail to trade based on inside information. The principle is that it is illegal to trade on the basis of market-sensitive information that is not generally known. No relationship to the issuer of the security is required; all that is required is that the guilty party traded (or caused trading) whilst having inside information.  [2]  In comparison in Japan first law against insider trading appeared in 1988 but even now as Roderick Seeman claims that: many Japanese do not understand why this is illegal. Indeed, previously it was regarded as common sense to make a profit from your knowledge.  [3] Insider trading Ethical Dilemma. Even with existing laws and regulations, ethical dilemmas still exist and the laws are sometimes vague. When we analyze insider-trading phenomena, we can ask ourselves the question what is wrong in taking good luck and opportunity to advance in business and profit? I would answer NOTHING, except the fact that it is an illegal act. That is why some economists and authorized scholars, like Henry Manne, Milton Friedman, Thomas Sowell, Daniel Fischel, Frank H. Easterbrook argues that laws, which makes insider trading illegal should be cancelled.  [4]  They claim that insider trading based on non-public information benefits investors, as well, by more quickly introducing new information into the market and in this way speeds up market efficiency, which is a benefit for all parties. Moreover according to some economist such control over the stock market is too much government regulation in the stock market, and in same way is harmful to capitalism. Henry Mann, argues that the legi slation has not stopped insider trading from happening, and that legalizing it is a sensible solution to the improper regulation that ultimately hurts the market. He also claims that if insider trading is allowed, it will allow stocks to show its actual worth, rather than have the price tempered by waiting for the information to go public.  Ã‚  [5]  Another great economist Milton Friedman, laureate of the Nobel Memorial Prize in Economics, said: You want more insider trading, not less. You want to give the people most likely to have knowledge about deficiencies of the company an incentive to make the public aware of that. Friedman did not believe that the trader should be required to make his trade known to the public, because the buying or selling pressure itself is information for the market.  [6] This brings me to another critical issue. Does the fact of possessing information bring necessary any value? No, because to act on any piece of information requires interpr etation of that information, which in turn requires a large number of other pieces of information. Lets imagine that for example Apple announced that that its Q4 profits have raised by 45 percent. This doesnt really tell anyone how to perform it in the market for Apple securities, whether to buy or sell. This requires additional general knowledge about IT market, the profits of other IT companies and Apple main competitors future actions plan and so on. Only if we add to the Apple announcement information about Microsofts profits, which let says, could have raised by 100 percent, we can draw father conclusions. So any single piece of information about a company, however critical it may be to that company and its future, does not in itself provide clear instruction to the investor. Action requires interpretation, which requires wider knowledge. Many market theorists have argued, that insider trading enhances market efficiency, smoothes price volatility and reduces the likelihood o f price shocks arising from unexpected events.  [7]  On the other hand, when we think about illegal aspect of these phenomena it is hard to not agree that providing information which are not public to the everyone knowledge introduce the problem of the fairness. Fairness which in these case would hold that in a fair market, all parties have equal access to information relevant to asset valuation, but entitled to nothing more.  [8]  So in this situation insider trading is perceived as an unfair act, it causes some injury to specific traders or potential traders, or because it causes investors as a whole to lose confidence in the securities markets. To illustrate, assume that insiders are aware of negative information regarding Alpha Corporation that, if disclosed, would cause the current per share market price of Alpha stock to drop from $25 per share to $20 per share. Prior to public release of the information, Alpha insiders sell Alpha stock on the basis of this negative in formation, reducing Alphas price to $23 per share. Some outsiders will undoubtedly sell at $23 and could thus legitimately claim to be $2 per share poorer than they would have been absent insider trading. A corresponding number of investors, however, will purchase at the more correct price of $23 per share, making them better off than they would have been in the absence of insider trading. Although the $23 per share price is higher than the $20 per share price that would have prevailed if the insiders had been forced to reveal their secret information prior to trading, this harm is attributable to the lack of a general duty to disclose material non-public information under the federal securities laws and not to insider trading.  Ã‚  [9] This example touches another critical issue in the insider trading discussion like stock price manipulation phenomena. We can imagine the situation where insider traders manipulate investors by releasing fails information about company in o rder to move market prices away from their fair values and take financial benefit from it. As the last, insider trading also violates the duty of trust or confidentiality that one individual or business entity owes to another. This causes loss in confidence in the securities markets. People fear that insider traders regularly take benefit at their expense, which lead to decrease people in willingness to invest. In this case raising new capital would be more costly for companies whose securities were harmed by insider trading. Hence, all else being equal, insider trading makes it harder for companies to raise money when opportunities to undertake new projects arise. Conclusion For sure there are no clear and easy answers to the question of regulating insider trading. Insider trading may have benefits for both the company and the capital market under certain conditions. As was presented above insider trading can positively influence the market effectivness Henry Manne Insider Trading and the Stock Market. However, the arguments against regulation show a certain ambiguity and doubts of regulators are proven. Even though scholars often argue that fairness considerations do not carry much weight, the personal feelings of the individual investor and his confidence in the integrity of securities markets must be taken into account. Although insider trading can have positive effects for the firm and its wealth, as the arguments of deregulators show, it also bears several severe risks. The costs seem to outweigh the benefits.  [10]  Therefore, it is correct to prohibit insider trading by a mandatory regulation.