Oracle and PeopleSoft

In this paper we will discuss the Oracle Corporation and its aggressive bid to acquire PeopleSoft and after acquiring the way it managed its software business, employees and the merger. Even before the purchase it was a known fact that Oracle intended to discontinue PeopleSoft products eventually.
Oracle wanted to get rid of the competition from PeopleSoft because customers requiring Enterprise Resource Planning Software normally negotiated with several ERP software companies before buying one of them and since each license costs a huge amount Oracle Corporation was losing huge amount of business and hence decided to buy and ease off the competition and gain a larger market share in the enterprise level softwares.
Look for a merger or an acquisition and collect information about it.

Oracle Corporation Today
Today Oracle Corporation is ranked as the third largest software company with respect to revenue generation in the world behind only Microsoft and IBM. Oracle is known for its flagship database management software but it also produces enterprise level software namely Customer relations management (CRM), Enterprise resource planning (ERP) and supply chain management (SCM).

Oracle has become a leader in the enterprise level software by several acquisitions over the past it has aggressively acquired large companies such as Siebel Systems, PeopleSoft, Portal Software, Stellent, MetaSolv Software, Hyperion Solutions Corporation and Sun Microsystems and BEA Systems.

One of the major acquisition till today that oracle has made is its acquisition of PeopleSoft. Oracle after a long battle acquired PeopleSoft and signed an agreement for 26.50 per share (10.3 billion dollars).

Until 2004, there were four large software companies that were producing enterprise level software namely Oracle Corporation, People Soft, J D Edwards and SAP AG. The first three were in the US while the last one was in Europe.

Oracle in its bid to become the largest and biggest enterprise software maker, under the aggressive management of CEO and founder Larry Ellison, showed its intent to purchase the other smaller companies of Enterprise Resource Planning software. This resulted in long tussle between Oracle and these ERP software making companies. Oracle showed interest in acquiring PeopleSoft as well as J D Edwards and approached both the companies but its offers were rejected by their boards.

PeopleSoft later acquired J D Edwards to counter the acquisition attempts of Oracle but couldnt handle the pressure and finally was bought out after the long takeover attempts starting from 7 billion, at the beginning of 2003, and finally ending at  10.3 billion, at the end of 2004, totaling approximately 2 year.

Before being taken over by the Oracle , PeopleSoft acquired J D Edwards to stay in the business and fight off the Oracle bid , therefore it is clear that Oracle not only purchased PeopleSoft but J D Edwards too in a period of two years.

Oracle Corporation is organized into several business units, none of the members of the board, which consist of 12 members, are from PeopleSoft, the largest acquisition of Oracle to date. The Oracle had to completely change its business strategy after acquiring PeopleSoft.

Out of the four main areas in which merger and acquisition could be discussed are finance, economics, organizational, and strategy, in this paper we will discuss the strategy of the Oracle Corporation, before and after acquiring PeopleSoft, to continue and in fact grow its business in ERP domain.

As stated Oracle sole aim to acquire the PeopleSoft was to extend its business horizontally and have a bigger market share in Enterprise Resource Planning and other Enterprise related softwares. Oracle planned the transition of merging the two large companies very smoothly.

Before acquiring PeopleSoft, Oracle announced that it intends to keep the PeopleSoft existing customers and was able to retain 95 of all of its customers by providing continuous support to the PeopleSoft products and by retaining the PeopleSoft existing products, although it has stopped developing the product but the support to the PeopleSoft product has continued, Oracle though has announced in the same connection that it will fuse the PeopleSoft and Oracle ERP with a slow transitional process by introducing fusion products in 2 years time frame, Oracle is successfully following this path right now. Look at the picture 2 to have a deeper insight into the merger of Oracle and PeopleSoft businesses.
Choose one field of the four ones in the course.

Oracle after the Acquisition of PeopleSoft
After the merger the Oracle moved aggressively to integrate the PeopleSoft business with its own and not only had that Oracle emerged successfully in satisfying the customers of PeopleSoft and retaining them. Oracle was able to do this successful merger by several difficult decisions.

Change in Management
Oracle had to shuffle the whole board over the period of time as well as the management of the PeopleSoft to get rid of the competition arising within the company, this was necessary because the managers of the PeopleSoft would never be able to work in a peaceful manner with the Oracle manager, hence for the smooth running of the company this was an essential step. The reason given was the fact that PeopleSoft board fiercely fought this takeover battle

Oracle cut jobs
As a result of the merger, Oracle had to cut at least 6000 employments, mainly from People soft. At the merger the combined work force of the two companies was 55000 and hence a 9 overall reduction in employees took place. Oracle kept the engineers of PeopleSoft and J D Edwards but laid off most of the other supporting employees, it should be note that People Soft had 11,255 employees just before the acquisition by Oracle took place.

The acquisition had brought resentment among the employees of the newly acquired company because several of their co-workers had lost jobs and the co-workers feared that they would also be laid off once the transition of the two companies is complete this is a common fact and has been observed in several other mergers in the past but Oracle was able to deal professionally with it and kept the PeopleSoft and J D Edwards support and development engineers and awarded ones who were performing exceptionally hence buying their loyalty.

Change in corporate environmenIt is a known fact that PeopleSoft had an easy going and a friendly corporate environment and Oracle had a hostile and an aggressive environment. Oracle had to change its corporate strategy in the light of the new employees and the acquisition and hence it was able to complete the merger in deeper terms and brought harmony among its workforce.
Write a brief case trying to tell a story about the field you chose.

Why was the merger necessary
Both the companies had related business and hence with the merger the Oracle was able to capture a larger market in enterprise levels software and expanded into the database markets.

The aim of the merger was to give the joint company larger consumer base, extended brand reach, critical mass in more industries, and be able to provide considerable business support which has definitely been achieved.

It is of interest to note that Oracle had to buy the PeopleSoft not because it had access of cast but its power increased within the market and it controlled it in a such a way that it could dictate the cost of the product as the price of deployment of such a ERP product and its development is very cost intensive.

Analysis of the acquisition of PeopleSoft
Oracle made it clear during its bid to purchase of PeopleSoft that the PeopleSoft software products would end eventually and only the Oracle developed softwares would remain but this was to phase out at a long period of time. This was helpful for the existing customers of the PeopleSoft and J D Edwards and helped Oracle in maintaining the trust of the customers because the way the PeopleSoft was purchased scared investors, stockholders and customers and they thought that right after the purchase the product support would end but nothing like that happened and hence Oracle gained market credibility.

Before the acquisition Oracle explained in detail to the customers and the stockholders that this buy out will cause Oracle  to have operational skills with increased distribution channel and enhanced technology and it would be benefit of the customer and in the long run increase the worth of the companys stock.

The studies show the Oracle had a very detailed plan on how to integrate the engineers of the new company with its own and how to develop products so that the PeopleSoft product is phased out but at the same time the customers are not affected this was a very vital part of the merger as the engineers were to be trained to develop the code for the Oracle who came from PeopleSoft and at the same time keep the company integrated, as there was a chance of old engineers vs. new engineers battle and hence a complete collapse of the company was possible.

Since there was no other bidder for PeopleSoft and the full intention was to end the business of PeopleSoft and the bid to acquire was hostile, Oracle received much criticism and got defame but it quickly gained it back and gained the confidence of the customers by adopting the strategy of providing continuous support to the PeopleSoft customers.

This acquisition provided expansion possibilities for the Oracle by removing a large competitor and letting the Oracle maintain a large market and enabled it to dictate the prices.
During the legal takeover battle, SAP, the second largest Enterprise Software maker, successfully gained importance and took advantage of the situation and was able to convince the PeopleSoft and J D Edwards customers to migrate to the SAP with financial incentive as Oracle was suppose to push for its own software and may have caused these customers to spend millions of dollars.

The transitional process of the merger of two companies is important and we will relate one of the slides used in the class with it and explain accordingly that how did the transition worked with respect to the product as well as the employees.

Figure 1 companys merger and then integration
Then write analysis using the models and theories in the course
Figure 1 explains how the integration of two companies take place , After the takeover the PeopleSofts was completely absorbed in Oracle with reference of manufacture, marketing and financial control, though there was overlapping manufacturing taking place to support the existing business of PeopleSoft and this corresponds to the right most and top most potion of this graph.

This merger was very complex it involved the regulatory policy makers from US and EU which monitored the transition in the light of antitrust laws. Both the companies had large number of customers with multinational businesses hence the negative impact to the joint company could have affected these businesses. Further the transition was of very importance as this affected the economy of the world on a large scale and there was much speculation. Oracle utilized the merger and acquire polices to effectively channel the integration and growth of the Enterprise Resource Planning

This acquisition benefited Oracles shareholders and increased the economies of scale as well as economies of scope and today, after 5 years the company is doing very well and its future is very promising.

Figure 2 A timeline displaying Oracle Corporations acquisition of PeopleSoft, Inc, software product release dates and maintenance support for ERP applications through 2013.

The merger has lead to the emergence of one ERP company and now the customers no longer have to look at several options to choose one, this has ended the options for the customers but it is also good for them, the single vendor has resulted in better products and customers can now purchase newer modules and build upon their existing database and ERP with their growing needs.

The reporting structure within the Oracle has been simplified too the main arms of Oracle today are Marketing, Support, Research and Development. The simplified structure has lead to more concrete efforts on building systems that can help the large as well as small companies.

At this point we can look at another slide from the course and can relate very well to our case study, as you can see the merger has resulted in common product and process technology and there is a central R  D now which can focus more.

The best of the two design teams have now come together to give customers a product that is very user friendly , other items from the list can also be easily related to the Oracle- PeopleSoft merger case.

If you relate to the slide from the course it is clear that the merger has further resulted in unified strategy of the company in terms of shareholders, accounting,  , management style, Legislation, governmental relations etc.

The corporate value of the Oracle after merging with the PeopleSoft has also increased, as you can see that the two companies had their own worth but when combined together their value has increased even more because of the corporate membership benefits. Utilizing the concept of Corporate Value formula we can demonstrate that this merger has caused in increase in the value of the two businesses combined.

Mcor  value resulting as a result of combing all these entities as their  combined technical and marketing and support departments can better serve the customers and help increase in the business of Oracle Corporation

Future of Oracle
With this acquisition and series of others Oracle Corporation has become a leading Enterprise Resource Planning and Database management company. Gartner in its 2008 report mentioned that Oracle had a share of 48.9 in the Worldwide RDBMS Market Share 48.9.

Oracle became a leading supplier and of Enterprise Resource Planning Software with several acquisitions one of the largest acquisitions it has done to date is of PeopleSoft, the bid was hostile and PeopleSoft rejected and tried to stop the acquisition for at least two years but later couldnt hold and the company was sold to Oracle at a price of 10.3 billion US dollars.

The acquisition made the Oracle third largest software revenue maker in the world and increased its market share, Oracle due to this merger holds more market share then 6 of its closest competitors, To manage the acquisition and merger of the product, the Oracle management had devised a detailed plan and one main way to integrate the two companies and save the business was by continued support of the PeopleSoft products for a long period of time, this helped retained the customers of the acquired company and fulfilled the purpose of the merger.

Merger Acquisition Tata Steel UK Ltd Corus Group Plc Acquisition Strategy.

Tata Steel, Indias leading steel maker acquired UK based Anglo Dutch steel maker Corus group for 4.3 billion. The Boards of Directors of both the companies approved the acquisition of Corus at a price of 455p per share in cash resulting in the worlds fifth largest entity with a capacity of 23.05 million tonnes per year. Tata Steel in a vertically integrated manufacturer and is one of the worlds most profitable and value creating steel companies whereas Corus is Europes largest steel producer with 9.2 billion revenues in 2005 and 18.02 million of crude steel production. (Pratiyogita Darpan, 2006) The PHD Chamber of Commerce and Industry stated that the acquisition of Corus by Tata was the first by any Indian company which placed India on the global scenario from Tata Steel ranked 56th before the deal became the fifth largest producer of steel. (Mahendra Gaur,2005)  The process of bid went through nine rounds along with the other contender CSN from Brazil, which increased the price 34 above Tata Steels initial offer to 11.3 billion. Tata Steel proposed to finance the deal using debt approach and the decision resulted in 11 fall in shares.

The costliest bid, as agreed by analyst, led to re-rating and valuation of the other industries in the Indian market. However, Tata Steel was able to clinch the deal from Brazilian Steel giant CSN that forced Tata Steel to increase its bid by 33.6 from its initial bid of 455 pence to 608 pence, 5 pence more than CSNs bid. (Pankaj Hambarde) According to analysts, Tata was paying too much for the Corus and that debt incurred to acquire the company would affect companys performance and future earnings. (Micheal A.H et al, 2008) Pratap G. (2008) states that Tata Steel adopted an LBO route to finance the acquisition and planned to raise over 10 billion for financing the deal. The entire financing structure was broken into two parts - 3.5 billion raised from Tata Steel and the remaining amount to be raised through LBO structure. The financial statement for both the companies shows that revenues of Corus were three and half times higher than Tata Steel in the year 2006 and will similar net income rate. The deal was financed through equity contributions from Tata Steels 3.88 billion, the consortium was lead by Credit Suisse which financed 45 further joined by ABN AMRO and Deutsche Bank each financing 27.5 of the required 8.12 billion to complete the entire process.(Pankaj Hambarde)
   
The Tata takeover marked the beginning of the growth of manufacturing sector, providing the industry with necessary push which was essential to facilitate a sustaine GDP growth. Amit Mishra, Secretary General, Federation of Indian Chambers of Commerce and Industry said that the acquisition was a milestone marking the beginning of realization of Indias dream of becoming the third largest economy in the 21st century. (Mahendra Gaur, 2005) The acquisition offered Tata Steels the opportunity for taking advantage of synergies and doubling the present national average earnings before interest, taxation, depreciation and amortization of the new company to about 25. (Great Britain, Parliament, House of Commons, Welsh Affairs Committee, 2009) Adrian and Alison (2008) mentioned that firms can take advantage of synergies between their different operations and product lines. The acquisition fits in with the Tata Steels strategy of achieving global reach in Europe and synergies with low cost intermediaries in India. (Brian and Nandini, Business Week) Through acquisition of Corus in 2007, Tata Steel was able to gain access to Corus Rolling Mills and distribution channels in Europe, while Corus gained access to Tata Steels in house sources of iron ore. The takeover by Tata Steel has led to its prominence in the global steel industry in terms of reach and production. 

A senior analyst tracking the group said that the acquisition process is safe at least in terms of investment as Corus was six times bigger than Tata Steel, ranked ninth in the world before acquisition and three times bigger than Tata Steel in production. (Justin and Ramneek, 2008) But due to the recent slowdown or credit crisis, the industry experts viewed the timing of acquisition turning out to be wrong and most of them opined that deal was done at the peak valuation as almost all asset classes started declining from late 2007 onwards.
The acquisition was the biggest by any Indian company of the overseas industry. This placed Indian industry on the global arena with Tata Steel ranking 5th in the list of worlds largest steel manufacturers. Tata Steel with the acquisition of Corus got entry into European market and other synergies also.

Part II
Acquisition is the process when one company takes over another and clearly establishes as the new owner. Legally, the target company ceases to exist the buyers swallows the business and the buyers stock continues to be traded. The process includes purchase of asset, business, share and apportionment of risks. The process of acquisition starts with finding a target company, appointing advisors, negotiating terms, due diligence, exchange of contracts and completion. While finding a new target business, synergy operations, entry into new markets, vertical integration and achieving the strategic objectives of the organization are the important points to consider.  (Pankaj Hambarde) Merger and Acquisition perspectives are based on economics, organizational theory, finance and strategy. According to Jensen (1987) market for corporate control is benefiting shareholders, society and the corporate form for organization. Corporate control transactions and the restructuring accompanying the merger and acquisition can be wrenching events in the lives of those involved in organizations managers, employees, customers, suppliers and residents of surrounding communities.

Jensen (1987) states that many factors force the process of acquisition which include deregulation, synergies, economies of scale, and scope taxes, managerial incompetence, and increasing globalization.  It is further mentioned that the agency costs associated with conflicts between managers and shareholders over the payout of free cash flow, which is one of the major cause for acquisition, has received little attention. Agency costs are the total costs that arise during the process of corporate strategy which include the costs of monitoring the managerial behavior and other inevitable costs incurred due to the conflicts. Myers and Majluf (1984) argue that financial flexibility can be achieved when a firms manager have better information than the outside investors. The theory explains how debts for stock exchanges reduce the organizational inefficiencies fostered by substantial cash flow how debt can substitute dividend why diversification programs are in the same line of business, why mergers with in an industry and liquidation motivated takeovers will generally create larger gains etc. (Jensen, 1987)

Jensen (1993) mentioned that cash flow in excess of that required funding all projects that have a positive that have a positive net value when discounted at the relevant cost of all, the amount should be returned to shareholders for maximum efficiency instead the managers prefer to fund increased growth through expansion or diversification. The Free Cash Flow theory as mentioned by Jensen (1987) assumes that managers of the firms with unused borrowing power and large free cash flows are more likely to undertake low  benefit or even value destroying mergers. Diversification programs generally fit this category, and the theory predicts that they will generate lower gains. Merger and Acquisition benefits shareholders of target companies like premiums in hostile offers exceed 30 on average, in past and presently 50. The acquiring firm shareholders on average earn about 4 in hostile takeovers.
   
Further it is also reported that managers receive handsome incentives for investing free cash flow for growth diversification in form of increased power, compensation and firm size positively correlated, promotion opportunities are greater in bigger companies, social prestige, diversifying employment risk, management entrenchment. It is further mentioned that firms with positive free cash flow, the theory predicts that stock prices will increase with unexpected increase in payouts to shareholders and decrease with unexpected decreases in payouts.
   
Coase (1992716) states that businessmen have to take into account the transaction costs while deciding on their ways of doing business. It is also stated transaction costs may prevent large part of economic activity. The various types of transaction costs include negotiating, writing and enforcing agreements contracts costs of opportunistic behavior preventing the same measurement, haggling, search, coordination, checking, etc. The advisors were involved in negotiating terms related to financial strength, nature of the fit, strategic intent, sharing of resources and legal documentation regarding transfer of shares, employees, tangible and intangible assets, liabilities, etc. (Pankaj Hembarde) Transaction costs are favorable in alliances if they involve impediments, are complex, non routine, excessively costly for one party to do it themselves, market opportunity is transitory or uncertain in duration, etc. (Chris Smith)
   
It is important to mention here that holdup between the negotiations can result in more difficult negotiations and more frequent negotiation, as in case of Tata Steel, investments to improve ex post bargaining positions, distrust and reduced investments in relation specific assets. (Chris Smith)     It is further stated that if acquisitions are well planned, executed and necessary precautions are taken for the deal a company can achieve its strategic objective and ensure its continuous growth. Thus, Tata Steel, through acquiring Corus, can confidently target becoming one of the top 3 steel makers in the world by 2015.

Mission and Strategy

Wal-Mart is the worlds largest chain of retail stores it has over five thousand stores in over nine countries, it is also the worlds biggest corporation and was founded in 1962 by Sam Walton in Arkansas. Since then it is worth one hundred fifty billion dollars, and employs 1.3 million people in over 4600 national and international stores (Meek, Palmer  Parkinson, 2007, p.56).
   
The business divisions of Wal-Mart have been segregated into Wal-Mart stores, supercenters, Sams club warehouses and neighborhood markets (Kneer, 2009,  p.2). Wal-Mart stores carry general merchandise, a selection of food sections and also include home supplies, mobile stores, gadgets, cash points, a food joint and a gasoline station.

Wal-Mart supercenters are stocked with the same range of products as found in a discount store, the only difference is that they also have a McDonalds joint they also stock poultry and meat products in a range of varieties and also stock pharmaceutical products (Wikipedia, 2009).
   
Neighborhood markets stand between discount stores and supercenters and although they have a limited selection of food items, they have a pharmacy point and other amenities. Sams clubs have been described by Ferrell, Fraedrich  Ferrell (2009) as
Membership warehouse clubs which provide brand name merchandise as members only  price  for small businesses, nonprofit organizations and personal use for large families(p.293).
   
The mission statement defines the purpose of the company to remind its workers of the reason behind the existence of the company, and is inculcated into their strategy and plans. The vision statement of Wal-Mart is to   Save money. Live better or to help people save money so they can live better (Silber Kearny, 2009, p.99). Wal-Mart explained their   mission statement by stating that they act as buyers for their consumers and strive to get the best value for them (Hill Jones, 2007). Though there have been concerns about the achievement of this mission, as Wal-Mart has cut down the healthcare benefits of their employees in order to offer better prices to their consumers.

Their mission is in tandem with their vision statement, which is an   image of the goals of the company that the organization strives to achieve over a period of time it serves as a benchmark for the employees of an organization (Graham, Roth  Dugan, 2009).  The vision statement of Wal-Mart is to become the world leader in retailing (Romeo, 2008, p.5). Wal-Mart has almost   achieved this vision, as Craig Johnson, president of the consulting firm Customer Growth Partners, states that Wal-Marts share of the 3 trillion U.S. retail market has edged up to 11.3 percent (Kapner, 2009, para.5).

The importance of an organizational culture lies in its ability to provide cohesion in between the goals of the company and that of the employees, thus a worker is able to put the benefit of the company over hisher own personal gain and it is often considered the accepted behavior and norm in handling situations (Brunn, 2006).
Wal-Mart has an all-encompassing organizational culture as well which is obvious in its  artifacts, values and underlying assumptions(Schein,1990) The employees of Wal-Mart wear blue vests with their first names and company slogan printed on the front and back which says We Work For You Always  and the back Our People Make The Difference. There are several postures as well that show Sam Waltons picture along with the slogan Pride Though Performance (Brunn, 2006).

The values of Wal-Mart can best be emphasized by the fact that there is a Wal-Mart employee who is always there to greet a customer their values are in providing service to customers and in emphasizes religion, patriotism, a classless collective identity, science, rationality, ecology, progressiveness, and low costs (Andre, 2007, p.448).

Wal-Marts underlying assumption lies in Sam Whartons corporate strategy that emphasizes on competition and accountability of managers and management people. Wal-Mart is also a highly capitalistic corporation that replaces small town culture with new patterns and identity (Andre, 2007, p.449). Wal-Marts values and assumption are based on a consumerism and provide the best possible quality at the lowest price.
 The organizational culture of Wal-Mart is in cohesion with its environment as employees show every bit of dedication to customer service and satisfaction. The managers are on the floor and are eager to solve queries that are beyond the job descriptions of executives thus the mission statement and the organizational culture are in cohesion. 

All of Wal-Marts strategies are based on its mission statement and they are not only cost competitive but also market leaders in reducing product packaging by keeping the prices that it got from its customer low as well (Dyck   Neubert, year, p.237).
It is naturally assumed that in a corporation like Wal-Mart, with its growth, its employees would benefit as well. Since its competitive strategy is based on low prices, Wal-Mart has had to seriously cut down on employee benefits like healthcare (Brunn, 2006).

There are other concerns which include its HR strategies, personnel policies, wages and possible gender discrimination. It has been reported that the workers are only paid the minimum wage rate and there have been allegations that Wal-Mart deliberately under-staffs its stores.     There also have been rumors that Wal-Mart is biased against pregnant women and often overlooks them on promotions and other opportunities (Brunn, 2006).

The WaltMart store that was visited is a discount store with 200 associates. The store was brightly-lit, with well-stocked aisles the floor was divided into sections according to the items which were being sold. There were separate sections for apparels and separate sections for home products and other categories of products. Every item in the store was properly categorized and kept in its proper place.  
The organizational structure of Wal-Mart can be described as divisional in style and has been divided into regions, every region is managed by a regional vice president it is further divided into eleven districts, which are managed by market managers and each district has six to eight stores which are managed by store managers.

The store managers are responsible for the management of the entire Wal-Mart store and have customer service managers working under them, who supervise management trainees and are also assigned to the management of various sections in the store, they form the management hierarchy of the store, below them are the associates, cashier and stocker workers on an hourly basis (Bobby, 2005). Research Methodology
   
The purpose of the study was to analyze the difference in organizational culture and climate as typified by the Wal-Mart Corporation and the ground realities as projected by the results of the research study.   The Wal-Mart discount store which was selected was through cluster sampling and was chosen on the basis of its proximity and size for the feasibility of the study.

The sampling frame consisted of 25 associates and two CSMs who were selected through stratified sampling method  as the associates and CSMs were on the floor constantly, and the sampling elements were chosen randomly from  the household items and electronic appliances section  (Babbie, 2009).
Close-ended questionnaires  in  explorative methodology were used in this research, as it provided easily analyzable quantitative data which could be easily coded and did not  require too much time and effort to complete by the sampling elements in this study .

Self administered interviews were conducted across the aisles of the household and electronic appliances section, the advantage of this method was that the questionnaires were filled in a relatively short period of time and the interviewer can personally filter the sample elements (McNabb, 2002).

The questionnaire was prepared on the basis of clarity, brevity, simplicity, precision, freedom from bias and appropriateness(McNabb, 2002, p. 130) and was constructed   in the comparative, interval and ordinal importance rating scales structure based on the Thurstone scale, Likert scales and  semantic differential scale.
Thurstone scale is an ordinal importance scale, wherein it is possible to measure the precise amount of difference between one elements attitude towards another one (Mc Nabb, 2002). In this method, the sample is given a range of options and one has to rate these options according to the level of importance one has attached to it (McNabb, 2002).

The Likert scale is the most popular method of extracting primary data. The objective of the Likert scale is to measure the extent of the subjects agreement with each item, this extent is measured on a five point scale as the scaling items are assigned values ranging from 1 to 5.  (Mc Nabb, 2002, p.141)

Hypothesis
There is an association between the organization climate as created by the management and the motivation and performance of the associates in Wal-Mart.

Results
From the raw data it can only be concluded that associates are more concerned about their job security. When asked to rank their preferences on the rating scale, associates gave more importance to job security, satisfying the boss, higher salary and more benefits. On the Likert scale, it was observed that employees were more concerned about the evaluation criterion of the boss as their incentives depended on it and also cited the need for more resources and cooperation from their team members.  The standard deviation that was calculated for each answer also signifies the fact that the answers more or less cluster around the mean which signifies that the answers of the associates were more or less similar and  thus the results that have derived are accurate with Std dev of 0 in some cases.

Thirty three percent of employees believed that they were given promotions and pay according to their performance and are moderately concerned about their jobs, acknowledging that the management has a stressful job. However employee morale is comparatively better as the management tends to listen to their employees.  Despite the insecurity of their jobs, employees have shown dedication but feel that associates still have skills that have not been utilized by their employees. 

There is a positive note to this research as associates feel that the CSMs are concerned about them and do take their complaints and suggestions on board. Communication between the departments has been rated highly, although associates believe that more efforts are needed in order to improve the frequency and consistency of information update between management and employees.

Conclusion and Recommendations 
Organizational climate has been defined as peoples perception and experiences in terms of warmth, trust, dynamism, and other affect laden dimensions (James, 1982). The current state of the organizational culture is such that employees are more concerned   about making a good impression on their supervisors than on actual commitment to their job profile, as is commonly known, Wal-Mart has had to make substantial cut-backs on health benefits and had even laid off several employees in order to remain cost effective in their competitive pricing strategy. 
   
The attrition rate in Wal-Mart is at thirty three percent, which is much higher than the rate in any of their competitors. The cost of training and recruiting staff is much higher than actually retaining long term employees. As signified by the analysis, employees motivation is at all times low, caused due to low scale salaries, possible unemployment and lack of promotion options currently available at Wal-Mart.
 The two customer service managers who were interviewed   believed that employees were highly motivated and employee goals and company objectives were in cohesion with each other. They also believed that employee motivation was strong and they were satisfied with the work environment. However, the statistical analysis and standard deviation showed other results.  The organizational culture is changing as the company adjusts itself to maintain its retailing edge over other competitors.
Various stratagems have been suggested in order to increase employee motivation and retain qualified associates

Re-introducing Wal-Mart  It includes comprehensive training sessions with the associates wherein the employees are reacquainted with Wal-Mart goals, objectives, and strategies. They can also highlight Wal-Marts latest international accomplishment, in order to instill a sense of pride and belonging among the employees.

Daily Competitions In order to foster a healthy competitive environment within the company, it is suggested that daily fun competitions be held wherein a nominal prize is offered to the employees who provide the best customer service in one day.

One to one Sessions These are especially useful when there are rumors floating via the grapevine about negative company strategies. Thus CSMs and store managers can have team meetings and one-to-one sessions to assure employees and various initiatives taken for employee retention, increasing employee benefit.

Mentoring Employees are mentored on the job and given adequate training to complete their job in an effective manner and given periodic feedback on their performance and methods of improvement.
Employee Participation   it is believed by organizational theorists that increasing employee participation in decision making has a direct impact on their job satisfaction and helps reduce role conflict and ambiguity in communication (Jackson, 1983).

My suggestions were met with a fair amount of skepticism as the CSMs insisted that the changes and programs that I recommended were already being implemented in the organization.  However they acknowledged, after scrutinizing the results of the analysis,  that the motivation amongst the hourly workers was low  and action would be taken to  improve  employee morale after discussing with their market manager.

ARE GERMAN BANKS RISKIER THAN THE EUROPEAN COMPETITORS

Basically, German public banks operate in the same fields of business as private banks including the European banks (Frenkel, et al 2004). However, there are significant differences between the German bank and other private banks in both domestic and foreign markets. The creditors of the German public banks are at no risk. This is because their investments are guaranteed by the state and the local governments. Therefore, the German banks are not risky as they reap refinancing advantages on the international capital markets and therefore it is almost impossible for the German public banks to go bankrupt (Lipponer, and Buch, 2007). The main point of contention between the German banks and the European competitors is the risk management and competitive advantage however, German banks are not any more risky than the European competitors. It is therefore important to not that the riskiness of a financial institution is basically based of the market base and competitive advantage against its competitors.

Literature review
The federal association of German banks as well as the European Banking Association, both of which represent the interest of the private banks, have continuously complained to the European Commission as they claim that there is a distortion of competition (MacAskill,  Menon, 2009). This is because the German public banks are supported by the government and hence other banks, both domestic and foreign has seen this as a kind of a disloyal aid in the part of the government. This has given the German public banks a competitive advantage against other private banks including the European banks operating in the same market (Angermiller, et al 2005). The European commission regarded the existing liability structure of the German public banking system as a direct subsidising from the government and therefore the European Commission forced the German federal government to modify this structure in order to enable a healthy competition between the German banks and private banks including the European banks. Even though the structure was modified in 2005, the German banks had already set up a strong customer base and a competitive advantage against its competitors both in the foreign and domestic markets. Therefore, the German banks are not risky to its creditors as their financial capabilities have increased with a larger equity that has enabled them to expand tremendously

In support of the German banks as non risky financial institutions, the German financial and supervisory authority (BaFin) put forward a new draft of the minimum requirements for the risk management in connection with the German implementation of Basel II among the German banks (Lipponer, and Buch, 2007)..

This was intended to minimise the financial risk of the German banks and to ensure that their creditors are guaranteed of the stability of the financial institutions. Though this process is still under progress, the European Union will be introducing Basel II through the European directives. This is also intended to be a binding standard for all the financial institution with the union and therefore all the members of the union will be required to prepare for the implementation of this draft. This process will enable all the banks including the German and other European banks to be able to limit the financial risk and therefore enabling them to work effectively and efficiency without the fear of solvency as it has been witnessed in the past (MacAskill,  Menon, 2009). While Basel II was regarded as the first and the largest pillar (pillar I) of the financial institutions, Pillar II has also been widely discussed recently. The European approach on Pillar II was intensified and made clear by the newly established Committee of European Banking Supervisors. This Pillar consists of the assessment of the capital adequacy of the internal capital of the banking institution and its risk management processes.

Therefore this enables the German banks to operate on minimal financial risk and therefore both German and European banks currently are not risky. Though most of the European banks are recovering from the recession, it is also important to note that both banking institutions were hit by the global economic crunch (MacAskill,  Menon, 2009). The new management risk (MaRisk) is the German answer to the implementation of Pillar II. This process is not entirely new since the UK- based Baring banks crashed in the mid 1995. This enabled the sound practices of risk management to become officially regulated. In 1995, the German banks in both domestic and foreign markets had to comply with the minimum requirements for the conducts of operational and trading practices that were intended to minimise the financial risk of the organization which could affect the certainty of the future position of the organization. The German banking act on the other hand stipulates that proper organization of business activities is of dire importance to the organization (Lipponer, and Buch, 2007).

This enabled the introduction of other minimum requirements that concerns credit business, internal auditing and outsourcing. All this requirements was introduced in order to enable the organization to have as minimum risk as possible so that both the internal and external customers are guaranteed of the security of their investments. The structure of the MaRisk process is modular and this enables the future extension, expansion and changers easier. In general, the entire structure deals with the overreaching requirements for all the banks especially the German public banks (Lipponer, and Buch, 2007).. This process is consistent with the Basel II which requires the risk management process to focus on all the material risks. Management risks also extends the risk fields that is covered especially with regards to liquidity and the operational risks though the category of the operational risk is additionally covered in Pillar I by the explicit minimum capital requirements (Angermiller, et al 2005).

The German banks also offers a large customer base a diverse range of first class banking services its private clients receive an all round service extension from account keeping and cash and securities investments advisory to asset management. On the other hand, its corporate and institution clients receive a number of full products assortment of both international and corporate and investment banks from payments processing and corporate finance to support with initial public offers (IPOs) and market authorities (MA) advisory. In addition to this, the German banks also has a leading position in the international foreign exchange, fixed income and also equity trading. This has enabled the German banks, both public and private to obtain a competitive advantage and therefore has become less risky for investors, especially both the internal and external customers (Angermiller, et al 2005).

The European competitors on the other hand have strengthened the need to improve their risk management especially after the economic crisis that pushed the global economy in to the worst recession in over six decades. The risk management process has been improved by the involvement off market participants and financial institutions which has brought in a progressive normalization of the economy (MacAskill,  Menon, 2009). With extensive consultations and comprehensive assessment of how the proposed regulatory changes would affect both financial companies and economy, it has enabled the European banking institutions to foresee the future positioning of the organizations and their for enabling them to set up strategies to eliminate major risks while also considering the emerging strategies. Therefore both the German banks and the European competitors have been able to eliminate risks that would otherwise lead to the insolvency and hence, enabling its customers to be guaranteed on their investments within these banking institutions and thus creating customer confidence.

Methodology and data 
In order to determine whether the German banks are risky than the European competitors, the financial history of the banking institution was analysed. The method of data collection was based on the past and the present financial position with regards to the policies, objectives and goals of the banking institutions. In order to collect the relevant and accurate data, an excel sheet was used. The sheet contained the name of the bank, year, equity, personnel expenses, total revenue, assets, loans, net income, net interest, deposits and short-term funding and loans. All this was compared with progressive years and the following deductions was made.

Results and discussion  
The loan assets of the Europe banks have continually increased over the years. During the late 1990s, the loan asset was at 11.33 in which it increase up to 13.97 while the German banks like the Banque Diamanta increased its loans on assets from 74.82 to 81.10. On the other hand, their loan dependencies have reduced over the years. This depicts that the financial position of the banking institutions is stable and hence less risky for the investors and creditors. The German and European banks have both increased the expenses on personnel significantly. This is a positive progress as it implies that the personnel are well remunerated and therefore enabling the workforce to work effectively and efficiently because of the motivation they obtain. Both financial institutions have also increased their assets to significantly huge amounts ranging from 900 to 3061 depending on the banking institution.

This means that the institutions have expanded tremendously over the years and therefore can be able to finance its operations effectively. Their securities and deposits also are of significantly huge amounts. Though other German banks have been dissolved in the past because of their poor performance, it can be seen that these financial institutions have expanded their assets and securities and therefore have set up a huge customer base while reducing their risk significantly as a result of the risk management processes. Other German public banks have recorded huge percentage with regards to their liquidity while the status of the banking institutions was also found to be active.
   
Financial risk of a banking institution depicts negatively in the entire corporate image and therefore the organization will be most likely to loose the customer confidence. Risk management in banking institution is of outmost importance, it is therefore imperative that processes of risk management are put in place in order to avoid adverse effects of solvency (Frenkel, et al 2004). Banking institutions that carry out these processes are likely to succeed as this will enable the organization to strategise and predict the future position of the organization. On the other hand, in order to avoid high financial risk of the banking institution, it is important for the management and leaders of the institution to set strategies while considering the emerging strategies in order to avoid financial risks (Frenkel, et al 2004). In order for the institutions to have a competitive advantage over other competitors, it is imperative that high technological innovation like mobile banking and creativity is achieved. This will enable the banking institutions to be able to operate effectively and to provide quality services for its customers. Moreover, this will increase the customer confidence as well as reducing the financial risks of the banking organization. It is also important to recommend the expansion of the banking institutions to new markets this will enable the organization to set up a diverse customer base that will in turn increase the profits and hence reducing the risk of the customers, creditors and that of the organization.

SAS Institute

SAS Institute is a company within the software industry. The company, with its headquarters in Cary, North Carolina was founded in 1976 and has therefore existed for fifty years. It was founded by James Goodnight who also acts as the companys CEO and owns two-thirds of the company while John Sall, a senior vice president, owns the other third. SAS Institute has been described as one of the largest privately owned software company and an international leader in decision support software and data warehousing with its offices scattered all over the world (Bankert et al.p.1).

Initially, the companys core product was base SAS software which was originally developed for agricultural data analysis on IBM mainframes at the State University of North Carolina. However, over the years, the SAS system has become an absolute information delivery system, in addition to 25 fully integrated modular applications that allow an organization complete control over its data - from data access, management, analysis and presentation (p.1). Rather than sell its software to its customers, SAS Institute leases it. The annual renewal of leases puts strong emphasis on customer quality and satisfaction by ensuring that any technological advances in the software product are determined by customer needs.

In an attempt to maintain the work environment, the company adopted competitive strategies aimed at supporting the companys culture. This includes a standard worksheet of 35-hours which affords employees quality time with their families. Those who work extra hours do so by choice. The compensation system allows the employee to participate in profit sharing and at the same time be eligible for bonuses. The company relies heavily on the input of employees and managers through annual employee satisfaction surveys which seek to determine the overall work environment. The results are then posted in their intranet and areas of improvement identified. Its hire hard recruitment strategy has assured the companys longevity. This strategy takes job applicants through a rigorous interview which lays strong emphasis on technical skills as well on attitude (p.1). These strategies have proven effective as they have placed the company on a higher pedestal in terms of growth and success.

The approach used by the SAS Institute to motivate employees is the employee-friendly approach. Various factors which support this approach include employee-centeredness, employee interdependence, challenging work, resource-rich environment, and spirit of risk-taking, physical surrounding and facilities (p.1). Though, this approach has proven successful in the SAS Institute, it might not be applicable in all organizations especially in a situation where the owners do not share the same values of providing a utopian environment for their employees or it is not financially feasible for them. Such companies productivity depends on quantity rather than quality therefore reinforcing the spirit of competition at the expense of teamwork which is necessary for the overall success of the company. In SAS Institute, pay is not a predominant feature because the company believes that it provides its employees with almost everything and the main motivation for being at SAS should be the work.

In conclusion, the SAS approach of team work, challenging work and physical surrounding is applicable in most companies as it promises success. All it requires is a change of attitude towards work and the value the company places on its employees who are the companys manpower and driving force.

As you are all aware, the office of the systems analyst carries out a review of the current office software in an attempt to keep abreast with the ever changing world of technology. The purpose of this memo is to specifically review the companys automation and group collaboration software. By a copy of this memo therefore, my office invites suggestions and criticisms regarding the acquisition and the application of these software.

The first to be reviewed is out task manager software. The software was introduced early last year as a way of distributing and managing tasks in a fair and substantial manner. Since its acquisition last year, the marketing department manager has reported a drop in the number of complaints regarding the so called unmanageable tasks that had become commonplace in the marketing department. Recently however, we have experienced problems with the software, Task Manager 2007, due to our switch from Microsoft Vista 2007 to the newest of version of windows operating system. This has created a sort of dilemma for our office because some of the newest software acquired is only compatible with the newest version of windows.

The other crucial software that needs a review is ivisit, our group collaborative software. This software is particularly important to those in the marketing department because many marketers have been able to hold meetings from locations of their choice. Given that marketing jobs require a lot of traveling, marketers have found this software almost indispensible. However, the software has had speed problems because it has been using has been satellite based communication, which is slower than the ones the fiber optic system. It has sometimes been hard communicating to the extent that some have almost preferred a one on one communication.

The office is now inviting your input regarding the matters pertaining to the issue in the memo. So far, we are aware that ivisit will soon be switching to fiber optic connection, but does not mean we are no longer open to suggestions. Please feel free to assist this office in its attempt to make work in this firm as convenient as possible.

Thank you as I await your much needed contribution.

Are the German banks riskier than the European competitors.

The study scrutinizes the financial and the non-financial backgrounds of various banks in continental Europe comprising financial units in Germany in comparison with the individual as well as aggregated highlights of the performance of other banks in the rest of the European continent. The statistical and qualitative analysis of available data articulate a number of insights and objective implications about the risks and prospects of the European banking system focused primarily on risk aversion of the German banks against the non-German entities.
   
The core of the analysis is the risk factors associated with the financial and non-financial management aspects of the banks and the impact of operational and strategic decision-making against economic drivers prevailing in the environment. The prospect of losses and even corporate failure arising from capital inadequacy, liquidity, credit risks and system imbalance in the investment mix of the banks resources in Germany appear to be more sensitive and reactionary to economic variables. The rationale is obvious and clear an overheated economy where banks aggressive credit lending can result to uncontrolled credit risk taking, bad loans and an unfavorable residual effect on capital adequacy. Other European banks are more conservative and diversified giving more strength where they are needed far into the strategic period.  Other banks in the European sector appear much luckier.                      

The financial volatility risks of European banks are becoming rigid and showing some signs of debt management pangs making it appear riskier than what markets actually think. Such a picture is not entirely surprising as European banks especially the German banking sector are more economically impacted by the developments in the United States and the major Asian regions. Banks hence, are becoming more wary of possible losses arising from market volatility, credit squeeze or aggressiveness and capital inadequacy issues. 
The element of risk in the banking sector is one reality the sector is able to profit or lose from. In general, risks are events or drivers from all over the environment,   expected of unexpected that may pose a threat to the ability of the company to achieve its goals and objectives. (Anthony  Govindarajan, 2004) Risks are inherent in all business and financial activities and processes and while they are indeed varied and complex, facing those risks are what make banks profitable and the higher the risks, the higher are the expected returns. (Shaw, 2003)

However, with the deregulation of the industry in many countries all over, these financial institutions no longer operate under a protected and regulated environment. (Scribd, 2010 p 1)  Banks now face a greater number of risks spawned by the global surge of business. (Hill, 2008) Risks can be in the area of interest rate, capital adequacy, credit, operations, market, liquidity, country or the management itself. (Scrbd 2010 p. 24) However, it is similarly the factor that has caused many banks to undertake major organizational changes such as mergers, consolidations, restructuring and even collapse.

Review of Literature and Theory
The German banking sector is currently experiencing the pangs of the global financial and economic crisis, primarily the reason the sector is undergoing tremendous changes. Its vaunted time-tested three-pillar model has come under closer scrutiny from many sectors with competition and intense rivalry increasing. Bent on liberalizing the market, the European Union is forcing the German government to remove the state guarantees enjoyed by the public sector banks. This scenario is likely to set the stage for the entry of foreign banks on account of the globalization and the political extension of the European Union.
The move by the government is expected to put unusual pressure on German banks to perform better. Retail lenders and customers, who were looked down upon by many big banks but are better served by medium-sized bank, are suddenly being wooed again by all the big banks. Consider the competition in the current business environment being full and the pressure to consolidate likely to occur becoming an uncertainty. In this scenario, it is becoming normal for banks, especially the bigger ones are today faced with the need to become more innovative, that is, ideas to sustain operations and extend their customer base while trying to address profitability.

A background overview over the developments as provided by (Taiwaril  Buce2, 2010), show German banks coming under pressure for their dismal profitability status. Assessments and rankings made of developed European nations along the profitability indicator place Germany at the tail end of the queue as well. Experts attribute that situation mainly to the German banking system being over-banked and over-branched. (Heir  Weib, 2006) This means that an overheated economy is translating into     

Methodology and Data
    Data for this study are taken from the statistical data base of European banks operating in the countries of France, Italy, Austria, Ireland, Belgium, Portugal, Spain, Holland and Germany. Data on assets, liabilities including deposits and equity accounts were taken including the qualitative aspects of the various banks such as status or on listing in the bourse. Ratio such as loan to deposit ratio, loan to asset ratio, liquidity indicators, equity issues are used to compare and contrast the banking units in the area.
  
The information taken from the data gathering procedures are to be tallied and entered in a spreadsheet application to generate ratios, percentages and even ranking as means of comparing and contrasting in terms of risk. Financial analysis of corporate data was likewise made to ensure that the decisions made under prevailing in the circumstances.

Results and discussions  
Part of the component intents of this paper is to analyze and examine data on the German market and the competitive landscape of the banking sector. The analysis contains four sections, the first one being the profitability ratios and indicators of German banks to their peers performances in the European area.  Here, the study provides surprising results in the bottom line and despite the high branch density and the claim of over banking.  Germanys banks operate with cost efficiency. Thus, it is in the lack of ability to generate adequate additional income that results in the general slowdown and sluggishness in the net earnings. In the second section, the authors examine the German banking system. The purpose of the method is to compare and contrast the peculiarities and distinctions to find out if the income and other operating problems are inherent in the system. Germany, more than in any other country, public banks dominate the industry together with the cooperative banks. However, banks hardly adhere to the economic principle of profit maximization common under privatization and deregulation.

Moreover, the public banks have also received unjust government subsidies in the form of the operating maintenance and guarantee of obligations. Thus, this may be construed as presuming that private German banks operate in a very difficult system with public banks enjoying all the privileges. The next section then takes a closer look at the market and analyzes the bank density, branch density and competition which the system produces. In the past, consolidations have occurred but branch networks have been reduced and thinned out by the private banks in an effort to manage operating costs. However, the result show that the current situation does not appear overly over-banked considering the demographic profile of the country including the business and economic environments. Further into the information, German banks were asked to discard the three-pillar model which includes the participation of the government sector in terms of subsidy and guarantee and move towards a market economy where competition takes into account the best options available to the customer. As it is, the German banks are now haunted by an open economy where competition is likely to call the benchmarking shots for globally prepared banks. Experts believe that the long period of government subsidy may not only hamper the weaning out of the banks, but may likely bring the

German banks into the risk area with less preparation.      
It appears that the scenario in which German banks find themselves in is because of misguided actions and wrong strategies that have led them into crisis situations. Experts agree that the way out of German banks is to strengthen the German banking market with interest focused on the consolidating and not fragmenting of the savings bank finance group. However, experts also stress the public character of the savings banks and the importance of the regional principle, which applies both to the savings banks and to the co-operative banks common in the German economy. This implies the pragmatic strength and presence of the government behind the German monetary system. This scenario however does not appear to be among the priorities of the European Union.

Nevertheless, the German banking sector has been very competitive, and calls for further consolidations are aimed at decreasing competition rather than realizing synergies. From another viewpoint, an appraisal of the current system is presented, is less risky considering that German banking customers benefit from the current market structure as it allows for easier access to credit compared to other countries. The establishment of smaller cooperative banks appears to have alleviated the economic plight of business and industry. Here, the technique is to offer banking services to everybody at low costs. Thus, Germany is over banked from the point of view of high competition which negatively impacts upon bank profitability, but positively impacts society more via the services provided.

MacAskill and Menon (2009) warn that German banks have yet to finalize participation in the open market with its resource strength.   Although there are at least 353 European lenders that have increased in size since the beginning of 2007, fifteen European banks now have assets larger than their home economies, compared with 10 lenders three years ago.

Although this scenario indicates prospects for the banking industry, the degree of risk is equally stabilized, but not as much in German banks where services beyond risks appear to be paramount. While the European Union has made headlines for deconsolidating and breaking up rescued banks, regulators have not looked and reined in firms that avoided as well as shunned government assistance  aid either because they are too big to fail or simply failed to comply with assistance guidelines. Nevertheless, European bank assets have grown 25 percent since the start of 2007 compared with a 20 percent increase with American lenders, (Bloomberg, 2010)

The profitability of the German banking sector is one of the main focus of the study that even if German banks are riskier than other European competitors, it is likely because their services are directed primarily towards the goals and objectives of their mandates as the public financing sector of the economy. Here, profitability is secondary to the mandates of real government support. Other European competitors apparently considered more the aspect of shareholder value over other priorities. Thus, while Germany is over banked, pressure by certain institutions and the advent of Basel II have put more pressure on these German banks to improve their earnings. Thus, it is important to equally understand the components of profitability, costs and income, and other key performance indicators of German banks. This study thus clarifies and provides understanding to the relative risks showcased by German banks.