Collaborative Learning Heterogeneous Versus Homogeneous Grouping

Collaborative Learning Heterogeneous Versus Homogeneous Grouping As EFL teachers we are concerned with two main issues in language learning. The first issue addresses the skills students should acquire in EFL classes as a result of teaching-learning experiences. Such skills are often measured by students achievement. The second issue takes account of the strategies EFL teachers use to help students acquire such skills and in turn increase their achievement. Writing is a skill which requires efforts from both the student and the teacher. It is one of the four language skills which is given emphasis in second language learning (Inggris 2009). Writing is one of the skills which need to be mastered by the learners. They learn different genres of writing like descriptive, expository, recount and narrative based on the prescribed syllabus of their providers. Language learning involves learning the language code as well as the culture (appropriate ways of thinking and acting) associated with the language (Becket Gonzales 2004). Students writing abilities are affected by the type of instructions teachers use within their classroom practices. Writing is one of the productive skills that learners are expected to achieve in order to ensure their communicative competence. While learning writing, students are supposed to get involved in many activities that enable them to produce a piece of writing at the end. They can be engaged for example in class discussions, act in role playing or get involved in peer editing. While engaged in classroom activities students build up experience and have more practice that may finally give the chance to reach a proper product of writing. In teaching writing, teachers strive hard to find strategies to facilitate increasing students achievement. There are many methods adopted by the teachers in teaching EFL writing in the classrooms. One of the methods recommended in teaching writing is the incorporation of cooperative learning (Kagan 2002). In ability grouping, students are grouped in a variety of more flexible ways so that they spend some portion of a school day in heterogeneous groups and some portion in homogeneous groups. (Grady et al 2007). In most EFL classes, some learners perform better beyond grade-level, others struggle with target language, while another great part of the class falls somewhere in between. In their effort to meet the needs of such a diverse students, educators tend to assign pair and group work with students of different ability levels finding ways to involve all students in the activities. These ways could include communicative and cooperative tasks to allow scaffolding of less advanced students. In this classroom environment advanced level learners act as a bridge to facilitate the learning process and lower level classmates exhibit a willingness to cross that bridge (Sean, 2002.   As a general rule, it would seem reasonable to suggest that classroom harmony might better be achieved in a group of motivated students who are allowed to participate and cooperate. Statement of the problem Teachers and educators seem to have struggled for decades to find answers to questions about heterogeneous and homogeneous grouping: Does anyone benefit from each? Is anyone harmed by each? Who benefits (or is harmed) the most? Why? Are there alternatives to these two types grouping? The answers are not always clear-cut and often depend on whom you ask and what learning outcomes are considered important. To many educators, grouping is considered a sensible response to academic diversity. To others, the practice has harmful unintended consequences and should be abandoned. Indeed, research, logic, and emotion often clash when debating the topic of grouping. But what do we really know? Consequently, this study aims to investigate the effect of homogeneous grouping versus heterogeneous grouping on EFL students achievement in writing in the hope that it may settle the argument on which is better for both high and low achievers. Homogeneous grouping can be defined as dividing students into small groups which include students of the same ability or level for example high achievers together and low achievers together . While heterogeneous grouping can be defined as dividing students into groups that include mixed or different levels, high and low achievers together. Theoretical Framework Cognitive growth springs from the alignment of various perspectives as individuals work to attain common goals. Both Piaget and Vygotsky saw cooperative learning with more able peers and instructors as resulting in cognitive development and intellectual growth (Johnson, et al., 1998). The assumption of behavioral learning theory is that students will work hard on tasks that provide a reward and that students will fail to work on tasks that provide no reward or punishment. Cooperative learning is one strategy that rewards individuals for participation in the groups effort. A review of the literature on cooperative learning shows that students benefit academically and socially from cooperative, small-group learning (Gillies, 2002). Cooperative learning can produce positive effects on student achievement (Cohen, 1986; Davidson, 1989; Devries Slavin, 1978; Johnson Johnson, 1989; Okebukola, 1985; Reid, 1992; Slavin, 1990). Academic benefits include higher attainments in reading comprehension, writing (Mathes, Fuchs, Fuchs, 1997) and mathematics (Ross, 1995; Whicker, Nunnery, Bol, 1997) and enhanced conceptual understanding and achievement in science (Lonning, 1993; Watson, 1991). Social benefits include more on-task behaviors and helping interactions with group members (Burron, James, Ambrosio, 1993; Gillies Ashman, 1998; McManus Gettinger, 1996), higher self-esteem, more friends, more involvement in classroom activities, and improved attitudes toward learning (Lazarowitz, Baird, Bolden, 1996; Lazarowitz, Hertz-Lazarowitz, Baird, 1994). According to Slavin (1987), there are two major theoretical perspectives related to cooperative learning motivational and cognitive. The motivational theories of cooperative learning emphasize the students incentives to do academic work, while the cognitive theories emphasize the effects of working together. Motivational theories related to cooperative learning focus on reward and goal structures. One of the elements of cooperative learning is positive interdependence, where students perceive that their success or failure lies within their working together as a group (Johnson, Johnson, Holubec, 1986). From a motivational perspective, cooperative goal structure creates a situation in which the only way group members can attain their personal goals is if the group is successful (Slavin, 1990,). Therefore, in order to attain their personal goals, students are likely to encourage members within the group to do whatever helps the group to succeed and to help one another with a group tas k. There are two cognitive theories that are directly applied to cooperative learning, the developmental and the elaboration theories (Slavin, 1987). The developmental theories assume that interaction among students around appropriate tasks increases their mastery of critical concepts (Damon, 1984). When students interact with other students, they have to explain and discuss each others perspectives, which lead to greater understanding of the material to be learned. The struggle to resolve potential conflicts during collaborative activity results in the development of higher levels of understanding (Slavin, 1990). The elaboration theory suggests that one of the most effective means of learning is to explain the material to someone else. Cooperative learning activities enhance elaborative thinking and more frequent giving and receiving of explanations, which has the potential to increase depth of understanding, the quality of reasoning, and the accuracy of long term retention (Johnson, Johnson, Holubec, 1986). Therefore, the use of cooperative learning methods should lead to improved student learning and retention from both the developmental and cognitive theoretical bases. Several studies have examined the effects of cooperative learning methods on student learning. Humphreys, Johnson, and Johnson (1982) compared cooperative, competitive, and individualistic strategies and concluded that students who were taught by cooperative methods learned and retained significantly more information than students taught by the other two methods. Sherman and Thomas (1986) found similar results in a study involving high school students taught by cooperative and individualistic methods. In a review of 46 studies related to cooperative learning, Slavin (1983) found that cooperative learning resulted in significant positive effects in 63% of the studies, and only two studies reported higher achievement for the comparison group. Johnson, Maruyama, Johnson, Nelson, and Skon (1981) conducted a meta-analysis of 122 studies related to cooperative learning and concluded that there was strong evidence for the superiority of cooperative learning in promoting achievement over competitive and individualistic strategies. Johnson and Ahlgren (1976) examined the relationships between students attitudes toward cooperation, competition, and their attitudes toward education. The results of the study indicated that student cooperativeness, and not competitiveness, was positively related to being motivated to learn. Humphreys, Johnson, and Johnson (1982) also found that students studying in a cooperative learning treatment group rated their learning experience more positively than did students in competitive and individualistic treatment groups. In a study involving elementary and secondary students Wodarski, et al., (1980) found that 95% of the elementary students enjoyed the cooperative learning activities and that they had learned a lot about the subject. Cooperative learning has its roots in the theories of social interdependence, cognitive development, and behavioral learning. Some research provides exceptionally strong evidence that cooperative learning results in greater effort to achieve, more positive relationships, and greater psychological health than competitive or individualistic learning efforts (Johnson, Johnson, Holubec, 1994( Social interdependence theory views cooperation as resulting from positive links of individuals to accomplish a common goal. The Gesalt psychologist Kurt Koffka proposed in the early 1900s that although groups are dynamic wholes the interdependence among members is variable. Kurt Lewin (1948) stated that interdependence developed from common goals provides the essential essence of a group. This interdependence creates groups that are dynamic wholes. The power of the group is such that a change in any member or subgroup directly changes any other member or subgroup. Within cognitive development theory, cooperation must precede cognitive growth. According to Emmer and Gerwels (2002) some research on cooperative learning has addressed instructional components. In a number of studies students have been taught interaction skills, such as how to question or to help each other so that they did not give answers but facilitated each others thinking (Fuchs, Fuchs, Kazdan, Allen, 1999; Gillies Ashman, 1996, 1998; Nattiv, 1994; Webb, Troper, Fall, 1995). And, when students are taught such skills, positive outcomes such as increased intrinsic motivation, liking for school, and self-esteem can result (Battistich, Solomon, Delucchi, 1993). Homogeneous grouping Homogeneous grouping has been proposed and implemented as a potential solution to meet the needs of the mixed ability classes, suggesting that students of different abilities can be gathered in groups of same ability thereby facilitating instruction (Slavin, 1987). This kind of grouping is based on the pedagogical principle that the teacher has the advantage of focusing instruction at the level of all the students in the particular group (Ansalone, 2000). It is assumed that teachers of mixed ability classes can increase the pace and raise instruction level for high achievers whereas low level students can enjoy individual attention. So, advanced pupils are taught more difficult concepts while low achievers deal with simple and fewer things. Proponents of homogeneous grouping opine that it is an excellent means of individualizing instruction. Achievement is considered to increase as teachers adjust the pace of instruction to students needs. Kulik and Kulik (1982) and Slavin (1987) carried out meta-analyses of studies at the elementary school level, finding benefits of within-class ability grouping. Both low ability students and more advanced ones placed in separate groups, benefited from instruction addressed to their level. More recently, Mulkey et al (2005) found that same ability grouping has persistent instructional benefits for both high and low level students. Marsh (1987) supports HG as a way of coping with mixed ability classes assuming that grouping children homogeneously enables those in lower ability groups to profit with respect to self-evaluation by being isolated from advanced peers. Furthermore, Allan (1991) supports that pupils model their behaviour after the behaviour of similar ability children who are coping well with their school work. The supporters of homogeneous grouping conclude that research fails to support that homogeneous grouping doesnt accomplish anything (Loveless, 1998). Although teachers of mixed ability classes seem to have positive attitudes towards homogeneous grouping (Scherer, 1993, Mulkey et al, 2005), the last quarter of the 20th century witnessed severe criticism of ability grouping. It has been declared that this type of grouping stigmatizes lower ability students, offering them inferior instruction. Several researchers argue that homogeneous grouping does not guarantee that all advanced or all weak students are alike. Matthews (1997) conducted a relevant research with students in grades 6 through 8 finding that gifted students are considerably more diverse than they are homogeneous. They vary in their degrees of advancement, their abilities, their learning styles and interests, their test-taking skills, and their social/emotional development. So, gathering advanced children of the mixed ability classes together in one group may not be the wisest solution to the problem. Ability grouping may decrease the self-esteem and aspirations of low ability children and therefore decelerate their academic progress. Welner and Mickelson (2000) carried out quite an extensive research review finding that low ability children are exposed to lowered expectations, reduced resources and rote learning. Childrens self-concept is affected and expectations are internalized (Ireson and Hallam, 1999, Gamoran, 1987). This implies that students of low ability in mixed ability classes are provided with low expectations if placed in same ability groups causing them feelings of inferiority. This is confirmed by Ansalone (2001) and Hallinan (1994) who demonstrated that children assigned to lower ability groups, are exposed to less and more simplified versions of the curriculum whereas high ability groups have broader and more challenging material covered. In this sense, Oakes (1992) and Wheelock (2005) support that educational benefits in mixed ability settings are not provided b y homogeneous grouping but rather by a challenging curriculum and high expectations. Research has accumulated evidence indicating that schooling tends to increase individual differences (Van der Veer and Valsiner, 1991). Homogeneous grouping seems to add more opportunities to advanced learners who are usually middle-class or upper-middle-class children, depriving pupils who already suffer from socio-economic segregation, or those who are learning less fast. Kozo seems to agree that homogeneous grouping damages not only low but also high-ability students as the latter who are usually the affluent children are not given any opportunities to learn the virtues of helping others or learning about unselfishness (Scherer, 1993). It is inferred that grouping students homogeneously for instruction on the mixed ability classes is one more advantage conferred on those who already enjoy many. Heterogeneous grouping Cooperative learning Heterogeneous grouping, that is gathering children of varying abilities in same groups has been proposed by many researchers as an effective strategy to promote academic development of students having diverse background knowledge and abilities. Brimfield, Masci and Defiore (2002) believe that all students deserve an academically challenging curriculum (p.15). So, our goal is to find a way to engage all pupils of the mixed ability classroom in the lesson irrespective of their abilities. The authors point out that by creating mixed-ability groups, we send the compelling message that everybody is expected to work at the highest possible level as high and low ability students deal with the same challenges. Disadvantaged pupils are at reduced risk of being stigmatized and exposed to a dumped-down curriculum in a mixed-ability setting. Teachers expectations for all pupils are maintained at higher levels and less able students have opportunities to be assisted by more able peers. It is assumed that heterogeneous grouping provides pupils access to more learning opportunities. Johnson and Johnson (1987) recommend assigning children of high, medium, and low abilities in the same group maximizing the heterogeneous make up of each group. Such ability diversity within the same group creates an effective learning environment (Manlove and Baker, 1995) providing learning opportunities for low-level students as well as opportunities to more advanced children to provide explanations to others revising, consolidating and using some things they have encountered before. The teachers can use cooperative tasks among high and low achievers of mixed ability groups or pairs in order to promote task engagement of all students in the mixed ability class as advanced children can provide explanations and guidance in carrying out a task. Cooperative tasks among high and low achievers are valued by the sociocultural theory of Vygotsky (1978). Pupils of mixed ability classes differ at their competence level and prior linguistic experiences. Vygotsky supports that children who are exposed to books and other out-of-school factors which contribute to linguistic development i.e .prior knowledge of English from private institutional instruction, are expected to have already run through a large part of their ZPD. On the other hand, pupils with poor literacy opportunities i.e. without prior knowledge of English may possess a larger Zone of Proximal Development (Van der Veer and Valsiner, 1991). So, they may benefit greatly from peer interactions which are likely to help low level students reach higher levels of performance. In this framework, Lyle (1999) showed that both low and high achieving students value the opportunity to work together as all pupils believed that they benefited. It was concluded that peer interactions can facilitate literacy development especially of low ability students. In this vein, Guralnick (1992) points out that social competence acquired in group work affects the elaboration of all students cognitive competencies, implying that both low and advanced learners of mixed ability classes may gain from such settings. The role of peer learning as contributing to language development has also been emphasized by Mize, Ladd and Price (1985) Webb (1989), Jacob et al (1996) and Slavin (1996). Rogoff (1993) refers to childrens social sharing of their cognition through interaction. When pupils participate in collective activities, they guide each others efforts. According to Tudge and Winterhoff (1993) advanced children give constant feedback through conversation forcing peers to strive for reaching higher levels of performance. Various studies have indicated a positive correlation between cooperative learning and achievement in mixed ability classes. For example, Walters (2000) asserts that cooperative learning is suitable for teachers dealing with increasingly diverse classrooms as it easily accommodates individual differences in achievement. Accordingly, Fulk and King (2001) support that class-wide peer tutoring improves all students learning. They add that serving in the role of tutor seems to be particularly beneficial for improving the self-esteem of students with low achievement while they may, for example, grade their partners reading. Therefore, it appears that CL may satisfy the needs of a mixed ability class. Studies conducted by Pica and Doughty (1985), Porter (1986), and Cotterall (1990) indicate that learners of different abilities produce more in mixed ability pair and group work by helping one another to overcome cognitive obstacles. This conclusion is consistent with Urzuas (1987) finding that the mixed ability children in the observational study conducted, appeared to have developed a sense of power in language through the process of working with trusted peers i.e. writing and revising. The benefits of cooperative learning are more tangible when it comes to written work. ODonnell et al (1985) found that involvement in cooperative dyads can improve the quality of students performance on a written task. Weak students of mixed ability classes can use advanced learners as sources of information, commenting on and critiquing each others drafts in both oral and written formats (Liu and Hansen, 2002). Rollinson (2005:25) attributes this phenomenon to the possibility that peer audiences are more sympathetic than the more distant teacher audience. Peer review groups are also favoured by Huot (2002) and Inoue (2005) and Cotterall and Cohen (2003) who showed the positive effects of scaffolding in mixed ability settings Cooperative activities such as group investigation are likely to encourage shy and low performance students since they have the advantage of requiring the participation of all group or pair members to carry out a task, allowing each member to do something according to ones abilities. Review of Literature Ability grouping can be carried out between-class or within-class (Dukmak 2009). Between-class ability grouping refers to a schools practice of forming classrooms that contains students of similar ability. Within-class grouping refers to a teacherà ¢Ã¢â€š ¬Ã… ¸s practice of forming groups of students of similar ability within an individual class (Gamoran, 1992; Hollified, 1987) An extensive research has been conducted on ability grouping suggesting that academically, high-achieving students achieve and learn more when they are grouped with other high-achieving students (Gentry Owens, 2002; Grossen, 1996; Hollified, 1987; Page Keith, 1996). In mixed-ability grouping it is difficult to provide an adequate environment for teaching to everyone. Since students differ in knowledge, skills, developmental stage, and learning rate, one lesson might be easier for some students and more difficult for the others (Slavin, 1987b). In ability grouping, high-achieving students view their own abilities more realistically and feel that they are appropriately challenged with their peers (Fiedler, Lange, and Wine-Brenner, 2002). Mixed-ability grouping is based on cooperative learning which demonstrates positive success related to students achievement. In this type of grouping, students work collaboratively to successfully achieve a desired educational outcome and develop a greater understanding and respect for individual differences. All forms of diversity within the learning environment are embraced (Felder Brent, 2001; Freeman, 1993; Saleh, Lazonder, DeJong, 2005). Moreover, in a mixed-ability, teachers respond to the individualized needs of all learners (Kulik Kulik, 1992). The most compelling argument against ability grouping is the creation of academic elites a practice which goes against democratic ideals (Slavin, 1987a). Johnson and Johnson (1999) and Johnson, Johnson and Smith (1998) say that cooperative learning has five basic elements. The elements are positive interdependence, individual accountability, promotive interaction, appropriate use of social skills, and periodic processing of how to improve the effectiveness of the group (Johnson Johnson 1999 ).When these elements are properly implemented, the research has shown that group collaboration in the classroom can increase learning and achievement, social skills, self-esteem, and attitudes toward classmates and school (Slavin, 1990 as cited in Webb, Nemer Zuniga 2002). Placing students in teams or cooperative learning groups has many advantages. It helps to build a students communication skills, can help increase tolerance and the acceptance of diversity, promotes higher level reasoning, promotes increased generation of new ideas, promotes greater transfer of information from one situation to another, increases retention, builds teamwork ski lls, reduces stress, and increased willingness to attempt challenging tasks (Baker Campbell, 2005; Huss, 2006; Lin, 2006; Payne Monk-Turner, 2006; Patrick, Bangel, Jeon 2005; Kim 2004; Vaughn, 2002; Johnson Johnson, 1999; Johnson, Johnson Smith, 1998; Slavin, 1996). The cooperative learning experience also [gives] students the opportunity to review and learn information that they did not understand before the cooperative learning activity (Webb, 2002). According to Lin (2006, ), research has concluded that cooperative learning is the top ranked teaching model that promotes greater higher-order thinking, problem solving, and achievement. Students can remember 75-90% of materials when they learn it in cooperative learning situations (Lin, 2006). In a survey of college students after an experiment involving group work, Payne and Monk-Turner (2006) found that 90% of students favored group work and that 90% learned from their group members. Since 1924, 168 studies have been conducted that compare cooperative learning to competitive and individual learning. These studies have shown that cooperative learning yields higher academic achievement than individual and competitive learning (Johnson, Johnson Smith, 1998). Cooperative learning groups are also said to be particularly beneficial to low academic achieving students and students of color (Huss, 2006; Vaughn, 2002). Cooperative learning groups appear to be successful for many reasons. Students become an instrumental part of the group when they feel their efforts will contribute to the success of the group (Baker Campbell, 2005). Students are successful and learn in cooperative learning groups because [they] learn by doing rather than listening (Payne, Monk-Turner, Smith 2006 ) and because they are actively using the material and information (Zimbardo, Butler, Wolfe, 2003). Cooperative learning also strengthens students social interactions, it gives them the desire to achieve, [to develop] more positive interpersonal relationships, and [have] greater psychological health than competitive or individualistic learning efforts (Johnson, Johnson, Holubec, 1994 as cited in Morgan, 2003, ). Cooperative learning can teach students that (a) that knowledge can be, or should be, shared with fellow students; (b) that differences in opinion can be rationally negotiated even under conditions of test pressur es; and (c) that cooperative learning procedures can be enjoyable and productive (Zimbardo et al., 2003, ). These types of lessons enable students to learn how to work well with others. The interdependent relationships that develop within a group help to facilitate the groups success. Everyone feels the goal of the group will be met if everyone achieves their individual goals (Vaughn, 2002; Morgan, 2004). According to Morgan (2004), group members should also be aware of the fact that a single group member can affect how and/or if the goal is achieved. The cooperative learning experience is most effective when the participants work well together and they successfully achieve their goal. There are many characteristics to successful teams. Some of these characteristics include open communication, effectively listening, open-mindedness, clear roles, an established leader, clearly defined tasks, teamwork where everyone works together and contributes, there are well developed attainable goals (Payne, Monk-Turner, 2006; Baker Campbell, 2005), and a timeline (Payne Monk-Turner, 2006). In a classroom, there are also many things a teacher can do to help insure the success of a group activity. The teacher should provide strong guidance (Payne Monk-Turner, 2006; Baker Campbell, 2005), model the desired behavior, provide immediate feedback, and reward desired behavior (Lin, 2006; Baker Campbell, 2005). The teacher can also use checks and balances to monitor productivity, employ various problem solving strategies (Friend Cook, 2007), leng then the amount of time the group spends together, provide proper group behavior training, establish ground rules (Mitchell, Reilly, Bramwell, 2004) and allow group members rate each other (Lin, 2006). If the teacher monitors, provides rewards and allows the students to rate each other, it may reduce the effects of a slacker and keep students from getting a grade they do not deserve (Payne Monk-Turner, 2006). Students that slack off can demotivate hard working students and give them a negative feeling about group work (Ashraf, 2004). Many studies have been conducted that demonstrate the success of teaming. Robert Slavin has conducted extensive research on the implementation of cooperative learning models in schools. He has examined the effects schools becoming complete cooperative learning centers on their academic achievement. He has found many successful situations where lower performing schools were transformed because they converted to a cooperative learning format (Slavin, 1999 22-23). Payne and Monk Turner (2006) conducted a study that examined how students felt about teams. In this study, they assigned students to groups, gave them an assignment, and then asked them how they felt about the assignment after the group project was completed. They found that 90% of the students had a favorable experience, 90% of the students learned from their group members, and 85% of the students felt they learned teaming skills that could be transcended into business. Baker and Campbell (2005) conducted a study in which stu dents were placed in groups and observed that the students who worked in groups, as opposed to working individually, were more successful because they had more access to knowledge, they felt pressured to succeed to keep the group from failing, and the various personalities helped alleviate the stress of the problems. For example a member often told jokes to help lesson the tension. Additionally, members often provided positive reinforcement and motivation. Placing students in groups to take tests is another way to use cooperative learning and group work. Morgan examined the benefits and nonbenefits of college students completing exams using cooperative learning groups. She concluded that The increased depth of understanding, the feelings of support, respect for others contributions, and the clarification of information produced more students with a greater awareness of the material and more developed social skills to be contributing members of teams (Morgan, 2004 ). The understanding of successful cooperative learning group models not only affects groups in grade school; it also affects groups in jobs and college. According to Payne, Monk-Turner, and Smith (2006) employers want college graduates that have developed teamwork skills. Miglietti (2002) says that group work is commonly used in the workplace and employers want to hire people with these skills. Furthermore, these skills can be learned when student

Off Balance Sheet Accounting

Off balance sheet financing is financing from sources other than debt or equity offerings, such as joint ventures, research and development partnership and operating leases. For complex institutions such as banks, they increase their use of off shore subsidiaries and swap transactions to avoid disclosing liabilities. In other words, off balance sheet accounting is a process which a business creates what is practically a debt that it must pay off, but the debt is accounted as another type of transaction that does not count as a liability. Similarly, this applies to asset too.Operating leasing is the most common form of off balance sheet financing. With leasing, on the one hand, an entity could acquire the right to use an asset through a rental agreement. On the other hand, the entity could purchase the same asset using external finance. While the two arrangements may result in identical net cash flows to the entity, in the case of a purchase both the asset and the associated financing obligation appear on the entity’s balance sheet whereas in the formal scenario rental payments are accounted for as a period expense, with the asset corresponding liability omitted from the entity’s balance sheet.Entities used Special Purpose Entities (SPE), are also known as Variable Interest Entities (VIE) for off balance sheet treatment of deals. SPE or VIE is a corporation or partnership formed for the purpose of borrowing money to buy financial assets. Debts are move to a newly created company (SPE OR VIE) specifically to make a company look like it has far less debt than it actually does, which was the case with Enron. For example, a company needs to finance a business venture but doesn’t want to take on the risk, or when there is too much debt to get a loan.By starting a new SPE, they can secure a loan through the new entity. There are situations where it makes sense to start a SPE. If a company wants to branch out into another area outside of its core b usiness, a SPE will keep that risk from affecting the main balance sheet and profitability of the company. The main factor that companies are doing off balance sheet accounting is to provide a better looking balance sheet with lower reported debt to equity ratio, which usually results in driving their stock price higher. Nevertheless, omission of the asset could help to inflate return on assets.This may make the firms look more creditworthy. For instance, by having operating leases, debt does not appear; thus, reducing financial leverage with an increase in operating leverage. By having lower leverage ratio or higher operating leverage, it could attract more investments from investors; therefore, it drives up the stock prices. Next, off balance sheet accounting allows the firms to receive benefits of the interest deduction for tax purposes while avoiding the obligation and the interest expense on its financial statements.In other words, firms with off balance sheet financing are lik ely to have tax interest expense that exceeds financial reporting interest expense. However, off balance sheet accounting has brought some impacts toward the stakeholders. Off balance sheet accounting removes the transparency from investors, markets and regulators. Firms use financial engineering to make their balance sheet appear that they are better capitalized and less risky than they really are. Without transparency, investors and regulators can no longer accurately assess risks.This is because investors and regulators use the balance sheet as an anchor in their assessment of risk. The shareholders could only guess at the extent of the firm’s exposure risks. This affects the judgment of stakeholders; and, it could bring tremendous loss to the stakeholders when the firms collapse. The Enron accounting fraud will best illustrate this. In order to overcome this issue, regulators have established several methods through Sarbanes-Oxley Act, MD&A as well as new rules on leasing .The Securities and Exchange Commission issues final rules implementing Section 401(a) of the Act relating to the disclosure of off balance sheet arrangement, contractual obligation and contingent liabilities. These rules require disclosure of off balance sheet arrangement that have, or are reasonably likely to have, a current or future effect on a company’s condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.The disclosure includes elements such as the nature and business purposes to the company of the off balance sheet arrangement and the importance to the reporting company of the liquidity, capital resources, market risk support, credit risk support or other benefits provided by the arrangement. Nonetheless, firms are to disclose the amounts of revenues, expenses and cash flows of the company arising from the arrangements as well as the nature and amounts of interest retained, securities issued and other debt incurred by the company in connection with the arrangements.The rules also require public companies to disclose in a tabular format in their MD&A the amounts of payments due under specified contractual obligations, aggregated by category of contractual obligation. The five categories of contractual obligations, consisting of long term debt obligations, capital lease obligations, operating lease obligations, purchase obligations and other long term debt liabilities reflected on the company’s balance sheet. The table must disclose what portion of payments under these obligations is due within less than one year, from one to three years, from three to five years and more than five years.To encourage the disclosure on off balance sheet arrangement, the amended rules include a safe harbor that applies the existing statutory safe harbors protecting forward-looking information required by the rules. With regard to the disclosure of off balance sheet arrangements, the safe harbor provision indicates that the meaningful cautionary statements element of the statutory safe harbor will be satisfied if the company satisfies all the requirements of the amended rules relating to off balance sheet disclosures.As mentioned above, operating leases can be exploited by entities for off-balance sheet financing – using an operating lease to obtain assets, thereby not increasing leverage and not decreasing return on assets. The proposed new standard on leases by the joint project of FASB and IASB, currently under development, moves away from the current â€Å"risk and returns† basis to a â€Å"right of use basis†. The lessee and the lessor will recognize assets and liabilities individually for all rights and obligations arising from a lease contract.There will no longer be separate treatments for operating and finance leases – all leases will be accounted for on the same basis. In short, operat ing leasing contract is no longer available and only finance leasing will be used for accounting in the near future. In short, off balance sheet accounting could be use but only with appropriate disclosures are done. By having the disclosures, balance sheet is more transparent to the stakeholders; and, the stakeholders do not need to have a wild guess on the risk of a company. Stakeholders’ investments are said to be more secured.

Disneyland Hong Kong Essay

1. What led to the eventual woes experienced by Hong Kong Disneyland in its first year of operation? How should Hong Kong Disneyland rectify its market situation? The venture into Hong Kong by Walt Disney was a simple example of a large successful western company not doing its homework. The case presents a clear picture of the importance of understanding a foreign market thoroughly before doing business there. Several factors led to an unsuccessful first year of operations and a majority of these factors could have been avoided with a better cultural understanding in the planning stages. One of the culture differences that was obvious to Disney was the fact that the children are not familiar with the Disney characters. Disney has established its brand and is a marketing poster child in the United States, however this advantage goes out the window in a country such as china that has sheltered itself from the outside world until recently. Disney thought that making a meager attempt at introducing the characters before the launch of the park would help, however familiarity isn’t synonymous with brand attachment. As listed in Global Marketi ng Management by Kotable & Helson, â€Å"Cultural Distance† is one of the six external criteria for choosing a mode of entry into a foreign territory, which was not accounted for by Disney. Cultural distance also recognizes the fact that different cultures have different expectations. This was also the case with China. As stated in the case, â€Å"for the tourists of Mainland China, going to Hong Kong means a shopping experience, and so they choose the cheaper alternative to Hong Kong Disneyland†¦Ã¢â‚¬  The case goes on to allude to the fact that the culture in China is one about dollars and cents – when a Chinese person spends his/her money, they are more interested in what they are physically getting. This is very culturally different from a Western vacation where relaxation and experience is the expectation. Disney does a great job at providing a  magical experience, but in my opinion this is what led to their struggle in Hong Kong – the Chinese tourists do not value that very magical experience that westerners do. There were also other factors such as neglecting to do homework on how Chinese tourists select a destination. The Chinese tend to have a strong relationship with travel agents where as in the U.S a vacation is generally booked online without any personal interaction. Failing to account for these small differences coupled with the lack of brand attachment created nothing but an overpriced theme park. All hope is not lost however! Hong Kong is a huge tourist market and there is plenty of opportunity, but the only way for Disney to rectify its market situation is to bridge the gap of cultural distance. One way to do this would be to add an educational element to their park. The case notes that the Chinese put a premium on education, and in this culture the parents are the ones making the decisions – so appeal to them and attract more people. If Disney wants to succeed it needs to also remember what made it so successful in the U.S. After year one it is clear that their brand is not established and would not do all the work for them, and must take the necessary steps to reestablish themselves all over again. It must create a magical feeling in every Chinese child hearts as well as fit the consumer expectations of their parents. 2. To what extend could Hong Kong Disneyland adapt its product to Chinese consumers without diluting its image? Hong Kong Disney obviously requires a lot of changes in order to be successful – but at what point to these changes start impacting its brand? Being such a different culture from Disney’s main operations, China presents a challenge in that Disney is at risk of tarnishing its name if it changes its product to suit the Chinese expectations. The best way to handle this would be to introduce characters and elements of the theme park that are brand new to China, and not introduce them anywhere else. Instead of using Mickey Mouse as the brand image they can introduce something completely new – and after due time this could be successful because it is not as though the Chinese consumer has any attachment to the already established brand, as a matter of fact they are not even familiar with it. It can also change the layout of its parks. China is more interested in taking home physical items  rather than memories so why fill up the park with aesthetically pleasing creations? Instead they can introduce bigger rides in order to allow for pictures. They can even put a super-sized mall within their park in order to establish a collection-type phenomenon surrounding Disney products in China. The text refers to this strategy as â€Å"International Market Segmentation.† A list of reasons is given by Kotable & Helson for the segment approach, and the first one is â€Å"Identifiable – The segments should be easy to define and measure.† A country like China certainly calls for this approach because of the potential dilution of brand image, however by keeping the Hong Kong Disney defined as just that – Hong Kong – the brand in the United States will be unharmed. 3. How should Hong Kong Disneyland address competition? Hong Kong Disneyland’s main competition is Ocean Park, a â€Å"homegrown† theme park. First Disney must recognize the advantage that Ocean Park has over them. Ocean Park has an advantage in that it understands the battlefield, so to speak. It is a Chinese company and it understands the expectations of its consumer. There is brand recognition and a little bit of loyalty since it was established in China. They have a popular educational segment which bodes well with the Chinese and generally provide a good overall experience for the price. They are recognized as the best way that Disneyland can separate itself is through differentiation – they have to make their product unique. Another way that they can address competition is by going after a different part of the market. As stated on Ocean Parks website, a midweek ticket is 320 HK which translates to about 40 bucks in US dollars. A potential opportunity might be to offer Disneyland as the premium option. At 40$, O cean Park offers a pretty cheap admission and there is not much room to beat their price, however by offering upscale restaurants and shops, Disneyland can capture the upper echelon of tourists. Through differentiation and a focused market, Hong Kong Disneyland can coexist with the large and established Ocean Park.

Basic Tenets of Animal Rights

Animal rights refers to the belief that animals have an intrinsic value separate from any value they have to humans  and are worthy of moral consideration. They have a right to be free from oppression, confinement, use and abuse by humans. The idea of animal rights may be difficult for some people to fully accept. This is because, throughout the world, animals are abused and killed for a wide variety of socially acceptable purposes, though what is socially acceptable is, of course, culturally relative. For example, while eating dogs may be morally offensive to some, many would react similarly to the practice of eating cows.   At the heart of the animal rights movement are two basic principles: the rejection of speciesism, and the knowledge that animals are sentient beings. Speciesism Speciesism is the disparate treatment of individual beings, based solely on their species. It is frequently compared to racism or sexism. Whats Wrong With Speciesism? Animal rights is based on the belief that treating a non-human animal differently just because the animal belongs to a different species is arbitrary and morally wrong. Of course, there are differences between human and non-human animals, but the animal rights community believes that those differences are not morally relevant. For example, many believe that humans have some cognitive abilities that are different from or higher than other animals, but, for the animal rights community, cognitive ability is not morally relevant. If it were, the smartest humans would have more moral and legal rights than other humans who were deemed intellectually inferior. Even if this difference were morally relevant, this trait does not apply to all humans. A person who is profoundly mentally retarded does not have the reasoning capabilities of an adult dog, so cognitive ability cannot be used to defend speciesism. Arent Humans Unique? The traits that were once believed to be unique to humans have now been observed in non-human animals. Until other primates were observed making and using tools, it was believed that only humans could do so. It was also once believed that only humans could use language, but we now see that other species communicate verbally in their own languages and even use human-taught languages. In addition, we  now know that animals have self-awareness, as demonstrated by the animal mirror test. However, even if these or other traits were unique to humans, they are not considered morally relevant by the animal rights community. If we cannot use species to decide which beings or objects in our universe deserve our moral consideration, what trait can we use? For many animal rights activists, that trait is sentience. Sentience Sentience is the ability to suffer. As philosopher Jeremy Bentham wrote, â€Å"the question is not, Can they reason? nor, Can they talk? but, Can they suffer?† Because a dog is capable of suffering, a dog is worthy of our moral consideration. A table, on the other hand, is incapable of suffering, and is therefore not worthy of our moral consideration. Although harming the table may be morally objectionable if it compromises the economic, esthetic or utilitarian value of the table to the person who owns or uses it, we have no moral duty to the table itself. Why is Sentience Important? Most people recognize that we should not engage in activities that cause pain and suffering to other people. Inherent in that recognition is the knowledge that other people are capable of pain and suffering. If an activity causes undue suffering to someone, the activity is morally unacceptable. If we accept that animals are capable of suffering, it is therefore morally unacceptable to cause them undue suffering. To treat animal suffering differently from human suffering would be speciesist. What is Undue Suffering? When is suffering justified? Many animal activists would argue that since humans are capable of living without animal-based foods, living without animal entertainment and living without cosmetics tested on animals, these forms of animal suffering have no moral justification. What about medical research? Non-animal medical research is available, although there is quite a bit of debate over the scientific value of animal research versus non-animal research. Some argue that results from animal experimentation are not applicable to humans, and we should conduct research on human cell and tissue cultures, as well as human subjects who provide voluntary and informed consent. Others argue that a cell or tissue culture cannot simulate a whole animal, and animals are the best available scientific models. All would probably agree that there are certain experiments that cannot be done on humans, regardless of informed consent. From a pure animal rights standpoint, animals should not be treated differently from humans. Since involuntary human experimentation is universally condemned regardless of its scientific value and animals are incapable of giving voluntary consent to an experiment, animal experimentation should also be condemned. Maybe Animals Dont Suffer? Some might argue that animals do not suffer. A 17th century philosopher, Rene Descartes, argued that animals operated like clocks—intricate machines that have instincts, but do not suffer or feel pain. Most people who have lived with a companion animal would probably disagree with Descartes’ assertion, having observed the animal first-hand and watched how the animal reacts to hunger, pain, and fear. Animal trainers are also aware that beating an animal will often produce the desired results, because the animal quickly learns what needs to be done in order to avoid suffering. Isnt the Use of Animals Justified? Some may believe that animals suffer, but argue that animal suffering is justified in certain instances. For example, they may argue that slaughtering a cow is justified because that slaughter serves a purpose and the cow will be eaten. However, unless that same argument applies equally to the slaughter and consumption of humans, the argument is based in speciesism.