Power Point Presentation (Submitted separately) sample essay
Insolvency arises from a situation whereby a business organization has too many liabilities than its assets. This makes the business organization unable to pay its debts hence resulting to closure of the business and all its assets auctioned to pay its debts. Insolvency affects the economic growth rate of a country. Insolvency mostly arises from poor organizational performance in terms of profitability and poor cash management and leadership. Due to increased insolvencies, the economic growth of a country is reduced. The economic growth rate has effects on the population of a country (Ackelsberg and Arlow, 2005). If the economy of a country is down, it population is low due to lack of necessary resources to meet needs of its citizens satisfactorily and vice versa. Therefore, the management of business organization should ensure that their organizations are performing exceptionally well in order to contribute significantly to the economy of the country, directly and indirectly to the population growth in the country or region.
1.1 Statement identified in the case scenario and the main research questions For business organization to operate smoothly, they need sufficient resources. For the organization to acquire all the necessary resources it requires to meet its goals and objectives, it has source funds from different available sources of funds. Apart from the capital owned by the business, a business organization borrows finance from banks and other financial creditors in order to finance its business operations effectively (Ackoff, 2003). The funds borrows are recorded as long term or short term loans depending on the repayment period. Insolvency arises whereby the business organization fails to pay its financial obligations with its lenders due to lack of sufficient funds to do so. Insolvency mostly arises from poor cash management within the organization, reduced forecasted cash inflow, increased cash expenses, continuous losses being made by the business organization and much more.
In a country where its business organizations continuously become insolvent, the economy declines. A decline in the economy of such a country affects the population of the country significantly due to lack of employment leading to poor living standards and hygiene hence increasing death rates (Andersen, 2004). The rise of crimes also results from lack of employment opportunities and the high rate of crimes affects the population of the country indirectly. Therefore my main research question for this research project is, “Has there been a decrease in population in North Scotland in the past 12 months as a result of insolvencies?” This gave me a variety of research topics to choose from and they are: 1. The causes and effects of insolvency in a country.
2. Ways in which businesses become insolvent and how business insolvency can be avoided in future.
3. Population decrease as a result of insolvencies within a country. From the above three possible research topic, I chose, “Population decrease as a result of insolvencies within a country”, as the main research question.
1.2 Factors that contributed to the process of research project selection Importance of business organizations in a country
Business organization performances affect the economy of a country either positively or negatively. Once the organizations are doing exceptionally well and achieving its goals and objectives, the economy of a country is raised. However, when the business organizations are continuously going bankrupt and insolvent due to insufficient funds, continuous losses and poor overall management, can affect the economy of a country negatively, and its decreases in terms of growth. The economy growth rate trend of a country has effects on the population growth of the country (Andersen, 2005). If the economy growth rate decreases, the population rate of a country also decreases and vice versa. Social and economical factors are to be considered when writing up this research project as this will be dealing with the general public of Scotland and their economical status. Ethical issues
I am fully aware of any ethical issues that may be involved in carrying out a research project. Privacy of the participants is of the utmost importance and is not to be disclosed to maintain the highest level of ethical integrity in regards to the research. Evans, G., Naim, M. and Towill, D. (1993, pp. 15-25), stated that when most people think of ethics (or morality), they think of rules to distinguish between good and evil, such as the Golden Rule (“Do unto others as we would have them do unto you”), Code of Ethics, such as the Hippocratic Oath (“First, do no harm”), a religious belief as the Ten Commandments (“Thou shall not kill …”), or the wise words of Confucius aphorisms. This is the most common way to define “ethical” standards of operation that separates acceptable and unacceptable behaviour. Most people learn the ethical standards at home, school, church or social settings. The same principle applies to research and enforces the highest level of ethical conduct in all phases of the research, including the interaction and confidentiality of the respondents. However I am not bound to such ethical issues as I have used only secondary data.
Significance of the study
This research study will enable the management of business organizations to understand the causes of business insolvency and ways to avoid going insolvent. This will assist in avoiding business organizations in a country from going insolvent since the management is aware of the appropriate methods to avoid such a scenario. The government of a country will be aware of the effects of business insolvencies on the population growth rate of the country. This will make the government to support business organizations within the country so that the economy of the country is not affected negatively leading to a stable population in the country.
1.3 Critical review of key references
Insolvency arises when business organizations fail to pay their debts (Covin, Slevin and Schulz, 2004). Business organizations have to raise sufficient funds necessary to carry out their operation smoothly by availing all the necessary resources and also to meet the business expansion requirements. The capital raised by the owners of large businesses is not enough to run the organization as expected towards its mission and vision since the business organization needs more and more funds as it grows (Ackoff, 2003). This forces the business organizations to borrow loans from creditors and they are expected to re-pay back the loans on the agreed time by both parties. These organization may incur continuous losses, experience increased cash expenses or poor management of cash thus making it difficult for them to repay the loans advanced to them. This leads to insolvency of the business organizations which in some cases may give rise to legal disputes. Population growth rate
As the economy of a country keeps on growing, its population growth rate increases. Availability of employment opportunities raises the standards of living within a country and this decreases death rates that could have arisen from poor hygiene (Armstrong, 2004). Increased per capita incomes also improve the population growth rate of a country since there are available resources to feed citizens of a country and this causes families to multiply hence increasing the population growth. However, business insolvencies affect the economy of a country negatively. The economy growth rate increases due to lack of sufficient income in the economy hence affecting the population growth of a country (Chakravarthy, 2006). Lack of enough resources to feed citizens of a country limits the number of family members since there is lack of enough resources to feed large families. Poor living standards also arise and this increases the death rate within a country (Ackoff, 2003). The quality of services offered in local hospitals is also affected by the decline in economy of the country.
1.4 Research project specification
The main question of this study is to investigate if a decrease in population has been experienced in North Scotland due to business insolvencies. Therefore the objectives of this study are; 1. To identify the trend in Scottish population in the past 2 years 2. To describe or explain the effects of population trend in relation to the decline of Scottish businesses 3. To determine the influence of population trend and Scottish business 4. To give recommendations according to the research findings Significance of the study
1. From the study, the management of business organizations may understand the reasons for insolvency and ways to avoid going insolvent.
2. The study may help the government of a county understand the importance of supporting business organizations in the country effectively.
3. The research study may be of great help to future researchers when conducting their own research studies.
Naturally, the research study that will be done will be descriptive. Descriptive research cannot fit in the description of quantitative or qualitative research methodologies but it can utilize both of them (Balestra, 2006). By being able to utilize both methodologies, I have a chance of achieving the objectives of this research exceptionally well by acquisition of necessary evidence for answering all the research questions appropriately. Research design
The design of this research study will be descriptive in nature. It entails the process of gathering data so as to answer questions concerning the present status of the research study by answering such questions as who, where, what, when, why and how. Data analysis techniques
Secondary data is sourced from textbooks, research journals, media sources and then vital information in relevance to the study is extracted. Raw data from primary sources is then collected and edited. The information is analyzed and interpreted using appropriate analytical tool to reveal the characteristics, nature and realtionship and then presented in form of pie charts and tables. 2.1 Matching resources to research questions of the study
Data Collection Methods
A data collection procedure was developed which checked the value of the ideas behind the research by using the internet search engine Google and available literature relevant to this topic. Snopes is an online source of information that is mostly assessed by researchers to obtain secondary data (Beard and Dess, 2009). Snopes was used in this study since it has been recommended by most researchers as the most reliable source. It was accessed in order to define the meaning of insolvencies and population growth rate. I obtained the population trend in North Scotland in the past two years from journals.
The relationship between the population growth of a country and business insolvencies will be obtained from primary data collected by other researchers. For example questionnaires distributed to 1,000 respondents in North Scotland and their feedback will be clearly and carefully analyzed through the appropriate analytical tools for reliable and valid conclusions and recommendations. These are data collected by previous researchers which seem to have some knowledge regarding the impact of decline of Scottish businesses. Data was collected from documents such as company annual reports and media reports, and government statistics data. Although primary information collected via interviews and questionnaires myself personally would have been more appropriate and help shape the findings into an authentic conclusion. But due to the time and financial limitations I only used secondary data sources for my research project.
2.2 Research methods that was used in the study
The research was conducted as outlined in the time table above and all deadlines met on time. The type of research conducted is descriptive in nature. Secondary data was obtained from online sites such as Snopes, journals, books and magazines and Governmental records of statistics.
2.3 Recording data acquired in the process of the research study Response rate
Previously researcher’s targeted one thousand respondents in North Scotland and all of them were given questionnaires to fill. From the 1,000 respondents, only 900 respondents filled the forms as required and returned them on the specified time. Figure 1: Actual response
Source: Research data
Out of the 900 respondents who participated in the research study, 40% (360) were women and 60% (540) were men. Figure 2: Gender details
Source: Research data
b. Level of education
From the study, 99 percent of the respondents who participated in the research studies were literate and had certificates, diplomas, degrees and masters. Only one percent of the lacked documents to support their academic credentials since they never finished school due to family and financial problems. Figure 3: Illiteracy or literacy percentage
Source: Research data
Effects of insolvencies on population
90% percent of the respondents argued that business insolvencies decrease the population growth rate of a country. Business organizations need to perform exceptionally well for them to improve the economy of a country since they are the main players in the economic development of a country. Once a large number of business organizations, go insolvent, the economic growth of a country declines. Lack of employment opportunities, poor lining standards and high crime rates increase leading to decreased population growth rate in a country. This is due to the fact that the number of family members is limited due to lack of sufficient resources to feed large numbers and increased death rates arising from poor living standards (Barney, 2008). The remaining 9 percent of the respondents thought that business insolvencies have nothing to do with the population of a country. Figure 4: Business insolvency Vs. Population growth
Source: Research data
The population trend in North Scotland for the past two years The population in North Scotland in the year 2010 was approximately 1, 800, 000 million according to online reliable sources. However in the year 2012, the total population of North Scotland decreased significantly by 100,000 due to increased death rates according to research conducted in the same year. Figure 5: Population trend in North Scotland in 2010 and 2012
3.1 Evaluation method
Both qualitative and quantitative evaluation methods of evaluation were carried out throughout the process of this project. Data were collected and interpreted in the form of numbers as statistics were involved. This project also investigated certain behavior and lifestyle of people in order to find out the cause and effect process, which led to answering my main research question about decrease in population and insolvencies.
3.2 Research findings
Businesses need adequate finances for them to operate smoothly. There are various sources of funds that a business organization can access to acquire the required finances to avail all necessary resources needed in the organization. the mostly accessed sources of funds is the selling of shares to the general public and potential investors and loans that are borrowed from banks and other financial institutions that offer loans to individuals and business organizations. The loans that are advanced to a business organization have to be repaid back in the specified period of time and amount. Once an organization fails to meet its debts in the agreed period of time, the organization is said to be going bankrupt and insolvent. The major reasons why businesses go insolvent is due to poor cash management, continuous losses, poor investments and poor overall management of the business organization. The population growth rate of Scotland generally in the pas t years has been improving significantly.
The approximate population of Scotland as per now is 5.3 million. This number is less due to the size of the country and although it much more than before. This shows that the economic development in the country is encouraging since the economy of a population plays a huge role in its population growth. Once the economy of a country is decreasing in its growth, the population of a country decreases due to lack of sufficient resources to meet the needs of all the country’s citizens satisfactorily. Poor living standards are also experienced due to lack of sufficient resources to promote high quality health care, education and general living standards. This leads to increased deaths and reduced birth rates hence decreasing the size of the country as discovered from the research. From the research study, we can see that, the population of North Scotland was 1.8 million in the year 2010. According to available statistics, the insolvency rate in the country at that time was very low and businesses were running smoothly hence the economy of the country was steady.
The population had increased by 200, 000 people in the same year compared to year 2009. This was due to the availability of sufficient resources to cater for all the needs of the residents of North Scotland satisfactorily. However, in the year 2011, the insolvency level in North Scotland started to increase. The number of businesses that were being closed down increased significantly and in the year 2012, a total of eighty two businesses had been closed down. This insolvency level lead to poor economic growth in the region since business organizations that were contributing effectively in the generation of income within the region were no more. This led to high unemployment level within the region, poor living standards, increased death rates and reduced birth rates. Some people migrated to other paths of the country to look for greener pasture. All this resulted to a decrease in population in the North region part of Scotland.
Business organizations play an instrumental role in the economic growth of a country. The income generated by these organizations is what grows the economy of a country. Therefore, organizational managers should ensure that all the organization’s resources are effectively managed and the organization is meeting its goals and objectives in order to be in a good state of repaying back debts. This will make business organizations avoid becoming insolvent and instead contribute significantly towards the economic growth of a region or country. The government of a country should assist business operations within the country for them to continue improving the economy of a country. In this case the population growth of a country will not be affected since there will be sufficient resources to cater for residents in the country. Health standards will be encouraging and crime rates will be low hence promoting the population growth in the country. This investigation has recognized five drivers: Enterprise
This audit acknowledges the first of these, endeavour. The investigation draws on existing research and frameworks what is implied by big business, why it is a critical driver of development, what the potential measures/indicators of big business are and how the UK and Scottish economies perform. Where accessible, execution is contrasted with the ‘Curve of Prosperity’ and other little European nations sketched out in the Government Economic Strategy Venture is an essential driver of investment development and profit, and additionally impacts levels of enhancement and rivalry. Undertaking includes the formation of little organizations and the advancement of new thoughts (business endeavor) and additionally the development of existing organizations. The entrepreneurial environment in Scotland is generally favorable, and contrasts well and different nations.
Nonetheless, Scotland confronts a testing in exploiting this and making an entrepreneurial society and new organizations. Start-up rates slack most other UK areas and numerous different nations, and in spite of the fact that Scottish mentality towards enterprise are sure and match those of the UK, Scots are more averse to change over this without hesitation. Access to back and an apprehension of disappointment may be purposes behind this. Various years of low rates of business development have left Scotland with a low business stock. Assuming that Scotland had the same number of organizations in respect to the population, GVA could be in the district of 30% higher. A low extent of organizations in Scotland show critical development – just about 5.5% expansion their turnover by more than £400,000 over a three year period. Then again, there is little proof that Scotland’s execution is any more terrible than the UK overall – and Scotland may perform somewhat better.
Access to additional powerful information however is obliged to completely evaluate the execution of organizations in Scotland contrasted with different zones. Impediments to development recognized by organizations incorporate the impacts of rivalry in the business sector, business regulations and the general monetary atmosphere. Market disappointments incorporate data lacks and data asymmetries that can influence access to general data about business start-up and development and access money for a few organizations and new begins. All in all, Scotland’s issue in connection to big business does not have all the earmarks of being that our organizations are less development orientated than those in whatever is left of the UK, its that we don’t have enough organizations regard.
The rate of business insolvency affects the economic growth of a country. Business organizations have the right to select their preferred sources of capital. The most preferred sources are bank loans, selling of shares to the public and ploughing back earned [profits. Loans advanced to business organizations have to be repaid in the agreed period of time and amount. Once organizations fail to repay their debts due to lack of sufficient cash arising from poor cash management and continuous losses, they are said to be insolvent. Insolvency affects the economy of a country due to reduced number of business organizations to generate the required income. In North Scotland, a high number of business organizations became insolvent and this led to decline in economic growth in the population. Poor economic growth resulted to decline in the population growth of the region. This is due to high unemployment levels, increased crimes, poor living standards, reduced birth rates and increased death rates within the region.
Ackelsberg, R. and Arlow, P. 2005. “Contribution of small businesses to population growth”, long Range Planning, Vol. 18 No. 5, pp. 61-7. Ackoff, R.L. 2003. A comparison of population growth in Wales, Scotland and England:, New York, NY. Andersen, T.J. 2004. “The performance of Scotland Firms and contribution to its population growth, Vol. 33, pp. 184-200. Andersen, T.J. 2005. “the effects of business insolvencies on population growth in a region”, Journal of Management Studies, Vol. 41 No. 8, pp.
1271-99. Armstrong, J.S. 2004 “The value of formal planning for strategic decisions: review of empirical research”, Strategic Management Journal, Vol. 3 No. 3, pp. 197-211. Balestra, P. 2006 “The concept of insolvency in business organizations”, J., Milgate, M. and Newman, P. (Eds), The New Palgrave: Econometrics, Macmillan, Basingstoke, pp. 70-4. Barney, J.B. 2008. “Firm financial position and sustained competitive advantage”, Journal of Management, Vol. 17, pp. 99-120. Beard, D.W. and Dess, G.G. 2009. “Industry profitability and firm performance: a preliminary analysis on the business insolvency question”, Academy of Management Proceedings, pp. 123-7. Chakravarthy, B.S. 2006 “Measuring financial performance”, Strategic Management Journal,
Vol. 7, pp. 437-58.
Covin, J.G., Slevin, D.P. and Schulz, R.L. 2004. “Implementing strategic mission to avoid insolvency”, Journal of Management Studies, Vol. 31, pp. 481-505.
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