The Impact of Dividend Policy on Shareholders Value - Book Report/Review Example

Research Reflection Report (Assignment Format) – Guidelines for the Report These notes are designed to help you deliver and conduct a successful Research Reflection Report. The Research Reflection Report is a major piece of work and is designed to support your own self-critical consideration of your research and related business skills and demonstrate that you can:- Reflect and comment critically on what you have learnt during the programme and during the carrying out of your research activities Carefully consider the research which you have carried out and critically comment on this Discuss the relationship of your research, research sources and evidence, and researching activities to the production of your Major Project Critically comment on the key areas, examples, sources of your research Consider the relationship of your research, and researching, to both your Major Project and possible future employment opportunities Your Research Reflection Report is not only an academic exercise but also a piece of work which you may wish to use in future employment contexts to demonstrate your ability to consider the importance of research and researching to:- business planning, business success, organisational contexts your own academic and business skills and the contribution which you can make to an organisation as a result of developing these skills The Research Reflection Report therefore aims to support the student’s ability to be self critical about their research. It also develops the students understanding and application of the core concepts of business and academic skills while developing their ability to perform more effectively within organisations in a real world context. The Report therefore encourages reflection on:- 1) Research Processes 2) The research methodologies which you have considered and applied 3) Research and researching as a problem solving process used by you as a student, 4) The identification and discussion of your key learning points which could be applied to other situations. 5) The relationship of research and your major project to your professional development opportunities and career development intensions Completion of the Report The contents of the report are given in a template format (see pages 3&4) You may treat this report as a self critical evaluation of your researching experience or “Learning Diary” or as a final summing up of your experiences while carrying out the Research and the Major Project in which you have been involved. It is advisable not to leave the completion of the Report until the last minute. Above all this Report should not be simply descriptive – it should be a self critical summary of your learning experiences. You should adopt a ‘critical’ viewpoint – what seems to work, what is less successful – and why? Discuss the examples of best /good/interesting research practice which you have come across. Consider how research examples/models can be usefully used in business situations– and be adapted to suit your future workplace/ academic environment. You should attempt to respond to all template sections You should keep to the overall word limit of 4000 words maximum for the whole Report. Things to think about when completing your Research Reflective Report:- The nature of your research and your Major Project Why is it being done; why are you working on this subject and how significant is it to you and to future employers? Plan of your schedules Have you managed effectively your research and Major Project schedules and are they logical? Resources What resources (i.e. people, evidence, references, and ideas) have you used and how are you using these? Why are they important? Methodologies Are the methods which you have used specified clearly, and are they sufficiently rigorous? Are data/evidence/literature sources specified and available? Are you conducting the research and the Major Project in a professional manner? What analytical frameworks will be used to make sense of the work? Are these appropriate? Support and Barrier Issues Have these been thought through by you? How any barriers to be/being overcome? Anticipated Benefits to you and to a future employment organisation What are they? – Knowledge? : Ideas? : Learning Experience? : Efficiency? : Effectiveness? Financial?: Organisational?: Skills? How will the project satisfy you? How will the work contribute to your personal development? How wide a range of skills and knowledge does it use from your programme? Will it demonstrate that you have an understanding of your programme subject areas? Major Project Conclusions: The conclusions which you are forming for your Major Project – are they based on rigorous reasoning and argument? Report Writing Skills Write your reflections and critical views clearly and simply. Student name: ……WRITE YOUR NAMES HERE AS THEY ARE IN YOUR PASSPORT…….. Student ID number: ……WRITE YOUR SCHOOL ID NUMBER HERE……………… RESEARCH REFLECTION REPORT (should contain the details given below) Please type your responses in the spaces below: Marks available Research Methods & Processes How and why have you chosen/decided on the research methods and processes which you are using/have used for the development of your Major Project? How would you describe these to: 1) a reader of your Major Project and/or 2) a future employer (max. 550 words) The chosen research topic of "The impact of dividend policy on shareholders’ value" is taken for oil sector in UK which is a known as one of the influential sectors of UK's economy. In this regard, in order to derive answers to the research question raised it was essential for me to conduct research using a mix approach. Quantitative and qualitative methods of research are being used to generate an understanding of the impact of dividend policy in different firms. As very few researches have been conducted on the subject hence, by using the two approaches, I was able to identify the gaps and analyze details of dividend policy framework so that they would not have an adverse affect on share holders’ value. These two methods are being used because the question raised is important for the shareholders and the results obtained from the research would help them to carry out their practice in the way that would not be harmful for their growth. Both the approaches used shall give detailed analysis that shall also help the future researchers get an understanding of the dividends policy and its impact on shareholders’ value in oil sector of UK in particular. Quantitative research approach is conducted using close ended questions as means to estimate the results in numerical data. In this kind of research close ended questions have helped me get accurate, precise and reliable data from the respondents. This has also helped me generate understanding of ten oil companies of UK for three years in a short span of time. In order to conduct qualitative research, secondary research methodology is being used which is through the previous research conducted on the same subject. However, findings obtained from the previous researches (qualitative approach) are carried out using open ended questions to get a detailed analysis on the subject. I have taken these two research methods or approaches to conduct the research work because through close ended questions I was able to get quick information from large sample of population, of 10 oil companies operating in UK. Moreover, the results obtained are valid and are not limited to specific group of people. Interviews in the qualitative approach using open ended question helped me gather precise information which was subjected to cross questioning to get profound understanding of the answers and clarification in case if there is any ambiguity. While conducting primary research using interview questions, I was also able to manage time with the respondents and could analyze the emotions and the behaviors of the respondents to see if they were true to their words or were bluffing. It is important to state the research through these approaches helped me overcome time constraints and additional costs associated with research. Additionally, I feel that the two approaches, quantitative and qualitative approach provide different answers because close ended questions restrict access of depth analysis or cross questioning but qualitative method using secondary data provide different views and responses of people which make the research work comprehensive and complete.I also feel that as the oil sector in UK is a big sector the qualitative research methodology limit potential errors that could occur due to any difference of opinions in respondents in empirical analysis through examination of secondary sources and literature review conducted on the same subject. Though, there are limitations in each of the approach but using both the approaches simultaneously shall cover the negative elements of each approach which shall facilitate learning and preliminary examination of all the information in the appropriate way. 15 Literature & sources 1) What are the most important theories/literature sources /evidence sources which you are using to justify your research and your Major Project? 2) Why are these sources important and fundamental to your work? (max. 550 words) In order to conduct a literature review, I had to look for the secondary sources or data which could provide me a detailed analysis of the effects of dividend policy on share holders’ value. The previous research done on this subject shall help the reader gather an understanding of the views of the scholars on the issue raised. In this regard, first of all I have extracted literature from reliable sources, theories and concepts that provide an understanding of shareholder’s value and dividend policy for instance in order to have an understanding of the relationship between the two I have made use of the theory of Modigliani and Miller. According to Modigliani and Miller, the dividend policy has no impact on any organization’s value provided that the markets are perfect and transaction costs are absent and there is no tax on investors. This theory cannot be applied practically in firms now but I feel this needed to be examined or studied to have an idea why dividends may impact shareholders worth now. There is another theoretical model examined in the literature review, developed by John and Williams. According to this model the changes in the dividend model may have a positive impact on the organizations values. Likewise, I feel that Walters Model examined in the study is significant as the assumptions in the model depict that the dividend policy shall influence a firm’s value but at the same time, it may not apply if any business has no debt and there are ongoing profits. Other scholars like Clientele have the view that the structure of dividends policy may not have any influence on the shareholders. The different views of the scholars are given to generate an understanding of how dividend policy is viewed differently and if it has any impact on shareholders worth. The literature review further consists of the dividend policies that are exercised in the British oil firms in the previous years. These sources are given because in my opinion I shall be able to gather the percentage of oil companies in UK which are influenced by these dividend policies. In order to analyze the data with respect to other researches, cases of other countries like India, Sri Lanka, Kenya and Nigeria etc are given so that comparisons can be conducted with respect to dividends policies in different regions and UK. The literature review comprises of ten empirical studies that review how dividend policy is affecting firm and the share holders. The studies in the section may also be regarded as the secondary sources used as a part of qualitative research. Data extracted through these sources show that most of the dividends policy has a positive impact on the share holders. I feel it is important to state that the sources in the literature review provide the details of the importance of the question raised in the study. In short, they provide analysis of the factors that have an impact on shareholders so that they can be compared with the results from the respondents when research is being conducted. 15 Your Knowledge What key areas of knowledge have you gained from undertaking your research and the Major Project? Indicate why these are so important to you? (max. 400 words) This research has helped me to attain a better understanding of the subject and has broadened my knowledge in a variety of ways. Since it has already been mentioned in the research that before conducting the study only a little data and information was available regarding the influence of dividends policy on shareholder’s worth in the UK’s oil market, therefore, the subject has always bothered me for the credibility and authenticity of the little information available regarding it. The research allowed me to not only study the subject in detail but it also provided me in depth understanding of some new policies and laws inside the UK’s oil industry. These new dividends policies and regulations are all studied and tested in detail in the research that resulted to have a positive influence on the worth of shareholders. Furthermore, it should be noted that during this research and the literature review, a number of past studies and researches on the subject were also studied and analyzed in order to draw an understanding of the past policies in the region and what their impacts on shareholders were worth. The literature review has helped me immensely and has added to my pool of knowledge in a variety of ways. I am now fully aware of all the key dividends policies inside the UK’s oil market and their consequences. Through this research I also got to know about the basic intrinsic and extrinsic factors that contributes or limits an organization’s decision making regarding profit distribution among the shareholders. My knowledge in this arena has increased immensely as I was able to discover the different ratios that were used by the organization in the Oil industry inside the UK. It should be noted that there were a few factors that negatively influenced the shareholders worth as many organizations decided not to distribute the dividend and to reinvest the entire profits as a part of retained earnings. Lastly, the research helped me towards a better understanding for conducting a research and what are the key areas to focus. My knowledge regarding the various techniques of research and different research methodology has also increased. Since the research comprised over both qualitative and quantitative techniques of research and includes interviews therefore it has polished my skills and capabilities in this area. Furthermore the use of primary and secondary sources in the research has also taught me a great lesson for their appropriate use. Since these topics are going to help me in the future therefore all the aforementioned details and knowledge has significance importance and is quite useful as well as helpful.       10 Your Learning What are the most important aspects/examples of learning and/or skills which you have gained from: (1) undertaking the MBA programme, (2) following through your research, and (3) applying your knowledge and what you have learnt in your Major Project (max. 400 words) Although a person develops most of his skills and polishes them during his / her school or college, however, there are a few skills and capabilities that are still left untouched and undiscovered. Undertaking an MBA course helps an individual to explore those hidden and powerful skills and to correctly implement them in his / her practical life. By undertaking the MBA program I have learnt a lot of skills and capabilities that were previously untouched. The MBA program allowed me to explore my leadership skills as I participated in numerous group projects and have also led a few. Furthermore the group presentations and assignments also helped me for showcasing my leadership skills to my teachers and to my friends. Such scenarios helped me to handle the real life business issues and to manage them correctly. Similarly, the program also helped me to polish my risk management skills as the current business environment heavily depends upon risk factors. The numerous analysis skills and teachings allowed me for better thinking and how decision making can be improved in order to avoid risks and other errors. The MBA course has also helped me in improving my interpersonal and public speaking skills. in the contemporary business society it is important to communicate with others in a better and effective manner, therefore, the MBA program has rightly taught me to communicate with people in various situations. As it has been discussed in the previous section that the research has improved my skills related to conducting a research and the various tactics and models involved in it, this study has done it all in an effective and brilliant manner and has prepared me well for future studies. For this reason I strongly believe that I can easily amend this knowledge and skills that are learnt from my major project, for future studies and researches and will also help me in my practical life. Furthermore, the knowledge would also allow me to make better and risk free decisions in real life scenarios.  10 Critical Thinking and your ideas In carrying out your research, your analysis, your evaluation of evidence, and in identifying or proposing conclusions, what has been the most important discovery, or piece of evidence, or theory, or viewpoint, or critical idea, or critical addition to your knowledge, or other item of importance and why? (max. 400 words) While conducting the research, I gained immense knowledge as mentioned before and most importantly, I understood how shareholder’s worth influences the business practice in internal and external environment due to the changes in the dividends policy. Surprisingly, I felt that though, such dividends policies are needed in the firm but the changes in the policy always had the positive impact on the firm or the enterprise which meant the strategic decisions concerning the design of dividends policy always needs to be created through the feedback from the shareholders. Moreover, the investment decisions taken by the management should always consider the worth of the shareholder as the main priority even above the public to have a profitable business practice. From research I got to know that the management of any firm has the right to change the dividend policy but at the same time they have to return back the value in case if increased losses have incurred in the company. The view points of different scholars have amazed me because I was not aware of the fact that dividend policy is changeable and even though firm manager has the means to return the investments of the share holder but they also have to address the issues of the primary shareholders. While conducting research specifically in literature review area I found that there was a positive relation of dividends on shareholders worth and even though there is nothing very surprising in this but I felt that if managers retained the profits and accumulated in the firm without giving them to share holders than there were chances of a negative impact on the firm as well due to the severe impact on the shareholders. Most of the evidences from the research indicate that the impact of dividends policy is always positive. However, due to limited and lack of data in companies such as Cairn energy plc, Borders and Southern plc, Borders and Southern plc, Ascent Resources plc, Active Energy plc and Amerisur Resources plc it shows that the owners are not focused on payments of dividends or policy associated with it, rather they are focusing on capital accumulation and development. These results show that directors of the firms know how to use shareholders worth in their hands and know that that there would be no impact of the dividend on them. Thus, the findings of the research that the dividends policy is unaffected by shareholders wealth came as a disclosure for me. 10 Barriers met What were the main difficulties and barriers which you were faced with in: (1) undertaking your research, and (2) completing your Major project (max. 400 words) While conducting the research, I faced few barriers and limitations which made it difficult for me to conduct the research in an effective way. For instance, firstly I had very limited time and I had to conduct research in 10 companies in UK which meant the requirement for sample size for focus groups and to conduct interviews was needed to more than what I have taken in my research work. As there was limited time, I opted to use a quantitative approach using close ended questions to get responses from the sample size. The responses from the interviews saved time as there were no detailed discussions carried out. Moreover, with respect to qualitative research I made use of secondary data using interviews extracted from previous researches. Though, the data from the researches helped me gain an understanding of the market but if the research would have been conducted through in through primary research, the results would be more concise and updated. The second barrier I faced during my research was that I had limited resources to carry out my results. Though, the sample size was still good, but while carrying out research in different firms in UK, there are many ethical considerations that one needs to be aware of. Many firms would not allow me to conduct the research and others didn’t have data relating to dividends data because they were not focusing on these issues thus, it can be said that these issues made it difficult for me to carry out the research in an effective way. Moreover, some times while getting responses it becomes difficult to estimate whether the answers coming from the respondents are true or not. As there is no way to validate the answers of the responses so I had to make sure that evidences were relevant, precise to the research question raised as well as associated with research problem in hand. While completing my major project, I felt that I had to accumulate a large amount data relating to dividends policy and its impact on shareholders’ value and had to relate the evidences and the results to the literature review so I felt that there was very little guidance on arranging my material extracted which made it difficult for me to stay focused on the research question raised. Moreover, if there is lack of evidences on the same it makes the research study invalid or incomplete and serve as a barrier when a person in conducting his study.  10 Your Professional Development What are the most important business and/or management skill(s) or academic idea(s) or lesson(s) which you have learnt from undertaking your research and your Major Project – and why? (400 words) After undertaking the research and making use of all the information relating to dividends policy and share holders value I feel that my personal development of determining financial ratios is polished which shall help me in professional career path. I have learnt the significance of dividends and their profound impact on shareholders. Moreover, I feel that in accounting profession the core knowledge of the fundamental ratios and terms are important to make useful reports of the practices that are followed by different organizations and with the passage of time, many accounting problems have emerged in the society and it shall help gather an understanding of the correct use of policies in different organizations and its impact on people whether it is about shareholders or other people in general. I also feel through the academic study on dividends policy and shareholders value has made me understand that if the company is willing to pay dividends at the correct time, it shows that they are portraying a powerful message to the people around them regarding the future prospects of the company which is important sign of fundamentals. Thus, the research has profound impact on my thoughts processes and enhanced my knowledge which shall always help me in my professional career or growth. I believe doing this project and carrying out academic research enabled me to become better in my time management skills and having the skills to apply knowledge in practice and to conduct research work on my own. This shall help me in my professional career because in organizations I would be expected to do certain tasks according to a certain time frame and will also be expected to see if I am able to meet my targets or not. Moreover, I also feel as that time constraints are also present in most of the organizational setups and I experienced the same during my research so I shall know how to manage my tasks in given with time constraints. All the above mentioned developments shall help me to stay progressive in my career path.Knowledge and understanding of the core subjects shall lead me to lifelong learning and development.  10 Objectives Based on your research and the work which you have done in the MBA Programme and its use in your Major Project, what were and how far have the objectives of your major project been achieved? (max. 450 words) My masters program has enabled me to carry out my research independently. The core objectives of the course and the research study have been met because I was able to identify a practical problem existing in UK and then I was able to find the relevant data associated with the research questions raised in the study. I feel that the objectives of the study were met because the answers coming from the respondents and the secondary data coincided with the literature review which was the purpose of the research along with the precise and relevant answers to question raised in the study. The study in my masters programs was focused on getting knowledge specifically on conducting or analyzing research papers with theoretical perspectives. I believe I was taught how to present, analyze and interpret data with and without causalities taking ethical considerations into mind. Moreover, my objectives have been achieved as during research I was supposed to identify key propositions that were significant in the research and that provided answers with strong evidences to the question raised. This knowledge transfer has helped me explain my research in descriptive way, transforming knowledge in paper which was the major aim of my objective in my master’s program. I believe that as the student of masters I had to primary goals while attending the program; first to get a sufficient knowledge and skills which can enable me to get a good job for myself and secondly to become academically sound and move towards self-improvement and self-exploration. I feel the research study has enabled me to gain personal and professional development in an effective way.  10 Findings & outcomes How useful and/or feasible are the findings, recommendations, conclusions, or outcomes of your Major Project to you and/or to a future Employer? You must justify your answer with specific examples. (max. 450 words) The findings of the research report indicate that dividend policy in 10 major companies in UK does not have any significant amount of impact on the shareholders value. Moreover, further results also indicate that many managers feel that focusing on capital investment shall increase the growth of the company. These results can be useful for me in the future because while working in the financial field, I would need to make corporate decisions relating to dividends. Furthermore, as finance professional I would need the data to identify the reasons and approaches the different firms are taking with respect to dividends policy. I also feel that being in the financial field as a professional or as the beginner working in any firm in UK, the understanding of the issues about dividend and divided policy is important because it enables a company to make important decisions specially when the economic conditions of the country become challenging. However, in UK it seen that there is few firms that are not too much concerned about dividends policy but I have a personal opinion that firms should follow a stable policy because many investors are dependent on dividends as a means of income to meet their expenses. Hence, if I shall be working in any firm in the near future I would make sure the firms take policies regarding dividends quiet seriously as they add value to the firm success and also indicate better earnings for the company as stated by the scholars in the chapter two, the literature review. Furthermore, I feel after analyzing my findings, I have reached to a conclusion that in UK, most of these oil companies are operating with their own framework, where some managers of the firm do not take dividend policy seriously. There are many gaps identified when comparisons are carried with theoretical frame work. Thus, the policy makers and individuals who make decisions related to dividends and dividends policy can make effective use of this report to make changes in their company’s policies. I also feel that while using this report, researchers can conduct further researches on the same areas. This report and findings obtained from the report shall also help economists and portfolio managers make their performances better in the capital market by focusing to make effective use of dividends policy as mentioned in the report. Hence, it can be concluded that the conclusions drawn from the report has increased my knowledge about oil sectors in UK and shall do the same for other researchers. 10 TOTAL 100 Read More