Martin Luther Essay

Martin Luther was born in 1483 in Germany. Although he was brought up in a catholic faith, he changed his faith by starting a new Christian movement that was against the teachings of Catholicism, which was consequently named as Lutheran. He taught as a theology lecturer, hence a professional in theology and he was a preacher as well. His parents Hans Luder mother Margarethe were catholic believers, therefore as soon as he was born; he got baptism on the following day which was St. Martin of Tours day of feast. He had brothers and sisters; however, two of his brothers passed way as a result of a plague. Jacob who had tight bonds with Martin lived on to old age. Martin’s father rented copper mines and smelters and he also worked as a spokesperson in the local council. Besides he wanted the best for his son; he aspired that Martin would be a lawyer . Martin began his early school life in 1497 at Mansfield, Magdeburg and Eisenach in that order; where he learnt Latin. When he was seventeen years of age he was a student at the University of Erfurt and by the year 1505, he had completed his postgraduate studies and was awarded a masters degree. Since his father wanted him to be a lawyer, he went ahead and registered for the law school however, he never pursued the course to completion since according to him law was ambiguous. Instead he preferred to study more on theology and philosophy and was fascinated by former philosophers like William of Ockham, Aristotle and Gabriel Biel. Nonetheless, he was more drawn to lecturers who taught on not laying trust on anyone including the philosophers unless the claims they state could be approved through familiarity. Because of this reason, Martin concluded that knowledge in philosophy could not help people get close to God because it merely emphasized on reasoning; which is valid when applied to people and organizations but not God. According to Luther, people could only acknowledge who God is by understanding the scriptures. From here, his quest for scripture understanding began. Later in 1505, Martin Luther abandoned his studies and joined the catholic monastery. Luther’s life as a monk was constituted by refraining from food, pilgrimage, declaration of his sins before a priest for forgiveness and praying for lengthy periods. The life at the monastery wasn’t easy at all; the monks spent less time in bed and they had to work hard in order to sustain community members. He confesses that his commitment to the church as a monk was not delighting to God; rather it made him aware of how sinful he was. Furthermore, the period within which he served as a monk gave a different perception of Jesus Christ in his life; the Christian life at the monastery was like a detention center that harassed innocent people, yet Jesus is â€Å"a Savior and a comforter†. Nevertheless, the monastery hardship transformed Luther as he found more time to know the Bible. Afterward, it was contemplated by Johann von Staupitz that Luther required to do something else so that his quest for the scripture could be disrupted. Accordingly, after his priestly ordination, he proceeded as a theology lecturer of Wittenberg University. By 1509, Luther had received two degrees; one in Biblical studies and the other in sentences. After three years, he graduated as a doctor in theology thereby becoming a member of the senate in the faculty of theology in the University of Wittenberg . The controversial issues regarding Catholicism began in 1517 when Martin Luther wrote the 95 theses. The theses focused on the indulgences that were sold in the church. Since the pope wanted funds to put up the St. Peter’s church in Rome, pardoning of sins was granted on condition that the sinner paid money. In other instances, one could purchase pardon for sins that he or she expects to commit. This spurred concern in Martin Luther because as he had read in the scripture, deliverance is freely given; whereas in Rome, salvation was an article of trade that could be traded between two partners- a sinner and the priest. Besides, more indulgences were sold so that those souls that were in purgatory could be released. Moreover, according to the Roman Catholic Theology it was believed that faith is not enough to justify a human being unless it is accompanied by deeds, for instance participating in works of charity and giving the church financial contributions . Luther objected the issue of indulgences that were being sold; consequently, he drafted a note to the archbishops of Magdeburg and Mainz; this note is what was later referred to as the 95 theses. A copy of the note he wrote to the archbishop was put on the door of Castle Church. According to Luther, the absolution and forgiveness of sins based on indulgences was wrong and deceptive. Within a short time the theses were converted to German, because they were written in Latin; after which they were printed and reproduced to make many copies. Accordingly, the reprinted theses were extensively distributed to various parts within Germany. Between 1510 and 1520, he spent his time in teaching the New Testament books including the Psalms. Even as he studied the Holy Scriptures, he came to realize that justification was a very significant aspect in salvation. That God acknowledges a sinner and makes him righteous when he believes the scripture; also God saves sinners because of grace. Luther proceeded to preach about justification, how it came from God’s only and faith as a present for humanity from God. The Roman papal authority took a period of three years to act in response to Luther’s writings despite the fact that the theses had been distributed at a faster rate. The Archbishop of Mainz and Magdeburg whom the letter was addressed to preferred not to answer Luther, but rather identified heretical phrases then sent the letter to Rome. Pope Leo X overlooked the letter believing that it was not a grievous issue; to him Luther was only drunk and after sometime he would get back to his senses. However, the perception was wrong: Country’s such as England, Italy and France were reading the theses by 1519. Furthermore, he wrote and published commentaries Psalms and Galatians, even though he had to work under protection. By 1520, he had published three books that are considered to be the most excellent among his works- â€Å"On the Babylonian Captivity of the Church, On the Freedom of A Christian and To the Nobility of the German Nation. The Pope came to rethink of Luther’s thesis in 1519 and ordered him to give details of his theses which he did in a synopsis. As a result, Luther was called to meet the Pope in Rome so that he could give a detailed justification to his writings. Nonetheless, Luther went to Rome but as it was arranged by Frederick the Wise, he met Cardinal Thomas Cajetan who was a legate to the pope Nevertheless, the pope went ahead and wrote to Luther in a writing termed as â€Å"papal bull Exsurge Domine† cautioning him to denounce the theses he had written as well as subsections within the books that he had written, in a period of sixty days; failure of which would result in him getting suspended from the catholic community. Conversely, Luther burnt the papal bull and the other manuscripts, an action he later justified in his writings- Assertions Concerning All Articles as well as Why the Pope and His Recent Book Are Burned. Following this, Luther was suspended out of the Roman Catholic community in 1521 by the Pope. Later in April, 1521, Luther was presented before the Diet of Worms, a gathering of the Roman Empire authorities in Worms, Rhine. It was required of him to confirm if he was the author of the theses and the other books he had written, an issue he readily confirmed. However, in answering whether he supported the writings, he agreed after one day having discussed with friends and prayed. Accordingly, in May 1521, Luther was declared a heretic and his writings were banned. In addition, no one was permitted to provide neither shelter nor food as this would amount to punishment. Luther by the help of the Elector of Saxony, Fredrick III, stayed separate away from people in the Castle of Wartburg for about eleven months under the name Junker Jorg. It is during this period that he interpreted the New Testament, initially in Greek to German . When he went back to Wittenberg in March 1522, Luther continued to preach and many people were drawn to his sermons. He revised the church doctrines and assisted in reinstating peace and unity within the nation. The new church doctrines were based on faith, grace and scripture alone. Instead of the seven sacraments that exist in the Roman Catholic, only two sacraments were recognized- baptism and the Holy Communion. Lutheranism did not advocate for celibacy, however, no one was forced to marry. The first Lutheran declaration of faith, otherwise referred to as the Augsburg Confession, was read before the Holy Roman Emperor, Charles V in 1530. The reformed church decided to name the new church as Lutheran in honor of Luther. Luther married Katharina who was initially a nun but defected. He passed away in 1546, in Eisleben after having been ill . Bibliography Collinson, P. (2004): The Reformation: a history, ISBN 0679643230, 9780679643234, Modern Library. Doak, R. S. (2006): Pope Leo X: Opponent of the Reformation, ISBN 0756515947, 9780756515942, Compass Point Books. Edwards, M. U. (March, 2000): Martin Luther: Exploring His Life and Times, 1483-1546. The Christian Century, Vol. 117. Fairchild, M. (2009): Martin Luther Bibliography. Retrieved on 13th April, 2009, from: http://christianity. about. com/od/lutherandenomination/a/martinlutherbio_2. htm Marius, R. (1999): Martin Luther: the Christian between God and death, 3rd Edition, ISBN 0674550900, 9780674550902, Harvard University Press. The Columbia Encyclopedia (2007): Luther, Martin, Sixth Edition, 2007.

Kashmir Issue

These claims are often reinforced with partisan interpretation of history and selective evidence. The real attitude and concrete policies towards the dispute, however, are often governed by perception of short term â€Å"national interests† as defined by dominant political elite of the two countries the interests that apparently are irreconcilable and non-negotiable. While each side sticks to its claims over Kashmir, the Kashmiri Muslims continue to pay a heavy price for their defiant struggle against overwhelming odds in order to exercise their right of self determination. For more than half a century the Kashmiris are oscillating between uncertainty and destitution. They continue to suffer misery and repression under illegal Indian occupation, and despite a stream of strong words and resolutions passed by the Security Council the Kashmir issue is still a bone o f contention between Pakistan and India. Rather the situation has taken a quantum leap for the worse. Indian has conceded the Security Council resolutions vindicating the right of self determination for the Kashmiris but has since reneged on its solemn commitment to the international community and the people of Kashmir. The brutal and blatant Indian repression and state sponsored terrorism against innocent Kashmiri men, women and children had few parallels in the annals of history. The valley has become a festering sore and the miseries of the oppressed people of this valley and the â€Å"terror let loose† by Indian forces is not less cataclysmic in nature than that of Jaliawala massacre ordered by infamous General Rex Dyer. In spite of facing all these hazards, the freedom fighters are exuberant. They have not only caused the military and political debacle to India but they have also done irreparable damage to Indian’s much touted and trumpeted secularism. Would it be too much to assume that Kashmir might well be the graveyard of Indian secularism. Unless sanity prevails to make the B.. P leadership realize the sheer folly o f their politico military aggression against the Kashmiris. In the name of freedom and self determination, the Kashmiris are being inured, mutilated and killed, their women raped, and their children robbed of hope for a better future. The dispute has shattered their economy polarized their society and festered a culture of violence among the people known for their non violent character. But the Kashmiris are not only the one’s who suffer from the adverse consequences of the dispute. Millions in Pakistan and India re paying a high cost form direct or indirect effects of this issue. Both counties spend huge and unaffordable resources on defence which could be spent more productively on improving the lot of their people. The Kashmir issue has also led both counties to use their limited scientific knowledge and skills to develop weapons of mass destruction exposing them the an unimaginable holocaust. The dispute and military activities related to it have strengthened the pre-existing culture of violence, promoted glorification of material values and intensified the desire to take revenge from the enemy for the past humiliations. The culture will be a breeding ground for future conflicts between the two countries. Even if the Kashmir problem itself is somehow solved. The Kashmiris have long history of sufferings and oppression, the worst chapter of which was written by the Dogra rule, particularly from 1931 onwards. Contrary to their hopes the partition of the sub-continent and the emergence of two new states, instead of ending the woes of Kashmiris, multiplied them. Since then they have suffered the consequences of three wars, well documented atrocities by the Indian army since 1989 and often violent activities of the militants, a umber of them religiously motivated non Kashmiris. Since the days of Muslim Mughal Empire, Kashmir has got a prominent Muslim majority population. There are more than eighty percent Muslims and the Hindu population is less than twenty percent. Unfortunately, on the fall of Mughal Empire, the State fell to the British East Company in 1840, which sold it to the Sikh traitor â€Å"Raja Gulab Singh† in 1846, as reward for his betrayal of the Sikhs at a very negligible price of Rs. 75 lac. Hence onward the Muslim population of Kashmir came under continuous torment of the cruel Sikh rulers. They tried to strengthened their hold on the State with the singular aim of shattering the will of their Muslim subjects, crushing their religious zeal. They cowed them down into accepting the slavery of the Hindu minority. The genesis of the Kashmir issue is that in August 1947, when partition of the sub-continent took place, Lord Mountbatten, the viceroy of undivided India, influenced Radcliff into awarding the predominantly Muslim district of Gurdaspur, situated in the East Punjab, to India. By this treacherous act, admitted by Lord Mountbatten himself on nation wide British television, the cruel Viceroy not only subjected a Muslim majority area to the cursed Hindu domination, it also sowed the seed from which could crop up the domination of India on another predominantly Muslim State Kashmir, because it is only through a narrow strap in the Gurdaspur district that India was linked with Kashmir. The canker in no time cropped up into the â€Å"Kashmir Problem† that has ever since proved to be a serious threat to the security of the South Asian region. Pakistan has made a lot of efforts to break the strangled hold of India on Kashmir, including third party’s mediations but the fate of Kashmiris is still trembling in the balance. The first effort was made when immediate after partition India airlifted its forces to Srinagar. When Quaid-e-Azam was informed he ordered Incharge of Pak Army General Gracy, to send forces to Srinagar but the General refused to do so. Mujahideen tried their level best to capture the valley but they were defeated by Indian army as they were not well equipped and trained. Then India took this dispute to the Security Council. The Security Council decided that a plebiscite must be held in Kashmir. At that time India agreed but after sometime she backed out of her promise. In 1962 Pakistan lost a golden opportunity to conquer Kashmir during Indo-china war. As India requested President Kennedy of America to influence Pakistan for not taking any step regarding Kashmir during Indo-China war. Kennedy pressurized Ayub Khan and he accepted the America influence on these conditions that after Indo-China war America would help in resolving the Kashmir issue through discussion. In this regard after the Indo-China war Sheikh Abdullah came to Pakistan to initiate some discussion on Kashmir. During his tour of Pakistan Jawahar Lal Nehru died and he had to rush back. Ayub Khan tried to atone for his mistake and he prepared five thousand gorillas form army to capture Kashmir. This operation was given the name of â€Å"operation Gibraltar† and it was done in 1965. All these gorillas caused a lot of destruction in the valley but at least they all were captured or killed by the Indian forces due to lack of planning. In revenge, India made heavy shelling on Awan Sharif, a village near border. In response to this incident Pakistani forces along with Azad Kashmir forces crossed the ceasefire line by making official announcement. During this war of 1965, at one stage the Pakistani forces advanced upto Akhnoor and they were in a position to capture Srinagar as well but under Soviet Union’s influence Ayub Khan declared ceasefire. In this way Pakistan also lost this opportunity to get Kashmir. The Indian areas occupied by the Pakistani forces were also given bank to India according to â€Å"Tashkent Accord†. After this war, tension mounted between the two countries upto this extent that they had another war in 1971. This war resulted in separation of East Pakistan as an independent State now known as Bangladesh. The Kashmiri freedom fighters took inspiration from brave freedom fighting display of Afghanis and an upgrade uprising began in the valley. But due to lack of planning and poor diplomatic approach, this brilliant tactical move ended in a terrible strategic blunder. Before Kargil episode, international opinion was focused on Indian army repression in Kashmir. What a pity that Kargil changed this focus completely. India achieved the world’s sympathies through its excellent diplomatic policies and quickly made propaganda against Pakistan mainly through its electronic media. On the other hand Pakistan became isolated in international politics and even China the most reliable friend of Pakistan gave a cold shoulder in these circumstances. The ex-Prime Minister of Pakistan had to call off the whole operation due to huge international pressure. The most unfortunate aspect of the whole Kargil operation was tht although jawans, officers and Mujahideen won the war at Kargil hills, yet they had to descend as Pakistani government lost this war on the diplomatic front. The great uprising is still going on in the valley. Pakistan tried to internationalize the Kashmiri freedom fighting and inhuman behavior of Indian forces through Kargil operation in 1999. Under this scenario of events, it is clear that a change in policy direction is necessary. New objectives have to be formed. Almost certainly the wings of our hawks have to clipped. For this purpose the following steps can be taken: One, the line of control can be transformed into the international border between Pakistan and India . India itself has been moving in this direction for a while now- in the event of its inability to stamp out the freedom struggle in Kashmir. This option is, from the Indian perspective, the least disturbing and the most aligned to its prevailing Kashmir stance. However, despite this option having support amongst some Western analysts, it is unworkable. This is because the line of control has never been accepted by the Kashmiris. Rather, it is simply a temporary cease fire line which marks a cessation of military hostilities between two antagonists and is expected to remain in place until the dispute is resolved. Two, the valley of Kashmir along with some Northern areas, must be given independence. This option although sounds very well, yet from India’s point of view it is not beneficial because an independent Kashmir bordering China will become a permanent thereat to India. Three, Northern areas in control of Pakistan whereas Jammu and Laddakh should be given under trusteeship of United Nations for twenty years in order to eliminate the Pakistan and Indian influence and than after twenty years it should be asked from the people of Kashmir whether they want to become independent or they want to become a part of Pakistan or India. In the light of above mentioned options for the solution of Kashmir issue, the third option is very much applicable as it looks neutral in all respects. So, conceived in this way, it is a reality that Kashmir continues to define parameters of the Pak-India relationship. And unless it is resolved there is a detente between these two states, there con not be meaningful stability in South Asia, which would allow India the power status is seeks. But as a matter of fact, India has ignored the realities of history its own leaders commitments to a plebiscite in Kashmir, India has denied itself a role commensurate with its power indicators. This is the time now that India must act with the confidence of a great power and more beyond its unacceptable status quo stance in Kashmir. It is clear that India can not maintain status quo in Kashmir indefinitely that is untenable. Even if Kargil had not happen in 1999, India would have had to accept that it has failed to make Kashmir an integral part of Indian Union through a bizarre mix of the use of military force and elections. Despite the horrible facts of Indian repression in the valley and the failure of lot of efforts mentioned above one may hope that according to the concrete stance taken by Pakistan the things will be changed for Kashmiris and that day is not far away when the Kashmiris will get the reward of their sacrifices and hey would also be able to get the palm. Kashmir Issue These claims are often reinforced with partisan interpretation of history and selective evidence. The real attitude and concrete policies towards the dispute, however, are often governed by perception of short term â€Å"national interests† as defined by dominant political elite of the two countries the interests that apparently are irreconcilable and non-negotiable. While each side sticks to its claims over Kashmir, the Kashmiri Muslims continue to pay a heavy price for their defiant struggle against overwhelming odds in order to exercise their right of self determination. For more than half a century the Kashmiris are oscillating between uncertainty and destitution. They continue to suffer misery and repression under illegal Indian occupation, and despite a stream of strong words and resolutions passed by the Security Council the Kashmir issue is still a bone o f contention between Pakistan and India. Rather the situation has taken a quantum leap for the worse. Indian has conceded the Security Council resolutions vindicating the right of self determination for the Kashmiris but has since reneged on its solemn commitment to the international community and the people of Kashmir. The brutal and blatant Indian repression and state sponsored terrorism against innocent Kashmiri men, women and children had few parallels in the annals of history. The valley has become a festering sore and the miseries of the oppressed people of this valley and the â€Å"terror let loose† by Indian forces is not less cataclysmic in nature than that of Jaliawala massacre ordered by infamous General Rex Dyer. In spite of facing all these hazards, the freedom fighters are exuberant. They have not only caused the military and political debacle to India but they have also done irreparable damage to Indian’s much touted and trumpeted secularism. Would it be too much to assume that Kashmir might well be the graveyard of Indian secularism. Unless sanity prevails to make the B.. P leadership realize the sheer folly o f their politico military aggression against the Kashmiris. In the name of freedom and self determination, the Kashmiris are being inured, mutilated and killed, their women raped, and their children robbed of hope for a better future. The dispute has shattered their economy polarized their society and festered a culture of violence among the people known for their non violent character. But the Kashmiris are not only the one’s who suffer from the adverse consequences of the dispute. Millions in Pakistan and India re paying a high cost form direct or indirect effects of this issue. Both counties spend huge and unaffordable resources on defence which could be spent more productively on improving the lot of their people. The Kashmir issue has also led both counties to use their limited scientific knowledge and skills to develop weapons of mass destruction exposing them the an unimaginable holocaust. The dispute and military activities related to it have strengthened the pre-existing culture of violence, promoted glorification of material values and intensified the desire to take revenge from the enemy for the past humiliations. The culture will be a breeding ground for future conflicts between the two countries. Even if the Kashmir problem itself is somehow solved. The Kashmiris have long history of sufferings and oppression, the worst chapter of which was written by the Dogra rule, particularly from 1931 onwards. Contrary to their hopes the partition of the sub-continent and the emergence of two new states, instead of ending the woes of Kashmiris, multiplied them. Since then they have suffered the consequences of three wars, well documented atrocities by the Indian army since 1989 and often violent activities of the militants, a umber of them religiously motivated non Kashmiris. Since the days of Muslim Mughal Empire, Kashmir has got a prominent Muslim majority population. There are more than eighty percent Muslims and the Hindu population is less than twenty percent. Unfortunately, on the fall of Mughal Empire, the State fell to the British East Company in 1840, which sold it to the Sikh traitor â€Å"Raja Gulab Singh† in 1846, as reward for his betrayal of the Sikhs at a very negligible price of Rs. 75 lac. Hence onward the Muslim population of Kashmir came under continuous torment of the cruel Sikh rulers. They tried to strengthened their hold on the State with the singular aim of shattering the will of their Muslim subjects, crushing their religious zeal. They cowed them down into accepting the slavery of the Hindu minority. The genesis of the Kashmir issue is that in August 1947, when partition of the sub-continent took place, Lord Mountbatten, the viceroy of undivided India, influenced Radcliff into awarding the predominantly Muslim district of Gurdaspur, situated in the East Punjab, to India. By this treacherous act, admitted by Lord Mountbatten himself on nation wide British television, the cruel Viceroy not only subjected a Muslim majority area to the cursed Hindu domination, it also sowed the seed from which could crop up the domination of India on another predominantly Muslim State Kashmir, because it is only through a narrow strap in the Gurdaspur district that India was linked with Kashmir. The canker in no time cropped up into the â€Å"Kashmir Problem† that has ever since proved to be a serious threat to the security of the South Asian region. Pakistan has made a lot of efforts to break the strangled hold of India on Kashmir, including third party’s mediations but the fate of Kashmiris is still trembling in the balance. The first effort was made when immediate after partition India airlifted its forces to Srinagar. When Quaid-e-Azam was informed he ordered Incharge of Pak Army General Gracy, to send forces to Srinagar but the General refused to do so. Mujahideen tried their level best to capture the valley but they were defeated by Indian army as they were not well equipped and trained. Then India took this dispute to the Security Council. The Security Council decided that a plebiscite must be held in Kashmir. At that time India agreed but after sometime she backed out of her promise. In 1962 Pakistan lost a golden opportunity to conquer Kashmir during Indo-china war. As India requested President Kennedy of America to influence Pakistan for not taking any step regarding Kashmir during Indo-China war. Kennedy pressurized Ayub Khan and he accepted the America influence on these conditions that after Indo-China war America would help in resolving the Kashmir issue through discussion. In this regard after the Indo-China war Sheikh Abdullah came to Pakistan to initiate some discussion on Kashmir. During his tour of Pakistan Jawahar Lal Nehru died and he had to rush back. Ayub Khan tried to atone for his mistake and he prepared five thousand gorillas form army to capture Kashmir. This operation was given the name of â€Å"operation Gibraltar† and it was done in 1965. All these gorillas caused a lot of destruction in the valley but at least they all were captured or killed by the Indian forces due to lack of planning. In revenge, India made heavy shelling on Awan Sharif, a village near border. In response to this incident Pakistani forces along with Azad Kashmir forces crossed the ceasefire line by making official announcement. During this war of 1965, at one stage the Pakistani forces advanced upto Akhnoor and they were in a position to capture Srinagar as well but under Soviet Union’s influence Ayub Khan declared ceasefire. In this way Pakistan also lost this opportunity to get Kashmir. The Indian areas occupied by the Pakistani forces were also given bank to India according to â€Å"Tashkent Accord†. After this war, tension mounted between the two countries upto this extent that they had another war in 1971. This war resulted in separation of East Pakistan as an independent State now known as Bangladesh. The Kashmiri freedom fighters took inspiration from brave freedom fighting display of Afghanis and an upgrade uprising began in the valley. But due to lack of planning and poor diplomatic approach, this brilliant tactical move ended in a terrible strategic blunder. Before Kargil episode, international opinion was focused on Indian army repression in Kashmir. What a pity that Kargil changed this focus completely. India achieved the world’s sympathies through its excellent diplomatic policies and quickly made propaganda against Pakistan mainly through its electronic media. On the other hand Pakistan became isolated in international politics and even China the most reliable friend of Pakistan gave a cold shoulder in these circumstances. The ex-Prime Minister of Pakistan had to call off the whole operation due to huge international pressure. The most unfortunate aspect of the whole Kargil operation was tht although jawans, officers and Mujahideen won the war at Kargil hills, yet they had to descend as Pakistani government lost this war on the diplomatic front. The great uprising is still going on in the valley. Pakistan tried to internationalize the Kashmiri freedom fighting and inhuman behavior of Indian forces through Kargil operation in 1999. Under this scenario of events, it is clear that a change in policy direction is necessary. New objectives have to be formed. Almost certainly the wings of our hawks have to clipped. For this purpose the following steps can be taken: One, the line of control can be transformed into the international border between Pakistan and India . India itself has been moving in this direction for a while now- in the event of its inability to stamp out the freedom struggle in Kashmir. This option is, from the Indian perspective, the least disturbing and the most aligned to its prevailing Kashmir stance. However, despite this option having support amongst some Western analysts, it is unworkable. This is because the line of control has never been accepted by the Kashmiris. Rather, it is simply a temporary cease fire line which marks a cessation of military hostilities between two antagonists and is expected to remain in place until the dispute is resolved. Two, the valley of Kashmir along with some Northern areas, must be given independence. This option although sounds very well, yet from India’s point of view it is not beneficial because an independent Kashmir bordering China will become a permanent thereat to India. Three, Northern areas in control of Pakistan whereas Jammu and Laddakh should be given under trusteeship of United Nations for twenty years in order to eliminate the Pakistan and Indian influence and than after twenty years it should be asked from the people of Kashmir whether they want to become independent or they want to become a part of Pakistan or India. In the light of above mentioned options for the solution of Kashmir issue, the third option is very much applicable as it looks neutral in all respects. So, conceived in this way, it is a reality that Kashmir continues to define parameters of the Pak-India relationship. And unless it is resolved there is a detente between these two states, there con not be meaningful stability in South Asia, which would allow India the power status is seeks. But as a matter of fact, India has ignored the realities of history its own leaders commitments to a plebiscite in Kashmir, India has denied itself a role commensurate with its power indicators. This is the time now that India must act with the confidence of a great power and more beyond its unacceptable status quo stance in Kashmir. It is clear that India can not maintain status quo in Kashmir indefinitely that is untenable. Even if Kargil had not happen in 1999, India would have had to accept that it has failed to make Kashmir an integral part of Indian Union through a bizarre mix of the use of military force and elections. Despite the horrible facts of Indian repression in the valley and the failure of lot of efforts mentioned above one may hope that according to the concrete stance taken by Pakistan the things will be changed for Kashmiris and that day is not far away when the Kashmiris will get the reward of their sacrifices and hey would also be able to get the palm.

Default and Disputes Essay

In this paper I will discuss the reasoning and methodology behind government contract defaults and disputes. I will also give recommendation to acquisition and cost containment. The standard contract clause which gives a customer the right to unilaterally terminate the contractor if the contractor fails to perform according to the specified terms. The contractor is generally not entitled to any payment for the unfinished part of the contract and, instead, may be liable for (1) repayment of monies advanced, (2) liquidated and other damages, and (3) excess cost incurred by the customer in completing the contract under a new contractor. Two primary types of terminations can arise under government contracts: â€Å"termination for default† and â€Å"termination for the government’s convenience†. Besides a criminal conviction or debarment or suspension for default is undoubtedly the most severe agency sanction that a termination can befall a government contactor. Terminations for default are much more common in supply contracts than in construction contracts. The standard clause used in supply and service contracts recites that the government has the right terminate for default if the contractor fails to (1) deliver the contract supplies or perform the services on time, (2) make progress so as to endanger performance of the contract. The â€Å"Termination for Cause† term also names three bases for terminating a commercial item contract for default: (a) â€Å"any default† by the contractor, (b) failure by the contractor â€Å"to comply with any contact terms or conditions,† and (c) failure by the contractor to provide the government on request, with â€Å"adequate assurances of future performance. The government’s right to terminate is not limited by standard inspection clauses, because they permit the government to exercise any other rights and remedies allowed by the contract. â€Å"Default terminations are provided for in government contracts under standard clauses set forth in the FAR. 52. 249–8 Def ault (Fixed-Price Supply and Service). As prescribed in 49. 04(a)(1), insert the following clause: DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) (APR 1984) (a)(1) The Government may, subject to paragraphs (c) and (d) below, by written notice of default to the Contractor, terminate this contract in whole or in part if the Con- tractor fails to—(i) Deliver the supplies or to perform the services within the time specified in this contract or any extension; (ii) Make progress, so as to endanger performance of this contract (but see subparagraph (a)(2) below); or (iii) Perform any of the other provisions of this contract (but see subparagraph (a)(2) below). 2) The Government’s right to terminate this contract under subdivisions (1)(ii) and (1)(iii) above, may be exercised if the Con- tractor does not cure such failure within 10 days (or more if authorized in writing by the Contracting Officer) after receipt of the no- tice from the Contracting Officer specifying the failure. (b) If the Government terminates this contr act in whole or in part, it may acquire, under the terms and in the manner the Contracting Officer considers appropriate, supplies or services similar to those terminated, and the Contractor will be liable to the Government for any excess costs for those sup- plies or services. However, the Contractor shall continue the work not terminated. (c) Except for defaults of subcontractors at any tier, the Contractor shall not be liable for any excess costs if the failure to perform the contract arises from causes beyond the control and without the fault or negligence of the Contractor. Examples of such causes include (1) acts of God or of the public enemy, (2) acts of the Government in either its sovereign or contractual capacity, (3) fires, (4) floods, (5) epidemics, (6) quarantine restrictions (7) strikes, (8) freight embargoes, and (9) unusually severe weather. In each instance the failure to perform must be beyond the control and without the fault or negligence of the Contractor. (d) If the failure to perform is caused by the default of a subcontractor at any tier, and if the cause of the default is beyond the control of both the Contractor and subcontractor, and without the fault or negligence of either, the Contractor shall not be liable for any excess costs for failure to perform, unless the subcontracted supplies or services were obtainable from other sources in sufficient time for the Contractor to meet the required delivery schedule. e) If this contract is terminated for de- fault, the Government may require the Con- tractor to transfer title and deliver to the Government, as directed by the Contracting Officer, any (1) completed supplies, and (2) partially completed supplies and materials, parts, tools, dies, jigs, fixtures, plans, drawings, information, and contract rights (collectively referred to as manufacturing materials in thi s clause) that the Contractor has specifically produced or acquired for the terminated portion of this contract. Upon direction of the Contracting Officer, the Con- tractor shall also protect and preserve property in its possession in which the Government has an interest. (f) The Government shall pay contract price for completed supplies delivered and accepted. The Contractor and Contracting Officer shall agree on the amount of payment for manufacturing materials delivered and accepted and for the protection and preservation of the property. Failure to agree will be a dispute under the Disputes clause. The Government may withhold from these amounts any sum the Contracting Officer determines to be necessary to protect the Government against loss because of outstanding liens or claims of former lien holders. (g) If, after termination, it is determined that the Contractor was not in default, or that the default was excusable, the rights and obligations of the parties shall be the same as if the termination had been issued for the convenience of the Government. (h) The rights and remedies of the Government in this clause are in addition to any other rights and remedies provided by law or nder this contract. FAR 52. 249-10 â€Å"Default (Fixed-Price Construction)† Clause (a) If the contractor refuses or fails to prosecute the work or any separable part, with the diligence what will insure it’s completion within the time specified in this contract including any extension, or fails to complete the work within this time, the government may, by written notice to the contractor , terminate the right to proceed with the work (or the separable part of the work) that has been delayed. In this event, the government may take over the work and complete it by contract or otherwise, may take over the work and complete it by contract or otherwise, and may take possession of and use any material, appliances, and plant on the work site necessary for completing the work. Although the â€Å"Termination for Cause† term in commercial item contracts does not contain a â€Å"cure notice† requirement, the FAR termination procedures for commercial item contracts require the Contracting Officer to send a standard cure notice ‘prior to terminating a contract for a reason other than late delivery. Consequences And Remedies Of â€Å"Termination For Default† And â€Å"Termination For Convenience† If a board or court determines that the contractor was not actually in default or the default was excusable, the termination for default will be converted into a termination for convenience. Similarly, before the appeal is even decided, the Contracting Office r can convert the termination for default into one for the government’s convenience. The Contractor’s recovery under a convenience termination may be significant. For example, under a convenience termination, the contractor is eligible to recover its costs of performance, some â€Å"continuing costs,† settlement expenses, and a reasonable profit on completed work. Should the contractor be unsuccessful in contesting the propriety of the default termination itself, it may still be able to challenge the excess costs assessment and achieve a reduction or elimination of those costs. The Fulford doctrine permits contractors to challenge the government’s imposition of excess re-procurement costs even if the time has expired for appealing the underlying default termination, but does not trump the Contract Disputes Act election doctrine. Remedy of â€Å"Excess Cost of Re-procurement† and â€Å"Liquidated Damages† The standard measures of excess costs is the difference between the contract price of the terminated contract and the price the government is required to pay to the re-procurement contractor for quantity f supplies or services called for under the terminated contract or for completion of unfinished work remaining under the terminated contract. To assess excess costs against the defaulted contractor, the government must show that the re-procurement contract has been performed and that complete payment has been made. The government may not obtain re-procurement costs for work that the government prevented the contractor from performing. If the default-terminated contract contains a â€Å"Liquidated Damages† clause, those damages may be assessed against the contractor until the government obtains completion of the contract work. Liquidated damages are in addition to the excess costs of re-procurement The Liquidated Damages† clause used in fixed-price supply and service contracts provides that, in the case of a termination for default, the contractor shall be liable for liquidated damages (as well as excess costs) â€Å"until the time the government may reasonably obtain delivery or performance of similar supplies or services. The â€Å"Liquidated Damages† clause requires the contractor to pay the government a specific amount for each calendar day of delay. The stipulated amount of the liquidated damages is set at the time the contract is entered into and is the parties’ estimate of the extent of loss that one party’s breach of the contract would cause to the other. Government policy is to use a â€Å"Liquidated Damages† clause in a contract when both (1)the time of delivery or performance is such an important factor that the government may reasonably expect to suffer damages if the delivery or performance is delinquent, and (2) the extent or amount or actual damages would be difficult or impossible to ascertain or prove. Contract Disputes Act The Contract Disputes Act of 1978 (â€Å"CDA†), which became effective on March 1, 1979, establishes the procedures for handling â€Å"claims† relating to United States Federal Government contracts. All claims by the contractor against the Federal Government must be submitted in writing to the Government’s Contracting Officer for a decision. All claims by the Federal Government against the contractor must be the subject of a decision by the Contracting Officer. Apart from claims by the Federal Government alleging fraud in connection with a claim by the contractor, all claims by either the Federal Government or the contractor must be submitted within six years after the accrual of the claim. Claims by the contractor that exceed $100,000 must be accompanied by a certification that (i) the claim is made in good faith, (ii) the supporting data are accurate and complete to the best of the contractor’s knowledge and belief, (iii) the amount requested represents the contract adjustment for which the contractor believes the Federal Government is liable, and (iv) the certifier is authorized to submit the certification on behalf of the contractor. There are procedures in the statute for remedying certifications that do not exactly mimic the required certification language. For claims of $100,000 or less, the Contracting Officer is required to issue a decision within 60 days of receipt of the claim provided the contractor requests a decision within that time period. For claims in excess of $100,000, the Contracting Officer is required, within 60 days, either to issue a decision or notify the contractor when a decision will be issued. All decisions should be issued within a reasonable time, taking into account the nature of the claim, and, if they are not, the contractor may either request a tribunal to direct the Contracting Officer to issue a decision within a specified time or treat the failure to issue a decision as an appealable â€Å"deemed† denial of the claim. If the contractor is dissatisfied with the Contracting Officer’s decision on a claim, the contractor may (i) appeal that decision to the cognizant agency board of contractor appeals within 90 days of receipt of the decision or (ii) bring suit on the claim in the United States Court of Federal Claims within 12 months. Decisions not appealed within one of these time periods become final and conclusive. There are procedures in the statute authorizing the use of mutually agreeable alternative dispute resolution techniques for handling disputes and well as for the use of streamlined and accelerated litigation procedures for smaller claims at the boards of contract appeals. The losing party may appeal a decision by either a board of contract appeals or the United States Court of Federal Claims to the Court of Appeals for the Federal Circuit. A contractor is entitled to interest on the amount found due on its claim running from the date the Contracting Officer received the claim until the claim is paid. Good acquisition planning is crucial to the overall project objective, government spending, tailored to objectives and constraints, and is flexible enough to allow innovation and modification as the project evolves. The strategy balances cost and effectiveness through development of technological options, exploration of design concepts, and planning and conduct of acquisition activities. These elements are directed toward either a planned Initial Operational Capability or retention for possible future use, while adhering to a program budget. The strategy should be structured to achieve program stability by minimizing technical, schedule, and cost risks. Thus the criteria of realism, stability, balance, flexibility, and managed risk should be used to guide the development and execution of an acquisition strategy and to evaluate its effectiveness. The acquisition strategy must reflect the interrelationships and schedule of acquisition phases and events based on a logical sequence of demonstrated accomplishments, not on fiscal or calendar expediency.

Critically Analyse the Role and Value of 'The Community' in Global Essay

Critically Analyse the Role and Value of 'The Community' in Global Justice Theory - Essay Example A modern example of how the world has rallied for social good is used to put the input of the global community in the topic under discussion into perspective. An example of â€Å"the invisible children†, an organization that produced the â€Å"Kony 2012† film that recently went viral for social good is used in this case. Introduction Social justice, is defined as the fair and appropriate implementation of laws in line with the natural law to all people regardless of their ethnicity, gender, wealth status, race, religious beliefs, political affiliations and so on with equality and without discrimination. Social justice begins with the acquisition of civil rights, defined as the privileges associated with citizenship of a particular country. These include the right to freedom, proper governance, justice and fairness in the implementation of the laws of the land together with human and natural rights like the privilege to hold public office subject to an individual’ s conduct (Kuper, 2000)1. From the definition, social justice begins at the local community level to the level of a country before going global. Global social justice cannot therefore be achieved if individual countries have not created room for its actualization. A deeper meaning of global social justice To have an in-depth understanding of global social justice, the following four areas must be properly explained; equal citizenship, entitlement to a social minimum, equality of opportunities and fair distribution of resources. With a proper appreciation of these issues, the social justice in a global context will be clearly realised. According to Simon Maxwell (2008)2, in his publication to the Overseas Development Institute (ODI), the above four areas have the following meaning: Equal citizenship. This is not just being a resident of a particular nation and earning a living within the confines of the country’s borders, but has a much wider requisite of freedom, equality and solidarity expressed by citizens of a country and by an extension the world. The voice of a citizen must be heard and they should be in a position to hold public institutions accountable to be considered full beneficiaries of social justice. Guarantee of social minimum. This has the implication of investments in social protection to ensure that all the civil liberties so achieved are not ceded but instead expanded to cover areas that are yet to experience social justice. It therefore requires vigilance on the part of citizens to ensure that all achievements with regards social justice are properly safeguarded from malicious interest groups seeking to steal any gains from a country’s citizens. Equality of opportunities This deals with the chance to reap the benefits of economic, social and cultural gains. Members of a country or society must have equal access to gains opportunities to education, health and fair administration of justice with the option of holding anyone attem pting to deny these opportunities to account. A society that avails equal chances to its members is therefore considered to have provided social justice to its constituents. Fair distribution The social justice agenda if facing problems thanks to the issue of distribution. This is one topic rarely discussed in most circles because it touches on the elite. America is considered on the nations

Climate change Coursework Example | Topics and Well Written Essays - 250 words

Climate change - Coursework Example Part of the problem with America’s stance on climate change is that many Americans are, as yet, unconvinced about the authenticity of the claims that the earth’s temperature having an effect on global weather conditions. It does not help when some of these skeptical people are sitting members of the United States Congress. If the people in charge of debating laws do not approve of international efforts to deal with climate change, then there can be little hope for the rest of us. The key thing with global warming is that there is a joined international effort to stop it. Because it affects the whole world, each country is forced to deal with the problem on its own. The United Nations Framework Convention on Climate Change is the first step to solving the problem. It may not be perfect, but it is a start. It is time that America stood up and realized this fact so that it can do something about

Workplace Discriminations Research Paper Example | Topics and Well Written Essays - 6000 words

Workplace Discriminations - Research Paper Example Discriminations can occur both in direct and indirect forms. Workplace discriminations affect both the employer and employee in many ways. Employee may face immense damage to his mental health as a result of employment discriminations. Discriminated employee may not show many interests in working hard for the organization and therefore the productivity of the organization may come down. Moreover, workplace discrimination cases may destroy the image and brand value of the company in many ways. Many federal, state and local laws are prevailing in America in order to avoid workplace discriminations; however, these laws are not fully successful in avoiding discriminations at American workplaces. Employees and employers should work together to avoid discriminations at workplaces. This paper analyses various types of workplace discriminations, its effect on employees and employers, federal, state and local laws to prevent workplace discrimination etc. Workplace Discriminations Globalizatio n has brought too many changes in the business world, and exchange of workforce is one among them. Majority of the prominent organizations in the world are currently keeping an extremely diverse workforce to accommodate the true spirit of globalization. However, the cases of work discrimination are also growing day by day due to various reasons. â€Å"Discrimination means treating some people differently from others. It isn't always unlawful - some people are paid different wages depending on their status and skills†( Directgov, n.d. para. 1). It can be witnessed in organizational functions such as hiring, promotion, job assignment, termination, and compensation. In places where employment discrimination is strictly prohibited, it may appear in other different forms. Even though cultural differences among workers are one of the major reasons, there are many other reasons for workplace discriminations. Race, ethnicity, gender, stereotyping, or differences in religious beliefs, sexual orientation, marriage, pregnancy, disability, age etc can also cause workplace discrimination in one way or another. Workplace discrimination can affect the productivity and efficiency of an employee negatively. In other words, it can cause damage both to the employee and the employer. Team work is necessary for an organization to function efficiently and the cases of discrimination may spoil the team spirit among the employees. America is one of the most civilized and advanced countries in the world, in which secular democracy exists. However the cases of workplace discrimination are numerous in America compared to that in some other parts of the world. In America, all types of workplace discriminations are prohibited by federal, state and local laws. However, the cases of workplace discrimination are growing every day in America. Different types of workplace discriminations Based on the nature and type, workplace discrimination can be classified as direct discrimination, i ndirect discrimination, harassment and victimization. Direct Discrimination â€Å"Direct discrimination happens when an employer treats an employee less favorably than someone else. For example, it would be direct discrimination if a driving job was only open to male applicants† (Directgov, n.d. para. 3). It should be noted that driving requires many physical as well as mental skills and because of that many companies have the habit of avoiding placing females in such positions. However, if a female comes forward to take the responsibility of a driver, she should be allowed to do so if she has all the other required qualifications to excel in that position. Otherwise, such practices can be labeled as direct workplace discrimination. Since different communities are running different schools, the

Personal Knowledge Management Journey Assignment

Personal Knowledge Management Journey - Assignment Example through experience or association (2) acquaintance with or understanding of a science, art, or technique (3) the fact or condition of being aware of something or, (4) the range of ones information or understanding the fact or condition of having information or of being learned†. Scholar Barry Allen (1999) clarifies, having knowledge â€Å"is to have the privilege of making a statement pass among others as known or true†¦speech acts are dialogical, intersubjective exchanges with reciprocal effects on many speakers. Knowledge has its object (what is known) and its â€Å"other,† the person whom it is offered and received as knowledge, passing over the other as â€Å"truth† (Allen, 1999, p. 71). So it seems that knowledge generation goes through a process. A person engages in certain habits of thinking when faced with a certain problem. Costa & Kallick (2007) define a problem as any stimulus, question, task, phenomenon or discrepancy for which an explanation is not known immediately. That means, a certain amount of knowledge should be on hand to help him out or else, such knowledge must be available to him soon so as to be able to solve his problem. Costa and Kallick term certain behaviors or dispositions for such problem-solving as â€Å"habits of mind†. They qualify that a habit of mind is having the appropriate disposition toward behaving intelligently when confronted with problems which do not have answers as of yet, at least for the person concerned. When a person draws on his own habits of mind, he gains results which are more powerful, of higher quality and greater significance that if he does not use such habits. In my personal journey seeking for knowledge, I do get to engage in certain habits of mind as I go through the four dimensions of knowledge management, namely: the analytical, information, social and learning dimensions. In each dimension, I shall share what I have learned from others about each as well as how I go through each dimension, from

History of Management Coursework Example | Topics and Well Written Essays - 1250 words

History of Management - Coursework Example Some of the known theorists whose theory’s themes are still in use now are Fredrick Taylor, Henri Fayol and Max Weber. They developed scientific management theory, modern operational-management theory and bureaucratic theory respectively. Managers use the ideas in the theories to run their duties and perform the organizations' activities to achieve their objectives. For example, many managers use the ideas to coordinate their workers, organize their plans, administer worker’s payments and employ skilled workers to achieve the company objectives. Frederick Taylor developed the scientific management theory in the 1880s and 1890s in the manufacturing industries. Scientific management is a management theory that synthesis and analyzes workflows. Its major objective is improving the efficiency of economics, mostly the labour productivity. It among the earliest attempts to use science in management and engineering processes. It needs a high-level managerial control of employe e practices on their work and entails a high managerial workers ratio to labourers than the prior management periods (Frederick, 2007). The theory evolved in an era when automation and mechanization were infancies. The methods and ideas of the theory extended to the American manufacturing system in the craft transformation in automation and mechanization. Therefore, the over labour-displacing technologies concerns rose with the increase of automation and mechanization (Frederick, 2007). Hence, the theory influences some of the management strategies in today’s industries. The theory guide on the worker’s payment. Fredrick studied that some employees were more talented compared to others, and the smart ones were mostly unmotivated. He also observed that many employees that got forced to work repetitive jobs tend to work at a slower rate that is unpunished.

Pfizer's unsuccessful takeover of AstraZeneca Case Study

Pfizer's unsuccessful takeover of AstraZeneca - Case Study Example In this regard, it is necessary to have a brief knowledge about AstraZeneca. The company is a United Kingdom (UK) based pharmaceutical company headquartered in London. AstraZeneca is also recognised among top companies in the global pharmaceutical industry. Like Pfizer, this company also have significant experience in acquisition and mergers as it has acquired and collaborated with a number of companies in recent years. The case in this paper focuses on the failed merger between Pfizer and AstraZeneca which took place in May, 2014. It was gathered from the Guardian (2014a) that the chairman of Pfizer initially approached chairman of AstraZeneca regarding merger in November 2013 while the detailed discussion took place in January, 2014. The exploratory meeting between both the companies took place in New York on January 5, 2014. It was gathered that Pfizer offered a settlement payment of  £58 billion or  £46.61 per share in its preliminary proposal to AstraZeneca. The offer also included establishment of a new holding company listed and headquartered in the US. However, AstraZeneca’s board turned down the offer concluding that Pfizer has heavily undervalued the company and its prospects. The company also questioned transaction structure and offered inversion structure of Pfizer and ultimately the proposal ended by the mid of January 2014 (International Business Times, 2014; The Telegraph, 2014; The Guardian, 2014a; 2014b). On 26 April 2014, Pfizer contacted chairman of AstraZeneca for a new discussion regarding collaboration of both the companies but AstraZeneca declined this offer. Consequently, Pfizer publicised its interest in merger with AstraZeneca on 28 April 2014. The US pharmaceutical giant revealed that they are planning to offer AstraZeneca cash and share at an attractive premium. They further added that they would move company domicile

Securitization, Regulation and Factors Contributing to Financial Essay

Securitization, Regulation and Factors Contributing to Financial Crisis - Essay Example This paper reviews the current financial crisis with focus on securitization, causes of the crisis, current regulatory framework and the scope of Basel Committee and proposes possible measures regulating the financial sector. The process of securitization and its significance Securitization refers to the transfer of assets from an entity, the originator, to another entity that is set for such purchases with the aim of increasing the generator’s liquidity level. The generator, a financial institution, sells its debt assets to the third party who in turn, provides agreed amount of cash in exchange. The process of securitization incorporates a number of stakeholders. It begins with the financial institution that wishes to securitize its assets. The originator offers its assets to an issuer that must be an established entity for such a purpose and the issuer obtains rights over the assets. The issuer is further a native organization and acquires rights of the assets. Fundamental t o the securitization process is the special purpose vehicle concept that transfers possession of the subject properties from the originator to the issuer and safeguards the issuer’s right over the property should the originator be declared bankrupt. The process also involves the concept of â€Å"credit enhancement† where a ‘non-privity’ party guarantees quality of the involved credit that is then rated before securities are offered. Issue of notes that are structured before they can be offered in the market (Choudhry, 331, 332) accompanies the security offers. The process of securitization identifies diversified benefits to both originators and investors. The process facilitates the originator’s liquidity level by through funding that is derived from owned assets. It therefore allows the financial institutions

Organizational studies Essay Example for Free

Organizational studies Essay The Functional -Structural Approach has dominated organizational studies. Describe and discuss the paradigm fully and assess the challenge posed to it by Postmodernism. Introduction Functional approach Is considered the second very essential paradigm In psychology. Functional structural approach in psychology deals with cognitive processes that Incorporate consciousness (Burrell and Gareth, 41). William James the father of functional approach came up to this paradigm from a viewpoint that functional approach in psychology is very important biological function. He also postulated that sychologists ought to understand the functions related to cognition so as to comprehend how mental processes in humans operate. Organizational studies is the study that Involves examining how individuals build organizational processes, structures, and practices, moreover, it studies how these phenomenon in turn shape social Interactions and creates organizations that impacts individuals (Knights, and Glenn, 252). Remarkably, organizational studies incorporate diverse areas that consider varied features of the organization. Arguably, cognitive oriented psychologists often describe human behavioral activities rom the perspective of mental constructs; they argue that classical conditioning as a means of behavior change is due the construction of associations within the individuals cognition. Postmodernism in philosophy is a movement that is very precarious of the Introductory assumptions and the propensity of western philosophy. Generally, postmodernism emphasizes the significance of personalization, power relationships and discourse in construction of the world views and truth (Alvesson, 5). It can be described as a set of strategic. critical, and rhetorical activities incorporating the use f concepts that Include trace, repetition and hyper reality to subvert other concepts such as Identity epistemic certainty, unlvoclty of meaning and historical progress. Following the present dominance of functional structural approach in organizational studies currently. this paper will present how functional structural approach has dominated organizational studies. Moreover, it will discuss this paradigm fully and further assess the challenge posed to It by postmodernism. Functional Structural Approach As a structural tneory, Tunctlonal structural approacn vlews tne organlzatlon In tne ociety being more important than any other individual within the society. Arguably, functional structural approach is a top down concept; individuals in the long run become products of societal influences as they become socialized by the institutions around them that include media, religion, family, and education. Functional approach is very important in the study of organizational studies because it offers a perspective of viewing the society as a set of interconnected parts that in the long run function as a whole. It is therefore of great importance to acknowledge he importance of functional structural approach in the study of organizational studies. Other than explaining the cognitive operations of human beings, the functional structural approach offers a platform of understanding the relationships that exist between these parts in the society hence contributing towards the maintenance of society. Through the notion of structural functionalism approach, the use of cognitive analogy in the tradition of Spencer, Comte and Durkheim has greatly influenced upon sociological thought (Burrell and Gareth, 43). By deriving upon the concepts of interrelationships between parts, holism, functions and needs the biological equivalence has been constructed in varied was to develop a social science perspective firmly linked to the sociology of regulation. Following the functional structural approach, the study of organizational studies have simplified in that functionalist believe that sociological matters should be approach from a perspective of scientific facts, a concept otherwise known positivism. According to the father of positivism Anguste Comte, functionalism should be based n primary facts and objectively weighed hence making it possible to note issues in the society that impact individuals hence providing a framework for innovation in law and implementing new legislation (Siebert, 36). The functional structural approach has been established to be of great significance in the study of organizational studies in that, by adopting the use of methodology in natural science and focusing on direct observable social facts, one is able to understand how parts that exist in the society function, hence the organizational behavior, organizational culture, organizational psychology, and organizational heory. Functional structural approach in sociology stresses the significance of the existing interdependence among various patterns and institutions within a social setting for its long term subsistence. According to †°mile Durkheim, functionalism is essential in understanding the utility of cultural and social traits, because it enlightens its contribution to the maneuvering of the overall system. Functionalism is therefore of great importance to the study of social behavior, organizational culture, organizational psychology, and organizational theory, because It OTTers a platTorm 0T crltlcally revlewlng tne reasons Denlna ce rtaln Denavlor patterns based on cognitive analysis. Arguably, functional approach is very significant in the study of attitudes (Herbert, 10). Understanding attitudes is very important to organizational studies. From a psychological point of view, the reasons behind changing attitudes are derived from the functions they accomplish to the individual specifically incorporating value expression, ego defense and knowledge. It is therefore very important to note the dominance of functional approach not only to the study of patterns in the society but lso to the changing attitudes from a cognitive perspective. In the recent years, organizational studies have been established to be increasingly important in social scientific investigation. Based on the number of research studies related to functional structural approach, it is important to note that organizational studies have claimed a better part of the functional approach (Crowther and Green, 50). Most research these days seeks a functional explanation of organizational studies, thus a societal functioning. What is the future of functional approach in organizational studies? Despite the opposition encountered by scientifically oriented organizational studies from some British organization researchers, their support on qualitative studies failed to yield credible knowledge. Their qualitative studies on organizational studies were not incorporated in the literature of organization studies because it produced no generalized knowledge. Following the failure of qualitative studies from these researchers, there has been a great increase in the number of researchers that incorporate the use of functional approach when researching issues that relate to rganizational studies. Majority of these researchers are oriented to the functional structural approach. Remarkably, the functional paradigm in psychology have hampered the rapid development of organizational studies, this will benefit the future due to the increased use of cognitive perspectives to in understanding patterns and structures in the society. Arguably, organizational studies will always provide knowledge about the performance within a society to the succeeding generations by incorporating and applying the use of functional approach hence making progress in social science. According to Hawthorne studies, functional approach has been helpful and dominant in studying and analyzing the behavior patterns among employees (Burrell and Gareth, 131). The conclusion made from these studies emerged based on conceptual scheme explanation of employee complaint which was determined drawing explanations from the functional approach. It is important to note that functional approach has dominated research pertaining to industrial problems, the interface which occurs due to the changes in the physical environment and the equilibrium established in such settings . Remarkably, theoretical views have changed overtime, nese views nave Decome more certain ana amDlvalent. I nese views nave Deen integrated to become more determinists, functionalists, more generalizing, and more organizationally rational. It is acknowledgeable that the functional approach has played a huge role towards explaining organizational studies. The challenge posed to Functional-structural approach by Postmodernism Despite the success and dominance of structural functional approach, postmodernism poses a great challenge to its subsistence and persistence. According to the post modernists, their theory is critical on the claims about bjectivity. The idea of grand theory is viewed by the postmodernists as skeptical and is viewed as unwarranted at its very least. This critique posed by the postmodernists to the structural functional approach has hindered the prosperity of this approach in the present times. Despite the importance of structural functional approach to organizational studies, postmodernism presents the dangers that the grand theory can pose, when not viewed as limited perspective when analyzing the society (Kilduff and Mihaela, 94). To some extent, the functional approach is not applicable in the postmodern society ecause norms and family structure within the society have incredibly changed overtime (Lord, 509), the changes realized in the postmodern times can be attributed as a move towards the idea of a new explanation of organizational studies. From this perspective, the use of functional approach is not useful anymore since it does not apply to postmodern society. The functional approach has been highly criticized for being more of teleological. It is has been viewed to be reverse the cause and effect order. Functional structural theory has faced a lot of criticisms from other social theories articularly the postmodernists. The most prevalent criticism faced by the social structural function from the postmodernists and other sociological notions, is the fact that most of these notions particularly the postmodern theory criticize the structural functional theory on the grounds that the concept systems of this theory offers too much unnecessary weight to consensus and integration, hence neglecting the concept of interdependence and conflict. In this theory, Parsons gave no satisfactory explanation as to how actors exercise their agency in antagonism to inculcation and socialization of the accepted norms. Generally, the structural functional theory does not offer a credible explanation as to why individuals accept or choose some values and norms within the society. From a postmodernist approach, the prominence of structural functional approach is heading to its end. This is based on the view that feminism is on a high rise and has launched critics on the functionalism theory. Considering that the functional approach did not incorporate the suppression of women in the society and the family, feminism and the post-modernist are at high opposition to the existence of this theory. Desplte tne Tact tnat Parsons aescrlDea sltuatlons tnat lead to tne rlse 0T women state of affairs and that some feminists agree that he provided accurate information concerning these situations. Parsons admits that he oversimplified his analysis concerning women in relation to family and work; moreover he postulates that he focused more towards the positive functions within the family rather than its dysfunctions towards women. The postmodernist criticize this theory because it lacks the feminist stability. Arguably, the postmodernist are likely to pose a huge challenge o the prevalence of this theory because it views the theory as a one that does not incorporate all the necessary elements. One major difference between modernism and any other notion paradigm in psychology particularly the functional approach is the fact that; whereas the structural functional approach seek universal laws for social behavior important in the study of organizational studies, the postmodernism views that the aim of social science should not be generalizability but rather innovation and discovery (Kilduff and Mihaela, 97). Remarkably, the catastrophe experienced in functional approach while analyzing rganizational studies can be attributed to postmodernism. Postmodernism is more likely to pose a huge challenge to the prevalence of functional approach, according to postmodernism, multiple contingencies upset outcomes while the historical and the cultural conditions can be ignored by people are well conversant with this knowledge. Conclusions In conclusion, it is evident that functional structural approach has dominated organizational studies. Despite its prevalence, postmodernism post a huge challenge to its development and growth.

Marketing Strategy for Decline Stage Essay Example for Free

Marketing Strategy for Decline Stage Essay Marketing Strategy for Decline Stage Posted on April 2, 2012 by admin in Marketing. The main characteristics of the maturity stage which help to define the appropriate marketing strategies are Sales of most product forms and brands eventually decline Decline may be due to Technical advances which lead to better substitutes Change in customer taste with time Increase in competition Lower sales volume leads to Over capacity Increases price cutting Profit erosion Carrying a weak product may be very costly if there are no suitable strategic reasons to keep the prodict alive in the market. To handle declining sales, marketing strategy could be Increase firms invest to dominate market/strength competitive position Maintain investments in innovations and RD until uncertainties above industry are resolved Decrease firms invest, selectively by dropping unprofitable products and focus on nice areas and profitable products Harvesting or divesting the product as per the GE Matrix strategic growth model. Appropriate marketing strategy for this phase depends completely on Industry’s relative attractiveness and Company’s strength in the industry. If the industry is attractive and company has significant strength in the industry then the company may decide to hold the product or brand even if sales volume decline during this phase. Post Tagged with Decline Stage, Marketing Strategy, PLC ↠ Previous Post If you enjoyed this article please consider sharing it! Next Post → Like crackmba.com/marketing-strategy-for-decline-stage/ 1/5 9/4/13 Marketing Strategy for Decline Stage | CrackMBACrackMBA Search Categories open all | close all Banking (114) Finance Wiki (183) HRM (9) Important Alert/News (95) Marketing (23) Online Fraud (1) Operations (20) Practice Tests (115) Previous Papers (24) Quiz (505) Strategy (8) Systems/IT (38) E-Mail Subscription Enter your email address: crackmba.com/marketing-strategy-for-decline-stage/ 2/5 9/4/13 Marketing Strategy for Decline Stage | CrackMBACrackMBA Subscribe Delivered by FeedBurner Pages open all | close all Finance Wiki Marketing Strategy Systems/IT HRM Operations Quiz Banking Alerts/News IBPS Online Fraud Recent Posts Previous Papers Practice Tests Tags Banking Awareness Quiz Banking Glossary Banking Quiz Banking Terms Banking Bonds Business Quiz Capital Market Computer Awareness Quiz Computer Quiz Data Quiz CMM Interpretation Debt Securities DI Different Funds English Exam Alert Finance Quiz Financial Ratio Analysis IBPS IBPS Quiz Interview Alert Logical Reasoning LR Marketing Marketing Awareness Quiz Marketing Quiz Mathematics MBA Admission crackmba.com/marketing-strategy-for-decline-stage/ 3/5 9/4/13 Marketing Strategy for Decline Stage | CrackMBACrackMBA MBA Quiz Options PO MBA Result Alert Practice Test Previous Paper Probationary Officers Quantitative Aptitude RBI RBI Assistant Recruitment Alert Risk SBI SBI PO Exam Specialist Officers Verbal Ability .. Current Affairs Business News GK Quiz Updates Current Affairs India – 3 September 2013 Sep 3, 2013 1. Indian Parliament gave its nod to the landmark Food Security Bill yesterday which seeks to provide highly subsidised foodgrains to†¦ Current Affairs Global – 3 September 2013 Sep 3, 2013 1. Ronald Coase, the British-born US economist who was awarded the Nobel Prize in 1991, passed away yesterday in†¦ GK Quiz – 3 September 2013 Sep 3, 2013 GK Quiz – 3 September 2013 4401 â€Å"World Population Day† is observed on _____________. A) 6-July B)†¦ Microsoft to acquire Finish phone maker Nokia’s mobile phone unit Sep 3, 2013 Global tech giant Microsoft has agreed to acquire Finish mobile maker Nokia’s mobile phone business for 5.4 billion euros†¦ Verizon to acquire Vodafone’s 45% stake in its US business for USD 130 billion; one of the largest deals in corporate history Sep 3, 2013 US mobile giant Verizon Communicat ions Inc agreed to acquire Vodafone Group Plc’s 45% stake in Verizon Wireless in a†¦ crackmba.com/marketing-strategy-for-decline-stage/ 4/5 9/4/13 Marketing Strategy for Decline Stage | CrackMBACrackMBA CrackM BA If its bout M BA, its @ CrackM BA. Colorway WordPress Theme by InkThemes.com crackmba.com/marketing-strategy-for-decline-stage/ 5/5

Application to Modern Investment Theory to EMH

Application to Modern Investment Theory to EMH The modern investment theory and its application on the efficient markets hypothesis 1. Introduction The Modern investment theory and its application is predicated on the Efficient Markets Hypothesis (EMH), assumption that markets fully and instantaneously integrate all available information into market prices. Underlying this comprehensive idea is the assumption that market participants are perfectly rational, and always act in self-interest, making optimal decisions. These assumptions have been challenged. It is difficult to tip over the neo classical convention that has yielded such insights as portfolio optimization, Capital Asset Pricing Model, Arbitrage Pricing Theory and Cox Ingersoll-Ross theory of the term structure of interest rates, all of which are predicated on the EMH[2] rather than downside risks[3]. The theory of behavioral finance is opposite to the traditional theory of Finance and deals with human emotions, sentiments, conditions, biases on collective as well as individual basis. Behavior finance theory is helpful in explaining past practices of investors and dete rmining the false performance of the investors. Behavioral finance is a concept of finance which deals with finances incorporating findings from psychology and sociology. It is reviewed that behavioral finance is generally based on individual behavior and financial market outcomes. There are many models explaining behavioral finance that explains investors behavior or market irregularities where rational models fail to provide adequate information. Investors do not expect such research to provide a method to make lots of money from inefficient financial markets quickly. According to Shiller (2001) Behavioral finance has basically emerged from the theories of psychology, sociology and anthropology where implications of these theories appear to be significant for efficient market hypothesis, that is based on the positive notion that people behave rationally, maximize their utility. It is found that in efficient market the principle of rational behavior is not always correct. Thus, the idea of analyzing other model of human behavior has come up. Gervais (2001) further explains the concept where he says that people like to relate to the stock market as a person having different moods, this person can be bad-tempered or high-spirited and can overreact one day or make amends the next. This person indicates human behavior which is unpredictable and behaves differently in different situations. Lately many researchers have suggested the idea that psychological analysis of investors may be very helpful in understanding financial markets better. To do so it is important to understand behavioral finance presenting the concept of traditional theory overestimating rationality of investors, their biases in decisions casting a cumulative impact on asset prices. To many researchers the study of behavior in finance appeared to be a revolution. As it transforms peoples mentality and perception about markets and factors that influence the markets. The paradigm is shifting. People are continuing to walk across the border from the traditional to the behavioral camp. Gervais (2001, pp.2). On the contrary some people believe that may be its too early to call it a revolution. Gervais (2001) states that Fama in (1970) argued that behavioral finance has not really shown an impact on world prices, and that model contradict each other on different point of times. Giving very less account to behaviorist explanations of trends and the irregularities anomaly ( is any occurrence or object that is strange, unusual, or unique) also argued that in order to locate patterns the data mining techniques are much helpful. Other researchers have also criticized the idea that behavioral finance models tend to replace the traditional models of market functions. Some weaknesses in this area, explained by Gervais (2001)are that generally overreaction and under reaction are major causes of market behavior. In these cases People take the behavior that seems to be easy for a particular study regardless of the fact that whether these biases are either primary factor of economic forces or not. Secondly, lack of trained and expert people. The field does not have enough trained professionals both in psychology or finance fields and therefore as a result the models presented by researchers are improvised. Gervais (2001) also focused on individual behavior impacting asset prices and explained that this field of behavioral finance is currently in its developmental stage, in its way of development it is facing a lot of disagreement which itself is a productive one. He points out that if we apply the conceptual models of behavioral finance to the corporate finance, it can majorly pay off. If money managers are incorrectly rational, means they are probably not evaluating their investment strategies correctly. They might take wrong decisions in their capital structure decisions. It has been found that quite a few people foresee behavioral finance displacing the age old Efficient Markets theory. On the contrary underlying assumption that investors and managers are completely rational makes insightful sense to many people. 2. Traditional Finance and Empirical Evidence Fung, (2006) claimed that Post Keynesian theory has criticized mainstream economic theory for using statistical methods to model the world in which histori ­cal market data cannot provide, In recent years, two different lines of research experimental economics and behavioral finance have pro ­duced results that are at odds with the predictions of mainstream finan ­cial theory. This paper argues that it is beneficial to the development of good financial theory for Post Keynesian economists to engage in an exchange of ideas with the practitioners of these two lines of research. The difference of opinion originated when experimental economics and behavioral finance understood the difference between agents rationality in theory and in real world. Both had a same point of view regarding Post Keynesian economists where both of them refused to assume Post Keynesian economists assumption of economic actors being always rational by maximizing expected utility. Instead of assuming ration al economic ac ­tors who always act consistently, they often tap into insights provided by psychology to try to explain economic behavior. The use of psychol ­ogy can be traced back to Keynes, and, in fact, some of the papers in experimental economics and behavioral finance take a remark of Keynes on the psychology of economic actors as an inspiration for designing empirical tests of economic behavior. Indeed, some of these papers rec ­ognize that we live in an uncertain world, and they examine the heuris ­tics, or rules of thumb, that economic actors develop to guide their behavior in face of uncertainty. When Keynes made his remark in 1936 (the original publication date of the General Theory), there was not yet an efficient market hypothesis. But in 1970 Fama published his pioneering paper on efficient markets. In it, he defined an efficient market as a market in which prices always fully reflect available information. Traditional theory assumes that agents are rational an d the law of one price holds that is a perfect scenario. Where the law of One price[5]. And agents rationality explains the behavior of investor Professional and Individual which is generally inconsistent with rationality or future predictions. If a market achieves a perfect scenario where agents are rational and law of one price holds then the market is efficient. With the availability of large amount of information, form of market changes. It is unlikely that market prices contain all private information. The presence of noise traders (traders, trading randomly and not based on information). Researches show that stock returns are typically unpredictable based on past returns where as future returns are predictable to some extent. According to Glaser et al. (2003) Few examples from the past literature explains the problem of irrationality which occurs because of naive diversification, behavior influenced by framing, the tendency of investors of committing systematic errors while ev aluating public information. Lately it has been found that investors` attitude towards the riskiness of a stock in future and the individual interpretation may explain the higher level trading volume, which itself is a vast topic for insight. A problem of perception exist in the investors actions that stocks have a higher risk adjusted returns than bonds. Another issue with the investors is that these investors either care about a stock portfolio or just about the value of each single security in their portfolio and thus ignore correlations. The concept of ownership society[6] has been promoted in the recent years where people can take better care of their own lives and be better citizen too if they are both owner of financial assets and homeowners. As Shiller (2006) suggested that in order to improve lives of less advantaged people in our society is to teach them how to be capitalist, In order to put ownership society in its right perspective, behavioral finance is needed to be und erstood. The concept of ownership society seems very attractive when people appear to make profits from their investments. Behavioral finance is also very helpful in understanding and justifying government involvement in investing decisions of individuals. The failure of millions of people to save properly for their future is also a core focus of behavioral finance. According to Glaser et al. (2003) there are two approaches towards behavioral finance, where both tend to have same goals. The goals tend to explain observed prices, market trading volume and Last but not the least is the individual behavior better than traditional finance models. Belief Based Model: Psychology (Individual Behavior) Incorporates into Model Market prices and Transaction Volume. It includes findings such as Overconfidence, Biased Self- Attrition, and Conservatism and Representativeness. Preference Based Model: Rational Friction or from psychology Find explanations, Market detects irregularities and individual behavior. It incorporates Prospect Theory[7], House money effect and other forms of mental accounting. Behavioral Finance and Rational debate: the article by Heaton and Rosenberg (2004) highlights the debate between the rational and behavioral model over testability and predictive success. And it was found that neither of them actually offers either of these measures of success. The rational approach uses a particular type of rationalization methodology; which goes on to form the basis of behavior finance predictions. A closer look into the rational finance model goes on to show that it employs ex post rationalizations of observed price behaviors. This allows them greater flexibility when offering explanations for economic anomalies. On the other hand the behavior paradigm criticizes rationalizations as having no concrete role in predicting prices accurately, t hat utility functions, information sets and transaction costs cannot be `rationalized. Ironically they also reject the rational finances explanatory power which plays an essential role in the limits of arbitrage, which actually makes behavioral finance possible. Heaton Rosenberg (2004) presented Milton Friedmans theory that laid the basis of positive economics. His methodology focused on how to make a particular prediction; it is irrelevant whether a particular assumption is rational or irrational. According to this methodology, the rational finance model relies on a limited assumption space since all assumptions that are supposedly not rational have been eliminated. This is one of the major reasons behind the little success in rational finance predictions. Despite the minimal results, adherents of this model have criticized the behavioral model as lacking quantifiable predictions that are based on mathematical models. Rational finance has targeted a more important aspect in the structure of economy, i.e. Investor uncertainty, which further cause financial anomalies. In explaining these assertions, the behavioral approach emphasizes importance of taking limits in arbitrage. Further his methodological approach falls into the category `instru mentalism[8], which basically states that theories are tools for predictions and used to draw inferences. Whether an assumption is realistic or rational is of no value to an instrumentalist. By narrowing what may or may not be possible, one will inevitably eliminate certain strategies or behaviors which might in fact go on to maximize utility or profits based on their uniqueness. An assumption could be irrational even in the long run, but it is continuously revised and refined to make it into something useful. In opposition to this, many individuals have said that behaviouralists are not bound by any constraints thus making their explanations systematically irrational. Heaton Rosenberg (2004) further explains the concept of Rubinstein that how when everyone fails to explain a particular anomaly, suddenly a behavioral aspect to it will come up, because that can be based on completely abstract irrational assumptions. To support rationality, he came up with two arguments. Firstly he w ent on to say that an irrational strategy that is profitable, will only attract copy cat firms or traders into the market. This is supported when a closer look is given towards limits to arbitrage. Secondly through the process of evolution, irrational decisions will eventually be eliminated in the long run. The major achievements characterized of the rational finance paradigm consist of the following: the principle of no arbitrage; market efficiency, the net present value decision rule, and derivatives valuation techniques; Markowitzs (1952) mean-variance framework; event studies; multifactor models such as the APT, ICAPM, and the Consumption CAPM. Despite the number of top achievements that supporters of the rational model claim, the paradigm fails to answer some of the most basic financial economic questions such as `What is the cost of capital for this firm? or `What is its optimal capital structure?; simply because of their self imposed constraints. So far this makes it seem lik e rational finance and behavioral finance are mutually exclusive. Contrary to this, they are actually interdependent, and overlap in several areas. Take for instance the concept of mispricing when there is no arbitrage. Behavior finance on the other hand suggests that this may not be the case; irrational assumptions in the market will still lead to mispricing. Further even though certain arbitrageurs may be able to identify irrationality induced mispricing, because of the imperfect market information, they are unable to convince investors of its existence. Over here, the rational model is accepting the existence of anomalies which are affected both through the factors of risk and chance; therefore coinciding with the perspective of behavioral finance. Two instances are clear examples of how rationalization is an important limit of arbitrage: i) the build-up and blow-up of the internet bubble; and ii) the superiority of value equity strategies. If we focus on the latter, we are able to see behavioral finance literature that highlights the superiority of such strategies in the ability of analysts to extrapolate results for investors. This is possible when rationalization is taken as a limit to arbitrage. Similarly these strategies may also limit arbitrage against mispricing, through the great risk associated with stocks. In explaining most anomalies it is essential that analysts first conclude whether pricing is rational or not. To prove their hypothesis that irrationality induced mispricing exists; behaviouralists may find it easier if they accepted the role of rationalization in limits of arbitrage. Slow information diffusion and short-sales constraints are other factors which explain mispricing. However these factors alone cannot form the basis of a strong and concrete explanation that will clarify pricing across firms and also across time. Those supporting the rational paradigm attack behavioral finance adherents in that their predictions for the financial markets have been made on irrational assumptions; that are not supported by concrete mathematical or scientific models. In their view the lack of concrete discipline in the methodology adopted in behavior finance leads to the lack of testing in their forecasts. On the other hand the rational model is criticized for its lack of success in financial predictions. The behaviouralists claim that this limitation exists because the supporters of rational finance dismiss aspects of the economic market simply because it may not fall into explainable rational behavior. Both perspectives claim to align themselves with respect to the goals of `testability and `predictions, while at the same time continue to offer evidence against the other model. In reality however, rather than being exclusively mutual both paradigms assist one another in making their predictions. Ray (2006) examines a new genre of behavioral markets prediction markets and their remarkable a bility to aggregate inside and expert information from around the world in order to accurately predict all types of economic and financial variables. To date it is said that the prediction markets are the most accurately efficient markets as they prove to show all three forms of market efficiency (weak, semi-strong, and strong), in contrast to regulated markets. Prediction markets are also said to be decision markets. It initially evolved in 1988 with the first online betting market the Iowa Electronic Market. These online markets have proven their predictions accurately since the time they came into being. To be precise these prediction markets are behavioral markets with powerful statistical components that are able to predict the most likely values of future financial variables, variances around such values, and their correlations with other future financial variables. Ray (2006) says that being unregulated, prediction markets are highly effective at flushing out and thereafter a ggregating relevant information including inside and expert information regarding a particular event, globally extracting such information from savvy bettors who are eager to profit from their inside and expert information. These sorts of prediction markets have become so popular that now a days major companies use such behavioral markets to accurately forecast sales, earnings, product success, and many other financial and economic variables. The foremost tool for these markets is the wisdom of crowd. In order to accurately predict financial and economical variables he presented few conditions as a prerequisite, which included mainly having a variety of opinions, with no herd behavior, should be able to use their knowledge according to the information available with them and last but not the least is the fact that prediction markets expectations are not self fulfilling prophecies. Prediction markets are a new genre of behavioral markets that continually reveal the thinking of confid ent insiders by suggesting them to profit from their inside and expert information. The subjective evidence with a few statistical evidences corroborates the impressive ability of these markets to predict financial events of all types. The phenomenon exists from ages and effectively proves its performance especially in worlds financial markets. The demonstrated accuracy of predictions in these markets can be of significant utility to traders, financial analysts, behavioral analysts, and many others intending to forecast and analyze financial data. A persons tendency to make errors is known as cognitive bias. These errors are based on the cognitive factors that include statistical judgments, social attribution and memory being common to all the humans in the world. Cognitive bias is the tendency of intelligent, well-informed people to consistently do the wrong thing. Crowell (1994, pp. 1). The reason behind this cognitive bias is that the Human brain is made for interpersonal relationships and not for processing statistics. He discussed the frailty of forecasts. Generally it is said that the world is divided into two groups: People forecasting positively and people forecasting negatively. These forecasts exaggerate the reliability of their forecasts and trace it to the illusion of validity which exists even when the illusionary character is recognized. Fisher and Statman, (2000) discussed five cognitive bias, underlying the illusion of validity that are Overconfidence, Confirmation, Representativeness, Anchoring, and Hindsight. Shiller (2002) discusses, that irrational behavior may disappear with more learning and a much more structured situation. History proves it that many of cognitive biases in human judgment value uncertainly will change; they may be convinced if given proper instructions, on the part-experience of irrational behavior. The three most common themes of behavioral finance are as follows: Heuristics, Framing and Market Inefficiencies. People when decide on the basis of the rules of thumb regardless of rationalizing suffer from Heuristics. Some forms of Heuristics are: Prospect theory, Loss Aversion, Status quo Bias, Gamblers Fallacy[9], Self-serving bias and lastly Money illusion. Framing is basically a problem of decision making where the decision is based on the point where there is difference in how the case is presented to the decision maker. Cognitive framing, Mental accounting and Anchoring are the common forms of Framing 3. Market Inefficiencies As observed, that market outcomes are totally opposite to rational expectations and efficient market hypothesis where mispricing, irrational decision making and return anomalies are examples of it. Fung (2006) introduced three forms of market efficiency earlier presented by Fama in 1970. In the weak form, the information set con ­tains only historical prices. In the semi strong form, information set contains all publicly available information. In the strong form, the infor ­mation contains not only all publicly available information but also insider information not available to the public. This definition of efficient mar ­kets is too general to be testable empirically. To make the model testable, he proposed a process of price formation known as the expected re ­turn or fair game efficient markets model. In this model, when investors form expectations of security prices, they fully utilize all the information that is fully reflected in those prices. It is called a fair game model, because using only the information that is fully reflected in security prices, no trading system can have expected profits or returns in excess of equi ­librium expected profits or returns. These terms have been described as specific market anomaly from a behavioral point of view. Anomaly (economic behavior) Disposition effect Endowment effect Inequity aversion Intertemporal consumption Present-biased preferences Momentum investing Greed and fear Herd behavior Anomalies (market prices and returns) Efficiency wage hypothesis Limits to arbitrage Dividend puzzle Equity premium puzzle Behavioral Economic Models are restricted to a certain observed market anomaly and it adjusts the neo classical models by explaining the phenomenon of Heuristics and framing to the decision makers. It is usually said that economics get along with in the neo classical framework, with just one restriction of the assumption of rationality. Loix et. Al (2005) in their paper Orientation towards Finances explains the individual financial management behavior, people dealing with their financial means. They have analyzed the Non-specific financial behavior as already we see extensive research on the specific finance behavior such as saving, taxation, gambling and amassing debt, and gave a lot of importance to stock market, investors and households. The analysis of general public`s behavior was done, where an ordinary man is not sure and simply act according to the guesses over their money related issues. It was also found that people interested in economic and financial matters are much more active in collecting specific information than general public, stating that financial behavior of household is an important relevant topic that needs to be discussed in much more details. Household financial management is similar to the financial management. The construct of orientation towards finances was developed where the individual ORTO FIN focuses on competencies (interest and skills). Having stronger money attitude is an indication of stronger orientation towards finances and much more effective competencies. Therefore we expect some relevance and similarity between corporate and household management behavior as both require organizing, forecasting, planning and control. Loix et. al (2005) analyzed general publics behavior in basically dividing them into two groups, Financial Information and Personal financial planning. Also explaining some practical and theoretical gaps in the area of psychology of money usage, they concluded that ORTOFIN (Orientation towards finance) indicates the involvement of individuals in managing their finances. Proving out the point that active interest in financial information and an urge to plan expenses are two main factors. A stronger ORTFIN indicates: greater use of debit accounts, higher savings account, wide variety of investments, greater awareness of ones financial Intimate knowledge of the details of ones savings/deposit accounts obsessed by money, higher achievement and power in monetary terms, Further age is also inversely proportional. Shiller, (2006) in his article talked about the co-evolution of neo-classical and behavior finance that in 1937 when A. Samuelsson one of the great economists wrote about people m aximizing the present value of utility subject to a present value. Another judgment he realized was time being consistent human behavior where if at any time t, 0 4. Investing and Cognitive Bias Money Managers and Money management is a very popular phenomenon. The performance in a stock market is measured at daily basis and waiting for a highly subjective annual review of ones performance by ones superior. Market grades you on a daily basis. The smarter one is, more confident one becomes of ones ability to succeed; clients support them by trusting them that eventually helps their careers. But the truth is that few money managers put in sufficient amount of time and effort to figure out what works and develop a set of investment principles to guide their investment decisions Browne (2000). Further he discussed the importance of asset allocation and risk aversion, in order to understand why we do what we do regardless of whether it is rational or not. General public opts for money Managers to deal with their finances and these managers are categorized in three ways: Value Managers, Growth Managers and Market Neutral Managers. The vast majority of money managers are categorized as either value managers or growth managers although a third category, market neutral managers, is gaining popularity these days and may soon rival the so-called strategies of value and growth. Some investment management firms even are being cautious by offering all styles of investments. What too few money managers do is analyze the fundamental financial characteristics of portfolios that produce long-term market beating results, and develop a set of investment principles that are based on those findings. Difference of opinion on the definition of value is the problem. The reasons for this are two-fold, one being the practical reality of managing large sums of money, and other related to behavior. As the assets under management of an advisor grow, universe of potential stocks shrinks. Analyzing why individual and professional investors do not change their behavior even when they face empirical evidence, suggests that their decisions are less than optimal. An answer to this questio n is said to be that being a contrarian may simply be too risky for the average individual or professional. If a person is wrong on collective basis, where everyone else also had made a mistake, the consequences professionally and for ones own self-esteem are far less damaging than if a person is wrong alone. The herd instinct allows for comfort of safety in numbers. The other reason is that individuals try to behave same way and do not tend to change courses of action if they are happy. If the results are not too painful individuals can be happy with sub-optimal results. Moreover, individuals who tend to be unhappy make changes often and eventually end up being just as unhappy in their new circumstances. According to traditional view of investment management, fundamental forces drive markets, however many other investment firms are consider being active and basing their working on their experienced Judgment. It is also believed that Judgmental overrides value and fundamental forces of markets can be lethal as well as a cause of financial disappointment. Historically it has been found that people override at wrong times and in most cases would be better off sticking to their investment disciplines and the reason to this behavior is the cognitive bias. According to Crowell (1994) and many other researchers, stocks of small companies with low price/book ratios provide excess returns. Therefore, given a choice among small cheap stocks and large high priced stocks, prominent investors (financial analysts, senior company executives and company directors) will certainly prefer small cheap ones. But the fact is opposite to this situation where these prominent investors would opt for large high priced ones and so suffer from cognitive bias and further regret. The assumptions made by Crowell (1994, pp.2) were that Long term investment value should be negatively correlated with size since small stocks provide superior returns. Long term Investment value should have a negative correlation with Price/book since low Price/Book stocks provide superior returns. Whereas the results Crowell`s survey were contrary stating that Long Term Investment had a positive correlation with size and with Price/Book stocks. Crowell further stated that according to Shefrin and Statman, prominent investors overestimate the probability that a good company is a good stock, relying on the representative heuristics, concluding that superior companies make superior stocks. Discussing the concept of regrets, aversion to regret is different from aversion to risk; Regret is acute when an individual must take responsibility for the final outcome. Aversion to regret leads to a preference for stocks of good companies. The choice of the stocks of bad companies involves more personal responsibility and higher probability of regret. Therefore, two major Cognitive errors appear: We have a double cognitive error: good company always makes good stock (representativeness), and involves less responsibility(Less aversion to regret). (Crowell, 1994,pp.3) The Anti Cognitive bias actions would be admitting to your owned stocks, admitting earlier investment mistakes. Further, taking the responsibility for actions to improve their performance in future. The reasons for all the available discip Application to Modern Investment Theory to EMH Application to Modern Investment Theory to EMH The modern investment theory and its application on the efficient markets hypothesis 1. Introduction The Modern investment theory and its application is predicated on the Efficient Markets Hypothesis (EMH), assumption that markets fully and instantaneously integrate all available information into market prices. Underlying this comprehensive idea is the assumption that market participants are perfectly rational, and always act in self-interest, making optimal decisions. These assumptions have been challenged. It is difficult to tip over the neo classical convention that has yielded such insights as portfolio optimization, Capital Asset Pricing Model, Arbitrage Pricing Theory and Cox Ingersoll-Ross theory of the term structure of interest rates, all of which are predicated on the EMH[2] rather than downside risks[3]. The theory of behavioral finance is opposite to the traditional theory of Finance and deals with human emotions, sentiments, conditions, biases on collective as well as individual basis. Behavior finance theory is helpful in explaining past practices of investors and dete rmining the false performance of the investors. Behavioral finance is a concept of finance which deals with finances incorporating findings from psychology and sociology. It is reviewed that behavioral finance is generally based on individual behavior and financial market outcomes. There are many models explaining behavioral finance that explains investors behavior or market irregularities where rational models fail to provide adequate information. Investors do not expect such research to provide a method to make lots of money from inefficient financial markets quickly. According to Shiller (2001) Behavioral finance has basically emerged from the theories of psychology, sociology and anthropology where implications of these theories appear to be significant for efficient market hypothesis, that is based on the positive notion that people behave rationally, maximize their utility. It is found that in efficient market the principle of rational behavior is not always correct. Thus, the idea of analyzing other model of human behavior has come up. Gervais (2001) further explains the concept where he says that people like to relate to the stock market as a person having different moods, this person can be bad-tempered or high-spirited and can overreact one day or make amends the next. This person indicates human behavior which is unpredictable and behaves differently in different situations. Lately many researchers have suggested the idea that psychological analysis of investors may be very helpful in understanding financial markets better. To do so it is important to understand behavioral finance presenting the concept of traditional theory overestimating rationality of investors, their biases in decisions casting a cumulative impact on asset prices. To many researchers the study of behavior in finance appeared to be a revolution. As it transforms peoples mentality and perception about markets and factors that influence the markets. The paradigm is shifting. People are continuing to walk across the border from the traditional to the behavioral camp. Gervais (2001, pp.2). On the contrary some people believe that may be its too early to call it a revolution. Gervais (2001) states that Fama in (1970) argued that behavioral finance has not really shown an impact on world prices, and that model contradict each other on different point of times. Giving very less account to behaviorist explanations of trends and the irregularities anomaly ( is any occurrence or object that is strange, unusual, or unique) also argued that in order to locate patterns the data mining techniques are much helpful. Other researchers have also criticized the idea that behavioral finance models tend to replace the traditional models of market functions. Some weaknesses in this area, explained by Gervais (2001)are that generally overreaction and under reaction are major causes of market behavior. In these cases People take the behavior that seems to be easy for a particular study regardless of the fact that whether these biases are either primary factor of economic forces or not. Secondly, lack of trained and expert people. The field does not have enough trained professionals both in psychology or finance fields and therefore as a result the models presented by researchers are improvised. Gervais (2001) also focused on individual behavior impacting asset prices and explained that this field of behavioral finance is currently in its developmental stage, in its way of development it is facing a lot of disagreement which itself is a productive one. He points out that if we apply the conceptual models of behavioral finance to the corporate finance, it can majorly pay off. If money managers are incorrectly rational, means they are probably not evaluating their investment strategies correctly. They might take wrong decisions in their capital structure decisions. It has been found that quite a few people foresee behavioral finance displacing the age old Efficient Markets theory. On the contrary underlying assumption that investors and managers are completely rational makes insightful sense to many people. 2. Traditional Finance and Empirical Evidence Fung, (2006) claimed that Post Keynesian theory has criticized mainstream economic theory for using statistical methods to model the world in which histori ­cal market data cannot provide, In recent years, two different lines of research experimental economics and behavioral finance have pro ­duced results that are at odds with the predictions of mainstream finan ­cial theory. This paper argues that it is beneficial to the development of good financial theory for Post Keynesian economists to engage in an exchange of ideas with the practitioners of these two lines of research. The difference of opinion originated when experimental economics and behavioral finance understood the difference between agents rationality in theory and in real world. Both had a same point of view regarding Post Keynesian economists where both of them refused to assume Post Keynesian economists assumption of economic actors being always rational by maximizing expected utility. Instead of assuming ration al economic ac ­tors who always act consistently, they often tap into insights provided by psychology to try to explain economic behavior. The use of psychol ­ogy can be traced back to Keynes, and, in fact, some of the papers in experimental economics and behavioral finance take a remark of Keynes on the psychology of economic actors as an inspiration for designing empirical tests of economic behavior. Indeed, some of these papers rec ­ognize that we live in an uncertain world, and they examine the heuris ­tics, or rules of thumb, that economic actors develop to guide their behavior in face of uncertainty. When Keynes made his remark in 1936 (the original publication date of the General Theory), there was not yet an efficient market hypothesis. But in 1970 Fama published his pioneering paper on efficient markets. In it, he defined an efficient market as a market in which prices always fully reflect available information. Traditional theory assumes that agents are rational an d the law of one price holds that is a perfect scenario. Where the law of One price[5]. And agents rationality explains the behavior of investor Professional and Individual which is generally inconsistent with rationality or future predictions. If a market achieves a perfect scenario where agents are rational and law of one price holds then the market is efficient. With the availability of large amount of information, form of market changes. It is unlikely that market prices contain all private information. The presence of noise traders (traders, trading randomly and not based on information). Researches show that stock returns are typically unpredictable based on past returns where as future returns are predictable to some extent. According to Glaser et al. (2003) Few examples from the past literature explains the problem of irrationality which occurs because of naive diversification, behavior influenced by framing, the tendency of investors of committing systematic errors while ev aluating public information. Lately it has been found that investors` attitude towards the riskiness of a stock in future and the individual interpretation may explain the higher level trading volume, which itself is a vast topic for insight. A problem of perception exist in the investors actions that stocks have a higher risk adjusted returns than bonds. Another issue with the investors is that these investors either care about a stock portfolio or just about the value of each single security in their portfolio and thus ignore correlations. The concept of ownership society[6] has been promoted in the recent years where people can take better care of their own lives and be better citizen too if they are both owner of financial assets and homeowners. As Shiller (2006) suggested that in order to improve lives of less advantaged people in our society is to teach them how to be capitalist, In order to put ownership society in its right perspective, behavioral finance is needed to be und erstood. The concept of ownership society seems very attractive when people appear to make profits from their investments. Behavioral finance is also very helpful in understanding and justifying government involvement in investing decisions of individuals. The failure of millions of people to save properly for their future is also a core focus of behavioral finance. According to Glaser et al. (2003) there are two approaches towards behavioral finance, where both tend to have same goals. The goals tend to explain observed prices, market trading volume and Last but not the least is the individual behavior better than traditional finance models. Belief Based Model: Psychology (Individual Behavior) Incorporates into Model Market prices and Transaction Volume. It includes findings such as Overconfidence, Biased Self- Attrition, and Conservatism and Representativeness. Preference Based Model: Rational Friction or from psychology Find explanations, Market detects irregularities and individual behavior. It incorporates Prospect Theory[7], House money effect and other forms of mental accounting. Behavioral Finance and Rational debate: the article by Heaton and Rosenberg (2004) highlights the debate between the rational and behavioral model over testability and predictive success. And it was found that neither of them actually offers either of these measures of success. The rational approach uses a particular type of rationalization methodology; which goes on to form the basis of behavior finance predictions. A closer look into the rational finance model goes on to show that it employs ex post rationalizations of observed price behaviors. This allows them greater flexibility when offering explanations for economic anomalies. On the other hand the behavior paradigm criticizes rationalizations as having no concrete role in predicting prices accurately, t hat utility functions, information sets and transaction costs cannot be `rationalized. Ironically they also reject the rational finances explanatory power which plays an essential role in the limits of arbitrage, which actually makes behavioral finance possible. Heaton Rosenberg (2004) presented Milton Friedmans theory that laid the basis of positive economics. His methodology focused on how to make a particular prediction; it is irrelevant whether a particular assumption is rational or irrational. According to this methodology, the rational finance model relies on a limited assumption space since all assumptions that are supposedly not rational have been eliminated. This is one of the major reasons behind the little success in rational finance predictions. Despite the minimal results, adherents of this model have criticized the behavioral model as lacking quantifiable predictions that are based on mathematical models. Rational finance has targeted a more important aspect in the structure of economy, i.e. Investor uncertainty, which further cause financial anomalies. In explaining these assertions, the behavioral approach emphasizes importance of taking limits in arbitrage. Further his methodological approach falls into the category `instru mentalism[8], which basically states that theories are tools for predictions and used to draw inferences. Whether an assumption is realistic or rational is of no value to an instrumentalist. By narrowing what may or may not be possible, one will inevitably eliminate certain strategies or behaviors which might in fact go on to maximize utility or profits based on their uniqueness. An assumption could be irrational even in the long run, but it is continuously revised and refined to make it into something useful. In opposition to this, many individuals have said that behaviouralists are not bound by any constraints thus making their explanations systematically irrational. Heaton Rosenberg (2004) further explains the concept of Rubinstein that how when everyone fails to explain a particular anomaly, suddenly a behavioral aspect to it will come up, because that can be based on completely abstract irrational assumptions. To support rationality, he came up with two arguments. Firstly he w ent on to say that an irrational strategy that is profitable, will only attract copy cat firms or traders into the market. This is supported when a closer look is given towards limits to arbitrage. Secondly through the process of evolution, irrational decisions will eventually be eliminated in the long run. The major achievements characterized of the rational finance paradigm consist of the following: the principle of no arbitrage; market efficiency, the net present value decision rule, and derivatives valuation techniques; Markowitzs (1952) mean-variance framework; event studies; multifactor models such as the APT, ICAPM, and the Consumption CAPM. Despite the number of top achievements that supporters of the rational model claim, the paradigm fails to answer some of the most basic financial economic questions such as `What is the cost of capital for this firm? or `What is its optimal capital structure?; simply because of their self imposed constraints. So far this makes it seem lik e rational finance and behavioral finance are mutually exclusive. Contrary to this, they are actually interdependent, and overlap in several areas. Take for instance the concept of mispricing when there is no arbitrage. Behavior finance on the other hand suggests that this may not be the case; irrational assumptions in the market will still lead to mispricing. Further even though certain arbitrageurs may be able to identify irrationality induced mispricing, because of the imperfect market information, they are unable to convince investors of its existence. Over here, the rational model is accepting the existence of anomalies which are affected both through the factors of risk and chance; therefore coinciding with the perspective of behavioral finance. Two instances are clear examples of how rationalization is an important limit of arbitrage: i) the build-up and blow-up of the internet bubble; and ii) the superiority of value equity strategies. If we focus on the latter, we are able to see behavioral finance literature that highlights the superiority of such strategies in the ability of analysts to extrapolate results for investors. This is possible when rationalization is taken as a limit to arbitrage. Similarly these strategies may also limit arbitrage against mispricing, through the great risk associated with stocks. In explaining most anomalies it is essential that analysts first conclude whether pricing is rational or not. To prove their hypothesis that irrationality induced mispricing exists; behaviouralists may find it easier if they accepted the role of rationalization in limits of arbitrage. Slow information diffusion and short-sales constraints are other factors which explain mispricing. However these factors alone cannot form the basis of a strong and concrete explanation that will clarify pricing across firms and also across time. Those supporting the rational paradigm attack behavioral finance adherents in that their predictions for the financial markets have been made on irrational assumptions; that are not supported by concrete mathematical or scientific models. In their view the lack of concrete discipline in the methodology adopted in behavior finance leads to the lack of testing in their forecasts. On the other hand the rational model is criticized for its lack of success in financial predictions. The behaviouralists claim that this limitation exists because the supporters of rational finance dismiss aspects of the economic market simply because it may not fall into explainable rational behavior. Both perspectives claim to align themselves with respect to the goals of `testability and `predictions, while at the same time continue to offer evidence against the other model. In reality however, rather than being exclusively mutual both paradigms assist one another in making their predictions. Ray (2006) examines a new genre of behavioral markets prediction markets and their remarkable a bility to aggregate inside and expert information from around the world in order to accurately predict all types of economic and financial variables. To date it is said that the prediction markets are the most accurately efficient markets as they prove to show all three forms of market efficiency (weak, semi-strong, and strong), in contrast to regulated markets. Prediction markets are also said to be decision markets. It initially evolved in 1988 with the first online betting market the Iowa Electronic Market. These online markets have proven their predictions accurately since the time they came into being. To be precise these prediction markets are behavioral markets with powerful statistical components that are able to predict the most likely values of future financial variables, variances around such values, and their correlations with other future financial variables. Ray (2006) says that being unregulated, prediction markets are highly effective at flushing out and thereafter a ggregating relevant information including inside and expert information regarding a particular event, globally extracting such information from savvy bettors who are eager to profit from their inside and expert information. These sorts of prediction markets have become so popular that now a days major companies use such behavioral markets to accurately forecast sales, earnings, product success, and many other financial and economic variables. The foremost tool for these markets is the wisdom of crowd. In order to accurately predict financial and economical variables he presented few conditions as a prerequisite, which included mainly having a variety of opinions, with no herd behavior, should be able to use their knowledge according to the information available with them and last but not the least is the fact that prediction markets expectations are not self fulfilling prophecies. Prediction markets are a new genre of behavioral markets that continually reveal the thinking of confid ent insiders by suggesting them to profit from their inside and expert information. The subjective evidence with a few statistical evidences corroborates the impressive ability of these markets to predict financial events of all types. The phenomenon exists from ages and effectively proves its performance especially in worlds financial markets. The demonstrated accuracy of predictions in these markets can be of significant utility to traders, financial analysts, behavioral analysts, and many others intending to forecast and analyze financial data. A persons tendency to make errors is known as cognitive bias. These errors are based on the cognitive factors that include statistical judgments, social attribution and memory being common to all the humans in the world. Cognitive bias is the tendency of intelligent, well-informed people to consistently do the wrong thing. Crowell (1994, pp. 1). The reason behind this cognitive bias is that the Human brain is made for interpersonal relationships and not for processing statistics. He discussed the frailty of forecasts. Generally it is said that the world is divided into two groups: People forecasting positively and people forecasting negatively. These forecasts exaggerate the reliability of their forecasts and trace it to the illusion of validity which exists even when the illusionary character is recognized. Fisher and Statman, (2000) discussed five cognitive bias, underlying the illusion of validity that are Overconfidence, Confirmation, Representativeness, Anchoring, and Hindsight. Shiller (2002) discusses, that irrational behavior may disappear with more learning and a much more structured situation. History proves it that many of cognitive biases in human judgment value uncertainly will change; they may be convinced if given proper instructions, on the part-experience of irrational behavior. The three most common themes of behavioral finance are as follows: Heuristics, Framing and Market Inefficiencies. People when decide on the basis of the rules of thumb regardless of rationalizing suffer from Heuristics. Some forms of Heuristics are: Prospect theory, Loss Aversion, Status quo Bias, Gamblers Fallacy[9], Self-serving bias and lastly Money illusion. Framing is basically a problem of decision making where the decision is based on the point where there is difference in how the case is presented to the decision maker. Cognitive framing, Mental accounting and Anchoring are the common forms of Framing 3. Market Inefficiencies As observed, that market outcomes are totally opposite to rational expectations and efficient market hypothesis where mispricing, irrational decision making and return anomalies are examples of it. Fung (2006) introduced three forms of market efficiency earlier presented by Fama in 1970. In the weak form, the information set con ­tains only historical prices. In the semi strong form, information set contains all publicly available information. In the strong form, the infor ­mation contains not only all publicly available information but also insider information not available to the public. This definition of efficient mar ­kets is too general to be testable empirically. To make the model testable, he proposed a process of price formation known as the expected re ­turn or fair game efficient markets model. In this model, when investors form expectations of security prices, they fully utilize all the information that is fully reflected in those prices. It is called a fair game model, because using only the information that is fully reflected in security prices, no trading system can have expected profits or returns in excess of equi ­librium expected profits or returns. These terms have been described as specific market anomaly from a behavioral point of view. Anomaly (economic behavior) Disposition effect Endowment effect Inequity aversion Intertemporal consumption Present-biased preferences Momentum investing Greed and fear Herd behavior Anomalies (market prices and returns) Efficiency wage hypothesis Limits to arbitrage Dividend puzzle Equity premium puzzle Behavioral Economic Models are restricted to a certain observed market anomaly and it adjusts the neo classical models by explaining the phenomenon of Heuristics and framing to the decision makers. It is usually said that economics get along with in the neo classical framework, with just one restriction of the assumption of rationality. Loix et. Al (2005) in their paper Orientation towards Finances explains the individual financial management behavior, people dealing with their financial means. They have analyzed the Non-specific financial behavior as already we see extensive research on the specific finance behavior such as saving, taxation, gambling and amassing debt, and gave a lot of importance to stock market, investors and households. The analysis of general public`s behavior was done, where an ordinary man is not sure and simply act according to the guesses over their money related issues. It was also found that people interested in economic and financial matters are much more active in collecting specific information than general public, stating that financial behavior of household is an important relevant topic that needs to be discussed in much more details. Household financial management is similar to the financial management. The construct of orientation towards finances was developed where the individual ORTO FIN focuses on competencies (interest and skills). Having stronger money attitude is an indication of stronger orientation towards finances and much more effective competencies. Therefore we expect some relevance and similarity between corporate and household management behavior as both require organizing, forecasting, planning and control. Loix et. al (2005) analyzed general publics behavior in basically dividing them into two groups, Financial Information and Personal financial planning. Also explaining some practical and theoretical gaps in the area of psychology of money usage, they concluded that ORTOFIN (Orientation towards finance) indicates the involvement of individuals in managing their finances. Proving out the point that active interest in financial information and an urge to plan expenses are two main factors. A stronger ORTFIN indicates: greater use of debit accounts, higher savings account, wide variety of investments, greater awareness of ones financial Intimate knowledge of the details of ones savings/deposit accounts obsessed by money, higher achievement and power in monetary terms, Further age is also inversely proportional. Shiller, (2006) in his article talked about the co-evolution of neo-classical and behavior finance that in 1937 when A. Samuelsson one of the great economists wrote about people m aximizing the present value of utility subject to a present value. Another judgment he realized was time being consistent human behavior where if at any time t, 0 4. Investing and Cognitive Bias Money Managers and Money management is a very popular phenomenon. The performance in a stock market is measured at daily basis and waiting for a highly subjective annual review of ones performance by ones superior. Market grades you on a daily basis. The smarter one is, more confident one becomes of ones ability to succeed; clients support them by trusting them that eventually helps their careers. But the truth is that few money managers put in sufficient amount of time and effort to figure out what works and develop a set of investment principles to guide their investment decisions Browne (2000). Further he discussed the importance of asset allocation and risk aversion, in order to understand why we do what we do regardless of whether it is rational or not. General public opts for money Managers to deal with their finances and these managers are categorized in three ways: Value Managers, Growth Managers and Market Neutral Managers. The vast majority of money managers are categorized as either value managers or growth managers although a third category, market neutral managers, is gaining popularity these days and may soon rival the so-called strategies of value and growth. Some investment management firms even are being cautious by offering all styles of investments. What too few money managers do is analyze the fundamental financial characteristics of portfolios that produce long-term market beating results, and develop a set of investment principles that are based on those findings. Difference of opinion on the definition of value is the problem. The reasons for this are two-fold, one being the practical reality of managing large sums of money, and other related to behavior. As the assets under management of an advisor grow, universe of potential stocks shrinks. Analyzing why individual and professional investors do not change their behavior even when they face empirical evidence, suggests that their decisions are less than optimal. An answer to this questio n is said to be that being a contrarian may simply be too risky for the average individual or professional. If a person is wrong on collective basis, where everyone else also had made a mistake, the consequences professionally and for ones own self-esteem are far less damaging than if a person is wrong alone. The herd instinct allows for comfort of safety in numbers. The other reason is that individuals try to behave same way and do not tend to change courses of action if they are happy. If the results are not too painful individuals can be happy with sub-optimal results. Moreover, individuals who tend to be unhappy make changes often and eventually end up being just as unhappy in their new circumstances. According to traditional view of investment management, fundamental forces drive markets, however many other investment firms are consider being active and basing their working on their experienced Judgment. It is also believed that Judgmental overrides value and fundamental forces of markets can be lethal as well as a cause of financial disappointment. Historically it has been found that people override at wrong times and in most cases would be better off sticking to their investment disciplines and the reason to this behavior is the cognitive bias. According to Crowell (1994) and many other researchers, stocks of small companies with low price/book ratios provide excess returns. Therefore, given a choice among small cheap stocks and large high priced stocks, prominent investors (financial analysts, senior company executives and company directors) will certainly prefer small cheap ones. But the fact is opposite to this situation where these prominent investors would opt for large high priced ones and so suffer from cognitive bias and further regret. The assumptions made by Crowell (1994, pp.2) were that Long term investment value should be negatively correlated with size since small stocks provide superior returns. Long term Investment value should have a negative correlation with Price/book since low Price/Book stocks provide superior returns. Whereas the results Crowell`s survey were contrary stating that Long Term Investment had a positive correlation with size and with Price/Book stocks. Crowell further stated that according to Shefrin and Statman, prominent investors overestimate the probability that a good company is a good stock, relying on the representative heuristics, concluding that superior companies make superior stocks. Discussing the concept of regrets, aversion to regret is different from aversion to risk; Regret is acute when an individual must take responsibility for the final outcome. Aversion to regret leads to a preference for stocks of good companies. The choice of the stocks of bad companies involves more personal responsibility and higher probability of regret. Therefore, two major Cognitive errors appear: We have a double cognitive error: good company always makes good stock (representativeness), and involves less responsibility(Less aversion to regret). (Crowell, 1994,pp.3) The Anti Cognitive bias actions would be admitting to your owned stocks, admitting earlier investment mistakes. Further, taking the responsibility for actions to improve their performance in future. The reasons for all the available discip