Research proposal of C.

RESEARCH
PROPOSAL
GROUP MEMBERS:
Muhammad Aqib Adeel

076

Muhammad Imran

065

CLASS:
M.B.A 3(a)
DATE:
04-05-2011
SUBMITTED TO:
SIR MALIK FAISAL AZEEM

M.A.ADEEL

Research proposal of C.G

INTRODUCTION:
We all are well aware about the corporate governance, now we are going to discuss the
corporate financial decisions & ownership structure. And later on there impact on
organizational performance.
Corporate financial decision includes all financial decisions that a corporation has to
make most of the time regarding

Investment

Loan advancement

Capital structure

The ownership structure is defined by the distribution of equity with regard to votes and
capital but also by the identity of the equity owners. These structures are of major
importance in corporate governance because they determine the incentives of managers
and thereby the economic efficiency of the corporations they manage.

PROBLEM STATEMENT:
The problem statement of our research study is what & how corporate financial
decision & ownership structure influence the over all performance of the organization

OBJECTIVE OF THE STUDY:

The main objective of our research study is to check the impact (effect) of corporate
financial decision along with ownership structure on the organizational as well as
individual performance.

SIGNIFICANCE OF THE STUDY:

M.A.ADEEL

Research proposal of C.G

The main significance of this research work is that, many studies shows the impact of
corporate financial decision on performance, the impact of corporate ownership structure
on performance, the impact of corporate social responsibility on performance, but they
see their impact separately.
I want to see the collective impact of corporate financial decision & ownership structure
on the performance of organization.

RESEARCH QUESTIONS:
Ass we all know research questions are developed on the basis elements based on
dimensions of basic concept.
Some of the possible research questions are
How much return your assets earn per year?
What is the percentage of return as compared to equity?
What is the ratio of debt against the assets?
Is the firm having sufficient current assets to pay off its current liabilities?
Is there any improvement in assets as compared to last year?
What is the percentage of cost in relation to sales?
What is its market position of company compared to industry..?
Is the cash flow position (liquidity) is satisfactory?
Is there any unlimited liability of directors as per article of association or law?

DELIMITATIONS:
In this study we include those financial decisions that are related to financial statements
only, other than financial statements are not included in this study.
We are conducting research on dairy industry as sample.
& in sample we take two companies

NESTLE

FAN MILK

M.A.ADEEL

Research proposal of C.G

LITERATURE REVIEW:
According to my area of research I study some literature; in that literature I see that
different peoples see organizational performance through different point of view.
Mohammad Al Mutair, Associate Professor Helen Hasan University of Wollongong (A
Panel Data Approach from Kuwait Stock Exchange) they both conduct research on the
effect of financing decision on performance. It means that through whatever means
company generate finance it will effect how it successfully operates. Lawrence D. Brown,
J. Mack Robinson Distinguished Professor of Accountancy Marcus L. Caylor Ph.D.
Candidate (December 7, 2004 Georgia State University Georgia State University) they
take one step ahead to performance they see impact of performance, valuation, share
holder payout on the governance score of the firm. Karen hopper Wruck (APRIL 1997,
Course module overview note.) he also work for organizational performance keeping in
focus the two things ownership & governance & control system. He means to say that
how the different forms of ownership create influence on performance, same is the case
with governance practices effects performance.
Rene B. Adams Heitor Almeida Daniel Ferreira (September 10, 2003 Stockholm School
of Economics New York University SITE and FGV) they work on top management
decision making in relation with organizational performance, means they take CEOs
decision making power as independent & see relation with organizational performance.
Ronghui Zhang (An International Review and Outlook Logos Verlag Berlin, 2006) they
see relation as well as impact of ownership structure on governance practices. Ownership
structure means that which kind of owner it has whether limited or unlimited, partnership
or company etc. Keith D. Brouthers /Maarten Gelderman/Patrick Arens (Stakeholder and
Strategic Contingency Perspectives) they study the effect of organization structure &
management style on performance of the organization. Babar Zaheer Butt, Ahmed Imran
Hunjra and Kashif-Ur-Rehman (World Applied Sciences Journal 9 (9): 997-1002, 2010
ISSN 1818-4952 Foundation University Rawalpindi Pakistan, Iqra University Islamabad
Campus Pakistan) as name implies all of these are Pakistanis doctors & researchers one
these is our universitys professor (Mr. Babar Zaheer Butt) they all see different financial
decision like capital structure decision, dividend policy, investment appraisal techniques
& working capital management on the financial performance.

M.A.ADEEL

Research proposal of C.G

So after a short literature review I came to know that various author see organizational
performance differently with different perspective.
I am going to establish not new but a change idea of viewing organizational performance
with a view of corporate financial decision & ownership structure collectively.

THEORATICAL FRAME WORK:

CORPORATE FINANCING DECISION

Investing Decision

Financing Decision

Dividend Decision

Unlimited Liability
Company
Non-profit
organization

Profit Organization

Non-Financial
Performance
OWNERSHIP STRUCTURE

Limited Liability
Company

Financial
Performance

M.A.ADEEL

ORGANIZATIONAL PERFORMANCE

Working Capital
Management

Research proposal of C.G

Here we take three variables, out of which two are independent and one is dependent
Independent corporate financial decision & ownership structure
Dependent organizational performance.
MODEL JUSTIFICATION:
We are going to see the impact of corporate financial decision & ownership structure on
organizational performance. In financing decision we see whether investment decision
have positive or negative impact on financial & non-financial performance. Same is the
case with financing. Dividend & working capital management.
On the other hand we also see in ownership structure of the firm whether it is limited
liability company or unlimited liability company and its positive or negative impact on
the financial & non-financial performance of the firm. Same is the case with profitable &
non-profit organization
SAMPLE:
We are taking sample dairy industry by taking

NESTLE &

FAN MILK

As sample to represent whole the industry.

DATA COLLECTION METHOD:

Financial statements of both the companies

Ratio analysis of both the companies

Annual disclosure

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Research proposal of C.G

AGM report

Audit report

Interview of directors & senior managers

Market performance of both companies in previous 3 years (data from stock

exchange and other relevant source)

DATA ANALYSIS TOOL:

Ratio analysis

Percentage change analysis

Vertical analysis

Trend & industry analysis

Others

REFERENCES:

Mohammad Al MutairiAssociate Professor Helen Hasan University of

Wollongong, A Panel Data Approach from Kuwait Stock Exchange.

Lawrence D. Brown J. Mack Robinson Distinguished Professor of Accountancy

Marcus L. Caylor Ph.D. Candidate, December 7, 2004 Georgia State University
Georgia State University.

KAREN HOPPER WRUCK, APRIL 1997, Course module overview note.

Rene B. Adams, Heitor Almeida, Daniel Ferreira, September 10, 2003)

Stockholm School of Economics New York University SITE and FGV.

Ronghui Zhang, an International Review and OutlookMLogos Verlag Berlin,

2006.

Keith D. Brouthers/Maarten Gelderman/Patrick Arens, Stakeholder and Strategic

Contingency Perspectives.

M.A.ADEEL

Research proposal of C.G

1Babar Zaheer Butt, 2Ahmed Imran Hunjra and 2Kashif-Ur-Rehman, World

Applied Sciences Journal 9 (9): 997-1002, 2010 ISSN 1818-4952, 1Foundation
University, Rawalpindi, Pakistan, 2Iqra University Islamabad Campus,
Pakistan.

M.A.ADEEL