The Motivation behind International Diversification for Portfolio Risk Reduction - Free Essay Example

Sample details Pages: 13 Words: 3962 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? It is often argued that the main benefit of international diversification is the reduction in portfolio risk rather than the increase in returns. The idea behind this concept lies in the fact that if investors randomly select stocks from a large market such as the NYSE the risk, measured by the standard deviation of portfolio returns, can substantially decrease as investors add foreign assets to their domestic portfolio. After a strong period of stock market gains last year, global equity fund managers shift their attention to developed markets which have been plunged during the financial crisis seeking for diversification benefits in their portfolios. Don’t waste time! Our writers will create an original "The Motivation behind International Diversification for Portfolio Risk Reduction" essay for you Create order Due to the time-varying nature of international diversification, a significant number of research papers tries to evaluate whether there has been an improvement in the risk-return trade off for investment portfolios in a number of ways such as hedging foreign returns with forwards and futures. Taking these into consideration, it would be worth reviewing if there are any benefits of diversification from the interaction of risk-adjusted returns with correlations(Elton and Gruber,1995) extending to conditional correlations in order to provide a dynamic structure between the markets using bootstrapping approaches(Efron,1979 and Hacker,2006) LITERATURE REVIEW International diversification benefits The existence of the benefits of international portfolio diversification as provided by portfolio theory is documented by Elton and Gruber (1995) who constructed portfolios based on Markowitz(1958) and depicted the relationship between overall expected portfolio return and the riskiness of this return by producing efficient portfolio sets which have the minimum variance(risk) for a given expected return. Based on the weekly price data of Morgan Stanley Capital International for the period 1970-2000,they calculated risk-adjusted returns based on the Sharpe ratio and the minimum returns required for diversification to be beneficial. The tangency portfolio that was drawn according to the market equilibrium model by Sharpe(1964) had a large amount of proportions in Japan accompanied by low correlations of Japanese market with the US market. Also, despite the fact that Japan yields a higher risk-adjusted return from the point of view of an American investor than the UK does, it still pa ys to diversify in UK markets as long as the correlation is low. This is also confirmed by the Sharpe ratio of the UK market which is above the minimum required. This diversified portfolio consisting of the three markets yields a higher risk-adjusted return than the portfolio investing only on the US market(no diversification).However, there is one study (Hanna et al, 1999) that suggests that there are no benefits for a US investor who invests in the equity markets of Canada, US, France, Germany, Italy and Japan during the period 1988-1997.The findings were reported based again on risk-adjusted returns and correlations between the US and these markets which were not low enough to reveal any gains from diversifying. In other words, they found that the risk-adjusted returns of a portfolio consisting solely of the SP 500 were considerably higher than those of the other G7 countries during the same period. Depending each time on whose point of view is taken, the results can be different and foreign returns can become lower than domestic returns. Emerging markets and developed markets The principle of diversification suggests that as long as the returns on the foreign assets do not have a perfect positive correlation with the domestic assets, investors can reduce but not eliminate the overall risk of their portfolio by altering the proportions held in the assets. Specifically, foreign asset returns have much lower correlations with domestic assets than the correlations among each of the domestic assets. In this paper, there is examined a number of variables that may explain the benefits from international diversification, if any. Specifically, benefits have been documented due to the low level of correlation among national equity markets (Grubel,1968 and Levy,1970) but there is a disagreement on the variables that cause this low correlation meaning that these low correlations may not be a true indication of potential gains. One of the papers that raised this issue, followed by several studies sharing the same view was that of Lessard(1974) who focused on common characteristics among returns within countries rather than across countries in order to determine possible gains. His key results were that national factors are more important than industry factors in defining securities sharing common characteristics and contribute more to risk portfolio reduction. In general, country and industry shocks have different impact on the returns of a portfolio because expected future cash flows are widely affected by economic activity, trading activity and liberalization of financial markets. As a result, the degree of economic integration of investment activities plays a significant role in explaining country and industry returns. Liberalization and diversification benefits in emerging markets New capital markets emerged when developing markets rebounded in the early 1990s followed by capital flows(fixed income and equity),foreign investments and a number of macroeconomic measures leading to a financial liberalization process which theoretically enables investors to embrace diversification benefits through emerging market integration with the global capital market. In reality, however, integration can increase the correlation between emerging market and world market returns leading to a reduction of possible gains from diversification toward emerging markets. Also, the extent to which the liberalization process can bring up diversification gains depends on the dynamics of capital flows in emerging markets. Specifically, many studies showed that there are significant benefits for investments in emerging markets because they yield returns that are less correlated with returns in the developed world(Divecha et al,1992).Thus, contrary to popular belief, investing in emerging markets can lead to lower risk since investment barriers had diminished and most importantly industry specific factors dominate country factors because stock returns in the emerging markets are more homogeneous than in developed. This view is also shared by Cavaglia et al(1994,1995) who casts doubts on earlier studies of Lessard(1974) by choosing to diversify across all industry sectors rather than across countries based on broad market indices. This optimal portfolio yields a lower risk than the broad market index portfolio since the correlation between industry returns in different countries is lower than the correlation between the returns on the broad market indices. In general, results suggest that industry factors are more important in countries whose industries depend on multinational productions and common production technologies because they have a high degree of industrial integration. This in turn suggests that industry shocks are important in explaining international portfolio returns. On the other hand, country factors seem to be important in countries whose economic activity is not affected by world economic activity. Although these studies make reasonable inferences based on the variables and determinants of country and industry returns, they are mainly driven by stock market behaviour which changes over time thus producing different results. A relevant study that was pioneering was that of Errunza et al(1999) testing the hypothesis that multinational corporations provide international benefits .While Agmon and Lessard(1977) showed that US investors can recognize benefits in holding multinational stocks and reduce the overall risk of their portfolios, Solnik(1978) concluded that multinational stocks are a poor substitute of foreign traded securities. Errunza et al(2002) further showed that benefits can be obtained by investing in closed-end funds in emerging markets because these funds are often traded at a premium when their underlying a ssets are invested in closed or restricted markets. This means that the returns from holding the funds instead of their assets are different providing potential gains to investors. The same view is also shared by Bekaert and Urias(1996) who used closed-end funds and mean-variance spanning tests to depict potential international diversification benefits. They tested whether a set of asset returns when added to a four-index benchmark leads to a leftward shift in the mean-standard deviation frontier(reduction of risk).This research differentiates from previous studies in taking into consideration investment costs that previous studies ignored, thus making more strong the existence of diversification benefits in emerging markets. International CAPM and weaknesses The findings of Lessard based on 16 developed countries have documented the importance of local monetary policies and regulations as the key determinants of stock returns. The existence of these factors led to a multi-factor process generating returns named the international capital asset pricing model(CAPM).Using the international CAPM to estimate the expected gains from international diversification to a US investor according to Lessard poses difficulties in the choice of the world factor and if the true world market factor is used, a structure based on a single index will be misleading since national factors can not be fully diversified thus affecting overall expected returns. As a result, Agmon(1972) and Solnic(1973) integrated different national markets into a single multinational capital market. Solnik(1974) used an equally weighted portfolio of a wide set of possible stocks to determine how effective is international diversification in reducing risk by considering 20 randoml y selected securities. He found that US investors could obtain almost full capacity of benefits from diversification by including up to 20 securities in their domestic portfolio achieving the minimum level of market(non-diversified risk) in each country chosen. The traditional CAPM postulates a linear relationship between the expected return on any asset and the covariance between that asset and the return on a world-wide portfolio. Also, it assumes that the market risk premium is the only relevant factor in international markets that are integrated and is restricted to be positive. That is because otherwise no risk-averse investor would willingly hold the stock when he could earn more by investing in the safe risk-free asset. However, during periods of high interest rates there may be a negative risk premium for which the model is unable to predict expected excess returns. Along with this, due to the increasing integration and globalization of the markets there is evidence that cor relations between any two markets change over time (Engle and Wooldridge,1988).Their pioneering research involved the concept of time-varying covariance with the market as a more realistic measure for the expected excess return of assets. For this reason, they employed the parsimonious(simple) GARCH model which enabled them to test the restrictions of the model simultaneously on a large number of assets where asset returns depend on multiple risk factors. Dumas and Solnic(1995) and De Santis(1999) encompassed currency risk in addition to market risk. Specifically, Solnics study was pioneering in considering perfectly hedging foreign currency returns by using a FX-forward contract but this holds only if you know for sure how much you will receive in one years time in foreign currency. So, the drawback of this study is the assumption of perfect hedging as the actual return from holding foreign stocks is uncertain and thus the hedge will not be perfect. It is noteworthy that until 1973 the exchange rate was fixed (Bretton Woods), so the reduction of the non-diversifiable risk was not different when taking into account exchange rate fluctuations. However, nowadays the hedged international diversification strategy would not result in the same reduction of portfolio risk if exchange rate changes are considered. For this reason, Glen and Jorion,(1993) showed that currencies appear to play an important role in global portfolios using mean-variance tests and adjusting for different exchange rates. Benefits in emerging markets Specifically, the approach used to calculate the optimal portfolio weights is similar to that used in the international CAPM but includes the forward premium which changes over time. Their findings suggest that conditional hedging strategies which take into account the time variation of hedge ratios yield higher returns without additional risk whereas with unconditional strategies there is little evidence of benefits from adding currencies in equity portfolios except for portfolios including bonds where the static currency hedging improves the risk-return trade-off. However their tests suggest benefits when investing in some individual Latin American or Asian countries but not when investing optimally in the combination of emerging markets which again confirms the weaknesses of the CAPM. This fact is attributable to the loss of power in mean-variance tests when more emerging markets are included(De Roon et al(2001).Papers examined by Glen, Jorion, De Roon et al make the assumption that short-selling is not allowed but they show that benefits disappear after imposing such restrictions,a matter that will be discussed later in the paper using the Bayesian inference. Further to the studies of Solnic(1995),De Santis and Gerard(1998) who acknowledged the pricing of currency risk premium, Claessens et al(1995),Carrieri and Majerbi(2005) found evidence of long-term risk premium considering an emerging-market-based portfolio that consists of equities, the returns of which are measured using the Morgan Stanleys Capital International World Index. The analysis includes seven Latin American countries. The factors that they consider is the home currency in which returns are measured and due to the fact that optimal weights change as forecasts of expected returns, variances and covariances change, they measure these variables in-sample data and out of sample data similar to the bootstrapping method used by Eun and Resnick(1988) .For a fully hedged portfolio, the risk-pre mium earned with respect to the local risk-free rate is equal to the risk premium with respect to the foreign risk-free rate. Thus the variance of a fully hedged global portfolio is just the variance of its dollar returns under the assumption that foreign currency rate will be paid with certainty(Claessens et al,1995).After analysing the long-term hedging decision ,they concluded that for open economies with flexible exchange rates currency hedging increases volatility followed by an increase in expected returns because hard currencies act as a natural hedge against portfolio losses(Claessens et al,(1995),Carrieri and Majerbi(2005).Also, this holds due to the fact that there has been an upward trend in currency betas which correspond to the contribution of the local currency to the volatility of the global portfolio based in a developed market. Higher betas mean that the local currency is riskier for an international investor as long as the volatility of the exchange rate remains co nstant. When considering exchange rate volatility, the overall risk of the global portfolio increases as countries allow currencies to fluctuate and not be fixed as analysed in Brazil, Colombia and Mexico in 1999(Fischer,2001) when currency betas have tripled compared to 2000-2004.Again the conclusion reached is that hard currencies act as natural hedges against negative returns in global equity(Claessens et al(1995),Carrieri and Majerbi(2005).Further to these studies, Eun and Resnick(1988) showed that for an unhedged portfolio, the gains are better than a solely domestic investment from the point of view of an American investor irrespective of whether the international portfolio comprises of equal weights or the optimal weights given by mean-variance analysis. Specifically, they showed that the overall portfolio risk depends on the covariances among stock market returns and covariances among exchange rate changes. It is noteworthy that they employed two methods of exchange risk red uction namely the multiccurency diversification and hedging through forward contracts. If correlations among exchange rates are negative then fluctuating exchange rates will decrease portfolio risk. Their results suggested an overall risk of 4.8% as opposed to 2% in the absence of exchange rate volatility(page 202).This analysis shows that since exchange rate is nondiversifiable to a large extent there may be gains from using forward contracts to hedge risk. Indeed, they showed that hedging using forward contracts almost always produces better results than not hedging whether investors use the optimal weights or the equal weights. As a result, it appears that there are benefits by investing internationally even for an American investor whose market makes up half of the world stock market capitalization. Nevertheless, investors seem to prefer holding domestic portfolios for fear of government regulations on exchange rates despite the gains that they can achieve by investing internati onally. Unstable correlations of international stock markets As discussed above, due to the increasing integration and globalization of the markets there is evidence that correlations between any two markets change over time and increase dependant on which is the market trend and not on the market volatility (Longin and Solnick,2002).They suggested that conditional correlation seems to increase in bear markets and not in bull markets which further enabled them to construct the optimum portfolio. In order to conclude reliably that the correlation is changing over time by simpling looking at different values of one or more variables is to specify each time the distribution of the conditional correlation which has not been done so far by previous studies examined. Since, financial time-series are not normally distributed, the parameter estimates from asymptotic tests are biased and the results are not reliable. Therefore, total reliance on correlations due to large volatility of return variables can be misleading. Theory shows that distribution of extreme returns can only converge to a distribution the shape of which is not well defined. Hence, in contrast to previous studies,(Efron, 1979 and Hacker,2006) use a bootstrapping approach with leveraged adjustments and new evidence is provided. They examined an international portfolio consisting of the US,UK and Japan markets as Elton and Gruber(1995) did but instead of using asymptotic tests, they applied causality tests. In detail, they took into account the dynamic structure between markets by using the bootstrap correlation coefficients which were measured by causality tests proposed by Granger(1969).The basic concept which differentiates this study from previous ones is that the degree of causality can indicate the size of the international diversification benefits that can be achieved. Granger tested whether movements in one variable follow movements in another variable and found that there is no evidence of causality between the three markets. This finding was reported in bootstrap correlation coefficients which were the same as the standard ones that Elton and Gruber(1995) estimated. Thus, there is additional support that international diversification can still provide gains to investors. This study can also be expanded to accommodate more markets and can also be done from the point of view of investors from other markets than the US one. Constraints in international diversification In all studies discussed so far, the results were reported without taking into consideration constraints such as short-selling and it was mentioned in the previous section that investors tend to hold a substantially larger proportion in domestic stocks because they fear of government regulations and find difficulties in taking short positions in many non-US equity markets. One advantage of the analysis undertaken by Elton and Gruber(1995) was that the measurement of international benefits was independent of expected returns since risk-averse investors can not forecast expected returns and seek to minimize the riskiness of their portfolio. That is why they measured the standard deviation of the global minimum-variance portfolio. Another advantage of this method is that the estimated weights may be more stable over different sample periods than returns. The surprising result is that they found diversification benefits after imposing short-sale constraints in emerging equity markets. However, the integration of world equity markets reduces but still there are benefits from diversifying in emerging markets after short-sell constraints are imposed. The results produced for portfolio efficiency subject to such constraints are examined through the Bayesian approach which unlike the asymptotic tests provides reasonable results. The sampling period examined is from 1976-1999.One measure of the diversification benefits employed follows the work of Kandel et al (1995) and Wang (1998) on portfolio efficiency. In general, it has long been argued that constraints on short sales could be a possible reason that the market portfolio is inefficient. However, Wang (1998) surprisingly found that when investors take large short positions(above 50%) can form a portfolio that dominates the market portfolio(e.g NYSE) by over 20% in annualized returns without incurring higher risk whereas when short positions are constrained to be less than 50%,the annualized returns fall. A general intuition is that investors will take a large positive position in an asset when they have favourable beliefs about the volatility of the returns and vice versa. As a result, the expected return of an efficient portfolio is sensitive to investors beliefs and constraints on portfolio weights prevent extreme long and short positions, thus reducing the variation in the efficient frontier. Thus, the expected return on the US equity index portfolio is either smaller or equal to the expected return on the internationally efficient portfolio(Kandel et al,1995 and Wang,1998).The difference between the expected returns are used to measure the size of benefits. Li et al (2003) also use a Bayesian approach and argue that international benefits from investing in emerging markets remain substantial even in the presence of short-sale constrains. However, De Roon et al (2001) argue the opposite with one exception when investing in some individual Latin American countries. Also, asset management in dustry supports that there are still substantial benefits but there has not been any formal econometric inference. In order to get a better understanding of the effect of short-sell constraints there has been reported a table with the means and standard deviations of the weights in the international portfolio that has the same variance as the US equity index. For the G7 countries the benefits before and after imposing short-sell constraints remain the same and for this reason short-sell constraints on emerging markets should not have a big impact whereas there is notable difference in developed countries such as Canada for which the optimum weights are zero when short-sell constraints are imposed. The standard errors of the portfolio weights of the developed countries indicate that there are massive errors when estimating portfolio weights meaning that the standard errors of the weights make the confidence intervals large(huge sampling variability).The standard deviation inter val of the optimal weights on US is below 60% supporting the idea that when emerging markets and short-sell constraints are considered, institutional investors can have the came benefits by taking short positions on developed countries as well. As a result, small errors in those parameters can lead to huge mistakes on how investors should invest their wealth. The only substantial short position in emerging markets is on Singapore at around 11%.These results are also consistent with the results reported by Britten-Jones (1999). It is also notable that when constraints are imposed only on emerging markets, individual markets such as Brazil provide benefits similar to those when portfolio weights are unconstrained whereas when weights are constrained to be nonnegative Argentina and Chile do not offer any benefits when added to developed countries. This evidence determines that diversification benefits come from individual emerging markets and not from the combination of them. The co ncept of this analysis is that there are international diversification benefits after imposing short-sell constraints but the prediction of future benefits coming from emerging markets is not evident under the static analysis and for this reason the analysis is more reliable when dynamic diversified portfolios are considered. Conclusion and recent data Most prior studies identify the existence of international diversification benefits by showing the tangency portfolio and simultaneously by examining the correlation or integration between markets. The critical issue addressed is the extent of diversifications benefits as measured by causality tests between markets based on bootstrapping method rather than on asymptotic tests. Thus, dynamic structure between the markets provides significant contribution to the existing literature suggesting that investors can reap benefits from international diversification but it remains difficult for global stock picking especially the last two years that stock markets in the world have gone through a harsh depression. Since the correlation among international equity markets is higher than used to be in the past implies that investors should not hold a portfolio invested in different countries if their domestic portfolios yield higher risk-adjusted returns. However, the environment is now normali sing which means that investors should seek for global companies and especially in developed countries with long-term growth prospects. Also, investors can hedge currency risk if the prospect of the sterling strengthening against the dollar continues during this year.

The Transition Of The Vet - 1464 Words

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Reform In Britain During The 1800s History Essay Free Essays

The call for reform in Britain during the 1800 ‘s was common with measure after measure turn toing issues such as working conditions, instruction and faith each going a subject of argument. The most of import of the reforms nevertheless were the legislative reform that began with the 1832 reform measure and was continued in 1867 and beyond. These first two measures nevertheless are the most important of the statute law passed during the century. We will write a custom essay sample on Reform In Britain During The 1800s History Essay or any similar topic only for you Order Now It was the 1832 Reform Act though that was the defining minute in British parliamentary History. It was the first major restructuring of the electoral system in over five hundred old ages, and as a consequence it is justified to name it a momentous event. Whether or non the Reform Act of 1832 was ‘great ‘ as it has been labeled or is slightly lesser in significance is a good inquiry. It could be stated that reform acts that followed accomplished more and affected a wider sector of the population than the original measure. The Reform Act of 1867 tantrums in to this class, it reached out to more people than the original act and as Gertrude Himmelfarb says, it was the â€Å" aˆÂ ¦act that transformed England into a democracy. †[ 1 ] However one reads that statement, there has to be a starting point and it is difficult to conceive of parliament doing such wide-ranging alterations like affranchising the working category in 1867 if non for the in-between category holding already been enfranchised at some earlier clip. Francis Herrick therefore, is a bit more accurate when he wrote that the â€Å" Reform Bill of 1867 is by and large considered as the 2nd measure in the long procedure which peacefully transformed the British authorities into a functioning democracy. †[ 2 ] Reform took about a century to finish, it did n’t go on overnight. No 1 in 1832 idea that the advancement they had made was traveling to be the terminal of the route. Ellis A. Wasson makes this clear by stating â€Å" †¦ conclusiveness was non their purpose, † they went from utilizing the nose count of 1820 to that of 1830 to apportion seats while they were revising the measure because they â€Å" tacitly admitted their ‘s could merely be a impermanent step. †[ 3 ]Herrick makes a good point when he says that 18th century British reform is a â€Å" aˆÂ ¦story of the transportation of political power from an nobility to a in-between category, and from the in-between category to the people. †[ 4 ]Therefore, the history of reform in Britain is, and it ‘s most of import minute has to be, the act of 1832 when the first measure was accomplished by reassigning power to the in-between category. The Reform Act, for that ground, is of great effe ct non merely for what it achieved but besides because it set in motion.A Prior to the 1832 act, parliament was under the control of the aristocracy and the landed elite in both the House of Lords and the House of Commons. Those who sat there were representatives of the privileged along with being distinguished landholders. These work forces were besides leaders in about every facet of British society. It can be argued that any sort of reform would be damaging to the domination the land-owning nobility held and it would look that these work forces would non vote for a measure that would cut down their power but, this â€Å" landed elite dominated the establishments which passed the parliamentary reform Acts of the Apostless of 1832 and 1867. †[ 5 ] One ground for their recognition of reform was that they saw problem looming in the skyline if there was non some kind of alteration was n’t made. Encouraged by what they saw as a successful revolution in France, the people of Britain became resolute in their privation for a more representative authorities. The instance could be made that outside parliamentary force per unit area to consequence reform was inspired by the in-between category along with a really convincing concern of a on the job category rebellion. This outside force per unit area could come in many signifiers with the most popular being some type of presentation. Therefore, it is difficult to visualize the Reform Act being passed on its ain agreement and the curates merely had to look at the Catholic Emancipation of 1829, which saw widespread perturbation prior to its passing. After the 2nd reading of the Reform Bill was rejected there were public violences that took topographic point in Bristol every bit good as serious perturbations at Derby and Nottingham, and a roseola of less alarming presentations in other topographic points.[ 6 ] After two unsuccessfully efforts, the Reform Act was passed by the Commons and sent to the Lords on 26 March 1832 but non without another signifier of play. The Whig cabinet threatened to walk out if the male monarch did non demo his support for reform by naming 50 extra equals. When he did n’t, Lord Grey resigned. Undeterred, the male monarch made an attempt to put up a Tory disposal that advocated a more moderate reform by reappointing Wellington to make a new authorities. This experiment did non hold the expected consequences and Wellington, recognizing that he could non sit a Front Bench of protagonists, ended his effort to take office. Having no other option, the male monarch sent for Grey who retook his station and rapidly moved to present another measure. Equally shortly as he was made cognizant that the King ‘s had come to an understanding with Grey and his Whig demands, Lord Althorp was reported to hold said: â€Å" It completes the revolution. †[ 7 ] Again, the Reform Act was the starting point of this revolution but its impact on future reform can non be understated. Talking to the House of Commons on February 28, 1859, Benjamin Disraeli makes mention to its impact by stating that â€Å" If we judge of the Act of 1832 by its effects†¦ it must be admitted that that policy was equal to the exigency it controlled and directed. †[ 8 ]There was no great public call for reform in 1867 and what small there was had no existent organisation behind it. What small call for alteration there was out at that place was non concentrated on any individual step for political reform.[ 9 ]Furthermore, the issue of reform played small portion in the election of 1865, which indicated a general satisfaction with the bing state of affairs.[ 10 ]Seven old ages after Disraeli ‘s address on March 12, 1866, William Gladstone made similar mention to 1832 while presenting his measure when he said â€Å" It may be said, and said really genu inely that at the clip there was a political heat and exhilaration, and a grade of apprehensiveness which do non now existaˆÂ ¦ †[ 11 ] The rudimentss of the Reform Act of 1832 were that it enfranchised the in-between category. This meant that they could form as a political force. Power had been passed from the little figure of elect whose ascendants had entitled them to a more commercially minded, progressive base and broke the old landholders ‘ clasp on power. If Nelson ‘s triumph at Trafalgar saved Britain from Gallic invasion and is considered a decisive event of the 19th century, so the reform act should be considered merely as worthy since it saved Britain from violent revolution from within. Phillips and Wetherell repeat an article in a 1836 issue of the Westminster Review that sang the congratulations for the measure by stating â€Å" The passing of the Reform Bill was our pickings of the Bastille ; it was the first act of our great political alteration. †[ 12 ] Phillips and Wetherell offer inside informations to the consequence the original measure. Prior to passage of the measure, the people entitled to vote is difficult to gauge because there was no signifier of enrollment â€Å" but the best-informed estimations suggest that instantly before the Reform Bill more than 400,000 Englishmans held a franchise of some kind. †[ 13 ]This figure comes out of a population in the England and Wales that was estimated to be merely about 14 million at the 1831 nose count.[ 14 ]The public permitted to vote so, represents merely 2.86 per centum of the population in 1831. In its concluding signifier nevertheless, the Great Reform Act â€Å" expanded the entire electorate in surplus of 650, 000, † which is an accurate sum â€Å" because of the infliction of a national system of enrollment. †[ 15 ]The addition of 250,000 new constituency members seems little out of the entire population but represented a 62.5 per centum addition in the figure of electors. Without uncertainty, the Reform Act of 1867 permitted more electors. The 1861 nose count shows merely over 20 million people lived in England and Wales which is an addition of four million people in 30 old ages. The Reform Act passed six old ages subsequently â€Å" added 938,427 new electors to the axial rotation, more than four times the figure enfranchised in 1832. †[ 16 ]It is difficult to accept as true that parliament in 1867 would hold been in favour of a measure that enfranchised the in-between category and the on the job category at the same clip which would hold been the instance if there was no 1832 Act. Without it, there would hold been an addition of over one and a half million new electors in a individual act of parliament. Whatever the addition in electors was, it was the figure of seats in the authorities that should be considered of import and here is where the Act of 1832 made a bigger impact. Prior to 1832, the landed nobility controlled Parliament, along with â€Å" icky boroughs, † parliamentary communities that had decreased in size but still elected members to the House of Commons. The reform measure did off with those icky boroughs as â€Å" rightists in Parliament advocated the riddance of rotten constituencies and the transportation of their seats to the more healthy county constituencies. †[ 17 ]It caused 56 boroughs to be wholly disfranchised. It besides included 31 extra boroughs that had less than four-thousand dwellers ended up losing one of their two M.P.s.[ 18 ]The entire figure of seats affected in 1832 so, was 143, a considerable sum more than in 1867 where the figure was 52 boroughs. This displacement in seats in 1832 efficaciously ended the blue monopoly on authorities and if one wanted to keep it, he would hold to depend on the support of the in-between category. The Act of 1867 did nil to change this as the representation ratio remained virtually the same as it had been with the 1832 act. Herrick considers this place and comes up with an effectual manner of thought by stating â€Å" In other words, the boroughs, where the new voters were most legion, were given a slightly smaller portion of the representation in parliament, and the counties, where a much smaller figure were enfranchised, received a larger portion.[ 19 ] The Reform Act of 1832 enfranchised homeowners who paid a annual rent of at least 10 lbs. That meant that about half of the in-between category and all of the working category malice of everything were still without a ballot. This was acceptable to the Whigs, who felt that those entitled to vote should be expected to utilize that privilege in an informed and responsible manner.[ 20 ] Seen from a current point of position, 1832 can be seen as an imperative gateway to a full representative parliamentary democracy. Subsequent reform was to follow and it would spread out the ballot to adult male homeowners in 1867 and produced blue-collar bulks in a batch of urban communities. The Third Reform Act of 1884 extended the franchise even further passing the ballot to mineworkers and many farm labourers. Wasson explains that â€Å" although it has been argued that the 1832 act had no necessary wake, † one can see â€Å" clearly the importance of the impact of reform on the relationship between members of Parliament and their components. †[ 21 ]He goes on to explicate how â€Å" The decisive minute in blue resignation came with the first measure and non with the 2nd. † There is no uncertainty that future steps were bound to go on and there can be no inquiry that their success be would come as a consequence of the first Act. Neither the Acts of 1832 or 1867 were perfect, there were issues with both, while the 1832 act was a beginning, 1867 was supposed to repair the issues left by the earlier act. The 1867 Reform Act contained unjust characteristics of its ain. The existent consequence of this inequality is evident when the re-distribution clauses are considered.[ 22 ]The unequal redistribution of seats in 1867 in malice of everything left citizens in the Midlands, London and countries of the North without adequate power to talk for them in Parliament. The unequal allotment of seats still favored the landowning categories who were able to pull strings the representation of the smaller borough seats. The old ages before and after the Great Reform Act of 1832 were critical minutes in the patterned advance of Britain accomplishing societal equality. This alteration was started with the motion to establish the rights of spiritual minorities. Soon, nevertheless, governmental reform took on a life of its ain and led to a cardinal interruption down in the constitutional order of Britain. However, such extremist steps as undertaken by parliament at the clip, were able to rectify most of the jobs and electoral corruptness would be eliminated and pureness and virtuousness restored to the full electoral procedure.[ 23 ] The Reform Act of 1832 deserves to be classified as great for a smattering grounds. The chief purpose of its blue Godheads was to free the representative system of untenable characteristics, and to bring forth a better representation in the House of Commons of the belongings and intelligence of the state.[ 24 ]With this accomplished, it reduced of the figure of nomination boroughs conveying about a new footing of order in political relations. The reform reshaped the political landscape accidentally ; it introduced a new political system by by chance changing the relationship between elections, electors, and the parliamentary parties.[ 25 ] The Reform Act may be seen as the terminal of the old order. However, its illustriousness is in the fact that it was done with future reform in head and it was done instead peacefully. The dominant nobility, still in control of the State, had acted, in some respects against its ain sectional involvements, to reform the Constitution by Act of Parliament, without revolution or civil war.[ 26 ]The measure did non stop nobility but it was â€Å" the first and most of import measure in the nobility ‘s supplanting. †[ 27 ]Future reform including the Act of 1867 was of import but there is no uncertainty that â€Å" The decisive minute in blue resignation came with the first measure and non with the 2nd. Subsequent steps may non hold been inevitable, but they were made possible. †[ 28 ] While non all inclusive, the Great Reform Act started Britain on the route to a better signifier of authorities. The first measure of acknowledging that representation was flawed and coming to the belief that the in-between category deserved a voice in their authorities was the most of import factor that guided subsequent reform. By the terminal of the 19th century, Britain was in front of her European neighbours when it came to democratic representation due to the fresh 1832 spring in the dark. How to cite Reform In Britain During The 1800s History Essay, Essay examples

Leadership Development in Nursing Education Program

Question: Describe about the Education Program on the Subject of Leadership Development in Nursing? Answer: According to Bleich (2015), a holistic approach is required for developing Creative Leadership (CCL) among the nurses to help them developing a professional outlook. Moreover, Bleich also emphasized on building three types of competencies abilities among the participants. These there skills are focused on teaching the leadership quality regarding leading the organization, leading the self-motivation and helping others (patients). However, the work is loosely based on the work of Crosby and Shields (2010) who proposed to assess the leadership quality based on their performance. However, the Magnet Model as proposed by Benjamin and her co-workers (2011) also highlighted various factors in motivating the patient care leaders for increasing the nursing leadership quality. The Magnet Model is focused on developing a strong program that is focused on installing the stigma of leadership quality within the emerging nurses from their master's program. The components of the Magnet Model provid e content for the achievement of the corrective procedure of the nurses based on each day of study. As explained by Glassman et al. (2002) the leadership development program leads to install a positive leadership quality among the nurses who will ultimately provide a positive impact on the institution. Moreover, the work conducted by Curtis et al. (2011) has also emphasized on building the leadership characteristics within a nurse which will enhance his/her problem solving capability and effectiveness in maintaining a group. After conducting the interview, the result obtained from the respondents have provided a proper justification and understanding of the leadership model as stated above. All the interviewees have shown that they understand the responsibilities. Moreover, all the participants have agreed to understand correctly the leadership activities that are required in an individual. Various significant findings have been established from the questionnaires. Moreover, everyone has agreed that the leaders are needed to possess visionary outlook and need to maintain some and strategies and plan to achieve the goal that are assigned to them (Howlin Halligan 2014). Moreover, the survey also highlighted the understanding of the participants about the necessity of problem-solving capability and maintenance of group effectiveness among the nursing leaders. However, the majority of the members disagree with the statement that leadership qualities are not inherited over time rather practice and experience can gain it (Kristjanson, Linda Scalan 1992). The result obtained from the interview section is tabulated below which highlights the understanding of the leadership program by various registered and enrolled nurses. Registered Nurses Enrolled Nurses Determination of goal Understanding the organizational activities Achieving coordination Problem solving capability Understanding the leadership principle Treatment planning Building employee morale Facilitating changes Providing guidance and inspiration to the patients for their fast recovery Care experience Well developed interpersonal skills Sound clinical knowledge Good experience Strong verbal communication ability Listening to the registered nurse Table 1: Answers given by the interviewee regarding the understanding of the leadership activity and program On the other hand, the Morrow (2015) suggested various educational strategies to implement a proper nursing education program. Morrow's work is based on providing active learning strategies for educating the nurses. Hence, by studying Morrow's work, it can be concluded that reflective learning, peer learning, interdisciplinary team learning, organizational partnership learning and curriculum reformation learning strategy can be considered the best educational plan for educating the nursing workforce. The reflective thinking induces and increases the critical thinking ability within a nurse. On the other hand, peer learning can install safety focused simulation education within a nurse. Moreover, this strategy also helps the nurses in improving their laboratory skills and also helps them to understand the importance of laboratory assessment and clinical settings. Moreover, revisions and incorporated experiences of the interdisciplinary workforce team within a graduate classroom enviro nment. This will help the nursing student in increasing their classroom experience. This educational setup helps the students in developing, implementing and stimulating knowledge from the certified nurses. Moreover, this educational framework also provides the patient with an opportunity to work in pairs with the certified nurses that would help them managing delegates and various tasks to manage care for the patients for their future endeavor. The nursing faculty needs to innovate their teaching style and form a close collaborating unit with the nursing students. Moreover, they should allow various multiple organizations that are associated with the health care section of the society to pay a visit to the student's class room in the university level. Moreover, the collaboration between a large state university and rural hospital would provide practical knowledge and exposure to the senior level students. However, various curriculum reforms are required to implement these ideologies. This reformation should endorse and emphasize on service learning content throughout the curriculum to enhance student leadership to handle various nursing-related issues and social justice. Moreover, the curriculum reform needs to focus on self-care, self-management, moral and ethical reasoning among the nursing workforce to enhance their leadership quality. On the other hand, the curriculum needs to focus on modeling out a culture of mentorsh ip and teamwork among the nurses to increase the leadership ability among the working staffs. However, Parrish and Kay (2014) have suggested conducting semi-structured interview practices among the nursing staff. They have emphasized on providing the students with perceptions and subject related explicit practical knowledge to enhance the implementation of the nursing quality. On the other hand, the work done by Nguyen (2011) have recommended the use of new technologies for education and increasing the standard of nursing practices among the graduate nurses. Some of the strategies that are highlighted are distance learning, simulation technique, telehealth and informatics and fundamental computer methodologies. The distance education method can provide course materials to the student via type-written, video technology, and internet facility. Moreover, rural nursing students will get a vivid idea of the nursing leadership in rural areas due to the blessing of the video and audio telecommunication. Adding to these Sandstrm et al. (2011) have suggested building evidence base pra ctice for the nurses to enhance their leadership quality. While discussing the leadership styles and methodologies, most of the interviewees have given illustrative examples. Various interviewees have accurately stated their viewpoints regarding the questions that have been asked to them (Allan 2010). The majority of the respondents have positively agreed that the institution had positively influenced their leadership qualities. Moreover, the prime and principal theme of the interview was to instill confidence among the interviewees in finding their style (Wong, Cummings Ducharne 2013). This is quite evident from the reply that was received from one of the respondents. A registered nurse interviewee stated that: "The program has motivated me immensely, and it helped to realize the potential present within me. This program has helped me to get rid of the mental blockage, and I can be a confident speaker and accommodator at the same time. Based on the levels of the interviews, the interviewees emphasized different stylistic changes. Registered nursing leaders provided more concrete justification and explanation about their stylistic changes (Horsch, Hapfelmeier Elter 2011). Moreover, they also agreed that this has helped them to meet the particular needs. On the other hand, the Enrolled Nurse leaders have emphasized more on the values systems (Benjamin, Riskus Skalla 2011). This interview also revealed that majority of the interviewees is aware of their beliefs and stylistic changes. Moreover, the majority of Registered Nurse has replied that they are very much aware of their stylistic changes. About 70 percent of the registered nurses have agreed to it. They also gave pieces of evidence regarding their changes in styles and behavior (MacPhee et al., 2012). They also provided a bulk of examples regarding the perceived changes in staff behavior and the practice environment. The tabulation of the leadership and educational program that are suggested by the researchers are tabulated below - Journal and Writer Education for the project Bleich, M. R. (2015) Identifying the leadership capacity and based on that a holistic approach should be conducted which will add contextual factors to help the nurse evolve in leadership quality. Benjamin et al. (2011) Providing a Magnet model and structure that is very wisely frame worked to transform the nurses to a potential leader in the future. Moreover, the work also helps the organization to identify and educate the potential leaders of the organization. Curtis et al. (2011) The knowledge to seek the help of the healthcare organizations in providing hand on experience to the graduate nurses. Moreover, leadership characteristics should be built within a nurse which will enhance his/her problem solving capability and effectiveness in maintaining a group Nguyen and Brenda (2011) The educational program can be added up with various technological advancements to increase the leadership efficiencies among the nurses. This improvement includes distance learning, improving simulation, developing a good telehealth and informatics work base to provide the nurses with advancement training and knowledge. Sandstrm et al. (2011) To increase the efficiency of the nurses evidence-based practice should be conducted and the training should emphasize on the practical knowledge. Parrish and Kay (2014) Semi-structured interview practices should be conducted among the nursing staff. They have emphasized on providing the students with perceptions and subject related explicit practical knowledge to enhance the implementation of the nursing quality. Morrow (2015) Implement reflecting, peer learning, interdisciplinary and reformation in the education system should be conducted to establish a strong work base of nursing leaders. MacPhee et al. (2012) Empowerment framework should be done to establish a proper education among the graduate nursing staff. This empowerment includes various factors that are related to nursing psychology and developing generic competencies for developing the leadership program for the upcoming nurses. Lucas (2014) Epistemological and ontological implications with proper sample designing (which includes theoretical sampling, non-probability sampling, snowball sampling, purposive sampling, and probability sampling) should be conducted to achieve good leadership among the graduate nurses. Horsch and Hapfelmeier (2011) The nurses with specifications should be well trained with the instruments that are used in those particular wards. For example, a nurses who is an oncology specialist should be trained with handling complex devices like screening mammograms. Butler and Hardin (2005) The education should focus on removing the transitional phase lag among the nursing student so that they can perform well and good once they are assigned to a hospital. Table 2: summary of the education that is required for creating educational program for building up a strong nursing work base Conclusion: After compiling, the data it was found that a proper leadership model is required to build a strong work base considering the nursing intervention technique. Reference: Allan, H. (2010). The perils facing nurse education: A call for leadership for learning.Nurse education today,30(3), 209-211. Benjamin, K., Riskus, R., Skalla, A. (2011). The emerging leader: leadership development based on the Magnet model.Journal of Nursing Administration,41(4), 156-158. Bleich, M. R. (2015). Leadership needs assessment. The Journal of Continuing Education in Nursing, 46(1), 10-11. doi:https://dx.doi.org/10.3928/00220124-20150109-13 Butler, K. M., Hardin-Pierce, M. (2005). Leadership strategies to enhance the transition from nursing student role to professional nurse. In Nursing Leadership Forum(Vol. 9, No. 3, p. 110). Springer Publishing Company. Curtis, E. A., Sheerin, F. K., de Vries, J. (2011). Developing leadership in nursing: the impact of education and training. British Journal Of Nursing, 20(6), 344-352 9p. Fardellone, C., Musil, C. M., Smith, E., Click, E. R. (2014). Leadership behaviors of frontline staff nurses. The Journal of Continuing Education in Nursing, 45(11), 506-13. doi:https://dx.doi.org/10.3928/00220124-20141023-05 Horsch, A., Hapfelmeier, A., Elter, M. (2011). Needs assessment for next generation computer-aided mammography reference image databases and evaluation studies. International Journal Of Computer Assisted Radiology And Surgery, 6(6), 749-767. doi:10.1007/s11548-011-0553-9 Lucas, S. R. (2014). Beyond the existence proof: Ontological conditions, epistemological implications, and in-depth interview research. Quality and Quantity, 48(1), 387-408. doi:https://dx.doi.org/10.1007/s11135-012-9775-3 Lucas, S. R. (2014). Beyond the existence proof: ontological conditions, epistemological implications, and in-depth interview research.Quality Quantity,48(1), 387-408. MacPhee, M., Skeltonà ¢Ã¢â€š ¬Ã‚ Green, J., Bouthillette, F., Suryaprakash, N. (2012). An empowerment framework for nursing leadership development: supporting evidence.Journal of Advanced Nursing,68(1), 159-169. MacPhee, M., Skeltonà ¢Ã¢â€š ¬Ã‚ Green, J., Bouthillette, F., Suryaprakash, N. (2012). An empowerment framework for nursing leadership development: supporting evidence.Journal of Advanced Nursing,68(1), 159-169. Morrow, K. J. (2015). Leadership curricula in nursing education: A critical literature review and gap analysis. Journal of Nursing Education, 54(7), 367-371, 1-2. doi:https://dx.doi.org/10.3928/01484834-20150617-02 Nguyen, D. N., Brenda Zierler PhD, R. N. (2011). A survey of nursing faculty needs for training in use of new technologies for education and practice.Journal of Nursing Education,50(4), 181. Parrish, D. R., Crookes, K. (2014). Designing and implementing reflective practice programs - key principles and considerations. Nurse Education in Practice, 14(3), 265-70. doi:https://dx.doi.org/10.1016/j.nepr.2013.08.002 Sandstrm, B., Borglin, G., Nilsson, R., Willman, A. (2011). Promoting the Implementation of Evidence-Based Practice: A Literature Review Focusing on the Role of Nursing Leadership. Worldviews On Evidence-Based Nursing, 8(4), 212-223 12p. doi:10.1111/j.1741-6787.2011.00216.x Wong, C. A., Cummings, G. G., Ducharme, L. (2013). The relationship between nursing leadership and patient outcomes: a systematic review update. Journal Of Nursing Management, 21(5), 709-724 16p. doi:10.1111/jonm.12116