...Earnings management, or some say ‘creative accounting’ are accounting practices that do not follow the rules of standard accounting practices. It is defined as ‘the use of judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company, or to influence contractual outcomes that depend on reported accounting judgments.’ (www.nysscpa.org/cpajournal/2001/0700/features/f073801.htm) There are compelling economic reasons for managers to engage in earnings management, because the value of the firm and the wealth of its managers are inextricably linked to reported earnings. Manipulating share price Firm managers perceive a connection between reported earnings and the company’s market value. In an effort to alter investor’s perceptions, companies usually engage in earnings management to manipulate earnings in an effort to report positive earnings and earnings growth. Such actions will also portray a strong financial position of the company at the end of the financial year. As a result, investors will be attracted to buy the company’s shares. Shareholder and public’s confidence with the company will also increase. Thus, this leads to an increase in stock price which is the ultimate goal of firm managers. Compensation Contracts between a company and its managements’ remuneration depend on accounting numbers to determine exchanges between them. The top management’s...
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...amount of risk NASA tolerated with the Challenger launch is absurd. NASA acted as though it were a busing system going to and from space. This high tolerance towards risk may have been caused by NASA falling into an overconfidence psychological trap. An overconfidence psychological trap is the process of estimating an overly narrow range of possible values, caused by initial impressions or past events (Hammond, Keeney & Raiffa, 1999). Prior to the Challenger, NASA had been extremely successful in its launches and achievements. NASA safely had launched shuttles 24 times before, and a sense of routine had crept in. This led to overconfidence and an unhealthy level of risk tolerance (Osgood, 2011). NASA was so confident in the safety of the mission that they allowed a school teacher to join the crew. The biggest risk of all is loss of life. It seems completely inappropriate that NASA allowed non astronauts on this mission. According to the NASA website, three conditions that can cause mission and safety failures are finite resources, task and organizational uncertainty, and changing, dynamic environments. Specific features common to all high-risk environments also include mission and systems complexity and distributed teams (engaged in both design and operations). Both features require huge amounts of coordination and information sharing, which are potential sources of risk (Mission, 2008). All three conditions occurred during the Challenger launch. The O-rings on the shuttle were...
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...Final Paper: The Challenger Project Christopher A. Pantoya PJM 520: Project Leadership and Communication Dr. Paul Sam March 30, 2014 Abstract The purpose of this paper is to examine the space shuttle Challenger from a project management perspective. The project team, controls, metrics, and the overall process will be evaluated. An emphasis will be placed upon the communications project leaders had with personnel responsible for critical deliverables in order to identify risks that were overlooked, which could have contributed to the catastrophic outcome. The Challenger Project The space shuttle Challenger is among the most studied events in U.S. history, especially from quality assurance and project management perspectives. At the time, NASA had recently successfully completed a series of significant accomplishments and seemed on the verge of achieving even more. However, program managers began to let small details escape scrutiny or ignored them altogether in order to meet established timelines, which eventually led to the catastrophic shuttle launch. Thus, numerous processes have been developed in order to prevent repeating the tragedy. In fact, many facets of project management can be attributed to the Challenger shuttle launch project failure. Specifically, the project’s leadership needs to be assessed in order to categorize some of the indicators, which were identifying risks that were overlooked. The plans execution from initiation...
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...Challenger Disaster Research Paper Space Shuttle Challenger was first called as STA-099, and was built as a test vehicle for the space program. But despite its Earth-bound beginnings, STA-099 was destined for space. In 1979, NASA awarded a contract to Rockwell, a space shuttle manufacturer to convert the STA-099 to a space orbiter OV-099. After completion of OV-099, it arrived at the at NASA's Kennedy Space Center in Florida in July 1982, bearing the name "Challenger." Space Shuttle orbiter Challenger was named after the British Naval vessel HMS Challenger that sailed the Atlantic and Pacific oceans during the 1870s. Challenger launched on her maiden voyage, STS-6, on April 4, 1983. That mission saw the first spacewalk of the Space Shuttle program. The NASA had planned for a six day flight, and their mission was to release and retrieve one satellite to study Haley’s comet, and to launch another satellite that would become part of the space communications network. Challenger was originally set to launch from Florida on January 22nd. But delays in STS-61-C and bad weather caused it to reschedule to January 23rd, 24th, 25th, and 27th. On January 28th 1986, the space shuttle was set to take off, but the launch time was delayed due to problems with the...
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...DeVry University Keller Graduate School of Management Pomona, California The Challenger- Nasa’s Decision MAking Process By Briana Bass Brianacbass@gmail.com Leadership & Organization Behavior MGMT-591-20623 John Poore 2/19/2015 The Challenger- NASA’s Decision Making Process Introduction: I am researching the decision making process that allowed on space shuttle, called the Challenger to go up into space, but was destroyed upon take off. I will analyze the reasons why NASA allowed this aircraft to take off, and the reason why it should not have. I will also research the aftermath and how this huge error could have been avoided. The National Aeronautics and Space Administration was created on October 1, 1958 by the President of the United States and Congress. It was to provide research into the problems of flight within and outside the Earth’s atmosphere. The main reason NASA was invented was due to World War 2. The United States and the Soviet Union were engaged in a cold ward. During this time, space exploration become the one of the highest priority discussions. This became known as the space race. (American Psychological Association, 2011) The United States launched its first Earth satellite on January 31, 1958. It was called Explorer 1. Then the United States started several missions to the moon and other planets in 1950 and the 1960’s. It had 8,000 employees and an annual budget of $100 million. Nasa rapidly grew. They...
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...Situation in Ronald Reagan’s Challenger Address. In this article, using the rhetorical situation, I will dissect the logical circumstance of the authentic discourse "The Challenger Address" conveyed by the 40th president of the United States, Ronald Reagan. The rhetorical situation is comprises of four components: audience, event, speaker and occasion, each one surveying the nature of discourse. Americans had elevated requirements of the space programs, which proposed to give the United States an extraordinary feeling of accomplishment. The importance of the space project lies basically in which symbolized American grandness in science and innovation (Lambright). Therefore, the gathering of people of Reagan's discourse was American open; the individuals who had encountered the shocking national misfortune of seven American space explorers came about because of the disappointment of space administration. Confirmations of Reagan continually including American subjects predominate...
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...pressure creates a blowhole in the putty, allowing the O-rings to move into the positions needed to seal the joint as the gap between tang and clevis expands. Through the blowhole, gases penetrate and wear away the O-rings.” As seen in the diagram the Solid Rocket Booster (SRB) has two O-rings, working in series. This means that when the primary O-Ring fails the Secondary O-ring will protect the system from the outside, increasing the reliability of the system. Or at least that was the intent of the design; which worked during testing. The main problem was that all testing was conducted at warmer temperatures between 65 – 80°F and the launch day was about 50 degrees colder than the temperature during testing. In preparation to the Challenger mission testing on the SRB system was performed and it was noted during testing that the O-rings eroded to an extent. It was also noted that the erosion was not to the point of failure, therefore NASA decided the risk was minimal. The problem with this approach was that the erosion noted during test was, as stated above, at temperatures higher that launch the ambient temperature. Temperatures as the one experienced at launch caused the O-rings to contract further compromising their sealing value. With a good Risk Board NASA might have studied the O-Ring failure mode and extrapolate the behavior of the O-Rings at the ambient temperature of the launch. The...
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...of Mexico Restoration” website uses three strategies to try to repair its reputation: to show the public that BP is trying to help to develop a better community in the Gulf states, the company’s website uses a video clip that shows the company’s sponsorship of the Challenger Learning Center which helps educate local children; to show the public that BP is an ethical company and is ready to compensate the damages people and businesses suffered because of the oil spill, the website offers the affected individuals claim forms to report damages; to show the public that BP’s effort to restore the environment is successful, the website uses colorful photographs of people involved in the restoration processes. To show that BP is trying to develop communities in the Gulf States, the company’s website uses a video clip that shows how BP is sponsoring the Challenger Learning Center, an attempt to bolster education in the Gulf Coast. Under the title “Community development in the Gulf states” there is a two minute and twenty second long video of Challenger Learning Center, its director, professors, and students. The video clip highlights how BP is giving a chance to low-income families to send their children to the Challenger Learning Center that specializes in...
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...The Challenger Disaster: And My Interpretation of the Ethical Flaws The Challenger disaster was not only a disaster in terms of the destruction of the spacecraft and the death of its crew but also in terms of the decision-making process that led to the launch of the investigation into the "causes" of the disaster. The decision to recommend for launch was made by lower-level management officials over the objections of technical experts who opposed the launch under the environmental conditions that existed on the launch pad at the time. Furthermore, the lower-level managers who made this decision both NASA and contractor personnel, chose not to report the objections of the technical experts in their recommendations to higher levels in the management chain- of-command to proceed with the launch. Finally, it seems that the lower-level managers had also received out-of-the-ordinary pressure from higher levels of management to proceed with the launch on time. The investigation began with an effort to determine the technical causes of the explosion of the Challenger. Initially, the decision-making process leading to the launch was not considered by investigators. This suggests that the initial purpose of the investigation was not concerned with ethical issues or issues of responsibility. As the investigation proceeded information appeared that suggested that NASA had been aware of the risk of explosion under the environmental conditions that existed for the Challenger...
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...Discuss the changes that NASA implemented after the Challenger disaster Really developing an organization consist of finding needs for change within an organization. It is also the time to quickly grasp the nature of the organization, identify the appropriate decision maker, and build a trusting relationship. The next step is the . Start-up and contracting. In this step, a company identify critical success factors and the real issues, link into the organization's culture and processes, and clarify roles for the consultant(s) and employees. This is also the time to deal with resistance within the organization. A formal or informal contract will define the change process. 3. Assessment and diagnosis. In this case the president needed to sit down and process their main issues in order to avoid another strike.(Grusenmeyer,2009) The Challenger disaster occurred in the first moments of launch on an unusually cold January 28, 1986. Because of the cold weather, an O-ring seal between SRB segments leaked hot combustion gas, which quickly triggered the explosion that destroyed the vehicle. The dynamics of launch cause the joints between SRB segments to flex, and to prevent leaks the O-rings must be resilient enough to "follow" this flexure and maintain their seal. The cold O-rings were too stiff to follow the joint flexure. (Coffey 2010)The Columbia disaster culminated during reentry on February 1, 2003, after completion of the mission's on-orbit tasks. During launch the external...
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... everyone except six were reelected. So what are we seeing here, incumbent looking for reelection to the House had a superior than 98% achievement rate? U.S. Legislators looking for reelection were just marginally less blessed somewhat under 90% of the Senate incumbent who looked for reelection in 1996 clutched their seats. What is it about sitting individuals from Congress that makes them so difficult to beat? Are incumbent simply better competitors (overall) or is the deck by one means or another stacked against challengers? For quite a long time, political researchers have investigated and expounded on the "incumbent point of interest" in congressional races. While trying to clarify the staggering accomplishment of individuals from Congress looking for reelection, analysts have recognized a few components which make sitting individuals from Congress difficult to beat. In the 2012 election s, every one of the 435 House seats were challenged. According to a report by Ballotpedia, there were 42 incumbent who resigned, leaving 393 seats to be challenged by incumbent. 22 incumbent were vanquished in the general election, 12 Republicans and 10 Democrats. 13 incumbent were vanquished in the essential elections. That makes for 358 incumbent reelected of the 393 who were running (or 35 House occupant misfortunes, contingent upon how you need to take a gander at it), making a reelection rate for 2012 of 91%. This speaks the truth 2% lower than the authentic normal since 1954. Additionally...
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...The Space Shuttle Challenger disaster occurred on January 28, 1986, when Space Shuttle Challenger (mission STS-51-L) broke apart 73 seconds into its flight, leading to the deaths of its seven crew members. The spacecraft disintegrated over the Atlantic Ocean, off the coast of Cape Canaveral, Florida at 11:38 EST (16:38 UTC). Disintegration of the vehicle began after an O-ring seal in its right solid rocket booster (SRB) failed at liftoff. The O-ring failure caused a breach in the SRB joint it sealed, allowing pressurized hot gas from within the solid rocket motor to reach the outside and impinge upon the adjacent SRB attachment hardware and external fuel tank. This led to the separation of the right-hand SRB's aft attachment and the structural failure of the external tank. Aerodynamic forces broke up the orbiter. The crew compartment and many other vehicle fragments were eventually recovered from the ocean floor after a lengthy search and recovery operation. The exact timing of the death of the crew is unknown; several crew members are known to have survived the initial breakup of the spacecraft. The shuttle had no escape system, and the impact of the crew compartment with the ocean surface was too violent to be survivable. The disaster resulted in a 32-month hiatus in the shuttle program and the formation of the Rogers Commission, a special commission appointed byUnited States President Ronald Reagan to investigate the accident. The Rogers Commission found NASA's organizational...
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...Re: Case Study Memorandum Subject: Roger Boisjoly and the Challenger Disaster: Disloyal Employee or Courageous Whistle-Blower? Facts: The focus of this case study is on Roger Boisjoly's attempt to avert the launch of the Challenger and his act of employee loyalty to set the record straight despite the negative outcome. Boisjoly was employed with Morton Thiokol Inc. as an engineer and an expert in rockets. During an examination of the Challenger (STS 61-C), Biosjoly and the Seal Erosion Task Force discovered a problem with the hot-gas blowby or ignited fuel which came from joint leaks and the O-ring convincing the team that it was not safe to launch until the problem was fixed. Boisjoly notified his boss in writing of what was found. Despite what Boisjoly informed his boss, NASA went ahead and did the launch. Predictions came true when a catastrophic explosion resulted from the failed O-ring seals and the Challenger and the crew was lost. President Reagan appointed a commission to look into the devastation and found that the interviews given by senior management of Morton Thiokol and Boisjoly and a fellow engineer contradicted eachother which lead Boisjoly to believe that senior management was trying to cover up what had happened. Boisjoly and his fellow coworker were reprimanded for telling the truth about what really happened. Eventually, Boisjoly resigned from his position due to psychological strain and a hostile working environment. Ethical Issues: Disloyal...
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...The Space Shuttle Challenger Disaster American History Semester 2 Term Paper By: Dhiren Reddy The space shuttle Challenger disaster was a very important event in our countries history. It was a terrible accident which gave it kind of infamy of being a failed space mission. People see an explosion and don’t think twice about the tremendous amount of work, over the years, and the number of aspects that went in to the mission. These included the extreme pre-launch training that consisted of strenuous physical exercises and hundreds of hours of reading and studying, the work NASA put in after the explosion to prevent any incident of this kind from happening again, and finally what actually took place on launch day. All of these thing were...
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...In the case study of the Challenger, Morton Thiokol was responsible for the challenger’s rocket boosters. Roger Boisjoly, a rocket booster engineer of Morton Thiokol, did an inspection on the rocket booster segments. Upon his investigation, he found a massive amount of hot gas from the propulsion which compromised the primary O-ring on the first rocket booster. He then discovered that the hot gas blasted pass the first O-ring and burned the second O-ring. He went over the post flight analysis and it shows the O-rings were 53 degrees Fahrenheit which was unusually cold for a launch. This was one factor that was different with flight 51C. With this information, he believes the temperature was a factor of the flawed design. In the design, the O-rings were supposed to be flexible, so they can stretch and squeeze to seal the gap in the joints of the rocket boosters. However, the primary O-ring failed on flight 51C but the backup, secondary O-ring luckily caught the leak, or the result would have been severely dangerous. After this discovery, he reported his concerns to NASA. Later, NASA and Morton Thiokol...
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