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To determine if the clothing someone wears will affect outcomes of a situation FF

To Determine If the Clothing Someone Wears Will Affect Outcomes of a Situation Author’s Name

Institutional Affiliation

Table of Contents

TOC o “1-3” h z u HYPERLINK l “_Toc329520429” Introduction PAGEREF _Toc329520429 h 3

HYPERLINK l “_Toc329520430” Statement of the Problem PAGEREF _Toc329520430 h 3

HYPERLINK l “_Toc329520431” Research Question PAGEREF _Toc329520431 h 4

HYPERLINK l “_Toc329520432” Literature Review PAGEREF _Toc329520432 h 4

HYPERLINK l “_Toc329520433” Research Methodology PAGEREF _Toc329520433 h 5

HYPERLINK l “_Toc329520434” Research Strategy PAGEREF _Toc329520434 h 6

HYPERLINK l “_Toc329520435” Research Philosophy PAGEREF _Toc329520435 h 6

HYPERLINK l “_Toc329520437” Research Design PAGEREF _Toc329520437 h 6

HYPERLINK l “_Toc329520438” The Merits of the Between Subjects Design PAGEREF _Toc329520438 h 7

HYPERLINK l “_Toc329520439” The Demerits of Between Subjects Designs PAGEREF _Toc329520439 h 7

HYPERLINK l “_Toc329520440” Selection of Participants PAGEREF _Toc329520440 h 9

HYPERLINK l “_Toc329520441” Random Selection and Random Assignment PAGEREF _Toc329520441 h 10

HYPERLINK l “_Toc329520442” Control and Experimental Groups PAGEREF _Toc329520442 h 11

HYPERLINK l “_Toc329520443” Variables PAGEREF _Toc329520443 h 12

HYPERLINK l “_Toc329520444” Methods of Data Collection PAGEREF _Toc329520444 h 12

HYPERLINK l “_Toc329520445” Data Analysis Procedures PAGEREF _Toc329520445 h 13

HYPERLINK l “_Toc329520446” The Rationale of Analysis of Variance PAGEREF _Toc329520446 h 14

HYPERLINK l “_Toc329520447” Validity and Reliability of Results PAGEREF _Toc329520447 h 14

HYPERLINK l “_Toc329520448” Ethical Considerations PAGEREF _Toc329520448 h 15

HYPERLINK l “_Toc329520449” Timeline: Gantt chart PAGEREF _Toc329520449 h 17

HYPERLINK l “_Toc329520450” References PAGEREF _Toc329520450 h 19

IntroductionThis dissertation proposal posits to investigate whether the clothes a physician wears while treating patients, affects patient attitudes towards the physician. The research proposal is an essential component of the thesis production process. Devoid of a clear proposal, it is improbable that the researcher would be capable of embarking on a systematic inquiry and discussion of a problematical issue in the research area. The preliminary step of the process begins with an initiative of what the researcher would like to examine. This initiative is then devised into a research problem question. The proposed procedure would be followed with the intention of answering the problem question is the research design. This would then be documented in the research proposal. Once the research proposal is finalized, the researcher would start on the actual thesis. It is important to invest adequate time and effort in developing an intelligible proposal. It is essential to mention that, the more thorough the proposal, the less intricate the writing of the research thesis would be. Naturally, a proposal would anticipate all the findings that the researcher may arrive at in the investigation, but an understandable map throughout the terrain of the research area would prevent the researcher from losing his or her way in the intertwined field.

Statement of the ProblemThe research will endeavor to investigate if a physician’s attire while treating patients, affects the patient’s attitudes towards the physician.

Research QuestionDo The Clothes A Physician Wears While Treating Patients’ Effect Patient Attitudes Towards The Physician?

Literature ReviewThe relationship between the patient and the physician forms the basis for the entire patient care. Studies have demonstrated that a patient’s original consultation with the physician plays a fundamental role in the relationship’s development. In the course of the consultation, a patient develops the initial impression of the physician based on the physician’s non-verbal and verbal communication, in addition to, personal attributes such as grooming, clothing, and cleanliness (Boore, 2006). This paper investigates patients’ preferences to a physician’s clothing as one component of the patient’s attitudes towards the physician.

Psychologists and sociologists have over the years acknowledged the effect of a person’s physical appearance on vital life experiences, for instance the job-related success and interpersonal relationships. In essence, the significance of physician attire on the relationship between the patient and the physician is traceable back to Hippocrates. Hippocrates posited that the physician ought to be clean personally, elegantly dressed, and anointed with fragranced ointment. Even in olden societies, the dress code of the healers played an essential part in healing rituals. In recent times, one may find a diversity of personal attitudes in relation to clothing and appearance suitable for physicians as mirrored in letters and editorials. Reviews of the accessible literature concerning the dress style of physicians reveal inconsistent findings. Numerous researches found that patients preferred a more conventional dress style for their physicians, although other studies show that patients would prefer physicians in increasingly casual attire. In a research carried by Stewart, (2009), it demonstrated that 65% of 250 patients preferred their physicians to dress in a white coat for the duration of a consultation and the greater part held that physicians ought to be dressed in formal clothing. Several studies reveal similar outcomes and the conventional items of attire for instance, formal outfit, a name tag, in addition to, a white coat were recommended by patients as proper attire for physicians. Other studies demonstrate that, a majority of patients prefer their doctor to be dressed in a white coat, be free of opinionated badges, and for males to have conservative hair length. However, some patients do not mind a male physician donning an earring, a female physician in trousers, or a male physician without a tie (Wallace, 2009). A study carried out by Rabson, (2007) among adolescent patients assessed patient attitudes subsequent to meeting with physicians whose attire varied from extremely casual to formal. The outcomes were that mode of dress did not make any statistical difference in regard to patient attitudes toward the physician (Castledine, 2008). According to Dover, (2006), most patients allege that the physician’s attire has no influence on their preference for a family physician or contentment. He posits that, the impact of attire in authentic patient encounters are an inconsequential factor overall. However, extremely few studies have investigated the impact of physician’s appearance and attire on the faith in doctors by patients. Therefore, the purpose of this study is to investigate whether the clothes a physician wears while treating patients, affects patient attitudes towards the physician.

Research MethodologyThe methodology chapter offers a representation and a discussion of the methodology that would be utilized in the research. This involves the anthology of information, in addition to, data analysis to scrutinize the hypothesis. The research philosophy states the research underlying principle and the approach. It as well explains the research strategy, in addition to, finalizing with the description of data collection and selection of the study sample (Creswell, 2002).

Research StrategyThe research strategy would signify the most noteworthy facet in the full research, in addition to, the survey process in the research methodology. This is commonly a technique of obtaining data from past studies, magazines, journals, and articles. The gathering of information will mainly facilitate the researcher in the long-term, and the short-term. Consequently, the researcher will implement varied inferences throughout the research. The research strategy section will focus mainly on the elementary characteristics of the research, which bear importance to the investigator (Coward, 2005). These decisive qualities might include the research procedures, anthology of information, and exploitation of varied types of information. The section brings about a number of merits, in addition to, demerits of diverse types of information, which facilitate the reader to understand the advantages and de-merits connected to a particular method. The key feature of considering a research process is to produce an astute school of thought with the intention that the researcher might accomplish a trustworthy conclusion (Creswell, 2002).

Research PhilosophyThis section concerns hypothesis on the perspectives applicable to life, which support the research strategy, in addition to, the preferred methods. The most commonly recognized research philosophies, and known as epistemology are positivism, realism, and interpretive.

Research DesignThe research will adopt the between subjects design, whereby the fundamental design in this form of study is that the research participants can be a component of the control group or the treatment group but cannot be involved in both. In the event that more than a single treatment is tested, an entirely new group would be necessary for each.

(Easterby, 2005).

The Merits of the Between Subjects DesignThe between subjects designs are extremely useful in some situations, and provide researchers the chance to carry out an experiment with extremely little contagion by unrelated factors. This form of design is frequently referred to as an independent measures design since each participant is simply subjected to one treatment. This lessens the probability of participants suffering tediousness following a long chain of tests or, otherwise, becoming increasingly accomplished by means of practice and experience, distorting the results (Easterby, 2005).

The Demerits of Between Subjects DesignsThe foremost demerit in the between subjects designs is the possibility of becoming complex and frequently demand a great number of participants in order to produce any practical and analyzable data. Since every participant is measured one time, researchers require adding a fresh group for each treatment and manipulation.

Individual Variability: in the between subjects design it is unattainable to preserve homogeneity amongst the groups. This method utilizes individuals, including all of their faint disparities, and this can distort data.

Gender, age, and social status are some of the observable factors, but emotive, intelligence quotient and all other personality constructs can manipulate the data. If, for instance, in utilizing a between subjects design to determine intelligence, it would be impossible to ensure that emotion does not influence the outcomes. Some individuals may be extremely intelligent but may be nervous when tests are carried out on them; therefore, they achieve inferior scores than they should. These individual disparities can generate numerous backdrop noises, therefore reducing the effect of statistics and obscure authentic patterns and tendency.

Practicality: in testing health care programs, for instance, a researcher may require two groups of 20 patients for a control and test group. If the researcher required adding a third program to the cluster, he would require another group of 20 patients.

For numerous research programs, the utter scope of the experiment, in addition to, the resources requisite might make between subjects designs unfeasible. If the condition under test is uncommon, then finding sufficient subjects would become increasingly difficult.

Generalization: While it is uncomplicated to seek to pick subjects of the similar age, gender, as well as background, this subsequently introduces generalization issues, since it is difficult to extrapolate the outcomes to include wider groups. The major rationale of employing the between subjects design is to strike the best balance in this regard. Failure to do this may lead to assignment bias, which consequently would threaten to obliterate this form of research.

Assignment Bias: Envisage researchers comparing health care programs, and they make a decision to utilize two hospitals as their participants. The researchers find that there is a disparity between the two groups and consequently decide that treatment A is more helpful than treatment B. On the other hand, the researchers neglected to consider the fact that the hospitals contain patients from dissimilar socio-economic backgrounds, and this would consequently create assignment bias. A superior suggestion would have been to utilize patients from a single hospital or employ random assignment, although this is not at all times feasible.

Environmental Factors: Environmental variables lead to major concerns and frequently arise from inappropriate research design. In the illustration above, envisage that the researchers use participants from one hospital and arbitrarily assigned them. As a result of time constraints, the researchers tested one group in the morning and another in the afternoon. Numerous studies reveal that the majority of persons are at their mental climax in the morning, so this will undoubtedly have produced an environmental bias.

These factors can easily become confounding variables and fail the outcomes therefore, researchers require being extremely cautious to eradicate as many of the confounding variables as possible in the research design. These demerits are indeed not fatal, but make certain that every researcher planning to utilize a between subjects design should be extremely thorough in their experimental design (Easterby, 2005).

Selection of ParticipantsThe research will be conducted in various medical facilities, through the use of current patients’ for the dependent variable, as well as, control group. For the physician, the researcher will make use of multiple pictures that display various levels of dress through the utilization of a model. The between subjects design that will be employed in the research will study the difference in attitudes between dissimilar groups of participants. The topic of study will concern whether the clothes a physician wears while treating patients, affects patient attitudes towards the physician. The participants will be randomly assigned into contrary conditions. Between subject-design is not influenced by the, carryover effect, practice effect or fatigue. However, there are several demerits as explained earlier. There might be inconsistency in participants, in dissimilar groups, nevertheless, this would be counterbalanced by the utilization of random allocation, as well as matched pairs.

Random Selection and Random AssignmentRandom selection entails how a researcher would draw the sample of participants for research from a population. On the other hand, random assignment refers to the way the researcher would assign the sample drawn to dissimilar groups or treatments in the study. It is feasible to have random assignment and random selection in a study. For instance, the researcher would draw a random sample of 200 patients from a population inventory of 1000 current patients in a hospital. That is referred to as random sampling. In the case of random assignment, the researcher would randomly assign 100 of these patients to obtain some new, further treatment and the other 100 to be controls (Glaser, 2007).

It is also feasible to utilize only one approach in any study. For instance, in the event that, the researcher does not randomly draw the 200 cases from the inventory of 1000, but as an alternative, takes the first 200 on the inventory, this would not be a random selection. However, the researcher may randomly assign this sample that is non-random to treatment vs. control. The researcher may as well randomly select 200 from the inventory of 1000 and subsequently unsystematically (non-randomly) assign the selected sample to treatment or control. Random selection is interrelated to sampling; as a result, it is most correlated to the generalization, or external validity of the study results. Nevertheless, it is possible to randomly sample, with the intention that, the research participants might represent the bigger group in a better way. Random assignment is mainly interrelated to design. Indeed, when participants are randomly assigned to treatments, this entails an experimental design by definition. As a result, random assignment is mainly interrelated to internal validity; nevertheless, randomly assign is utilized in order to assist in ensuring that the treatment groups are comparable to each other, meaning equivalent, before the treatment (Bachmann, 2008). The participants’ demographics that will be collected from the participants will include:

Age.

Sex.

Level of education.

Employment Status.

Occupational Status.

Ethnicity.

Marital Status.

Socioeconomic status.

Control and Experimental GroupsThe control group in the research study will be the physicians’ standard attire, of one clothing option, which will be shown to the control group only. This will be what regular patients see and are accustomed to seeing. This will be documented through the use of a likert scale, depicting the level or degree of the patient’s attitude. In regard to the experimental groups, each group would have a physician dressed in different attire and record their attitude towards each physician, using a likert scale, to include honest, trustworthy, competent, incompetent, likable, and unfriendly. Subsequently, once the reactions above are recorded, the researcher will document to what degree each reaction changes with regards to the physicians’ clothing.

VariablesThe variables that will be considered in the research study will be as follows;

Independent variables: Physicians attire:

Lab Coat with white shirt, tie, and stethoscope.

Lab Coat with white shirt, and tie.

White shirt and tie.

White shirt, tie, and stethoscope.

White shirt only.

White shirt and Lab Coat.

White shirt, Lab Coat, and stethoscope.

The dependent variables in the research study will be the patients.

Methods of Data CollectionThe randomly selected participants will be given a questionnaire whereby the survey responses will be obtained through the use of closed-ended questions. The compilation of secondary data will be employed with the intention of supplementing the techniques of primary data compilation (Burney, 2008). The researcher would be predominantly interested in comprehending the significance of whether the clothes a physician wears while treating patients, affects patient attitudes towards the physician. The secondary research would involve document reviews whereby a massive quantity of publications, in addition to, applicable materials are evaluated and analyzed. A broad diversity of books, journals, in addition to, articles would be employed in order to accumulate pertinent information concerning the subject matter.

Data Analysis ProceduresAnalysis of Variance (ANOVA) is utilized with one definite independent variable and a single continuous variable. The independent variable may consist of several groups (levels). For instance, a researcher hypothesizes that, groups of three would learn more effectively than groups of two or individually. Patients are assigned randomly into three groups and all patients study a segment of text. Those in the first group study the content individually (control group), while those in group 2 would study in groups of two, whereas those in group 3 studies, in groups of 3. Subsequent to studying for a stipulated period of time all patients would complete a test related to the studied materials. Firstly, it is essential to note that this is in line with the between-subjects design, given that there are dissimilar subjects in every experimental condition. Secondly, it is noteworthy that, instead of 2 levels (groups) of the independent variable, there will be 3. The t-test, which is frequently employed in comparable experiments with 2 groups, is only suitable for conditions whereby there are only 2 levels of a single independent variable. When there is a definite independent variable, in addition to, a continuous dependent variable, as well as, more than 2 levels of the independent variables and/or more than a single independent variable then the suitable analysis is the analysis of variance. In such situations, it would be appropriate to utilize a multi-way, rather than one way ANOVA (Easterby, 2005).

In the event that, there are more than 2 levels of the independent variable the scrutiny goes through 2 steps. First, it is appropriate to perform an over-all F test in order to decide if there is any considerable disparity existing among some of the means. In the event that, this F score is statistically noteworthy, then a second step would be performed, in which a comparison of sets of two means is performed simultaneously in order to determine explicitly, where the significance disparity lies. In the event that on running the experiment on group learning it is identified that for this experiment the appropriate investigation is the between-subjects one-way analysis of variance. It follows that a statistical program would be utilized in analyzing the data with the group as the independent variable, while the test score would be considered as the dependent variable (Burney, 2008).

The Rationale of Analysis of VarianceThe principle of analysis of variance (ANOVA) is to test for noteworthy disparities between means. Elementary concepts provide a concise introduction to the fundamentals of statistical significance testing. In comparing 2 means, ANOVA would generate similar results as the t test for independent samples, in the event of a comparison between 2 dissimilar groups of observations or cases. ANOVA would also generate similar results as the t test for dependent samples, in the event of comparing 2 variables in a single set of observations or cases (Easterby, 2005).

Validity and Reliability of ResultsIn this research study, the reliability and validity of the gathered data will depend on the design of the actual questionnaire employed. On the other hand, in optimizing the latter, precautious planning of questions, the outline, in addition to, distinct explanation of the underlying principle as well as pilot testing would be considered. The generalizations, validity, and reliability will be dealt with through employment of data verification, in addition to, construct legitimacy checks (Glaser, 2007). The researcher would be cautious concerning reflexivity concerns. Sources of information consisting of journals and books must be considered so as to realize reliable and valid data through triangulation.

Ethical ConsiderationsEthics will be considered by implementation of a human subject’s application. This would be in compliance with standard, good practice concerning research that involves individual volunteers as study subjects. All relevant ethical conditions will be taken into consideration through the obligatory best practice standards. Consent will be solicited before engaging the patients in the questionnaire. An informed consent form would be granted to the participants whereby their right to participate, decline to participate or withdraw from participation will be highlighted (Rabson, 2007). Opinions will be recorded in the questionnaires while confidentially will be preserved. Upon conclusion of the analysis of data, the questionnaires utilized will be destroyed. All acquired research findings will be regarded as exceedingly confidential in reference to the information provided by the participants. As an ethical responsibility, comments cannot be associated with the source without the express permission of the participant (Hooker, 2005).

Informed consent is a critical component of the research process and by itself entails more than acquiring a signature on paper. Researchers ought to educate their potential subjects in order to make certain that they can arrive at a truthfully informed decision concerning whether or not to partake in the research. The participants’ informed consent should be given liberally, devoid of coercion, and should be anchored in a clear understanding of what involvement in the research entails. The process of educating the research subjects concerning the study would begin in initial contact and would continue for the period of their participation. Consequently, information that would be conveyed through recruitment letters, advertisements, pre-screening telephone calls, study explanation sheets, and printed informed consent documents, in addition to, discussions ought to be understandable to the research subjects. These ought to contribute to the subjects’ understanding of the rationale of the research. Medical and scientific terminology will be circumvented or clarified in simple and common language. The materials will be written in 8th grade comprehension level or lesser. Non-English speaking research subjects will have the information accessible in a language that they would comprehend. Written, as well as, oral information, together with recruitment materials provided to research subjects will be approved prior to and throughout the informed consent process, by the Partners Human Research Committee (PHRC) (Hussain, 2011).

Timeline: Gantt ChartActivity Weeks

Week commencing 1 2 3 4 5 6 7 8 9 10 11 12

Explore literature Writing literature review Reading on methodology Writing methodology Collection of quantitative data Analysis of quantitative data Writing conclusion Submission of first draft Revision and submission of final draft References

Bachmann, M. (2008). Causes & Effects of Socio-Demographic Exclusion in Clinical Trials. Health Technol Journal, 14, 65-70.

Boore, J. (2006). Postgraduate Education in Nursing: A case study. Journal of Advanced Nursing, 23, 20-29.

Burney, S. (2008). Inductive & Deductive Research Approach. Karachi: University Of Karachi Press.

Castledine, G. (2008). The Important Aspects of Nurse Specialist Roles. British Journal of Nursing, 11, 5-10.

Coward, H. (2005). Perspectives on Health & Cultural Pluralism: Ethics in Medical Education. Clinical and Investigative Medicine, 3, 61-65.

Creswell, J. (2002). Research Design: Qualitative, Quantitative, &Mixed Methods Approaches. Beverly Hills: Sage.

Dover, P. (2006). Patients’ Attitude to Physicians’ Clothing & Appearance. Health Journal, 5, 11-21.

Easterby, S. (2005). Management Research. London: Sage. 2005.

Glaser, S. (2007). The discovery of grounded theory: Strategies for qualitative research. Chicago: Aldine.

Hooker, R. (2005). Physician Assistants & Nurse Practitioners. The Medical Journal of Australia, 18, 4-7.

Hussain, B. (2011). Under-Representation of Tribal Minority Groups in Clinical Trials: Review of Literature. Health Society Journal, 12, 82-88.

Rabson, K. (2007). White Coats & Other Matters. Journal of Medicine, 22, 24-25.

Stewart, S. (2009). Effect of Physician’s Dress Code on the Patient-Physician Interaction. Journal of Adolescent Health, 8, 56-59.

Wallace, H. (2009). Patients’ Attitudes as Regards Physical Character of Physicians. South Medical Journal, 6, 90-94.

To convey value to their organizations HR should effusively comprehend business strategy

To convey value to their organizations HR should effusively comprehend business strategy. Devoid of that cognizance it is not feasible. When HR has this acquaintance it then becomes probable to craft a Strategy Map and Balanced Scorecard for the HR utility itself, and even for devolved sections. A sound conscious HR scorecard will illustrate how the purpose delivers value to the endeavor through efficacy and competence themes. It as well shows how HR is mounting the endowment within the purpose to deliver the people aspect of the enterprise-level strategy. HR has a decisive role to participate in shaping forceful enticement compensation plans. This is most likely the major challenging of all HR’s responsibilities concerning the Balanced Scorecard as there is still a dearth of good illustrations of line up enticement compensations to the stratagem by means of the Balanced Scorecard. Human Resources are accountable for numerous of the activities concerned in scheduling, procuring, edifice and sustaining an organization’s human assets. HR can play a function in apprehending business intentions by foremost organizational revolutionize, nurturing modernization and efficiently mobilizing aptitude to protract the firm’s competitive periphery. Specified the investment characteristically requisite to shore up an HR organization, it makes excellent business intellect to exploit HR’s impact on the business. HR as strategic partner facilitates to augment efficiency of the labor force and thus, effectiveness of the organization as well enhances. HR as strategic partner facilitates in developing proficiency and talent management. Inception of information technology and the enormous quantity of acquaintance employed in the itinerary of the actions of organizations. HR as strategic partner aids in getting acquainted with the varying business milieu. HR as strategic partner takes care of the consequence of globalization on the business backdrop. Formulate efficient utilization of Human Resource Information System (HRIS) to hold every day organizational HR tasks. Employees can make utilization of the self-service competence online. This accumulates occasion and decreases expenses. Fully engross human resource in HR system improvement that is compassionate of business stratagem improvement and execution. This endorses ownership.

www.thefrelixgroup.com/uploadFiles/doc_48a35b15ccb99.pdfwww.ipacweb.org/conf/01/lawler.pdfwww.hrpa.ca/…/HRPA_KB_CEO_Perspective_Research_Highlight.www.merit.unu.edu/publications/rmpdf/1994/rm1994-036.pdf

To Buy or Lease a Car The Economic Considerations Involved

To Buy or Lease a Car: The Economic Considerations Involved

Ashford University

By (Student’s name)

BUS 640 Managerial Economics

Dr. Steve McQueen (Date of submission)

Abstract

Decision-making processes in business and project management assignments require appropriate consideration of available options for value optimization. Financial decisions are for instance among the most affected decision making variables requiring consideration of different options to maximize value. In order to determine how value added coincides with the overall objectives of the organization, managers require analytical skills that facilitate cost-benefit consideration of each available option. In this discourse, the managerial decision making process is highlighted in terms of the best financial option from a cost-benefit analysis. The main task requiring the managerial consideration involves the determination of the best alternative in buying or securing leasing services for a vehicle. Securing a car through a lease agreement is considered under the discussed circumstances of the decision case. A section designated for the definition of the managerial task in question appears at the beginning of the presentation to contextualize the decision-making necessity at hand. To illustrate the compelling situation that makes the decision-making process imperative in the operations, a factors analysis follows the contextualized decision setting. To further clarify the position of the managerial decision taken, an enumeration of the financial benefits and costs measurement criteria and incidental variables is included. A build-up to the summary is generated with the help of the case analysis.

Introduction

In the definition of the decision scenario involving business operations requiring a vehicle, is it important to underscore the importance of availing a means of acquiring the services. In this case, the business is a small company offering VIP transport services that has secured a contract to ferry the CEO of a foreign investment company with business assignment in the country for a period of one year. Under the current capacity, it is not immediately possible to allocate a car due to a complete schedule in bookings. The possibility of operating under the current capacity without any change can only be achieved after two months, which is upon the expiration of immediate due contract. However, due to the strategic business opportunity presented by the new client, and the importance of the current contracts, acquisition of a car is inevitable.

Research Question

The management must devise the most appropriate answer to the business question involving buying or hiring. Is it financially viable to lease or buy a car for purposes of a sudden need to meet a temporary client’s needs?

Assumptions

Car buying decision is within a business context as opposed to private use.

Business context for car usage under consideration is for a shortage of goods ferrying for a temporary client.

Acquisition considerations are particularly important due to apparent financial constraints experienced across the world now.

Factors and Costs

In the determination of the appropriate option to be adopted for the acquisition of the car, the management will bring into perspective a number of factors against the cost analysis. Firstly, the need to attract business transactions of all levels of income within the difficult economic environment may be a survival tactic in maintaining sustenance. It therefore follows that the consideration of terminating existing contracts will lead to loss of revenues that are much needed in the economic sense. Accepting more revenue generation projects is perhaps the main viable option amid increased business maintenance costs. Secondly, the harsh nature of the business environment prevailing across the globe makes it difficult to quickly arrive at an acquisition option. Purchasing the car implies that the element of capital investment needed may not be directly advisable at a time when capital expenditure is unsupported by the economic conditions.

Thirdly, temporal aspect of the business implies that there are times when capacity fluctuates to occupy different operations level. To arrive at the exact cost estimation for the two options, it is important to highlight the cost aspects expected at the beginning and at the end of the chosen option. Buying the car will demand meeting of the cost of the car at the time of buying. This may involve the borrowing of money to finance the purchase at a high interest rate that covers the entire value of the vehicle. The fourth factor includes the fact that the business environment poses mixed feelings of uncertainties in sustenance implies that buying at the moment may lead to uncertainties in opportunities ahead. As an illustration, buying the car at the current high costs with looming uncertainty on recovery implies that the business will be undertaking risky business decision since returns distribution across the fleet is not ensured. In light of the setting under a lease agreement, it is possible to terminate the contract and avoid incurring further costs while taking advantage of the improved capacity.

Fifthly, interest rates play an important role in determination of the appropriate financing option (Bishop, 2011). Apparently, the both options must involve borrowing of money at some level to finance the acquisition and the relative cost of both options represents different value for money. In this regard, tying large amounts of capital during high interest and cost period is not in the best interest of the business in the long-term projections. Bearing in mind that the purchase option requires the entire cost to be cleared at the time of acquisition is disadvantageous during high interest periods. On the other hand, acquiring the car through leasing will only factor in costs incurred during the specified duration of time. Lease agreement at the beginning of the acquisition will involve the down payment and further costs are amortized across the duration of acquisition.

The sixth factor is return on investment analysis, which under the two options implies that the buying cost will require a longer time to recover the incurred costs as opposed to leasing. In view of the lean spending environment necessitated by difficult economic environment, this is the best alternative in avoiding tying capital at a time when costs are high (Barkham and Park, 2011). Despite the fact that the relative cost for both options after a long fixed duration of time is higher for a lease agreement, short-term returns on investment are higher in the lease agreement. As an illustration, over the first six months of acquisition through both buying and leasing, the return on investment will be lower for buying when compared to leasing due to the relatively higher initial cost involved.

The seventh factor in favor of the lease is based on the fact that the lease arrangement can partly be funded by the business in which the leased car will be involved. In a lease arrangement, the monthly repayment will only attract a manageable portion of the acquisition cost. In terms of the valuation computation, the depreciated value of the car can be considered for purchasing if the lessee is interested in disposing it off, which is better business based on returns on investment analysis. On the contrary, buying transfers all costs at once to the buyer and it may not be possible to make sufficient returns on investment within a similar duration of time as a lease would.

The other factors of importance in the decision making that favor a lease agreement is the fact that the high interest rates of financing the acquisition can only be expected to drop in the future. It therefore implies that taking a short-term lease agreement then terminating it at the most opportune time is a viable business idea. Additionally, buying the car may not be a viable business idea at the moment due to intense technology that drives future demand for motor vehicle services. As an illustration, the future of motor vehicle business is leaning towards eco-friendly energy consumption and this may affect disposal valuation in future as well as affect demand for the business transport services. Equally, business outsourcing is a market niche that spares the actual purchase of a product due to availability of cheap alternatives. Leases are therefore designed for a better business experience in the modern day business, making it better when compared to purchases in the short run.

Measurements

Assumptions

Assumptions made alongside those indicated above include the acquisition of the car through two possible ways for the same motor vehicle. A different model of car on offer in the lease would change the cost differences significantly.

The immediate need for the acquisition is the business opportunity presented by the CEO of a foreign investment company against the stretched capacity that relaxes at the end of the first two months. If the immediate need appeared at the end of the second month or beyond, it would perhaps not raise the cost benefit analysis considered.

Within the context of the fleet specifications and the needs at hand, it assumed that a lower cost car could not be acquired for replacement with the current units involved in contracts for redeployment to fit in the new investment portfolio needs. This would significantly change the decision patterns considered.

The main costs of consideration do not include other costs such as; incidental costs in the line of business, shipping, legal fees and, consequential costs.

Acquisition Cost Figures

Table 1: Projected cost measurement

Purchasing the Car Leasing the Car for 1 year

Cost $30120 Down Payment (20% of depreciation value) = 1506

Fixed monthly fee + 502

2008.00

Interest rate + 10.00

First month = 2018.00

Total cost of the 1 year lease 64.9+6024+1506= $7594.90

Analysis

Instead of termination of the lease agreement, which would attract high charges of termination, it the best alternative is to go for an entire lease period of one year. At the end of the contract involving the transport cover for the CEO for one year, the cost expected is estimated to be at least $7595 as illustrated in Table 1. Due to the lean operations adopted during the difficult economic times, it is viable to consider the lease which will save (30120-7595) $22,525 in the interim period.

During the same period of time, the lease will have earned the entire contractual fee of $17,340 as indicated in agreement from a monthly pay of $1445. From a business perspective, the book value of the leased car at the end of the first year will be 25% of $30120 (22590). Only a small proportion of the value of the leased car will be required from the earnings made from the lease agreement (17340-7594) 9746, which can easily be financed as opposed to the initial value of $30120. Further computation details are provided in the endnote section contained in Appendix 1.

Summary

In terms of lean spending usually adopted during difficult economic times, the value of the vehicle after the particular contract in contention will be tied in capital. Apparently, the current stretched capacity of operations is likely to be relaxed when the running contracts reach maturity in two months time. Taking the temporal cost element until the maturation of the immediate contract must be considered against the cost of a permanent acquisition. From the need for avoidance of unnecessary costs, it is more advisable to factor in the difficult economic times and save tying up capital up to 30120 while as little as 7594 can be used in the acquisition. (Table 1) Measuring the returns on investment in the short run for the duration of the initial year after acquisition favors the lease option. The assumptions to the effect that the car model in consideration, commencement of the immediate contract, fleet redeployment and the specific acquisition costs must hold true throughout the discourse alongside those contained in the introduction.

Recommendations and Conclusion

Within the context of lean operations, it is difficult to venture into capital spending due to issues such as liquidity and high interest rates that may negatively affect the operations of the business. It is important that alternatives be closely considered in making the final decision for the optimization of returns and benefits and reducing costs incurred. Every business and personal spending decision involving significant amounts of money must be approached from a cost benefit analysis. Determining the returns on investment during difficult economic times may be useful in maintain sustainability in operations.

In the setting of a small company offering VIP transport services, it is important that capital spending be considered for the best acquisition from a number of options (Shilling, 1997). The initial step is the contextualization of the business scenario and available alternatives, which must be conducted within the financial limits of operations. The contextualization must highlight the costs and benefits of each alternative in order to facilitate in the making of the most viable economic decision. Budget constraints may force certain factors to be more feasible in the short run whereas they are expensive in the long run.

References

Barkham, R., & Park, A. U. (2011). “Lease versus Buy Decision for Corporate Real Estate in the UK,” Journal of Corporate Real Estate, 13 (3):157-168

Bishop, J. (2011). “Lease vs Buy- Financing IT Asset Acquisitions,” Retrieved from: HYPERLINK “http://blog.thehigheredcio.com/2011/08/19/lease-vs-buy-financing-it-asset-acquisitions/” http://blog.thehigheredcio.com/2011/08/19/lease-vs-buy-financing-it-asset-acquisitions/

Shilling, J. D., (1997). “Economic Forces Shaping Investment in Office Markets,” Journal of Property Finance, 8(4):283-302

Appendix 1

End Notes