Human Computer Interaction Essay

The Human Computer Interaction(HCI) is the field of study of mutual communication between the user and the computer. This is the field of interaction is equipped by using the user interface which includes the software as well as the hardware too. All the software which are being made are enabled with user interface design and their implementation. Today, Microsoft Windows XP, Microsoft Windows 98 etc. are the operating systems which are enabled with graphical user interface. This is also the human computer interaction. The World Wide Web is also the example of human computer interaction. The field of the human computer interaction is well developed today with the advent of new technologies in software and hardware both. With the development in this the field the new terms like menu, buttons, icons etc are introduced which recite the uses and advantages of human computer interaction. (Brad A. Myers March, 1998 pp. 44-54 ) With the development in application of mobiles the human computer interaction’s are also increased. The new interface design like touch-screen designing of computers and mobiles also has given a new direction to HCI. The HCI in future has better opportunities with the developing software and hardware. 2) Methodologies and processes for designing interfaces: the HCI design methodologies are developed from early methods like treated users’ cognitive processes to the new ones like web designing. The methods for designing the HCI always looks for interaction between the user, computer that is the machine and the designers. User centered design is also the method in which every aspects like requirements, design etc. are included in which the attention is being paid on cognitive factors. in this design processes the users use through the hyperlink with a very high speed. These models as the name denotes are based on the models which are based on human expectations. The model can be integrated by programming and then can be implemented and then the feedbacks can be undertaken for modifications. (HUMAN COMPUTER INTERACTION p. 1) Paper prototyping is also a method for designing HCI by developing software. It is used for examining and scheming user interface. In this method the drawings of the interfaces are created for design. Its is a useful method as the sketching is faster than the programming. This method can be useful as the persons who do not the programming can also do this. Web design is also a method of designing user interface like web pages, websites etc. using HTML, JAVA as the software toolkits for development of web pages. The web design is used to made websites as graphical user interface(GUI). The web design also implemented to meet the requirement of the website developer as well as the end-user. The web design is based on languages like JAVA, HTML for safety purposes to eliminate the problem like hacking etc. Cognitive method of HCI designing is a earlier method but still its very constructive. It is based on analysis of two aspects cognitive exchanges with computers like learning, reading and other aspect is cognitive stuffing, composition etc. In this process the user analysis is done firstly like requirements, tasks etc. This analysis contains the features like memory, perception, requirements etc. The next step is designing and analytical test. This contain the features like language and memory. The last phase is system testing to test the authentication of the system. (Douglas J. Gillan & Nancy J. Cooke p. 1) 3) Methods for implementing interfaces: There are many methods of implementing the interfaces like software, research methods, efficient algorithms etc. There are many software tools like windowing systems, toolkits, interface builders etc. These software includes the software like JAVA, Macintosh Toolbox, Visual Basic etc. These software are very beneficial as they have application in HCI designing as well as in other fields also. The software programming is easy to handle as any person can gain knowledge of it. The methods of implementing interfaces using the software is also beneficial as the cost is reduced in designing and the modifications can be made very easily. The software used has the advantage that if the new version of software comes in light and the user want the interface based on this new version. Then the interface can be programmed in the new software and interface can be modified. The libraries can also be used to develop the software. The libraries are used to store the data, execute the programs. Then the programs are implemented which are stored in these libraries. These libraries can be connected to share the heavy load of data. With the advancement of these libraries the data is now stored in organized and can be shared in any part of the world. The algorithms are also used for HCI designing as these algorithms are created for systematic workflow. For detailed representation of the problem which has to be solved has to be studied carefully. This approach is developed by efficient use of the algorithms. 4) Techniques for evaluating and comparing interfaces: There are many techniques for evaluating the interfaces design and utilization. There are many criteria for evaluating like EC directives. There are many issues which have to be undertaken for evaluation of interfaces like controllability, data integrity etc. These factors are mainly used for HCI interfaces evaluation as these are basic factors for designing and comparison of interfaces. The HCI interfaces which are being developed must be user friendly. The techniques which are being used today are EVIDAS II, MUSiC, KABA etc. These are the latest techniques which are used for comparing the interfaces. These techniques are categorized further as user-oriented like MUSiC and product-oriented like EVADIS II(Chris Stary*, Thomas Riesenecker-Caba, J &-g Flecker, pp1-2). These techniques undertake various fields like user interface, organization of work, software features etc. These techniques are designed to evaluate the various factors like appropriateness, management of data, failure of interface chances etc. These techniques has developed the chances of improvement in software quality, user-friendly quality, success rate, cost effectiveness etc. The major task is transparency of software for future modification. These HCI interfaces are applicable to group work, this factor is also tested by these techniques. 5) Developing new interfaces and interaction techniques: The new interfaces which are being designed for the future must includes many features like management and filtering of data, input devices and sensors, learn ability, user satisfaction etc. The Augmented Reality(AR) design is a latest one. This design is oriented from the Virtual Reality(VR) design. These design are implemented to reduce the cognitive overhead. ( Andreas D? nser, Raphael Grasset, Hartmut Seichter, Mark Billinghurst pp1-5) There are many principles which are being undertaken like affordance, user satisfaction, low physical effort, learn ability, flexibility etc. There might be a switching from 2D to 3D visualization. The HCI may be designed by touch-screen application. The models which are being designed must correlate according to the needs, task, goals of the user. The 2D screen desktop may be given a new look by 3D view. The HCI may be developed such that they might be connected to mobile and when a e-mail, message etc. come then the user interface attach directly connect with the processor and the communication system and will inform the user directly. One technique may be used by using sensors. When the user wants to switch on the computer or want to give any instruction. Then the sensor which are employed just start their working and obey the order of user. The HCI must respond to the user’s instruction quickly. The problem of slow response must be eliminated in order to make new interface more efficient. The error must be eliminated or must be decreased to a zero level. The interface must have the tracking stability. The user-centered design must be improved to AR designs. The user intervention must be taken into account. 6) Developing descriptive and predictive models and theories of interaction: The models which are to be developed must be based on the many key factors like virtual and augmented reality, tangible user interface, affective computing, sensing interface eye moved based interface , perceptual interface etc. The models are used to design and evaluate the interface technique The graphical user interfaces(GUI) are used today mainly. These interfaces will be modeled according to the needs of the user. The new models will used the basic qualities of the WIMP interface as well as they will work on new innovative techniques like using sensors, 3D environment. The HCI environment must be created such that the communication process must be strong. The metaphoric systems are related to the descriptive models and the those which are related to mathematical systems, are towards the predictive models. The predictive models analyze the interface technique with any time-consumption. The descriptive model are different than the predictive models but are used as well like the predictive model. These models does not give the quantitative measure but just provide a scenario to think about the situation of the problem or to describe the problem. These models are used for keyboard interfacing, mouse interfacing etc. ( I. Scott MacKenzie, pp. 27-54 ) The models which are based on these models are also modified according to the new theories presented like the use of new methods like digital libraries. 7) Conclusion: The human computer interaction is very beneficial today as well as few decades ago when WIMP interfaces were in use. With the advent of new technologies and theories, the new HCI environments has been created and the development in the field of the HCI is going on like 2D to 3D environment on desktop. These all development are due development of new software and techniques which are being used. The latest research strategies like Ethnography is also beneficial for the HCI development. The web application are being developed with the use of new methods. Thus the HCI environment has been developed a lot. References: 1) Human Computer Interaction, Wikipedia the free encyclopedia. (Online), 4th April, 2007. http://en.wikipedia.org/wiki/Human-computer_interaction

Punctuation Essay

Punctuation is one of the most important aspects of written English, yet it is one taken the most lightly. And it changes meaning, gives a pause to the reader,and changes the tone of the voice when speaking. In all of the essays authors surprised me.They showed me what punctuations actually is, whats te importance of punctuations. as for example â€Å"Don’t stop† and â€Å"Don’t, stop† do both of them are same? No, just a comma changed full meaning. This is how the essays impressed me. â€Å"The comma is a flashing yellow light that asks us only to slow down† this line has been taken from the essay â€Å"In Priase of the Humble Comma† paragraph no.2 line no.5, this is the line which gives all the description about Comma. Like this in every essays they described each punctuations in this way, which I was hoping to. This essays has changed my view of how to see puntuations. Before I didn’t cared that much about punctuations, but now I got a clear information about punctuations.And I came to know that to convey a correct message and write a good piece of English I must use punctuations. â€Å"The relationship with my father in Winnipeg has became more personal than it had been with the alternating saturday father-son telephone call.Because of its brief nature every single character is an enormous significance.† this lines has been taken from the essay â€Å"The Impotance of Email Punctuation: A Cautionary Tale† paragraph no.2 line no.9, this lines makes me understand that punctuations played a great role to make their son-father relation stronger which serves to an emotional investment. These essays made me felt ’emotionally invested’ because it can grow a stronger relation between two person which is really a important thing in this society and these essays made me understand impotance of punctuation too.

Workplace Motivation

Motivation in the workplace is the single most influential factor in achievement of higher productivity and profitability by an organization. Over the years, psychologists have concurred with social analysts and workplace managers that employees indeed act as the main springboard to effectively promote objectivity of their organizations management plans (Weiner, 1985). It is from this notion that motivation in most of the organizations has been assimilated not just at the top management levels only, but at the lower sections to derive genuine intrinsic returns. Owing to this consideration, this paper seeks to explore workplace motivation strategies, their related theories and affects in organizations' workplace settings. Deriving this interlink, the paper outlines various recommendations that could be employed to effect the necessary changes and therefore assimilate holistic productivity and progress. 2. Affects of motivational strategies on work productivity a) Introduction In my organization where I work [XYZ] workplace motivation has been the defining factor for its current success. As an airline company, the management underscores the need to strongly motivate the employees as they are entirely independent in their operations by nature of their jobs. Though the concept of giving the highest possible quality to the consumers through motivating the staff was initially not effectively understood, entry of the current Chief Executive officer made the notion easy to grasp and apply with ease. b) Organizational efforts to promote performance Due to the high level competition in the airline industry, measures that have the capacity to promote returns are always welcome. As a result, workers motivation has been assimilated as a major facet for enhancing greater returns. Therefore, the management has facilitated the formation and operation of teams and groups at the lower levels of employees. Use of teamwork and team leadership has therefore brought the staff and employees at the decision making level as they are entrusted with all the major activities that take place during flights. Indeed, this model been hailed and emulated by other airlines in that the staff is entrusted to address all the emergent issues to generate the highest possible satisfaction to the consumers. Besides, unlike other airline companies that keep on hiring and firing their staff, XYZ observes a high retention system with internal promotions serving as a major motivational consideration. After the terrorist attack at world trade center in US, XYZ maintained its entire staff as others strongly downsized to cater for the crisis period as more people drifted away from air flights. Top leadership and management officials are identified and promoted from the teams’ operations efficiency. Such emergent leadership has been a strong motivating facet to the level lower employees as they seek to follow the same trend to get at the top. Bridging the gap between the top management and the lower level employees has perhaps been the best motivating notion that the company employs to boost the morale of the workers in their duties. Since the onset of the current economic crisis the management has sought to break the previous hierarchical mode of management and bring together all the staff to work together at all times. By bringing them closer to the management, it became much easier to understand their overall needs and sentiments therefore pro-actively solving them. Indeed, discussions and problem analysis between the management and staff in search for solutions and alternatives has become part of the XYZ culture. This brings out the sense of ownership and identity which drives the employees to work in their organizations with great efforts as they would have done for their personal jobs. It is from the above efforts that XYZ maintained its profitability after the terrorist attack in the year at the world trade center and the current economic downturn as the employees seek to gather more efforts from the continuous motivation they generate. c) Employees resistance to increasing productivity It is worth noting that though the management has over the years been strongly committed to enhance greater motivation, strong resistance has also been increasing with time. Some of the employees view the current initiatives as a facet to divide them in that some cannot be able to get the different team leaders positions or being promoted. Though the management has been considering this to be part of the anti development group that generally views any form of development from a negative point of view, the company leadership has often been cautioned to ensure that it does not spread to the rest of the staff. This has prompted the management to establish a general criterion to be used for promotions and awards therefore preventing any sense of sabotage among them. To add to that, bulk of the major changes have seen introduction of modernistic highly computerized and automated systems to not only reduce the time of service to the consumers, but promote the general quality and utility equivalence of the payment. However, this has been interpreted to indicate possible threats to their jobs even with the management confirmation of total retention for all the staff. This has further been linked with the overall resistant nature of the human beings in their work places emanating from their complexity analysis of the present events but overshadowed by the future uncertainty. ) Management philosophy of motivation and practices Application of motivation systems by the company has been deeply based on the understanding of interplay between the different needs of the employees and their efforts to see higher productivity. As a result, the management overview has been in a twin fold model where the general returns to the staff acts as the main driving force to their general efforts. Though this has been cited to be the major factor in the company behind its success, a general shift was recorded when the employees suggested their allowances reduction to anchor the general company's cost reduction strategy. As Hatch underscores in his model of cultural dynamic, the ability of the staff to effectively support the management decisions depends on how the leadership will harmonize their views and needs of the workers to reduce the overall resistance to infer the necessary motivation for work and innovation (2000). In this respect XYZ brought sought to bring the management closer to the staff by invoking the necessary autonomy in their work, reducing the hierarchical management system, and incorporating the employees in the decision making process. 3. Implications of applying other motivational theories a) Vroom's expectancy theory Though XYZ application of motivational theories has been highly integrative of the different theories due to its nature, some have not been effectively applied. To begin with, Vroom's expectancy theory indicates that motivation to the staff and employees is based not only on the material well being, but to attain the necessary anticipated outcome as the general achievement and assimilate the belief that the exerted effort has been helpful in promoting the status of the company. Application of this theory would be of great essence to the company management by being self driven from the onset, carefully self evaluated, and highly cautious to raise productivity and profitability of the company. However, its application would perhaps be highly controversial due to lack of the necessary guidance as exemplified by the present management of XYZ. However, it would be a great relevance in reducing the overall expenses and therefore put greater emphasis on productivity and profitability of the company. To the employees, this theory would infer mixed reactions on their perceptions in that the general assimilated attitude towards the company could be essential in enhancing their efforts towards higher production. However, it also has the capacity to be misinterpreted to indicate oppression by the management towards the employees and therefore become a major stabling block for productivity and progress in the company. It is therefore essential that its application be effected instantaneously to give the correct message to the employees. b) Aldefer's ERC theory. Then Aldefer's ERC theory indicates that for all the expected returns to be assimilated, the staff would be required to attain different set standards to get the necessary benefits attached to them (Bollesm, 1975). Though this would infer further need of grater returns to the company, the management may indeed get the direct opposite. Motivation as indicated in the earlier sections in this paper should be self driving without a sense of coercion. Possible standards should always be established in consultation with the staff to affect the general acceptability of the system by all. For the employees in the company, this would be viewed as part of the general initiative to render them unworkable. Indeed, it has the capacity to spark unrest from the general sense of inferiority to attain the different set standards. It is imperative that such level marks are set at the possible levels that the staff would be able to attain and more importantly in teams. 4. Conclusion It is from the above discussion that this paper concludes by supporting thesis statement that motivation in the workplace is the single most influential factor in achievement of higher productivity and profitability by an organization. It is important that staff is carefully handled by the management to generate the necessary perception from them for higher productivity. Motivation should be integrated to the general culture of the company in a manner that all the major operations project to profitability. To add to that, the management should give the employees the necessary room to contribute creatively and promote innovation for higher returns.

Health Care in the USA Essay Example | Topics and Well Written Essays - 750 words

Health Care in the USA - Essay Example Authorities to transmit overt health messages, such as those for AIDS prevention, immunization, or family planning, may use the electronic media. Perhaps more significant are advertisements (for insecticide, beer, soft drinks, automobiles, powdered milk, cosmetics, and other items of commerce) and programmatic content depicting supposedly admirable people and their lives and activities. Emulation of such models may have rapid and profound health consequences, both good and bad. Moreover, decades ago, the medium is often the message, and the mere presence of the radio or television receiver may lead to significant changes in personal or group behavior, independent of the nature or content of the broadcast messages. Most commentators ascribe the great decline in mortality in countries like US that were developing during the 18th and 19th centuries to improved nutrition, water supply, excreta disposal, and housing; legislation to control employment of women and children; and public health services in the broad sense. There seems to be a common misconception in the world that Health Care Services in US have monolithic socialized medicine systems under which a person need only appear on a hospital doorstep to be showered with free services. Perhaps equally widespread is the idea, promoted by television pictures of starving hordes, "such is not the case in the United States, where not all Americans are covered by health insurance" (Shi, L. & Singh, D., 2004, p. 2). Neither of these extreme images is accurate. While often useful, comparative studies have their limitations. On a superficial level, comparative health services research can uncover statistics on the numbers of facilities, physicians, hospital beds, and so on; on money and other resources put into the system; and on the number of patient visits or immunizations given over a certain period of time. It can also illustrate certain structural relationships within systems, such as the organization of divisions of a health department or the regionalization of hospitals, health centers, clinics, and dispensaries. Pages of tables and charts can be prepared in such studies, but skill and care are needed to draw correct conclusions from these data. There are two basic problems: (1) what the data show and (2) what they do not show. "Health care is a continuously evolving process impossible to describe adequately in an instantaneous snapshot, any more than a single frame can exemplify a long and complex motion picture" (Frick, K., Jensen, P.L., Quinlan, M. and Wilthagen, T, 2000, p. 86). The fact that a system for health care exists does not necessarily mean that it functions according to design or that it is used, or used appropriately, by the people whom it is intended to serve. The official health care system is not necessarily the health care system, because it has several parallel systems. Persons may by necessity (= lack of access) or by intent (= distrust) circumvent the official system. Indeed, in some parts of the US only a minority of the population may make use of official health services, preferring to consult pharmacists, healers, or others whose services are not recorded on government charts and tables. Whereas the elements of a system, and the resources put into it, can be counted and described, t he output or product of the system, in terms of improved health, is impossible to measure and may even defy estimation. Attitudes, motivations, and policies cannot be indicated on an organizational

Business Aquisitions Essay Example | Topics and Well Written Essays - 500 words

Business Aquisitions - Essay Example Whenever an acquisition takes place, there is a wide range of motives behind it but the three most important ones are managerial, synergy and hubristic (Du & Boetang, 2014). A detailed review of the situation highlights that CEO has made the decision for attaining synergy as it lacks few resources possessed by the foreign organization. It is even mentioned that this decision will allow it to be the market leader and such initiative will prove to be beneficial for the entire company. Moreover, it appears that there is managerial motive behind this choice because the person is expecting an increase in salary coupled with bonuses and other fringe benefits. As a result, there will be ample growth opportunities for the existing employees as they will be allowed to enhance their competence. Traditionally, the classical approaches have been followed in such type of corporate decisions. The situation at hand is in alignment with the resource-related approach as the acquiring of the foreign company will offer the firm an opportunity of employing the proficient resources available with the enterprise. The present decision is in accordance to this tactic as it will make sure that the company has access to those sources which were unavailable with the firm. Also, it will allow the resulting corporation to gain leading position within the industry. In addition to the capital sources, the company will have access to the competent management team and employees who will be able to share their international business experience.

Report Case Study Example | Topics and Well Written Essays - 750 words

Report - Case Study Example Business intelligence is a tool that combines all equipment needed by decision makers to come up with intelligent managerial decisions. This tool enables proper monitoring of important business information which includes market trends, competitor monitoring and ensuring proper firm strategies. House Depot needs to mend its business information and data acquiring methods in order to improve their business performance. House Depot needs to connect its various warehouses to ensure a network system enabling sharing of inventory information. The network to be setup depends on the proximity of the warehouses to one another (EC-Council 60). In this case that warehouses are not in close proximity to enable a LAN connection. WAN network connection is the best to use in House Depot scenario. The WAN network established should be secured using the VPN protocols. Using virtual private network will ensure security in the network (EC-Council 54). Bus topology should be used to connect the computers in the warehouses to enable a domesticated LAN network. Research is meant to find out different entities in the market. If House Depot were to find a freeware in the course of their research they cannot claim ownership of it. Claiming ownership would be a form of embezzlement or grabbing personalized software. Furthermore, there is very little chance of discovering functional software that is not patented. In order to boost their technological systems if House Depot was to invent its own operational software it should be within the bounds of the law to avoid any claim of plagiarism. Acquiring information from the original software developer about the bounds of their patent will enable a healthy development with the original developers. The software characteristics can also be merged and merger terms set for all software presidents. Patenting of the software developed by House

DO GOOD ETHICS PAY FOR THEMSELVES Essay Example | Topics and Well Written Essays - 4000 words

DO GOOD ETHICS PAY FOR THEMSELVES - Essay Example The objections made by Tightpenny to the idea of ethics seem to be ill-founded since it can be shown that ethics are quite relevant to business and can actually help profits. Ethical responsibility and corporate social awareness have become important for modern business enterprises but today, a company has to do a lot more than simply support social causes. It must advertise that it is supporting social causes. The ease with which information can shared amongst people in countries like the UK makes it impossible for a company to lie about something or hide it for long from the public. Dark pasts and shady dealings soon come out and hurt the company in more ways than one. Therefore, remaining ethical and advertising about being ethical is quite important. In this sense, business ethics are important aspects of running any company and the reasons for that are not limited to legal requirements or government orders (Medawar, 1976). The reason for running an ethical business can be shown to come from the highly valued theory of ethical egoism which suggests that people should what would be best for them in the long run. This approach may be connected with the ideals coming from utilitarian ethics or the approach taken by universalism but the basic reason for companies acting ethically is that ethics are good for business. The basic reason for this situation is due to the emergence of ethical consumers. These consumers like to know that their buying decisions and the support they give to companies are responsible companies. This consumer will make purchase decisions which are influenced by knowing the operations of the company from s/he is buying products. While the idea of being ethical may have as many definitions as there are consumers in the market but in a broad sense, the consumer could be very hesitant when buying goods or services from an organisation that does not have high ethics. These high ethics include stipulations such as its

Deficit Spending Essay Example | Topics and Well Written Essays - 500 words

Deficit Spending - Essay Example Deficit financing has many advantages that benefit the economy in times of economic trouble but it has many disadvantages and overemphasis on it may turn hazardous for the economy. In a modern economy, budget deficit often evolve due to some common reasons like increase in government expenditure, fall in aggregate income level, inefficiency in the tax collection mechanism, subsidies granted by government in diverse sectors of the economy and so on. All these results in diminished pool of the state exchequer causing budget deficit wherein the mechanism of budget deficit by the government make its intervention coming with its own set of advantages. As discussed earlier, with two major tools like borrowing and printing new currency, the economy experiences development in infrastructure with capital infusion which in turn propels productivity boom in essential sectors like education, medicine and real estate to name a few. Money supply within the economy increases that as a spillover effect increase price level (although inflation acts as a predicament) of the economy that fetches gains to the producers in the supply side luring investments. One of the major advan tages of deficit financing is that it increases the aggregate demand within the economy increasing employment opportunities, income and thus more investments (Hajela, 2010, p. 348). After analyzing the advantages of deficit financing, it can be stated that there are some disadvantages of it as well. Inflation is one of the most prominent disadvantage or evil effects of deficit financing. If deficit financing cannot be controlled in a proper manner then inflationary pressure will increase. As for instance, in case of production owing to excess capacity deficiency, discrepancies between demand and supply of goods within the market and shortage of complementary factors coupled with increase in money supply accelerates inflationary pressure. Apart from that some

Why or why not a well-known leader (of your choice) is leading Assignment

Why or why not a well-known leader (of your choice) is leading appropriately for the situation - Assignment Example Wynn had to direct his followers by offering them guidance so as to avoid doubt. His behavior and thinking were being accepted by his followers and he earned their trust. He has encouraged and supported them in attaining the goals that he had set for them. Wynn achieved this by making the path easy and clear for his juniors to follow. He offered the right guidance on the way for his followers and offered schedules to specific work since his subordinates had no experience. These initiatives boost control and the sense security for the followers. Thus, the path-goal theory is the right leadership theory to apply in the situation at hand (House, 128). Based on the analysis of this leader, the theory shows that Wynn as the leader is effective as he gets his followers able to achieve their goals and the goals of the organization. His followers accept his ways of leading and therefore readily and willingly follow

Business law Essay Example | Topics and Well Written Essays - 500 words - 20

Business law - Essay Example It is suitable in a business environment in which the party are able come together and the party values a relationship that they have enjoyed. An example is the case in which one party to a contract has breached terms of a contract. The parties can come together with the aim of reconstructing the contract or finding a suitable remedy to the injured party. The negotiation process will involve the elements of the Bloom’s Taxonomy as the parties consider available alternatives. The parties will remember terms of the contract and reasons for the breach in order to understand their positions. They can then use the information to generate possible solutions. An evaluation of the possible solutions can then inform the parties’ decision into formulation of a remedy or a collection of remedies to the dispute. In implementing the Bloom’s taxonomy in negotiation, the party can reach a solution that is acceptable to both of them and one that can sustain their existing relati onship (Miller and Jentz 75; Overbaugh and Schultz 1). Mediation is another form of alternative dispute resolution system that parties in a business environment can use. The method involves the role of a third party that tries to bring the parties together in order to reach a solution. The party is always neutral to the dispute and does not impose any solution to the parties. The third party may however propose solutions and try to enlighten the conflicting parties of the benefits of the solution. The parties to the conflict however reserve the power to make a decision on whether to resolve the conflict or not and the solution to accept. Unfair business practice, such as blackmailing advertisement, is an example of a situation in which mediation can be used. In case, the parties may have a tense inter-business relationship that makes it hard for them to come together and agree. A third party can however bring them together and help them to reflect on the problem and understand its root

Gender roles. Roles of Men and Women in Society Essay

Gender roles. Roles of Men and Women in Society - Essay Example II. The biological make up of an individual within a society has long been used to determine how that person should behave †¢ Biology is not necessarily a determining factor in gender roles †¢ In many of the societies today, there is a tendency to ascribe roles according to the biological makeup of the individuals within them †¢ Men were given the positions of power, not because they could do better than women, but because of their biological makeup III. The society plays a major role in determining the gender roles of the individuals within it †¢ The parents of a large number of people in society determine the gender roles of their children and rigidly enforce them. †¢ Society is a powerful force in the lives of the individuals within it †¢ It is often extremely difficult for individuals to go against the roles which have been set for them by their own societies IV. Culture is another major factor that determines the gender roles of individuals in the societies within which they live. †¢ There are many different cultures around the world and each has its own expectations about what roles the members of each sex should undertake †¢ Other cultures cannot be judged according to the western standards because of the fact that while there may be similar cultures, there are others which are completely different †¢ In a globalized culture, men and women are considered to be equal and tend to be given equal opportunities, with each sex performing those tasks which were traditionally reserved for the other V. The various roles that are ascribed to the various genders are mostly determined by the society within which individuals live as well as by its culture. Biology only acts as a marker to determine how the society is going to socialize an individual to behave and it is not in itself a definer of gender roles Within the modern world, gender roles are starting to become insignificant Women can take up the roles traditionally reserved for men with the same efficiency and the reverse has also been proven to be true The gender roles are today slowly becoming blurred and they may cease to exist altogether in future It is a fact that gender roles have existed for almost as long as the human race has existed and it is quite possible that they will continue to exist in the foreseeable future. T hey are a part of the daily lives of individuals and are manifested within the society by observable factors such as how one behaves or appear. Gender roles can be considered to be patterns of feelings deemed appropriate or inappropriate because of one’s gender and they derive from the social expectations of how members of the different genders whether male or female, should behave. An example of this is if a person considers themselves to be female, then she would be expected to display the characteristics which are typically associated with being female, such as being gentle, dependent and expressive of their feelings. There are various factors that are used to determine the gender roles in society and the most important of these are biological, social, and cultural factors. One would state that the biological make up of an individual within a society has long been used to determine how that person should behave. However, there is yet to be proof of the fact that whether on e is male or female, he or she is born with the innate knowledge of the characteristics that are often ascribed to their gender (Zosuls et al 827). In

Deviance Behavior and the Possible Causes Essay Example for Free

Deviance Behavior and the Possible Causes Essay Some may say its biological or psychological and even sociological reasons. There have been many studies to try and determine why people have deviant behavior and what happens to individuals when norms are broken. Not all behaviors are judged the same by all groups. For example, some may question if there are conditions under which suicide is an acceptable behavior. Lets same one person commits suicide in the face of a terminal illness but another person is a despondent person who jumps from a window, the second person may be judged differently. The first person’s suicide may be looked at with pity which the second person would be looked at in a shameful way. Another behavior that would highly be considered deviant would be committing a crime. For example, juvenile gangs provide an environment where young people learn to become criminals. Gang members glorify violence and retaliation as means to achieve social status. Whether it is an act of a crime or gang violence, criminals learn to be deviant as they embrace and conform to their street or gang’s norms. Americans consider such activities as alcoholism, excessive gambling, being nude in public, starting fires, stealing, lying, prostitution, and being gay to name only a few as being deviant. Therefore people who engage in deviant behavior are referred to as deviants. References Richard T. Schaefer. (2012). Sociology A Brief Introduction (Tenth Edition). McGraw-Hill Companies Inc, New York. Sociology of Deviance and Crime. (2013) By Ashley Crossman.

Quarterly Earnings Forecasting Decisions by Family Firms

Quarterly Earnings Forecasting Decisions by Family Firms Quarterly Earnings Forecasting Decisions by Family Firms and the Market Reaction to Them Abstract We study the disclosure incentives for family firms by examining the characteristics of their quarterly earnings forecasts and analysts and investors responses to them. Forecasts offered before the fiscal quarter-end (guidance) by SP 500 family firms are generally more specific and timely than those offered by SP 500 non-family firms, particularly when they convey bad news or confirm analysts current expectations. Further, family firm guidance elicits a stronger response from both analysts and investors. While many of these differences largely disappear when the forecasts are offered after the quarter-end but before the earnings announcement itself (preannouncements), family firm preannouncements still tend to be more specific when they contain bad news. These more specific preannouncements also generate a significantly stronger response from analysts. Overall, our results suggest that large, visible family firms use manager-generated earnings forecasts to create a more transparent i nformation environment, and that these forecasts are likely to be most useful in reducing information asymmetry and agency costs when they are issued as guidance. Key Words: Management earnings forecasts, family firms, preannouncements, earnings warnings. Data Availability: Data are available from the sources listed in the text. Introduction. Family firms are generally defined as companies that are significantly influenced by founding family members or their descendants, through large shareholdings and/or operational control.[1] Anderson and Reeb (2003a, 2003b) report that family members hold approximately 18% of the equity of the family firms in the SP 500, on average, and control 45% of the CEO positions. In addition, family members often hold seats on the board of directors or are part of upper-level management in these firms (â€Å"Family Inc.†, Business Week, November 10, 2003). The structure inherent in these family firms gives rise to different agency problems than those in firms with much greater separation of ownership and control. Specifically, the family firm structure significantly limits the agency problems that arise from the separation of ownership and control (often referred to as Type I agency problems) while exacerbating those that arise in the conflict between controlling and non-controlling shareholders (often referred to as Type II agency problems, see Ali et al. 2007, Chen et al. 2007, Wang 2006 and Anderson and Reeb 2003a). It is well known that the second type of agency problem can be partially mitigated by frequent and transparent disclosure. However, it is also possible that reputational concerns may arise from the long-term nature of family members investment in their firm, mitigating this problem and reducing the need for more frequent and transparent disclosure (Wang 2006). The purpose of this paper is to add to our understanding of these competing incentives for differential disclosure by examining the characteristics of quarterly earnings forecasts issued by the management of family firms and the response of sell-side analysts and investors to them. Recent accounting research that examines mandatory financial disclosures by family firms suggests that reputational concerns alone may not be sufficient: Characteristics of family firms mandatory financial reports are consistent with their being used to mitigate the agency problem between controlling and non-controlling shareholders. More specifically, Ali et al. (2007) and Wang (2006) show that large family firms offer higher quality financial reports as evidenced by lower discretionary accruals, greater ability of earnings to predict cash flows and larger earnings response coefficients. In addition, Ali et al. (2007) find that family firms in the SP 500 are more likely to voluntarily issue earnings forec asts during periods of earnings declines. However, they also find that family firms are less forthcoming in their disclosures about corporate governance. In a paper that was written concurrently with ours, Chen et al. (2007) study the frequency of voluntary disclosures (earnings and non-earnings forecasts and conference calls) from a larger sample of firms that includes the SP 500, SP MidCap 400 and SP SmallCap 600 in the five years before the enactment of Regulation Fair Disclosure (Reg FD). They also find that family firms are more likely to issue bad-news earnings warnings but overall make fewer forward-looking disclosures than non-family firms, and conclude that their results are consistent with family owners having a longer investment horizon and better monitoring of management, characteristics that obviate the need for greater disclosure. This paper contributes to the growing literature on the disclosures of family firms by studying one of the most informative and common types of voluntary financial disclosures—the companys own forecasts of its quarterly earnings per share—and sell-side analysts and investors responses to them. More specifically, we examine the characteristics of these disclosures (forecast specificity, surprise and accuracy), and the impact they have on important market indicators—professional analysts earnings estimates and stock prices. Thus, our analysis is designed to provide additional evidence on the relation between ownership structure and the quality of the firms information environment and, in particular, complements the existing empirical evidence on the characteristics and informativenesss of mandatory financial disclosures made by family and non-family firms (Ali et al. 2007 and Wang 2006). As noted above, we focus on a particular type of voluntary disclosure, managements forecasts of quarterly earnings per share, and do so for two reasons. First, prior research indicates that these forecasts are highly value-relevant—and more value-relevant than management forecasts of annual earnings per share (Pownall et al. 1993, Baginski and Hassell 1997). As a result, we believe that the quarterly forecasts are particularly well-suited for examining the different incentives family and non-family firms face in their attempts to control Type I and II agency problems, respectively. For example, higher quality forecasting by family firms (in terms of their forecasts being more specific, timely and accurate) is consistent with such firms creating a more transparent information environment and reducing a potentially severe Type II agency problem. Second, we are able to use a non-stock-price measure of the news in these management forecasts in our empirical work, which allows us t o more effectively analyze the markets perception of the differential information content in the forecasts made by family and non-family firms.[2] We also separate our sample of forecasts into guidance (i.e., forecasts made prior to the end of the quarter) and preannouncements (i.e., forecasts made after the quarter ends but before earnings are released). We do this because the forecast horizon associated with preannouncements is very short, sometimes a matter of two or three weeks, and because much of the uncertainty regarding the forthcoming earnings number is resolved by the fiscal quarter end for most, if not all, firms, regardless of whether or not they are controlled by a family. Thus, the Type II agency problem in family firms, if it dominates the Type I agency problem, is more likely to be mitigated through the provision of guidance than preannouncements. This leads us to hypothesize that the characteristics of guidance, but not preannouncements, are systematically related t o family-firm status, and that analysts and investors will react differently to the guidance, but not to preannouncements, issued by family firms, holding all else constant.[3] We test our hypotheses on the quarterly earnings forecasts made between 1998 and 2006 by the family and non-family firms in the SP 500 index, as identified by Business Week (November 10, 2003) and contained in the First Call Company Issued Guidance (CIG) database. There are two aspects of our sample that should be highlighted. First, our sample firms are among the largest, most stable and most visible in the U.S. As a result, our results may not generalize to smaller, less visible family firms such as those included in Chen et al.s (2007) sample. Second, our sample period spans the implementation of Reg FD. Thus, we provide evidence that complements the pre-Reg-FD evidence in Chen et al. (2007) and the limited post-Reg-FD evidence in Ali et al. (2007). The results of our empirical tests generally indicate that the guidance provided by family firms is of higher quality than that provided by non-family firms. In particular, after controlling for other influencing factors, we find that the family firms in our sample provide significantly more specific guidance (in terms of forecast form and narrowness of forecast range) than non-family firms, especially when conveying bad news or offering confirmatory guidance. We also find that family firms use guidance to make smaller average adjustments to the markets estimate of the upcoming quarterly earnings than non-family firms, especially when conveying bad news. This is consistent with their being more timely in offering corrections to analysts estimates. More importantly, we find some evidence of a stronger and quicker response by analysts (as measured by the number of subsequent earnings estimate revisions and the speed with which they occur) to the guidance issued by family firms, and str ong evidence of a significantly greater investor response (as measured by announcement-period abnormal stock returns) to the guidance issued by family firms. These findings, taken together, indicate that guidance is more informative and more useful to the market when it is issued by a family firm. They are also consistent with family firms using guidance to create a more transparent information environment, which therefore, complements the finding of higher quality financial reporting by family firms in Ali et al (2007) and Wang (2006). Consistent with our expectations, we find little evidence of differences in the characteristics of preannouncements issued by family and non-family firms, although there is some (weak) evidence of family-firm preannouncements being more specific when they contain bad news.[4] Also consistent with our expectations, we find no evidence of a differential stock price response to preannouncements made by family and non-family firms, although we do find that analysts response more strongly to family-firm preannouncements, especially when they contain bad news. These results, when considered with the guidance results discussed above, suggest that family firms produce higher quality earnings forecasts than non-family firms, particularly when they are offered as guidance or contain bad news, and that their guidance is more informative and useful to investors and analysts. Thus, our paper provides evidence of family firms using management-generated earnings forecasts to create a more transpare nt information environment. Our paper contributes to two bodies of research: the growing literature on disclosures by family firms, as noted before, and the established literature on management forecasts. While our paper is most closely related to Ali et al. (2007), Chen et al. (2007) and Wang (2006), who examine the mandatory financial disclosures of family firms and the frequency of their voluntary disclosures, we also complement Anderson et al.s (2006) analysis of other dimensions of disclosure transparency. Anderson et al. (2006) find that family firms are significantly more opaque than non-family firms as measured by a summary statistic that captures the effects of trading volume, the bid-ask spread, analyst following and analyst forecast errors. Taken together, the evidence in Anderson et al. (2006) and our paper suggest that certain types of transparent disclosures appear to be better suited than others to mitigating the agency problem that arises between controlling and non-controlling owners. The literature on management forecasts is more mature and, as a result, guides much of the structure for our analysis. Consequently, we follow prior work by Ajinkya and Gift (1984), Baginski and Hassell (1990, 1997), Bamber and Cheon (1998), Baginski et al. (2002, 2004), Ajinkya et al. (2005) and others, in designing our tests. In a recent paper, Hirst et al. (2007) provide a review of this literature and propose a framework for continued research in this area. They observe that choices concerning the characteristics of management earnings forecasts are not yet well understood and suggest that additional work addressing this issue is needed. Our contribution to the literature on management forecasts is to analyze the differential impact of Type I and Type II agency problems on the characteristics of management earnings forecasts provided by family and non-family firms, including the time of their release, as well as the market and analyst reactions to them. Thus, we add to the initia l evidence on the underlying reasons for providing management forecasts in different forms and with different specificity—and on their impact of the stock prices of family and non-family firms. Finally, our results on confirmatory guidance support and extend the results in Clement et al. (2003). The rest of the paper is organized as follows. In Section 2, we review of the relevant literature and develop hypotheses. In Section 3, we describe our sample and data, and in Section 4, we present the empirical tests. We offer concluding remarks in Section 5. 2. Literature Review and Hypothesis Development Family firms are defined in the academic literature as firms in which founders or their descendants exercise control either because they are significant shareholders or because they are part of top management or the board of directors. Not only are family firms common in Europe and Asia (see, for example, LaPorta et al. 1999, Claessens et al, 2000, Gomez-Mejia et al. 2001 and Faccio and Lang 2002), they comprise approximately one-third of the SP 500 in the U.S. (Anderson and Reeb 2003a).[5] Further, family members ownership stakes are significant: Anderson and Reeb (2003a) report that in the SP 500, family members hold, on average, 18% of the voting shares in their companies. A large literature on family firms has recently developed in accounting and finance, much of it focused on the differences in agency problems that arise in family and non-family firms.[6] Of particular interest to us are the agency problems arising from (1) the separation of ownership and control, and (2) the conflict between controlling and non-controlling shareholders.[7] The papers that examine these conflicts generally argue that (1), referred to as the â€Å"Type I† agency problem in Ali et al. (2007), is less important for family firms because of the unusually close alignment of owners and management in those firms when compared to non-family firms (e.g., Ali et al. 2007, Chen et al. 2007, Wang (2006).[8] They also argue that the tight linkage between some owners and control in family firms exacerbates (2), referred to as the â€Å"Type II† agency problem in Ali et al. (2007), in which family members transfer wealth to themselves to the detriment of other sharehol ders. As is well known, such agency problems can be partially mitigated by frequent and transparent disclosure, suggesting that family firms are more likely to offer a variety of mandatory and voluntary disclosures whose implications are clearer to market participants.[9] In contrast, Wang (2006) suggests that family firms may not face a more severe Type II agency problem if the long-term nature of their investment is well understood by the market. In essence, he argues that long-term investors are less likely to exploit agency problems for short-term gain—thus, family firms may not need to resort to greater frequency or transparency of disclosures. Ali et al. (2007) and Wang (2006) empirically test these competing predictions by comparing aspects of the accounting disclosures made by family and non-family firms. Both find that earnings quality is higher for family firms, especially when a founder CEO is in place. Thus, both provide some evidence consistent with family firms mitigating their Type II agency problems—or responding to the demands of the users of financial statements—with higher quality disclosures. More specifically, Ali et al. (2007) document lower discretionary accruals and greater earnings persistence for SP 500 family firms compared to SP 500 non-family firms. In addition, they find that the association between earnings and stock returns is higher for the family firms. Similarly, Wang (2006) finds that SP 500 founding family firms have lower abnormal accruals, greater earnings informativeness and less persistence in transitory loss components in earnings. He extends this analysis by considering th e effect of the percentage of common stock owned by family members on the magnitude of the Type II agency problem. Interestingly, he finds that the relation is nonlinear: When founding family ownership is above (approximately) 60%, the quality of the earnings reported by non-family firms exceeds that of family firms. Ali et al. (2007) also provide some evidence inconsistent with family firms mitigating their more severe Type II agency problem through the use of disclosures: They observe that family firms are less forthcoming about their corporate governance practices and that when they employ a dual class share structure, earnings quality is lower relative to when they do not have such a structure. Another method for testing whether family firms mitigate the potentially more severe Type II agency costs—or respond to financial statement users demand for high quality accounting information—through greater frequency and transparency of disclosures is to examine the issuance of management earnings forecasts by family and non-family firms. Complicating this is the litigation argument proposed by Skinner (1994) and Kasznik and Lev (1995) which suggests that the use of earnings warnings will vary positively with the litigation risk that the firm faces, and inversely with the severity of the firms Type I agency problem (Ali et al. 2007). However, since the Type II agency problem is expected to be more severe and the Type I agency problem less severe in family firms (Ali et al. 2007), family firms would be expected to provide management forecasts to mitigate both types of agency problems, holding litigation risk constant. The relative severity of the Type II agency problem further suggests that family firms earnings forecasts will be of higher quality (i.e., more specific, timely and accurate), and that market participants (e.g., sell-side analysts and investors) will respond more strongly to them. Ali et al. (2007) provide initial evidence in favor of this hypothesis when they observe that family firms are more likely to provide earnings warnings (i.e., guidance that warns of a forthcoming earnings decline) than non-family firms. In a more recent paper, however, Chen et al. (2007) provide evidence that family firms make fewer voluntary disclosures than non-family firms. They collect ownership and founding family information from several sources to identify family firms in the SP 1500 and find that family firms are (1) 8.1% less likely to provide management forecasts of all kinds (i.e., annual and quarterly earnings, revenues, cash flows, etc.), and (2) less likely to hold conference calls as well. They also find, however, that family firms are more likely than non-family firms to issue bad-news earnings warnings. Chen et al. (2007) conclude that these results, when considered collectively, indicate that family firms owners prefer less disclosure because of their long investmen t horizon and effective monitoring of managers, but that their concern with reducing litigation costs results in an increased likelihood of bad news earnings warnings. In this paper, we hope to add to our understanding of the relative importance of the competing incentives studied in previous work by examining (1) the characteristics of management forecasts of quarterly earnings per share (both guidance, which is offered prior to the end of the quarter, and preannouncements, which are offered after quarter-end but before the actual earnings announcement) of family and non-family firms, and (2) the response of sell-side analysts and investors to those forecasts. In particular, we hope to add to our understanding of the disclosure choices of family firms by determining whether their own earnings forecasts are more specific, timely and accurate, consistent with family firms providing higher quality disclosures—and whether those forecasts are viewed as being of higher quality by market participants as measured by their response to the disclosure. We also separate our forecasts into guidance and preannouncements under the assumption that any fami ly-firm effect will be more likely to be observed in guidance because of the longer horizon over which the forecasts can be made. More specifically, in the case of preannouncements, there is a very short forecast horizon (e.g., a few weeks beyond the end of the quarter) and so we do not expect large differences in timeliness of the preannouncements between family and non-family firms. Further, because much of the uncertainty about the earnings numbers is resolved by quarter-end, differences in the specificity of preannouncements between family and non-family firms, if any, are likely to be small. Finally, motives to provide preannouncements are likely to be dominated by the litigation argument proposed by Skinner (1994) and Kasznik and Lev (1995).[10] If this is the case, differences in characteristics of voluntary earnings forecasts, and in market participants responses to them, are likely to be concentrated in guidance. As in prior research, we recognize that because of competing forces, whether the guidance of family firms is of higher quality is an empirical question. Thus, our formal hypotheses regarding guidance are non-directional, as in Chen et al. (2007) and Wang (2006): H1: The specificity, timeliness and content of earnings guidance is systematically related to whether the firm is classified as a family firm. H2: Sell-side analysts and investors responses to earnings guidance is systematically related to whether the issuing firm is classified as a family firm. 3. Sample and Data. Our sample is comprised of 4,130 management quarterly earnings guidance announcements issued between 1998 and 2006 by the family and non-family firms in the SP 500 as identified by Business Week in its November 10, 2003, issue. Business Week defines a family firm as â€Å"†¦any company where founders or descendants continue to hold positions in top management, on the board, or among the companys shareholders.† To identify family firms, Business Week relies on the methodology developed by Anderson and Reeb (2003a, 2003b) as well as their advice and the help of Spencer Stuart as they â€Å"†¦examined regulatory filings, company Web sites and corporate histories† to ensure significant family involvement in the company. (For details, see â€Å"Defining Family,† Business Week, November 10, 2003, p. 111.) Before proceeding, we want to highlight certain aspects of our sample. First, because the Business Week classification pertains to only SP 500 firms, the fi rms in our sample are among the largest, most stable and most profitable companies in the U.S. As a result, our findings might not extend to mid- or small-cap companies. Second, our reliance on the Business Week classification means that we do not form a new sample of family and non-family firms each year. However, as Ali et al. (2007) note, family firm status is sticky, and thus misclassifications due to changing firm status will most likely bias against our finding significant results. Third, Business Weeks classification scheme is designed to identify firms that are controlled by a family without relying on a single proxy for control, such as ownership share. As a result, it captures features of family firms, beyond simply having large blockholders, that are likely to exacerbate Type II agency problems. Fourth, by using Business Weeks classification, which is based on the â€Å"standard† developed by Anderson and Reeb, our results are more easily compared to many prior res ults. Finally, while we recognize that Business Week might not accurately classify every firm, both types of classification errors (i.e., misclassifying firms without significant family control as family firms, and misclassifying firms with significant family control as non-family firms) limit our ability to detect differences in the forecasts of family and non-family firms and therefore bias against our finding significant results. We form our sample by first gathering all forecasts of quarter-ahead earnings made between 1998 and 2006 by the SP 500 as of June 2003 from the First Call Company Issued Guidance (CIG) database. We lose 1,994 of the original 7,694 observations because of unavailability of (1) necessary Compustat and CRSP data, (2) actual earnings per share and other analyst forecast data from First Call, and (3) observations with multiple actual earnings per share numbers. After deleting stale forecasts (those made before the prior quarters earnings announcement date), we retain all â€Å"guidance† observations (forecasts made at the same time as or after the prior earnings announcement and at or before the quarter end, N = 4,332). We trim the sample to mitigate the effect of outliers as follows. First, we eliminate the top and bottom one-half percent of the management forecast errors in each sample, the top and bottom one-half percent of the forecast surprises in each sample, the top and bott om one-half percent of the three-day cumulative abnormal returns in each sample and finally, the top and bottom one-half percent of return volatility ratios in each sample—and retain the union of the remaining observations. (These variables are defined in the Appendix and will be discussed in detail later.) We then eliminate 62 firm quarter observations whose stock price is less than $5 as of the beginning of the quarter. This results in a final sample of 4,130 guidance announcements. One-hundred-and-forty six of the 177 family firms identified by Business Week (82.5%) provide guidance during our sample period as compared to 240 of the 323 non-family firms in the SP 500 (74.3%). [11] Before turning to the empirical analysis, we note for the reader that the management guidance we gather from the CIG database is not split-adjusted whereas the analysts estimates and reported earnings per share in the main First Call file are (further, they are rounded to the nearest penny). An I/B/E/S unadjusted data file is available but unfortunately, we would lose a significant number of observations if we were to use it. Consequently, to keep the sample size as large as possible and still allow for comparability, we split-adjust the management guidance from the CIG file using the split-adjustment procedures used for the analysts estimates and reported earnings per share in the First Call file.[12] 4. Empirical Analysis. 4.1. Univariate Analysis. We present descriptive statistics for the guidance announcements, firm-specific characteristics and variables relating to analysts and stock returns in Table 1. We also include the results of two-sample t-tests and Wilcoxon signed rank sum tests for each variable. As noted before, we provide a list of variables and their definitions in the Appendix. We begin with forecast characteristic metrics designed to help us understand the differences, if any, in the specificity, timeliness, frequency and content of the earnings forecasts offered by the management of family and non-family firms. We present descriptive statistics first for the form of the forecast (an indicator of specificity) as measured by Forecast Form. As is well known, forecasts in the CIG database take one of several forms, which we code in the following manner: If the forecast is a specific earnings per share number (a point forecast), it is coded as 4; if it is a range of possible earnings per share numbers (a range forecast), it is coded as 3; if it consists of a one-sided directional forecast (either a maximum or minimum forthcoming earnings per share number), it is coded as 2; and if it contains no quantitative information (a qualitative forecast), it is coded as 1.[13] Note that our coding scheme is designed so that a higher value of Forecast Form indicates a mo re specific forecast. To further examine forecast specificity, we focus next on Forecast Width for range forecasts, which measures the difference between the maximum and minimum earnings per share figures offered in the forecast. (A narrower width indicates a more specific forecast.) In later tests, we include point forecasts as forecasts with a width of zero. To examine forecast timeliness, we use Forecast Horizon which is the number of calendar days from the management forecast date until the end of the quarter. More days in the forecast horizon indicate more timely forecasts. Finally, we form Annual Frequency and Quarterly Frequency variables, which measure the number of annual and quarterly management forecasts for each of our sample firms in the CIG database from 1994 through 2006, scaled by the total number of possible forecasting years (for Annual Frequency) or quarters (for Quarterly Frequency) to date. The descriptive statistics and statistical tests for Forecast Form provide initial evidence consistent with family firms issuing significantly more specific guidance than non-family firms. In particular, Forecast Form has slightly higher numerical values, on average, for family firms (p = .028, using the Wilcoxon test).[14] To further explore the potential differences, we examine the frequency distributions of the forms that guidance takes, as presented in Figure 1. As is obvious from the figure, range forecasts are by far the most common form of guidance for both family and non-family firms, making up nearly two-thirds of all guidance in our sample. Further, both family and non-family firms offer approximately 89% of their guidance as point or range forecasts. However, family firms offer relatively more of the more specific point forecasts (28% versus 23% for non-family firms) and relatively fewer of the less specific range forecasts (61% versus 66% for non-family firms).[15] Conver sely, guidance in the form of qualitative statements or minimum/maximum earnings per share numbers is unusual in our sample, regardless of the type of firm examined. The small number of qualitative forecasts in our First Call sample is inconsistent with Hutton et al. (2003) and Miller (2002), who find a substantially larger number of such forecasts when hand-collecting their samples than are included in the First Call database. (Anilowski et al. 2006 also suggest that First Call is more likely to include quantitative forecasts than qualitative ones.) This suggests that our sample is most likely incomplete and most representative when only quantitative forecasts are considered. For these reasons and because many tests require that we restrict attention to point and range forecasts, we will generally focus our discussion on point and range forecasts only. As just noted, range forecasts are the most common type of guidance in our sample. While it is clear from Figure 1 that non-family firms issue more range forecasts as guidance than family firms, Table 1 indicates that those issued by family firms are significantly narrower, as measured by Forecast Width (p = .000 for both the Wilcoxon and the two-sample t tests). This finding, when considered with the preliminary evidence of greater usage of point forecasts by family firms, suggests that guidance issued by family firms is generally more specific than that issued by non-family firms, consistent with H1. The next two forecast c Quarterly Earnings Forecasting Decisions by Family Firms Quarterly Earnings Forecasting Decisions by Family Firms Quarterly Earnings Forecasting Decisions by Family Firms and the Market Reaction to Them Abstract We study the disclosure incentives for family firms by examining the characteristics of their quarterly earnings forecasts and analysts and investors responses to them. Forecasts offered before the fiscal quarter-end (guidance) by SP 500 family firms are generally more specific and timely than those offered by SP 500 non-family firms, particularly when they convey bad news or confirm analysts current expectations. Further, family firm guidance elicits a stronger response from both analysts and investors. While many of these differences largely disappear when the forecasts are offered after the quarter-end but before the earnings announcement itself (preannouncements), family firm preannouncements still tend to be more specific when they contain bad news. These more specific preannouncements also generate a significantly stronger response from analysts. Overall, our results suggest that large, visible family firms use manager-generated earnings forecasts to create a more transparent i nformation environment, and that these forecasts are likely to be most useful in reducing information asymmetry and agency costs when they are issued as guidance. Key Words: Management earnings forecasts, family firms, preannouncements, earnings warnings. Data Availability: Data are available from the sources listed in the text. Introduction. Family firms are generally defined as companies that are significantly influenced by founding family members or their descendants, through large shareholdings and/or operational control.[1] Anderson and Reeb (2003a, 2003b) report that family members hold approximately 18% of the equity of the family firms in the SP 500, on average, and control 45% of the CEO positions. In addition, family members often hold seats on the board of directors or are part of upper-level management in these firms (â€Å"Family Inc.†, Business Week, November 10, 2003). The structure inherent in these family firms gives rise to different agency problems than those in firms with much greater separation of ownership and control. Specifically, the family firm structure significantly limits the agency problems that arise from the separation of ownership and control (often referred to as Type I agency problems) while exacerbating those that arise in the conflict between controlling and non-controlling shareholders (often referred to as Type II agency problems, see Ali et al. 2007, Chen et al. 2007, Wang 2006 and Anderson and Reeb 2003a). It is well known that the second type of agency problem can be partially mitigated by frequent and transparent disclosure. However, it is also possible that reputational concerns may arise from the long-term nature of family members investment in their firm, mitigating this problem and reducing the need for more frequent and transparent disclosure (Wang 2006). The purpose of this paper is to add to our understanding of these competing incentives for differential disclosure by examining the characteristics of quarterly earnings forecasts issued by the management of family firms and the response of sell-side analysts and investors to them. Recent accounting research that examines mandatory financial disclosures by family firms suggests that reputational concerns alone may not be sufficient: Characteristics of family firms mandatory financial reports are consistent with their being used to mitigate the agency problem between controlling and non-controlling shareholders. More specifically, Ali et al. (2007) and Wang (2006) show that large family firms offer higher quality financial reports as evidenced by lower discretionary accruals, greater ability of earnings to predict cash flows and larger earnings response coefficients. In addition, Ali et al. (2007) find that family firms in the SP 500 are more likely to voluntarily issue earnings forec asts during periods of earnings declines. However, they also find that family firms are less forthcoming in their disclosures about corporate governance. In a paper that was written concurrently with ours, Chen et al. (2007) study the frequency of voluntary disclosures (earnings and non-earnings forecasts and conference calls) from a larger sample of firms that includes the SP 500, SP MidCap 400 and SP SmallCap 600 in the five years before the enactment of Regulation Fair Disclosure (Reg FD). They also find that family firms are more likely to issue bad-news earnings warnings but overall make fewer forward-looking disclosures than non-family firms, and conclude that their results are consistent with family owners having a longer investment horizon and better monitoring of management, characteristics that obviate the need for greater disclosure. This paper contributes to the growing literature on the disclosures of family firms by studying one of the most informative and common types of voluntary financial disclosures—the companys own forecasts of its quarterly earnings per share—and sell-side analysts and investors responses to them. More specifically, we examine the characteristics of these disclosures (forecast specificity, surprise and accuracy), and the impact they have on important market indicators—professional analysts earnings estimates and stock prices. Thus, our analysis is designed to provide additional evidence on the relation between ownership structure and the quality of the firms information environment and, in particular, complements the existing empirical evidence on the characteristics and informativenesss of mandatory financial disclosures made by family and non-family firms (Ali et al. 2007 and Wang 2006). As noted above, we focus on a particular type of voluntary disclosure, managements forecasts of quarterly earnings per share, and do so for two reasons. First, prior research indicates that these forecasts are highly value-relevant—and more value-relevant than management forecasts of annual earnings per share (Pownall et al. 1993, Baginski and Hassell 1997). As a result, we believe that the quarterly forecasts are particularly well-suited for examining the different incentives family and non-family firms face in their attempts to control Type I and II agency problems, respectively. For example, higher quality forecasting by family firms (in terms of their forecasts being more specific, timely and accurate) is consistent with such firms creating a more transparent information environment and reducing a potentially severe Type II agency problem. Second, we are able to use a non-stock-price measure of the news in these management forecasts in our empirical work, which allows us t o more effectively analyze the markets perception of the differential information content in the forecasts made by family and non-family firms.[2] We also separate our sample of forecasts into guidance (i.e., forecasts made prior to the end of the quarter) and preannouncements (i.e., forecasts made after the quarter ends but before earnings are released). We do this because the forecast horizon associated with preannouncements is very short, sometimes a matter of two or three weeks, and because much of the uncertainty regarding the forthcoming earnings number is resolved by the fiscal quarter end for most, if not all, firms, regardless of whether or not they are controlled by a family. Thus, the Type II agency problem in family firms, if it dominates the Type I agency problem, is more likely to be mitigated through the provision of guidance than preannouncements. This leads us to hypothesize that the characteristics of guidance, but not preannouncements, are systematically related t o family-firm status, and that analysts and investors will react differently to the guidance, but not to preannouncements, issued by family firms, holding all else constant.[3] We test our hypotheses on the quarterly earnings forecasts made between 1998 and 2006 by the family and non-family firms in the SP 500 index, as identified by Business Week (November 10, 2003) and contained in the First Call Company Issued Guidance (CIG) database. There are two aspects of our sample that should be highlighted. First, our sample firms are among the largest, most stable and most visible in the U.S. As a result, our results may not generalize to smaller, less visible family firms such as those included in Chen et al.s (2007) sample. Second, our sample period spans the implementation of Reg FD. Thus, we provide evidence that complements the pre-Reg-FD evidence in Chen et al. (2007) and the limited post-Reg-FD evidence in Ali et al. (2007). The results of our empirical tests generally indicate that the guidance provided by family firms is of higher quality than that provided by non-family firms. In particular, after controlling for other influencing factors, we find that the family firms in our sample provide significantly more specific guidance (in terms of forecast form and narrowness of forecast range) than non-family firms, especially when conveying bad news or offering confirmatory guidance. We also find that family firms use guidance to make smaller average adjustments to the markets estimate of the upcoming quarterly earnings than non-family firms, especially when conveying bad news. This is consistent with their being more timely in offering corrections to analysts estimates. More importantly, we find some evidence of a stronger and quicker response by analysts (as measured by the number of subsequent earnings estimate revisions and the speed with which they occur) to the guidance issued by family firms, and str ong evidence of a significantly greater investor response (as measured by announcement-period abnormal stock returns) to the guidance issued by family firms. These findings, taken together, indicate that guidance is more informative and more useful to the market when it is issued by a family firm. They are also consistent with family firms using guidance to create a more transparent information environment, which therefore, complements the finding of higher quality financial reporting by family firms in Ali et al (2007) and Wang (2006). Consistent with our expectations, we find little evidence of differences in the characteristics of preannouncements issued by family and non-family firms, although there is some (weak) evidence of family-firm preannouncements being more specific when they contain bad news.[4] Also consistent with our expectations, we find no evidence of a differential stock price response to preannouncements made by family and non-family firms, although we do find that analysts response more strongly to family-firm preannouncements, especially when they contain bad news. These results, when considered with the guidance results discussed above, suggest that family firms produce higher quality earnings forecasts than non-family firms, particularly when they are offered as guidance or contain bad news, and that their guidance is more informative and useful to investors and analysts. Thus, our paper provides evidence of family firms using management-generated earnings forecasts to create a more transpare nt information environment. Our paper contributes to two bodies of research: the growing literature on disclosures by family firms, as noted before, and the established literature on management forecasts. While our paper is most closely related to Ali et al. (2007), Chen et al. (2007) and Wang (2006), who examine the mandatory financial disclosures of family firms and the frequency of their voluntary disclosures, we also complement Anderson et al.s (2006) analysis of other dimensions of disclosure transparency. Anderson et al. (2006) find that family firms are significantly more opaque than non-family firms as measured by a summary statistic that captures the effects of trading volume, the bid-ask spread, analyst following and analyst forecast errors. Taken together, the evidence in Anderson et al. (2006) and our paper suggest that certain types of transparent disclosures appear to be better suited than others to mitigating the agency problem that arises between controlling and non-controlling owners. The literature on management forecasts is more mature and, as a result, guides much of the structure for our analysis. Consequently, we follow prior work by Ajinkya and Gift (1984), Baginski and Hassell (1990, 1997), Bamber and Cheon (1998), Baginski et al. (2002, 2004), Ajinkya et al. (2005) and others, in designing our tests. In a recent paper, Hirst et al. (2007) provide a review of this literature and propose a framework for continued research in this area. They observe that choices concerning the characteristics of management earnings forecasts are not yet well understood and suggest that additional work addressing this issue is needed. Our contribution to the literature on management forecasts is to analyze the differential impact of Type I and Type II agency problems on the characteristics of management earnings forecasts provided by family and non-family firms, including the time of their release, as well as the market and analyst reactions to them. Thus, we add to the initia l evidence on the underlying reasons for providing management forecasts in different forms and with different specificity—and on their impact of the stock prices of family and non-family firms. Finally, our results on confirmatory guidance support and extend the results in Clement et al. (2003). The rest of the paper is organized as follows. In Section 2, we review of the relevant literature and develop hypotheses. In Section 3, we describe our sample and data, and in Section 4, we present the empirical tests. We offer concluding remarks in Section 5. 2. Literature Review and Hypothesis Development Family firms are defined in the academic literature as firms in which founders or their descendants exercise control either because they are significant shareholders or because they are part of top management or the board of directors. Not only are family firms common in Europe and Asia (see, for example, LaPorta et al. 1999, Claessens et al, 2000, Gomez-Mejia et al. 2001 and Faccio and Lang 2002), they comprise approximately one-third of the SP 500 in the U.S. (Anderson and Reeb 2003a).[5] Further, family members ownership stakes are significant: Anderson and Reeb (2003a) report that in the SP 500, family members hold, on average, 18% of the voting shares in their companies. A large literature on family firms has recently developed in accounting and finance, much of it focused on the differences in agency problems that arise in family and non-family firms.[6] Of particular interest to us are the agency problems arising from (1) the separation of ownership and control, and (2) the conflict between controlling and non-controlling shareholders.[7] The papers that examine these conflicts generally argue that (1), referred to as the â€Å"Type I† agency problem in Ali et al. (2007), is less important for family firms because of the unusually close alignment of owners and management in those firms when compared to non-family firms (e.g., Ali et al. 2007, Chen et al. 2007, Wang (2006).[8] They also argue that the tight linkage between some owners and control in family firms exacerbates (2), referred to as the â€Å"Type II† agency problem in Ali et al. (2007), in which family members transfer wealth to themselves to the detriment of other sharehol ders. As is well known, such agency problems can be partially mitigated by frequent and transparent disclosure, suggesting that family firms are more likely to offer a variety of mandatory and voluntary disclosures whose implications are clearer to market participants.[9] In contrast, Wang (2006) suggests that family firms may not face a more severe Type II agency problem if the long-term nature of their investment is well understood by the market. In essence, he argues that long-term investors are less likely to exploit agency problems for short-term gain—thus, family firms may not need to resort to greater frequency or transparency of disclosures. Ali et al. (2007) and Wang (2006) empirically test these competing predictions by comparing aspects of the accounting disclosures made by family and non-family firms. Both find that earnings quality is higher for family firms, especially when a founder CEO is in place. Thus, both provide some evidence consistent with family firms mitigating their Type II agency problems—or responding to the demands of the users of financial statements—with higher quality disclosures. More specifically, Ali et al. (2007) document lower discretionary accruals and greater earnings persistence for SP 500 family firms compared to SP 500 non-family firms. In addition, they find that the association between earnings and stock returns is higher for the family firms. Similarly, Wang (2006) finds that SP 500 founding family firms have lower abnormal accruals, greater earnings informativeness and less persistence in transitory loss components in earnings. He extends this analysis by considering th e effect of the percentage of common stock owned by family members on the magnitude of the Type II agency problem. Interestingly, he finds that the relation is nonlinear: When founding family ownership is above (approximately) 60%, the quality of the earnings reported by non-family firms exceeds that of family firms. Ali et al. (2007) also provide some evidence inconsistent with family firms mitigating their more severe Type II agency problem through the use of disclosures: They observe that family firms are less forthcoming about their corporate governance practices and that when they employ a dual class share structure, earnings quality is lower relative to when they do not have such a structure. Another method for testing whether family firms mitigate the potentially more severe Type II agency costs—or respond to financial statement users demand for high quality accounting information—through greater frequency and transparency of disclosures is to examine the issuance of management earnings forecasts by family and non-family firms. Complicating this is the litigation argument proposed by Skinner (1994) and Kasznik and Lev (1995) which suggests that the use of earnings warnings will vary positively with the litigation risk that the firm faces, and inversely with the severity of the firms Type I agency problem (Ali et al. 2007). However, since the Type II agency problem is expected to be more severe and the Type I agency problem less severe in family firms (Ali et al. 2007), family firms would be expected to provide management forecasts to mitigate both types of agency problems, holding litigation risk constant. The relative severity of the Type II agency problem further suggests that family firms earnings forecasts will be of higher quality (i.e., more specific, timely and accurate), and that market participants (e.g., sell-side analysts and investors) will respond more strongly to them. Ali et al. (2007) provide initial evidence in favor of this hypothesis when they observe that family firms are more likely to provide earnings warnings (i.e., guidance that warns of a forthcoming earnings decline) than non-family firms. In a more recent paper, however, Chen et al. (2007) provide evidence that family firms make fewer voluntary disclosures than non-family firms. They collect ownership and founding family information from several sources to identify family firms in the SP 1500 and find that family firms are (1) 8.1% less likely to provide management forecasts of all kinds (i.e., annual and quarterly earnings, revenues, cash flows, etc.), and (2) less likely to hold conference calls as well. They also find, however, that family firms are more likely than non-family firms to issue bad-news earnings warnings. Chen et al. (2007) conclude that these results, when considered collectively, indicate that family firms owners prefer less disclosure because of their long investmen t horizon and effective monitoring of managers, but that their concern with reducing litigation costs results in an increased likelihood of bad news earnings warnings. In this paper, we hope to add to our understanding of the relative importance of the competing incentives studied in previous work by examining (1) the characteristics of management forecasts of quarterly earnings per share (both guidance, which is offered prior to the end of the quarter, and preannouncements, which are offered after quarter-end but before the actual earnings announcement) of family and non-family firms, and (2) the response of sell-side analysts and investors to those forecasts. In particular, we hope to add to our understanding of the disclosure choices of family firms by determining whether their own earnings forecasts are more specific, timely and accurate, consistent with family firms providing higher quality disclosures—and whether those forecasts are viewed as being of higher quality by market participants as measured by their response to the disclosure. We also separate our forecasts into guidance and preannouncements under the assumption that any fami ly-firm effect will be more likely to be observed in guidance because of the longer horizon over which the forecasts can be made. More specifically, in the case of preannouncements, there is a very short forecast horizon (e.g., a few weeks beyond the end of the quarter) and so we do not expect large differences in timeliness of the preannouncements between family and non-family firms. Further, because much of the uncertainty about the earnings numbers is resolved by quarter-end, differences in the specificity of preannouncements between family and non-family firms, if any, are likely to be small. Finally, motives to provide preannouncements are likely to be dominated by the litigation argument proposed by Skinner (1994) and Kasznik and Lev (1995).[10] If this is the case, differences in characteristics of voluntary earnings forecasts, and in market participants responses to them, are likely to be concentrated in guidance. As in prior research, we recognize that because of competing forces, whether the guidance of family firms is of higher quality is an empirical question. Thus, our formal hypotheses regarding guidance are non-directional, as in Chen et al. (2007) and Wang (2006): H1: The specificity, timeliness and content of earnings guidance is systematically related to whether the firm is classified as a family firm. H2: Sell-side analysts and investors responses to earnings guidance is systematically related to whether the issuing firm is classified as a family firm. 3. Sample and Data. Our sample is comprised of 4,130 management quarterly earnings guidance announcements issued between 1998 and 2006 by the family and non-family firms in the SP 500 as identified by Business Week in its November 10, 2003, issue. Business Week defines a family firm as â€Å"†¦any company where founders or descendants continue to hold positions in top management, on the board, or among the companys shareholders.† To identify family firms, Business Week relies on the methodology developed by Anderson and Reeb (2003a, 2003b) as well as their advice and the help of Spencer Stuart as they â€Å"†¦examined regulatory filings, company Web sites and corporate histories† to ensure significant family involvement in the company. (For details, see â€Å"Defining Family,† Business Week, November 10, 2003, p. 111.) Before proceeding, we want to highlight certain aspects of our sample. First, because the Business Week classification pertains to only SP 500 firms, the fi rms in our sample are among the largest, most stable and most profitable companies in the U.S. As a result, our findings might not extend to mid- or small-cap companies. Second, our reliance on the Business Week classification means that we do not form a new sample of family and non-family firms each year. However, as Ali et al. (2007) note, family firm status is sticky, and thus misclassifications due to changing firm status will most likely bias against our finding significant results. Third, Business Weeks classification scheme is designed to identify firms that are controlled by a family without relying on a single proxy for control, such as ownership share. As a result, it captures features of family firms, beyond simply having large blockholders, that are likely to exacerbate Type II agency problems. Fourth, by using Business Weeks classification, which is based on the â€Å"standard† developed by Anderson and Reeb, our results are more easily compared to many prior res ults. Finally, while we recognize that Business Week might not accurately classify every firm, both types of classification errors (i.e., misclassifying firms without significant family control as family firms, and misclassifying firms with significant family control as non-family firms) limit our ability to detect differences in the forecasts of family and non-family firms and therefore bias against our finding significant results. We form our sample by first gathering all forecasts of quarter-ahead earnings made between 1998 and 2006 by the SP 500 as of June 2003 from the First Call Company Issued Guidance (CIG) database. We lose 1,994 of the original 7,694 observations because of unavailability of (1) necessary Compustat and CRSP data, (2) actual earnings per share and other analyst forecast data from First Call, and (3) observations with multiple actual earnings per share numbers. After deleting stale forecasts (those made before the prior quarters earnings announcement date), we retain all â€Å"guidance† observations (forecasts made at the same time as or after the prior earnings announcement and at or before the quarter end, N = 4,332). We trim the sample to mitigate the effect of outliers as follows. First, we eliminate the top and bottom one-half percent of the management forecast errors in each sample, the top and bottom one-half percent of the forecast surprises in each sample, the top and bott om one-half percent of the three-day cumulative abnormal returns in each sample and finally, the top and bottom one-half percent of return volatility ratios in each sample—and retain the union of the remaining observations. (These variables are defined in the Appendix and will be discussed in detail later.) We then eliminate 62 firm quarter observations whose stock price is less than $5 as of the beginning of the quarter. This results in a final sample of 4,130 guidance announcements. One-hundred-and-forty six of the 177 family firms identified by Business Week (82.5%) provide guidance during our sample period as compared to 240 of the 323 non-family firms in the SP 500 (74.3%). [11] Before turning to the empirical analysis, we note for the reader that the management guidance we gather from the CIG database is not split-adjusted whereas the analysts estimates and reported earnings per share in the main First Call file are (further, they are rounded to the nearest penny). An I/B/E/S unadjusted data file is available but unfortunately, we would lose a significant number of observations if we were to use it. Consequently, to keep the sample size as large as possible and still allow for comparability, we split-adjust the management guidance from the CIG file using the split-adjustment procedures used for the analysts estimates and reported earnings per share in the First Call file.[12] 4. Empirical Analysis. 4.1. Univariate Analysis. We present descriptive statistics for the guidance announcements, firm-specific characteristics and variables relating to analysts and stock returns in Table 1. We also include the results of two-sample t-tests and Wilcoxon signed rank sum tests for each variable. As noted before, we provide a list of variables and their definitions in the Appendix. We begin with forecast characteristic metrics designed to help us understand the differences, if any, in the specificity, timeliness, frequency and content of the earnings forecasts offered by the management of family and non-family firms. We present descriptive statistics first for the form of the forecast (an indicator of specificity) as measured by Forecast Form. As is well known, forecasts in the CIG database take one of several forms, which we code in the following manner: If the forecast is a specific earnings per share number (a point forecast), it is coded as 4; if it is a range of possible earnings per share numbers (a range forecast), it is coded as 3; if it consists of a one-sided directional forecast (either a maximum or minimum forthcoming earnings per share number), it is coded as 2; and if it contains no quantitative information (a qualitative forecast), it is coded as 1.[13] Note that our coding scheme is designed so that a higher value of Forecast Form indicates a mo re specific forecast. To further examine forecast specificity, we focus next on Forecast Width for range forecasts, which measures the difference between the maximum and minimum earnings per share figures offered in the forecast. (A narrower width indicates a more specific forecast.) In later tests, we include point forecasts as forecasts with a width of zero. To examine forecast timeliness, we use Forecast Horizon which is the number of calendar days from the management forecast date until the end of the quarter. More days in the forecast horizon indicate more timely forecasts. Finally, we form Annual Frequency and Quarterly Frequency variables, which measure the number of annual and quarterly management forecasts for each of our sample firms in the CIG database from 1994 through 2006, scaled by the total number of possible forecasting years (for Annual Frequency) or quarters (for Quarterly Frequency) to date. The descriptive statistics and statistical tests for Forecast Form provide initial evidence consistent with family firms issuing significantly more specific guidance than non-family firms. In particular, Forecast Form has slightly higher numerical values, on average, for family firms (p = .028, using the Wilcoxon test).[14] To further explore the potential differences, we examine the frequency distributions of the forms that guidance takes, as presented in Figure 1. As is obvious from the figure, range forecasts are by far the most common form of guidance for both family and non-family firms, making up nearly two-thirds of all guidance in our sample. Further, both family and non-family firms offer approximately 89% of their guidance as point or range forecasts. However, family firms offer relatively more of the more specific point forecasts (28% versus 23% for non-family firms) and relatively fewer of the less specific range forecasts (61% versus 66% for non-family firms).[15] Conver sely, guidance in the form of qualitative statements or minimum/maximum earnings per share numbers is unusual in our sample, regardless of the type of firm examined. The small number of qualitative forecasts in our First Call sample is inconsistent with Hutton et al. (2003) and Miller (2002), who find a substantially larger number of such forecasts when hand-collecting their samples than are included in the First Call database. (Anilowski et al. 2006 also suggest that First Call is more likely to include quantitative forecasts than qualitative ones.) This suggests that our sample is most likely incomplete and most representative when only quantitative forecasts are considered. For these reasons and because many tests require that we restrict attention to point and range forecasts, we will generally focus our discussion on point and range forecasts only. As just noted, range forecasts are the most common type of guidance in our sample. While it is clear from Figure 1 that non-family firms issue more range forecasts as guidance than family firms, Table 1 indicates that those issued by family firms are significantly narrower, as measured by Forecast Width (p = .000 for both the Wilcoxon and the two-sample t tests). This finding, when considered with the preliminary evidence of greater usage of point forecasts by family firms, suggests that guidance issued by family firms is generally more specific than that issued by non-family firms, consistent with H1. The next two forecast c