Rules Based And Principles Based Approaches Finance Essay - Free Essay Example

Sample details Pages: 9 Words: 2622 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Firms mainly adapt to weaker environment by adopting voluntary corporate governance measures. A study on a number of firms within the U.S. indicated that the more firms adopt voluntary corporate governance mechanisms, the higher their valuation (including profitability and sales growth) and the lower their cost of capital. The function of a code of corporate governance is to enhance the general quality of corporate governance practice and assist effective, entrepreneurial and prudent management that can yield the long-term success of a company. Part 1 Changes to Corporate Governance in the UK since the Cadbury Report The original Cadbury Report of1992 was followed by several reports and a succession of voluntary codes that reflected prevailing issues and debates. The reports on corporate governance entail the Cadbury Report (1992) (attached to best practice), Greenbury Report (1995) (made recommendations on Code of Best Practice and executive pay) Hampel Report (1998) (Combined Code on corporate governance), Turnbull Report (internal control), and Higgs Report (the role and effectiveness of non-executive directors) to mention but four, plus intervening specialist reviews such as Myners Review (DTI, 1996, HMT, 2001. A significant change has been witnessed in the UK since the Cadbury Report, notably a new Companies Act 2006. The Financial Reporting Council has heralded changes to the UK Corporate Governance Code to aid company boards become more and more effective, and accountable to their shareholders. The changes carried out to the code entail clearer statement of the boards responsibilities in relation to risk, an enhanced emphasis on the significance of getting the proper mix of skills and experience on the board, and a recommendation detailing that all directors of listed companies be put up for re-election each year. Don’t waste time! Our writers will create an original "Rules Based And Principles Based Approaches Finance Essay" essay for you Create order UK Corporate Governance Code (2010) Principles The comply or explain approach represents the trademark of corporate governance within the UK. This approach has been critical in operation since the Codes beginning and forms the basis of the Codes flexibility. The main principles of the code entail: first, leadership touching on the separation of responsibilities directed by an effective board. Second, effectiveness whereby the board and its committees ought to manifest the appropriate balance of skills, independence, experience, knowledge of the company to enable them discharge their respective duties and responsibilities effectively. Third principle involves accountability whereby the board is expected to present a fair and understandable appraisal of the companys position. Fourth, remuneration touching on the level and components of remuneration and procedure whereby the levels of remuneration should be adequate to attract, motivate, and retain directors. Finally, the fifth principle explores dialogue with shareholders and con structive use of the AGM based on the mutual understanding of objectives. Rules-based and Principles-based Approaches to Corporate Governance Many countries, inclusive of the UK have adopted what has come to be referred to as a principles-based approach to the enforcement of the various provisions of the corporate governance code. Notably, the publicly-traded companies have to recognize the significance of corporate governance provision. By featuring the requirement to fulfil the codes within the listing rule companies are able to adopt a more flexible approach to code provision, compared to instances in which the compliance if underlined by law. It is essential to note that compliance in a principles-based jurisdiction is not voluntary in any material sense. In rules base approach, compliance is essentially a matter of law rather than a rule of listing. For instance, U.S. companies must comply with SOX provisions. This has led to the rise of compliance consultancy among both management consultants and accountants. One of the criticisms levelled against this approach is that it adopts a one size fits all approach to c orporate governance whereby similar detailed provisions are demanded of small and medium-sized entities. If an approach is rules-based or regulator-led (monitoring and enforcement of corporate governance), then it must be a one-size-fits-all approach that constraints innovation and adaptability. Part 2 The Role of Institutional Investors and their Relationship with this Business Company overview GlaxoSmithKline (GSK) operates in three key areas of business, namely: pharmaceuticals that entail prescription pharmaceuticals; vaccines; and, consumer healthcare that encompasses oral health, wellness, nutrition, and skin health consumer health products. GSK has instituted a sustainable long-term approach to enhancing access to medicine (ATM). GSK has board-level responsibility for ATM activities and has instituted a sustainable approach to deliver access initiatives within Index Countries. GSK engages with multiple external stakeholders on ATM linked issues. During the Index p eriod, GSK engages with diverse stakeholders such as NGOs, government representatives, investors, academics, and industry organizations on issues such as access to healthcare and disease prevention, intellectual property, pricing, and competitiveness. Reporting to Shareholders GSK reports formally to stakeholders twice each year during release of half-year and full-year result in face-to-face presentations with institutional investors, analysts, and the media. To guarantee that the non-executive directors are aware and comprehend the views of substantial shareholders, GSKs board has instituted briefing process managed by the chairman highlighting sector-specific issues and overall shareholder preferences. It is no doubt that institutional investors have played a central function in enhancing the corporate governance within corporations, as well as impacting positively on the efficiency and stability of financial systems. In the UK, the level of ownership by individuals has overall decreased over the years, whereas ownership by institutional investors has increased. Institutional investors represent financial institutional that accepts funds from third parties for investment under their own name, but on such parties behalf and entail pension funds, mutual funds, and insurance companies. Corporate governance codes and guidelines have overtime recognized the critical role played by institutional investors. Recent corporate governance reforms undertaken in response to the global financial meltdown have placed significant emphasis on the function of institutional investors. The UK Stewardship Code stipulates that: institutional investors should publicly disclose their policy regarding how they intend to discharge their stewardship responsibilities; should manifest a robust policy on managing conflicts of interest; monitor their investee companies; establish concise guidelines dwelling on when, and how to enhance their activities as a mode of safeguardin g and enhancing shareholder value; should be willing to act collectively with other investors where suitable; should manifest a concise policy on voting and disclosure of voting activity; and, should report periodically on their stewardship and voting activities. The UK corporate governance code embraces the underpinning assumption that shareholders can best safeguard their own interests, provided that they manifest adequate rights and access to information. The Cadbury Report appreciated the function played by institutional investors. The combined code (2008) (sec E) highlights three core principles. First, it outlines that institutional shareholder should enter into a dialogue with companies grounded in the mutual understanding of objectives. Second, it outlines that in evaluating an entitys governance arrangements, especially centring on the board structure and composition, institutional shareholders should award due weight to all pertinent factors drawn to their attention. Th ird, institutional shareholders have a responsibility to make use of their votes. The Role of Institutional Investors in GlaxoSmithKline (GSK) Institutional investors mainly have a strong preference for firms that manifest good governance and that are cross-listed. Such firms mainly tend to have higher firm valuations, better operating performance, and lower capital expenditures. As a result, institutional investors have become a prominent force among GSKs stakeholders. Given the size of their shareholding, the power of institutional investors cannot be underestimated. The Cadbury Committee appreciated that institutional investors have a distinctive role to ensure that its recommendations were adopted by corporations. As such, institutional investors in GSK have utilized their power and influence to guarantee the implementation of best practice outlined in the Code. The institutional investors capability to exert significant influence over GSK has concise implications for corp orate governance, especially with regard to standards of corporate governance and issues relating to enforcement. In GSK, institutional investors have been able to: dialogue with the company based on the mutual understanding of goals; appraise the companys governance arrangements, especially those touching on board structure and composition; and, bear a responsibility to make considered utilization of their votes. As such, institutional investors should manifest a concise statement of their policy on activism and how they intend to undertake their responsibilities; should closely monitor the performance of GSK; should intervene where necessary on issues such as companys strategy, GSKs operational performance, GSKs acquisition/disposal strategy, independent directors falling short of holding executive management to account, internal control failing, insufficient succession planning, an indefensible failure to comply the Combined Code, unsuitable remuneration packages, and GSKs app roach to corporate social responsibility. Discuss the Issues Arising from Growth in Importance of Institutional Investors The growth in significance of institutional investors has brought to the forefront critical issues such as the exercise of ownership rights by all shareholders. Institutional shareholders are subject to broadly varying levels of regulation and in some cases exercise fiduciary responsibility in voting their clients securities. Institutional investors acting in a fiduciary capacity are expected to disclose their overall corporate governance and voting policies, procedures, and how they manage material conflicts of interest that may influence the exercise of ownership rights regarding their investments. 2. Discuss the Major Potential Conflicts of Interest that Affect Non-executive Directors Executive directors mainly possess a direct responsibility for business operations, while the non-executive directors possess a responsibility of bringing autonomous, objective judgement to abide on Board decisions. In key areas of the business, executive directors straightforwardly manifest conflict of interest in such areas such as remuneration of directors and supervision of the audit of the entitys accounts. Other areas that may cause conflict of interest include defending ones own turf, not inviting criticisms of ones consequent proposals, and takeovers and management buyouts. The core role of non-executive directors is to avail independence, oversight, and constructive challenge to the board. This governance function differs with the role of the executive team that is to manage the business. To evade potential conflicts of interests, non-executive directors are expected to consult with the Chairman prior to taking up any additional external appointments. Non-executive directors should ensure that they make all decisions objectively in the interest of the company. Hence, non-executive directors should ensure that they are not sufficientl y dependent on the income generated from their non-executive appointment to the level that it impacts on their independent judgement. Conflicts of interest may arise when a decision has to be made regarding the reappointment of a director. The UK Corporate governance Code outlines that all fees/compensation for non-executive directors ought to be fixed by the Board of Directors, and demand previous approval of shareholders within general meeting. A non-executive director represents one from outside the company. Role Non-executive Directors in GlaxoSmithKline (GSK) Non-executive directors in GlaxoSmithKline have been pivotal in the overall success of the company, especially for the creation of long-term shareholder value. The key roles played by the non-executives centres on bringing an independent judgement to bear on managements proposals and performance. In all of these roles, independent non-executive directors manifest fewer conflicts of interests compared to executive dir ectors. The independent non-executive directors have contributed numerous qualities to the board; nevertheless, they should not be viewed as heralding the expertise in a certain area to the company. This success has arisen from constructive engagement with, and challenging management, aiding in the structuring of the companys strategy, satisfying themselves on the sufficiency of the reporting and management information standards, and re-examining the effectiveness of the executive management. Overall, the non-executive directors have acted in a manner that they perceive to be in good faith, exercise reasonable care, skill, and diligence and evade conflict of interest. Part 3 Lessons from other Countries: Comparison with U.S. Regulator-led Corporate Governance The regulation of corporate governance within the UK derives from diverse rules, regulations, and recommendations, notably: common law rules (directors fiduciary duty), statute (Companies Act), listing rules, companys constitutional documents, the combined code on corporate governance, non-legal guidelines released by bodies that embody institutional investors, and financial services Authority Code of Market Conduct. The U.S. approach to corporate governance can be typified as a regulator-led system largely enforced via SEC regulation, stock exchange listing rules and state law. Corporate governance in the U.S. is determined largely by legislation in the shape of the Sarbanes-Oxley Act (2002), plus detailed regulations that SOX demanded that entities such as the Securities Exchange Commission (SEC), NASDAQ, and NYSE draw up. The UK comply or explain approach differs significantly from the general approach adopted by SOX. Although, SOX-related regulations employ the comply or exp lain principle in a number of instances such as determining whether a company manifest a code of ethics or its audit committee manifest a financial expert, in the majority of cases, U.S. regulation tends to depend on the legislation and fines (and/or imprisonment penalties) for the contravention of the requirements of SOX. The U.S. approach to the supervision of corporate governance at a state level is minimally dependent on shareholder engagement compared to the UK, in which shareholders are empowered via voting rights as provided by the company law. Nevertheless, the application (or threat) of shareholder action law suits is dominant within the U.S. and can be an effective measure to herald change. Furthermore, there is generally more deference to board decision-making within the U.S., compared to the UK. Publicly listed companies registered with the SEC are supposed to stick to strict disclosure requirements. Frequently, the amount of supervision, regulation, and reporting req uired in the U.S. is cited as being more than what is necessary. Ways in which Corporate Governance in the UK could be improved The UK Corporate Governance approach features non-binding, principles based approach that highlights the need to adapt implementation to differing legal, economic, and cultural practices. Whereas the code is proportionate and capable of dealing with a broad variety of circumstances, there is a relatively absence of prescription as to the manner in a companys board organizes itself and carries out responsibilities. The UK Corporate Governance Code highlights good governance practices, although companies can still choose to adopt a varying approach is that is more suitable to their situation. The key linkage is between the company and its shareholders, rather than between the company and the securities regulator. Contrary to legislatively-based approach of the U.S., UK corporate governance highlights board engagement with shareholders and compliance with a voluntary code of best practice. This facilitates high standards of corporate governance behaviour devoid of stifling wealth c reation. Indeed, the UK approach is perceived as less costly and more flexible compared to the U.S. model. Nevertheless, there are no grounds for complacency. Efforts to enhance corporate governance should centre on intensifying the dialogue between boards and shareholders, the effectiveness of non-executives, and a more consequential implementation of the comply or explain principle. It is also essential that the distinctive needs of smaller entities are addresses. The UK corporate governance approach, grounded on the assumption of critical dialogue between boards and UK institutional investors, ought to adapt to the challenge of a transformation within the ownership structure of listed companies. Similarly, the regulatory burden enforced on boards should be vigilantly monitored. A disproportionate focus on compliance, instead of issues of strategy and value-creation, weakens the viability of the UKs unitary board concept. Conclusion Good Corporate Governance underlies market confidence, efficiency, and integrity, and subsequently facilitates economic growth and financial stability. The UK approach to corporate governance combines high standards of corporate governance with comparatively low associated costs. The UK corporate governance code can derive insights from the financial crisis. First, there is a need for reform efforts focussed on: reinforcing board oversight of management; positioning risk management as a critical board responsibility; and, encouraging remuneration practices that balance risk with long-term performance criteria. Policy makers can seize the momentum generated by the financial crisis to address the weaknesses exposed in corporate governance regime.

Plagiarism Is Not Simple - 1932 Words

There is cause for discussion when it comes to originality. As a college student I find myself struggling with the the concept of being original. My whole academic career prior to college I was told to strive for originality, but now that I am attending a university I have learned that being original is not simple, but instead a very complex process. Questions such as: what is originality? How does someone achieve pure originality? Can someone actually be truly original? may come to mind when discussing the topic. Another idea that seems to go hand in hand with the discussion of originality is the discussion of plagiarism. How is plagiarism defined? Is plagiarism unavoidable? I have come to find out that what I have learned about plagiarism in my thirteen years of schooling prior to College actually contrasts what I have learned in one semester at the university I am attending. Originality is defined on page 799 in the book Writing About Writing as being, â€Å"the condition of bein g singular, unique, and entirely made up or invented, as opposed to imitative or derivative.† What I take from this definition is that in order to be truly original there needs to be noone other than myself to have or ever had have the ideas that I posses. That is nearly, if not completely, impossible. When I am given a writing assignment for my current English 101 class I always have reading to do in preparation for that writing. When I am reading I am highlighting specific ideas of the author’sShow MoreRelated How to Beat Online Plagiarism1462 Words   |  6 PagesOnline Plagiarism Plagiarism is best described as copying someone elses work and putting your name on it without giving the original author any credit for his or her work. It is a problem that has existed in academia for centuries, since the creation of text documents. Original methods of plagiarism were limited, however, to copying by hand the work of another person from sources found in libraries and other books and magazines. This form of plagiarism, while it still existed was not simple toRead MoreEssay on How to Avoid Plagiarism1228 Words   |  5 PagesAvoid Plagiarism Plagiarism is a growing problem in universities (Matheson Starr 2013) and becoming too common in the scientific world (Ober et al. 2012). Hence it is important for students as well as researchers to know how to avoid plagiarism. Before discussing the ways to avoid plagiarism, this paper discusses the definition, the types and reasons for plagiarism. â€Å"Copying’ or â€Å"borrowing† someone else’s words or ideas may perhaps be the more inoffensive way of explaining plagiarism. HoweverRead MorePlagiarism, Cheating And Academic Standards1674 Words   |  7 PagesIntroduction The demonstration of showing the thoughts of others as your own without referencing known as plagiarism. This is cheating and degrades academic standards. One of the most important contributing factors that make plagiarism a worldwide problem is the simple access to web assets, where all the investigative papers and reports are effectively accessible. It has been evaluated that plagiarism has always been an area of interest for both administrators and teachers when they want efforts of studentsRead MorePlagiarism And The Ethics Of Plagiarism926 Words   |  4 Pagesand parents have heard the term â€Å"plagiarism† while talking about writing essays, poems, and other works. Plagiarism is defined as â€Å"to steal and pass off (the ideas or words of another) as one s own† by Merriam-Webster dictionary. While plagiarism may be denoted as stealing one’s work without credit, a more vast and broad definition usually applies to college level work. Every college and uni versity has their own handbook and code of conduct on what exactly â€Å"plagiarism† is defined as, and what are theRead MorePlagiarism Essay957 Words   |  4 Pages Plagiarism, the practice of taking someone elses work or ideas and passing them off as ones own (â€Å"Plagiarism†). Such act is a crime and is not lightly, however what is considered plagiarism is very tricky and if you are not well informed you can easily fall victim to this crime. The most common types of plagiarism are intentional and unintentional plagiarism. Currently both of these types are punished in the same ways such as expulsion or suspension in academic groups. There has been many debateRead MoreOvercoming Plagiarism Essay1247 Words   |  5 Pages Plagiarism is an ever-increasing problem throughout the world today, as the internet, along with technology such as Iphones and Tablets, has made accessing another person’s useful work as easy as typing a few words into a search bar. Pirating that work is then a simple matter of â€Å"cutting and pasting†. Similarly, advanced word processors have provided a stress-free way of integrating another’s writing into one’s own, or editing a plagiarized work so that it is more difficult to detect. HoweverRead More Plagiarism and the Internet Essay683 Words   |  3 Pages Plagiarism and the Internet A recent study of 500 middle and high school students by Dr. Donald L. McCabe, Rutgers professor and authority on academic dishonesty, revealed that half the students felt it was okay to have parents do their homework. Plagiarism is an extremely controversial issue, whether copying other students work in grade school or getting information from a document on the Internet, plagiarism plagues the minds of the youth of today. The question is how far will students takeRead MorePlagerism Means More than Copying the Written Word Essay506 Words   |  3 Pages Plagiarism, what is it? Webster’s defines plagiarism as â€Å"wrongful appropriation, purloining and publication of another authors language, thoughts, ideas, or expressions, and the representation of them as ones own original work†. Now some would argue that in order to truly plagiarize someone else’s work they have to be a copy written author. This how ever is not true from an academic point of view. Plagiarism covers so much more, i.e.; using unauthorized notes during a test, copyingRead MorePreparing for Academic Success at Graduate Level Essay1437 Words   |  6 Pageswritten to express their feelings, ideas, and thoughts, thus educating people about the world around us. Describe Plagiarism and Steps to Avoid It Defining Plagiarism in simple terms, it is the â€Å"wrongful appropriation, or stealing the publications of another author’s thoughts, words, or ideas, and representing them as their own original work.   Avoiding the unintentional plagiarism a person must give credit where credit is due. To do this a person needs to cite everything, this means citing whereRead MorePlagiarism Essay887 Words   |  4 PagesIntroduction Plagiarism is copying another persons ideas, words or writing and pretending that they are ones and one’s own work. Whenever another persons work is copied and republished without an appropriate reference it is considered plagiarism. Because it is so easy to copy and paste digital information, plagiarism in the information age has become a serious problem. The best way to avoid plagiarism is to avoid reading anything written by somebody else. In simple words plagiarism is kidnapping

Power and Authority Free-Samples for Students-Myassignmenthelp

Question: What is Power and What is Authority in your View, and how do these two Concepts relate to one another in Decision Making Context. Answer: Introduction All life forms are characterized by domination of one group over the other groups with regard to the allocation of resources, distribution of the same or undertaking a particular task. It could also take an individual perspective. In this respect, either power or authority will be revealed. The manner in which influence on an individual basis or group is conducted will reveal whether it is power in play or authority. Nevertheless, the presence of either of the concepts in social, political, cultural or economic settings cannot be questioned. In order to understand how these concepts are similar, different and overlap each other, the paper takes an investigative attempt to bring forth the interrelationship adapted by power and authority. It will take an examination of their application in far diverse settings with specific emphasis on what connects and differentiates them as well. Most importantly, an in-depth analysis will seek to lay bare their application in decision making process . Power and Authority Power alludes to the ability or rather the potential that a person or a group of people have to influence another group or an individual to perform a particular act. Usually the eventual decision to perform the act in question does not have to be voluntary. In essence, power connotes to the ability to influence events. This ability could be personal which pays homage to personal power. Basically, a person gets their personal power from either personality or from the expert knowledge they possess. For instance it could be cultivated from the academic path. Engineers, Doctors, Programmers, Lawyers among others derive their power from their professional knowledge as well as their expertise (Bassan et al, 2016). Furthermore, power could also be either official or legitimate power. An important aspect of power is that it comes from a higher authority. Authority must always flow downwards. It is always delegated from the top to the bottom. Authority basically implies the claim of legitimacy, right or justification to exercise command over a certain group of people or individuals to act in a particular way. It is established through being able to wield collective power rather than having people deciding to use the same power independently. In other words, authority is important for the overall achievement of collective goals. When people are called upon through a certain system to exercise over others, they are mandated to do so (Wolin, 2016). It is guided by a certain followed rules that determine what is wrong and what is correct as well. In this regard, authority implies that people are influenced to partake in an act that is both lawful and just because what gives them such command is honored by a section of laws mainly in the constitution. Therefore, its conduct must follow and an authorized manner as well. Conceptualization of power and authority can be distinguished in the following example. A riot erupts involving the law enforcement in a given area with a notorious mob. Following the law enforcement losing control of the area, the army is therefore ordered to intervene in order to have restoration of order (Li, Matouschek Powell, 2017). In this case, the chief of police has authority but does not have power. Clearly, he/she has the responsibility and the right to exert power but again, he does not command the effective means to do it. On the other hand, the head of the mob has power. He can decide to direct his mob as the sees it fit (Guinote, 2017). However, he does not have the authority. More so, the use of mob power is not lawful or legitimate. However, the head of the military has both power and authority. Therefore, he has the responsibility and legal right to proceed in directing his unit. This underscores his authority as well as the unit being his source of power as well. In terms of the decision making as aforementioned above, authority lays emphasis on the command by people of top leadership to those of the lower echelons. It calls upon them to undertake certain tasks. In an organization, managers are called upon to command others to ensure that they perform the tasks expected of them by management with a key reason of achieving the objectives of an organization in general (Popitz, Gotlich, 2017). This is similar to the government structure. The president has the authority to command the cabinet to see certain actions are taken with regard to the objectives decided on (Hill, Jones Morales, 2013). It is their right for instance to have things being done in a manner that it is needed through others. It is therefore their right to make decisions clearly. A manager gets his authority by virtue of his position or rather post and all his decisions result from the fact that he/she has power. Most significantly, top level management authorities should get their authority from key stakeholders in the industry, be it governmental or non-governmental (Suleiman, 2015). In this case, it implies that authority must always flow from the highest level to the lowest level. It is delegated from the top to the bottom. Decision making feeds on the manner and nature that both power and authority are delegated in any institution. For the case of power, its generally given to a person who has authority of knowledge in most of the business organizations. This power of knowledge can either be acquired through education or perceived by nature which practically alludes to the leadership tendencies. On the other hand, the role played by an individual or a group in the society gives them the audacity to project authority. For instance, the police have authority to arrest people as well as carry out prosecution on them as dictated by individual actions which are usually criminal according to Siddiqui (2017). However, the decision making for persons with authority follows a very clear and thought out procedure. Certain conditions have to be met for that authority to be valid. In democratic institutions, decisions that are perceived to be made out of being in authoritative position have to be vetted. Vetting c ould be done prior to its making by following rules and regulations that have been put in place. Essentially, decision making has to be accountable to the people it is going to have an impact on. For instance, the President has the authority to declare a state of emergency in most of the democratic countries in the world although this has to be honored in the constitution for it to be valid and not draw reactions that are likely to jeopardize it. Power on the other hand, provides room for absolute decision making. Due to its susceptibility to be abused, a system of checks and balances must be put in place to control it. This is a common practice in most democracies in the world. The likely illegitimacy of power in most circumstances implies that people could easily fall into the trap of abusing it as a result. While authority of power have a thin line separating them, they are hence consistent with overlapping aspects. For instance, prevalence of power is down to possession of knowledge far beyond others particularly in cases of academic feats. Such a person is therefore able to amass more power than others. As a result he/she will be instrumental in influencing the decisions of others in a manner that favors their own position. It will be used to gain more power hence giving them the authority to partake what they would wish to do to anybody. An example of this case scenario is whereby people in the academic world opt to join politics. By doing this, political power will give them authority to advance their interests over the larger majority. A person with power will therefore be able to influence the decisions of others both consciously and unconsciously. This illustrates the manner in which power goes hand in hand with authority. Having powerful turns people into authoritative nature wh ich primarily alludes to a powerful authority. It further lays emphasis on the claim that power gives people authority which further alienates them into higher grounds subsumed into both concepts. Conceptualization of power and authority projects a grey area when the issues of morality are brought into focus. Basically, the fact that morality is conceived as moral since it is constructed on the scale of legality, it implies that power has the tendency to corrupt this morality. The aspects of right and wrong therefore blur the issue. For instance, historically, the Nazis sanctioned the exercise of state authority to launch their barbaric acts and so they are rightly deemed immoral. On the same page, during the world war two partisans in France exercised raw power against the same NAZI occupiers through sabotage (. Their actions are rightly deemed moral. This has created a big overlap. Authority and power predisposes the issues of morality vis--vis immorality as well as legality and illegality. In this case, the retaliatory actions of the French on the Nazi are generally deemed as moral while when the coin is flipped, it is immoral in the first instance where the Nazi made the a ssault. Authority essentially flows from power and so on itself it cannot provide a baseline. Power begets authority. A person must first of all acquire power before they can command authority. And commanding this authority is centered on power. Should none of them fail to achieve its target then the other becomes clearly useless (Basan et al, 2016). Power and authority must therefore coexist. One cannot have one without the other. For instance, a person can have the authority over a certain will but lack the power to impose this will. It therefore makes authority useless without the influence of power. Power and authority are nonetheless similar in a number of ways which further broadens their interrelationship. The two concepts are prone to manipulation to suit individual interests even though power stands on the pedestal. Since both of them are borne out of a consensus, should there be a legitimate process that allows its implementation in the society then it means that they achieve their desired goals (Wolin, 2016). However, since all of them are susceptible to bowing into individual interest or group interest that categorically outmaneuvers the rest, the goals of either can be dislodged as a result. Both of them can be corrupted whether they are applied singularly or in complement of each other. According to Pye Pye (2009), power and authority have an uncanny knack of getting to the head and messing up the definitive values, behavior and acts which got people into those positions of leadership. In other words, they both provide way from leading to welfare to leading a way to d isaster. It only take a little change of tact by the partisan parties. Simply put, power alludes to a means of performing a particular action. It leaves a person who wields it to choose what they can decide to do with it. It could be disaster or beneficial. For instance, a person of influence can either decide to influence people to do or act in a certain way. Having authority puts one in the same situation whereby they have to take the same choices (Giroux, 2016). In terms of leadership, they both equip people to take tasks that have a large impact either directly or indirectly in their lives. Conclusion Power and authority are closely related concepts as reflected by the similarity of the role they play in the society. They both have an important role in the society if well regulated since they put individuals in positions of influence. Through this influence, they can be instrumental in putting forth favorable polices and initiatives for the benefit of the society at large. While authority alludes to a claim of legitimacy which transpires into a downward of influence and command such that it is those at the lower levels of authority that have to ensure accountability is recognized on the higher authority, power indicates the influence to have people do what one desires. The two concepts also have higher levels of overlap in that authority flows from power. For one to have an activity done, they must have power even if authority is present. As a result, it points to their relationship in decision making. All in all, the close interrelationship of these concepts means that their appl ication in any social, political or economic concept must follow a well-structured manner to avoid corrupting either of them since they are susceptible to manipulation. References Basaran, T., Bigo, D., Guittet, E. P., Walker, R. B. J. (Eds.). (2016).International Political Sociology: Transversal Lines. Routledge. Giroux, H. A. (2016).Stealing innocence: Youth, corporate power and the politics of culture. Springer. Guinote, A. (2017). How Power Affects People: Activating, Wanting, and Goal Seeking.Annual Review of Psychology,68, 353-381. Hill, J. A., Jones, P., Morales, A. J. (Eds.). (2013).Experiencing Power, Generating Authority: Cosmos, Politics, and the Ideology of Kingship in Ancient Egypt and Mesopotamia. University of Pennsylvania Press. Li, J., Matouschek, N., Powell, M. (2017). Power dynamics in organizations.American Economic Journal: Microeconomics,9(1), 217-241. Popitz, H., Gottlich, A. (2017).Phenomena of Power: Authority, Domination, and Violence. Columbia University Press. Pye, M. W., Pye, L. W. (2009).Asian power and politics: The cultural dimensions of authority. Harvard University Press. Siddiqui, S. (2017). Power vs. Authority: al-Juwayn?s Intervention in Pragmatic Political Thought.Journal of Islamic Studies, etw057. Suleiman, E. N. (2015).Politics, power, and bureaucracy in France: The administrative elite. Princeton University Press. Wolin, S. (2016). Theories of the political, political theory, and politics.Politics and the Concept of the Political: The Political Imagination, 222.