Citation
The application of March and Simon's organizational conflict theory to the voluntary interinstitutional consortium

Material Information

Title:
The application of March and Simon's organizational conflict theory to the voluntary interinstitutional consortium
Creator:
Brennon, Willie D., 1940-
Publication Date:
Language:
English
Physical Description:
xii, 136 leaves : ; 28 cm.

Subjects

Subjects / Keywords:
Colleges ( jstor )
Community education ( jstor )
Conflict theory ( jstor )
Educational research ( jstor )
Higher education ( jstor )
Organizational communication ( jstor )
Perceptual organization ( jstor )
Questionnaires ( jstor )
Scheduling ( jstor )
Universities ( jstor )
Interorganizational relations ( lcsh )
Social conflict ( lcsh )
University cooperation ( lcsh )

Notes

Thesis:
Thesis--University of Florida.
Bibliography:
Includes bibliographical references (leaves 127-134).
General Note:
Typescript.
General Note:
Vita.
Statement of Responsibility:
by Willie D. Brennon.

Record Information

Source Institution:
University of Florida
Holding Location:
University of Florida
Rights Management:
Copyright [name of dissertation author]. Permission granted to the University of Florida to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Resource Identifier:
000091153 ( ALEPH )
AAK6548 ( NOTIS )
05859371 ( OCLC )

Downloads

This item has the following downloads:


Full Text














THE APPLICATION OF MARCH
ORGANIZATIONAL CONFLICT THEORY
INTERINSTITUTIONAL CON


WILLIE


AND SIMON'S
TO THE VOLUNTARY
SORTIUM


BRENNON


IN P


A DISSERTATION PRESENTED TO THE GRADUATE
THE UNIVERSITY OF FLORIDA
ARTIAL FULFILLMENT OF THE REQUIREMENTS F
DOCTOR OF PHILOSOPHY


COUNCIL


OR


DEGREE






























To my wife,


Peggy,


our two daughters,


Tarryn and Mia,


dedicate


this


work.


Without


their


support and encouragement,


perseverance


and endurance,


thi s


endeavor


would have never


been completed.

















ACKNOWLEDGEMENTS


The writer


acknowledges


indebtedness


those


individuals,


faculty


friends,


who contributed


to his


professional


growth


and development during his


graduate


studies.


Sincere


appreciation


is also merited by


those


individuals


without whom


this


dissertation would not have


become


a reality.


Among


these,


special


thanks


are accorded


those who


encouraged


writer


brother-in-law,


pursue


graduate


Rayfield M.


McGhee


studies,

, whose


including

persis-


tent encouragement


persuaded him


to attend


University


Florida.


Thanks


are


extended


to Dr.


Ralph


Kimbrough,


writer


s advisor


during


studies


toward


the master


degree


one


of several


persons who encouraged him


pursue doctoral


studies.


Sincere


appreciation


offered


to Dr


Michael


Nunnery


invaluable


assistance he


provided during


the embryonic


stage of


this work.


assistance


with


theory made


further


development


this


study


seem


plausible.


*I-, t~' t.l a ,-~ r t-% ,. r. 4


- -I. -


rr *-LI 4..4 4. .


4--'


t~ ,,,cFnlC


II Ik










that committee.


guidance


Their patience,


throughout


understanding,


this endeavor -will


support


forever


remembered.


William M.


until his


Pro found


Alexander,


retirement


appreciation


a member


from


also extended


doctoral


University


to Dr.


committee


of Florida.


Acknowledgement


Council


is accorded


Interinstitutional


those members of


Leadership who gave


untiringly


their


time


in assisting


the writer.


Special


thanks


The many


to Drs.


Lewis


suggestions


Patterson and Fritz


provided by


them greatly


Grupe.


enhanced


quality


this work.


Finally,


Nickens,


appreciation


Marcia J.


extended


Belcher


to Dr.


Donald F.


John M.


Chichester


technical


and editorial


assistance


they provided


various


points


during the development of


this


study.



















TABLE OF CONTENTS


ACKNOWLEDGEMENTS


LIST OF


TABLES


S~~ ~ ~ S S


LIST OF FIGURES


S S S S S S S S S S S S S S


ABSTRACT


CHAPTER


INTRODUCTION


5 5 5 5 5 5 5 5 5 51


The Problem .
Background of
Statement of
Delimitations
Justification
Assumptions
Definitions of T


Organization of


. .
the
he
and
for


erms
the


. .
Problem
Problem .
Limitations
the Study .


S S S S S S


Research


CONFLICT THEORY


AND RELATED LITERATURE


iflict The
March and
Indivi
Organi
confli
Organi
confli
Intero
Conflict
Resolu
within
Resolu
within
Conflict J
Consortii


ory


Sim
dual
zati
ct w
zati
ct w
rgan
Reso
tion
the
tion
the
Mana'
um .


,O0


n's Concept
conflict
nal conflict


.an
con
an
ona
n


: individual
lization
: intergroup
nization


conflict


of individual
organization
of intergroup
organization
gement .


S S


* conflict
conflict

conflict


S S S S S S S S


Report


Con
















The


Pa ge











Governance and Decision-making
Conflict Within the Consortium


As an Approach


DESIGN AND METHODOLOGY
Overview and Study
The Sample .
Instrumentation
Data Collection
Data Analysis


RESULTS AND ANALYSIS


to Community Education


Design .


OF DATA


Research Questions .
Introduction
Results and Findings
Summary .


DISCUSSION, CO
RECOMMENDATION
Discussion
Review o
Findings


Conclusions
Implications
Recommendation


INCLUSIONN
S .


IMPLICATIONS


AND


e Theory


* S S S S S S 5 4 5
~~~ ~ ~ S S S
* ~~ S S S S S S


ns


Future


Study


APPENDICES


CONSORTIA PARTICIPATING


IN THE


STUDY


LETTER MAILED TO CONSORTIUM DIRECTORS
REQUESTING INFORMATION .


LETTER,
AND DATA


GENERAL INFORMATION AND
COLLECTION INSTRUMENTS


INSTRUCTIONS,


FOLLOW-UP


REFERENCE


LETTERS


NOTE


REFERENCES


BIOGRAPHICAL


SKETCH


















LIST OF


TABLE S


Table


A Typology


Individual


Conflict


S. 22


A Profile o
Theoretical


the Composite
Propositions


sponses


S S S SS S S 565


Resource

Scheduling


Goals


*


S S S S S S S S S S S S


Informational


Source


S S S S S S S SS 571


Information Channeling


S 73


Distribution of
Consortia .


the Age


Represented


S) S S S


Distribution


the Consortia


the Membe


rship


S S S S S S S S S S 75


Distribution of


Provided by


Number of


Represented


Services


Consortia


Homogeneity/Heterogeneity
the Consortium Membership


Correlation Matrix


Distribution of
. .


Variables


Paae

















LIST OF FIGURES


Figure


The bargaining


area


.. 18


Factors


affecting


individual


conflict


individual

Factors af


reaction


fecting


to conflict


individual


conflict


within organizations


S S S S S S 525


Factors affect
within an org

Communication


ting


intergroup conflict


anization


patterns


the decision-making


level


consortium


Page
















Abstract of


Dissertation Presented


the Graduate


Council


of the University of
Requirements for the


Florida


Degree of


in Partial


Doctor


Fulfillment


of Philosophy


OF MARCH AND


SIMON 'S


THE APPLICATION


ORGANIZATIONAL CONFLICT THEORY TO THE VOLUNTARY
INTERINSTITUTIONAL CONSORTIUM

By


WILLIE D

June


. BRENNON

1979


Chairman:


Phillip A.


Clark


Major


Department:


Educational


Administration


primary


purpose


this


study was


to describe


interorganizational


consortia by


conflict


studying


voluntary


perceptions of


interinstitutional


consortium direc-


tors


presidents


propositions


of March,


of consorting


developed by


Simon


institutions,


March and Simon


, H.


(see


Organizations.


using


122-128


New


York:


John


Wiley


Sons,


1958)


describing


organic national


con-


flict in


traditional


organizations.


secondary purpose


was


to determine


relationships


existed between


theory


other variables


associated


with


consortium.


Specifically,


following


conditions


were


addressed.


To what extent do


consortium directors


insti-










the greater


felt need


joint decision-making with


respect


that resource.


greater


inter-


dependence


timing


of activities,


the greater


felt


need


joint decision-making with


respect


to scheduling.


"The


less


subjective operationality


of organizational


goals,


the greater


the differentiation of


individual


goals


the organization.


"The greater


number


independent


information


sources,


the greater


the differen-


tiation of


perceptions within


the organization.


"The


greater


channeling


information-processing,


greater


the differentiation


of perceptions


within


organization.


What


relationship


between


extent


which


conflict

theory


was

and


perceived


to occur


four variables


associate


the area

ed with


predicted


the con-


sortium:


age,


size,


number


services


pro-


vided,


the degree of homogeneity/heterogeneity


the membership.


An opinionnaire


developed by


author was


used


survey


randomly


selected


voluntary


interinstitutional


consortia.


These consortia


comprised


a sample


population


cons

and


isting


presidents


administrators,


consortium directors


institutional members.


Percentage,


I .*1


^









their perceptions


variables.


following


conclusions,


therefore,


are


based


results


composite


analysis


these


groups.


extent


to which


institutional


members were


mutually


dependent


upon a


limited


consortium resource was


directly


proportional


the members'


desire


joint


decision-making regarding


Institutional members'


allocation


involvement


that resource.


in interdepen-


denies


requiring


timing


activities was directly


proportional


members'


desire


joint decision-


making


regarding


scheduling.


The extent


in ascertaining


to which


the membership was


consortium's


level


success-


achievement of


stated


goals


goals was


advocated


The


inversely proportional


the consortium by


informational


number


the differences


the members.


sources within


interinstitutional


consortium does


not


vary


directly with


the degree


to which


differences


exist


the membership's


perception of


the consortium.


valid


conclusion


could be drawn


from


findings


regarding


channeling of


information within


consortium.


size


consortium showed a


relationship


with the


resource


S. a


scheduling variables.


Evidence










significant relationship existed between:


age,


number


services


provided,


degree of


homogeneity/heterogeneity


consortium membership and


extent


to which


conflict


was


perceived


to occur within


areas


predicted by


theory.
















CHAPTER I

INTRODUCTION


Conflict


a phenomenon which


permeates all


aspects


society.


It is


an integral


part


a fact of


life which


of a democratic


unavoidable,


society


(Schofield,


1975,


According


to Lipset


(1960),


"the


existence of


a moderate state of


conflict is


fact


another way


defining


a legitimate democracy"


83).


A review of


literature


revealed


that


there


is a


general

theory


1963,


phenomenon of

that delineates


This


conflict

a basis


evidence


and,

for


provides


therefore1

direction


a basis


a general


(Boulding,


denoting


"why";


behavior;


it provides


serves


foundation


a guide


consistency


to new knowledge and,


consequently


1966,


new behavior


More


(Saunders,


specifically,


Phillips


theory of


Johnson,


conflict has


been


derived


from


analysis of


personal,


group,


organizational


behavior


that


purports


to provide


universality


predictability of


conflict


situations


these


rc( Qgnnnt-, \70=> rrnmn flg -










theory.


this


end,


collaborative environment as


exemplified by


consortium will


serve


exemplary


model.


The c

autonomous


onsortium,


a formal


institutions,


association of

a nontraditional


two or more

organizational


structure,

to 1925, a


a history


ind a


in the


phenomenonal


United


States which


growth rate


which


dates


spanned


back

the


10-year period between 1965


and 197


Patterson,


1974,


However,


until


1970s,


few researchers


attempted


to observe


and document


the various


aspects


its organizational


characteristics.


This


apparent lack


of interest regarding


research


the consortium parallels


paucity


of interest concerning


need


study


characteristics


traditional


organization


that


permeated


the early


1950s.


Boulding


(1953)


, in his


treatise


entitled


"The Organizational


Revolution,


" quite


succinctly


expressed


that idea


following manner:


This
and


revolution has
s not something


particularly
us silently.


received


conscious.


lit


i which we
It has


tle study
are
crept upon


something which


accept as
thinking.
raises pr
equipped


a


"natural "


And


oblems


yet,
with


almost without


the whole movement


which


we are


to deal.


When


the economic


conditions


existing


1970s


arc


STC










postsecondary


institutions,


dominant organizational


consortium may


form in modern


society.


become


Indeed,


ironic


that only


limited knowledge


been accumulated


regarding


various


characteristics


exemplified by


this


organizational


form.


theory


appropriately


serves


a guide


new


knowledge,


as a means


to delineate a basis


direction,


a foundation


consistency


in behavior,


then,


organizational


characteristics


the consortium environ-


ment need

context.


to be

Such


thoroughly

analysis wo


analyzed


uld enable


within a


one


theoretical


to determine how


previously


autonomous


organizations


with


limited resources


can


effectively


collaborate and adequately


serve


needs


their members.


the applicability

consortium setting


standing

consortium:


It logically


traditional


should be


characteristics pe

m. It should also


follows


conflict


first step


retaining


that a


theory

toward


to conflict


a first step


toward


test


under-


the

develop-


ing the


potential


for predicting


and describing


future


events


regarding


these


characteristics.


this


end,


field


portion


analyzing


data


this


gathered


study


involves


from a


sample


collecting and

population consisting


consortium directors


presidents


institutional










Problem


Background


Problem


scholarly


tional

purport


literature


organization has


possess


reveal


descriptive,


on conflict in

ed theoretical


heuristic,


tradi-


concepts


that


predictive


qualities.


Propositions


that maintain consistency with


these qualities


and,


therefore,


describe


nature of


con-


flict


in organizations


have been


postulated by


March


Simon


(1958


follows:


greater


resource,


the mutual


the greater the


dependence on


felt need


a limited


joint


decision-making with


respect


that resource.


122)


greater


interdependence of


timing


activities,


the greater


felt need


joint


decision-making with


respect


to scheduling.


less


subjective


operationality of organi-


national


goals,


the greater


the differentiation


individual


goals


the organization.


(pp.


125-


126)


greater


number


of independent


information


sources, tn


,e greater


differentiation of










perceptions within


the organization.


128)


March


and Simon also


asserted


that


aforementioned


propositions


should maintain


validity when applied


interorganizational


setting


131) .


Hence,


it is


intent of


this


study


to determine


applicability


these


propositions


an interorganizational


setting,


consortium.


Statement of


Problem


purpose


national


this


conflict in


studying


study


voluntary


perceptions


to describe


interinstitutional


interorgani-


consortia

s and


of consortium director


presidents of


consorting


institutions,


using


propositions


developed by March and Simon


describing organizational


conflict


traditional


organizations.


More


specifically,


answers


following


questions


will


be sought:


To what extent do


consortium directors,


and


institutional


presidents


agree with


the state-


ment,


upon


greater


a limited


the membership's


consortium resource,


dependency


greater


the membership's


regarding


desire


allocation


joint decision-making


that resource?


What


the extent


to which


consortium










scheduling


times


for activities


to occur,


greater


making


What is


which


the desire


regarding


joint decision-


scheduling?


relationship between


the consortium goals


extent


are achieved


extent


to which


consortium goals of


institutional


members differ


, as


directors,


perceived by


institutional


consortium


presidents?


To what extent do


consortium directors,


institutional


presidents


agree with


state-


ment,


the greater


informational


number of


sources


within


independent


the consortium,


greater


the difference


the membership's


perception of


consortium?


To what extent do


consortium directors,


and


ins titutional


presidents


agree with


state-


ment,


greater


within


consortium,


channeling of


the greater


information


the dif-


ference


the membership's


perception of


consortium?


What


relationship


consortium and


perceived


extent


to be engendered


between


to which


age of


conflict


within areas


predicted


i 4 4


rr


I I


'I 11










perceived


to occur within areas


predicted by


theory?


What is


relationship


between


number


services


consortium provides


its members


extent


to which conflict is


perceived


to be


engendered


within areas


predicted by


theoretical


propositions


What effect does


homogeneity or


heterogeneity


consortium membership


have


upon


the extent


which


conflict


is perceived


to occur within areas


predicted by


Delimitations


theory?


and Limitations


This

ness of pr

tradition


study was


positions


confined


to investigating


on organizational


organization in


describing


conflict

conflict


the effective-


in the


consortium.


this


purpose,


consortia


included in


this


investigation were only


those


that:


were classified


formal


association,


consisted


two or more members,


were


tions.


composed


Referent


primarily


groups were


of postsecondary


limited


institu-


the directors of


consortia


presidents of


institutional members.


Confinement was


also exemplified by


inclusion of


only


existing


consortia


that were


organized


the continental










A major


limitation of


this


study was


that


is an


post

the


fact design.

restrictions a


It was,


Attributed


therefore,


this


subjected


type


all of


of research.


Consistent with


latter,


this


researcher


recognizes


that


there may


have


been


limitations with


respect


data-gathering


process.


example


maturation as


described by


Campbell


Stanley


(1967,


may


have


been


inhibiting


the extent


that respondents


not have


re-


called


significant


past events.


Furthermore,


as a result


of developing


an understanding of


consortium processes


through


some


long


involvement with


respondents may


differently


today


have


from what


this


perceived


organizational

consortial co


they


time


form,


nflict


some con-


flict situations


actually


occurred.


Other


limitations


the data-gathering process


were:


failure


some


potential


respondents


respond;


incompleteness


inappropriateness


of some of


some of


instruments


returned;


respondents who


com-


pleted


instrument.


Justification


Study


The major


justification


this


investigation was


that


it will


serve


add knowledge


an area


in which


very


limited research has


been done.


This


investigation also










many unique characteristics


this


organizational


setting.


Secondly,


indicated in


the Introduction and


Review


Scholarly


was experiencing


Literature,


phenomenal


growth.


consortium movement


Franklin Patterson


(1974)


indicated


that between


1925


1965 only


con-


sortia


were


established


Eighty of


these organiza-


tions,


comprising


institutions,


were


listed


1973


Consortium Directory.


1977


Consortium Directory


listed


consortia.


Grupe and Murphy's


(1974)


Survey


of Statewide Agency/


Consortia


Relationship


revealed


that within


states


trend


toward


agencies


[was]


interrelating


clearly


consortia


and


in evidence"


coordinating


173)


More


specifically,


in 1973


study was


done


in California


determine


feasibility


of developing regional


consortia


for the


facilitation


a myriad of


higher


educational


endeavors


consortia


(Grupe


idea


& Murphy,


was


1974,


174)


considered in Florida


regional


during


1970s.


In fact,


a bill


entitled


"Senate


Bill


1003"


was


submitted


the Florida Legislature


1975.


Although


it did


pass


Senate,


the bill


was


revised


subsequent sub-


mission.


intent of


this


bill


was


amend


Section


93)a Q3n


P~~~r~~r4A~nr C4n4i4-r iN tr' ? -n -


nr;


~C~C11Cn~


nnr., rr t~CI re A nL:


YIM"T










In recent


years


a number of


municipalities


and school


districts


in several


states


have


formed


consortia


community


education endeavors.


formation of


Jacksonville,


Florida,


consortium


community


education


in 1975


illustrative of


this movement.


Economically,


consortium concept conveyed great


potential


its members


(Jordan,


1970;


Wells,


1967;


Zimmerman,


1968) .


This


seemed evident when issues of


institutional


services,


survival,


societal


quality


allocation of


and quantity


resources


of educational


education,


and other


was,


fully


factors


had


bridged


were


between


considered


theory


the extent


that


However,


practice


previously


the question


been success-


autonomous


institutions,


with


limited resources,


could


form a


collab-


orative association and not experience


conflict which


would


thwart


effectiveness


organic nation,


or bring


about its


demise?


Perhaps


attrition


rate of


consortia,


along with


frequency


turnover among


consortium


directors


. Patterson,


1974;


Patterson,


1973,


1975a;


Patterson


Burns,


1977) ,


could be


considered


indicative of


considerable


conflict within


these


associations.


According


unity


Simmel


that seems


(1955),


to be


very principle


needed by


embedded


nontraditional


I I I -. -


1~





I __ I I I










1970;


Lancaster,


1969;


Patterson,


1971b,


1975c;


Smith,


1966)


asserted


that considerably more


consortium should be


conducted.


research

It was


pertaining

further


suggested


that


these


research


results


should be


disseminated


among


segments


society


Patterson,


1974,


127-


128)


need


theoretically oriented analysis


as well


need


development of


theory


interorganizations


been addressed by


several


writers


(Clark,


1965;


Etzioni,


1960;


effort


Parsons, 1956


to overcome


Silverman


lack


, 1970)


of knowledge


Therefore,


between


in an


relation-


ship of


conflict


theory--as


reported


scholarly


literature--to


consortium,


field


portion of


this


study


involved a


representative


sample


consortia


throughout


continental


United States.


Assumptions


Four


this


assumptions


that were


study were developed by


this


critical


writer.


the success of

It was assumed


that:


Conflict is a

organizations


.n inevitable p

regardless of


phenomenon within

the organizational


structure


or purposes.










Conflict


theory


developed


traditional


organizations


applicable


consortium.


potential


respondents


will


not only


participate


but will


do so objectively.


Definitions


of Terms


Autonomous


institutions.


Postsecondary


educational


institutions


which


traditionally


have


operated


independ-


ently


of each


other.


Channeling of


information processing.


process


of limiting the


number


of organizational members


to whom


information is


transmitted.


Conflict.


A breakdown


standard mechanisms


decision-making


such


that an individual


or group experi-


ences


difficulty


in selecting


an action alternative


(March


Simon,


1965,


122)


Consortium.


A voluntary


association of


two or more


autonomous


institutions


formally organized


purpose


of satisfying

employment of


pertinent needs


an executive officer,


the membership.


consortium director,


exis tence


a board of


directors


are


required


criteria.


Consortium director.


chief


administrative officer


chief


---










Consortium resources.


facilities,


equipment,


staff,

other


etc.,


of an institution which are made


ins titutions


a result of


available


cooperation and coordina-


tion


engendered by


consortium.


Grants


gifts


that


consortium staff


secure


from other


sources


are


included


this


definition.


Informational


source.


A person


from whom information


pertaining


consortium originates.


Institutional


presidents.


chief


administrative


officers


institutions


participating


con-


sortium.


Interdependencies.


Relationships


in which


institu-


tional members


depend reciprocally upon each


other


in the


attainment of


goals.


Operationality


of goals.


The extent


to which


it is


possible


goals


to observe


are being


evaluate how well organizational


achieved.


Perceptions


of goals.


Views


held


concerning


consortium goals which


are


engendered by


a mutual


depend-


ency


on limited resources


and


the operationality


consortium goals.


Perceptions of


reality.


Views


held regarding


aspects


consortium which


are


engendered by


-I I- r a -' t -


.. _...


I ,I ,


r










regarding


a mutual


dependency


on limited resources


interdependence s


involving


scheduling


of activities


group consensus.


Referent


group.


Those


group members within


sample


population


that provided


necessary


data


this


study.


Theory.


A set of


assumptions


from which a


set of


empirical


laws


principles


may


be derived


(Griffiths,


1959,


18) .


Organization of


Research Report


Thi

chapter


study


reported


provided an


background of


five


introduction,


problem


chapters.


problem,

f the pr


statement o


first

including


*oblem;


delimitations


limitations


justification


study;


assumptions;


definitions


terms.


second


chapter


provides


devo ted


provides


Chapter


a review of


general


results


V presents


related


literature;


design of


and analysis of


the discussion,


study;


data


Chapter


Chapter


collected;


conclusions,


implica-


tions,


recommendations.
















CHAPTER II


CONFLICT THEORY


AND


RELATED


LITERATURE


This


chapter


is written in


sections.


first


section


March


includes


Simon's


a general


theoretical


treatment of


concepts,


conflict


conflict


theories,


resolu-


tion


conflict management.


Section


is concerned


specifically with


consortium.


Conflict


Theory


According to Griffiths


(1959),


theory


is essentially


a set of ass

(principles)


3umptions


may


direction.


from which a


be derived


serves


set of


empirical


It provides


as a guide


new


laws

a basis


knowledge


consequently


new


behavior


(Saunders,


Phillips


Johnson,


1966,


Further


theory


received


analysis


considerable


practical


agreement and


nature


uniformity


among


theoreticians.


Dewey


(1929)


stated


that


"theory


the end,


the most


practical


things"


Caladarci


Getzels


(1955)


asserted


tha t


"even










theory]


comes


from


ability


one


gains


from


the knowledge


theory which


because


enables


he knows


one


to act in specific


generality


[the]


situations


situations"


When


theory


taken in


context of


ideas


contained


scholarly


literature


that conflict is


inevitable


that it is


possibly


rampant


throughout society


(Boulding,


1963;


Follett,


1940;


Lipset,


1960


Schofield,


1975),


one


might ask,


there


a general


phenomenon of


conflict and


therefore


, a general


theory


that is


applicable


to all


domains of


society


endowed


with conflict?


Could it not be


said


that,


theories


of social


and human behavior


indeed address


themselves


distinct


goals


of predicting


events


providing


a basi


s for


understanding


these


events


as indicated by


Dubin


(1969),


then


there


are


universally


applicable


principles


that


underlie observed and classified


phenomena


According


Schofield


(1975)


, theory


implicitly


contains


predi


active element which


underlies


specified


operation,


conditions,


specific


that when certain principles


results


are


be predicted


Boulding


(1963)


contended


that


there


s a


general


theory


conflict and


presented


types


general


models


that were


purported


to be


universally


acceptable.


-










party.


A party


is a pair of


behavior


units


(persons,

capable of


theories

assuming


or organizations)


a number of


that are


different


positions


while


retaining


respective


identities


or boundaries


Behavior


space.


This


position of


behavior unit


at a moment of


time


as defined by


a set of


values


or a set of


variables


that


defines


the behavior unit.


These


variables


are


not


necessarily


continuous


or quantitatively measur-


able,


but must be


capable of


simple ordering


Competition.


Competition


in its


broadest sense


exists when


potential


positions


two


behavior


units


are mutually


Conflict.


Conflict is


incompatible


a situation


4).

of competition


in which


ability


each


parties


of potential


party wishes


are


future


aware


to occupy


incompati-


positions


a position


in which


that


incompatible


with


wishes


other


In Figure


Part


a contact


curve


(stretched


out


convenience


into a


straight


line)


, CW1


acceptability


C2W2


There


are










and a bargain


Figure


Part c,


can be

shows


struck at

a field of


W but


no other place.


acceptability,


W1W2,


that is


mutually


acceptable


set.


dynamics


bargaining,


changes


acceptability


set are


first


importance


(Boulding,


1953,


C1 W


Figure


The bargaining


area.


Several


very


sophisticated models


that depicted


con-


flict situations


were


also


presented by


Boulding


(1963)


These models


were


described


as:


"(a)


Richardson Process


n .. __ -- ---


n ,, I -- ---


fs










Other


organizational


theories


of conflict have


also


received recent attention.


Some of


these have


been


identified


zero-sum


theory,


game


bargaining


theories


(Deutsch,


1973;


March


Simon,


1958)


In regard to organizational


conflict,


some


writers


stressed


that attention should be


given


fact


that


an organization


iS a


very


complex


social


system and should


investigated with


this


fact


in mind.


Such


a system con-


of certain aspects


individuals


(Boulding,


input,


1961,


output and


43) .


Hence,


interaction


in its


normal


state,


"structure


the stable


equilibrium it


contains


the normative


constraints


organizational


conflict"


(Krupp,


1961,


161)


opinion


Scott


(1965),


conflict of many


descriptions--actual


or potential--is


present


in organiza-


tions


Follett


. 114) .

(1940),


However,


this


vernacular of


"conflict


neither


Mary


good nor


Parker


bad.


merely


represents


differences


of opinions


interests"


March and Simon's


Concept


According


to March


term


down


making


Simon


[conflict]
ie standard


that an


1958)


is applied


mechanism of


individual


to a break-


decision-


or group


sists










To support


this


position,


March


and Simon


(1958)


presented


three main classes


of conflict phenomena.


They


are:


individual


conflict or


conflict in individual


decision-making,


organizational


conflict or


group conflict


within an organization,


interorganizational


conflict or


conflict


between organizations


Individual


or groups.


conflict


Individual


conflict arises


three major ways which


can be


distinguished as


uncertainty.


individual knows


unacceptability,


case


probability


incomparability,


of unacceptability


distribution of


, the


the out-


come


associated


with each


alternative


action,


but


preferred alternative


individual knows


is inadequate.


probability


For


incomparability,


distributions


of out-


comes,


but cannot identify


a most preferred


alternative.


With


respect


uncertainty,


individual


aoes


not know


probability


distributions


connecting


behavior


choices


environmental


outcomes


(March


& Simon,


1958,


113)


further


characterize


individual


conflict,


March and


Simon


(1958)


developed


following


typology:










Bland alternative.


--An alternative which has


little

having


likelihood


of producing


either positive


or negative


a state of


affairs


value


individual.


Mixed alternative.


--An alternative which has


high


probability


of producing both


positively


negatively valued outcomes.


Poor


alternative.--An alternative


that


likely


to result in a


desirable outcome


likely


result in an


undesirable outcome.


Uncertain alternative.


--An alternative


in which


individual


does


not have a


conception of


probabilities


attached


114)


A summary


these


typologies


type of


conflict


created by


their


interaction


provided


Table


Figure


also


presents


conceptual


factors


underlying


individual


conflict.


Within


context of


types


of conflict illus-


treated


Table


writers


advanced


notion


that of


15 possible


situations


given,


no conflict


is anticipated


cases


because


alternatives


do not


present


dif-


ficulty


decision-making.


However,


the other


cases


represent


conflict


various


forms


incomparability,


. *


I


I .


I .


I -






















Table


A Typology


Individual


Conflict


Alternatives
A B Type of Conflict

1. Good Good Incomparability
2. Good Bland No conflict
3. Good Mixed No conflict
4. Good Poor No conflict
5. Good Uncertain No conflict
6. Bland Bland Unacceptability and
incomparability
7. Bland Mixed Unacceptability and
incomparability
8. Bland Poor Unacceptability
9. Bland Uncertain Uncertainty
10. Mixed Mixed Unacceptability and
incomparability
11. Mixed Poor Unacceptability
12. Mixed Uncertain Uncertainty
13. Poor Poor Unacceptability and
incomparability
14. Poor Uncertain Uncertainty
15. Uncertain Uncertain Uncertainty









































Figure


Factors


affecting


individual


alt



conflict


individual


reactions


to conflict.


Organizational


conflict:


individual


conflict


within an


organization


Organizational


conflict may


arise


two ways.


First,


decision pr

individual.


*oblems may


this


arise

case,


that are


primarily


problem may


intra-

that none of


the members


known acceptable


alternatives


terms


Subjective
uncertainty


Subjective
incomparability


Subjective
unacceptability


Perceived
conflict


Amount of
time pressure


Motivation to
reduce conflict










choices made


different individuals


the organization.


This


situation


in which


individual


participants


are not in


conflict but


organization


a whole


(March


Simon,


1958,


118)


From previous


hypotheses


possible


to predict


that


intraindividual


conflict within


the organization


most likely

organization


to occur when

al decision i


nvolv


conditions

e widespread


surrounding


uncertainty


or a


scarcity

quently,


regarding


acceptable


it is possible


factors


alternatives


formulate


of actions.


Conse-


hypotheses


affecting uncertainty:


greater


amount of


past experience with


a decision situation,


less


probable


that intraindividual


organizational


con-


flict will


arise;


less


the complexity of


decision,


less


probable


that intraindividual


organiza-


tional


conflict will


arise


(March


Simon,


1958,


119).


a result of


introspection


extrapolation


individual


behavior,


it is


possible


to predict


factors


affecting


acceptability with


respect


to a


general


disparity


between aspirations


and possible


achievement.


Then,


greater


disparity


between


aspiration


levels


achieve-


ment,


the higher


probability of


individual


conflict


within


organization.


This


usually


happens


when


TVn 1 ; I rnn Vn4- ,a, ,a r F 1 F~I'1%%an ~I'b'4 ,r vaar .


-^ /- A^ A3 -^.


1~ n r3 n rNn n n


nn~t; ~nnmn n C


nlr rr H ~n


r- r^/-












Munificence of
the environment




Aspiration level
and achievement





Subjective
unacceptability


Figure


Factors


affecting


individual


conflict


within


organizations


Organizational


conflict:


intergroup


conflict within an organization


general


absence


individual


conflict--


uncertainty


unacceptability--the mechanism


that


pro-


duces


disagreement


among


participants


in an


organization


thus


three


organizational


variables:


conflict may


existence of


summarized


a positive


terms


felt


need i


joint decision making,


a difference


in goals,


Complexity
of decision


Subjective
uncertainty


Perceived
conflict


.










Factors


affecting


felt need joint decisinn-


making.


Schachter


(cited


in March


Simon,


1958)


asserted


that where many


tional


individual


decisions,


decisions


potential


become


areas of


joint organiza-


conflict are


substantial


122)


. This


consistent with March and


Simon's


(1958)


position


that a


felt need


joint decision-


making


problems


an organization arises


in organizational


through


decision-making.


central


resource


allocation and scheduling.


More


specifically,


following


derivations


were


provided:


greater


the mutual


dependence


on a


limited


resource,


greater


felt need


joint


decision-making with


respect


that


resource;


greater


interdependence


timing


activities,


greater


felt need


joint


decision-making with respect


to scheduling.


122)


The mechanisms


underlying


these


propositions


are


readily


tion of


apparent,


resources


inequality


invol ve


and ambiguity


the most dramatic


the alloca-


situations


conflict in complex organizations


(Sherif


Sherif--cited


in March


Simon,


1958) .


long


there are


interdepend-


encies


associated with


scarce


resources


or scheduling


felt


ne ed


ioint


deci sinn-


-










Factors


affecting


differentiation of


goals.


Many


characteristics of


organizations


that affect differ-


entiation


of goals


among participants were


categorized


into


three broad areas:


Those


that affect


commonality


of individual


goals within


organization.


Those


that affect


clarity


consistency


reward structure and,


therefore,


reinforce-


ment system.


Those


that affect


compatibility of


individuals.


From


"the


these


less


characteristics was


subjective


derived


operationality


proposition,


of organizational


goals,


greater


the differentiation of


individual


goals


organization"


(March


Simon,


1958,


125) .


Factors


affecting


differentiations


of individual


perceptions.


Within


the organization,


the cognitive


processes


underlying decision-making


are major


factors


affecting


differentiation of


individual


perceptions.


cause


goals


there


a substantial


cognition,


individual


goals,


the greater


greater


interaction between individual


the differentiation of


differentiation of


individual


perceptions


vice


versa.


According


to March










Organization members may share


a common


source


of information.


formal


technique


processing


information


within an organization may provide


for wide


communication.


Informal


information


channels


may


provide wide-


spread


sharing


of information.


127)


From


those


statements,


following


set of


proposi-


tions was


derived:


greater


sources,


number


greater


ceptions within


greater


processing,


of independent information


the differentiation of per-


the organization.


channeling


greater


perception within


127)


of information-


the differentiation of


organization.


conceptual


outlines


framework


presented


the major propositions


in Figure


forth by


March


vividly


and Simon.


These


propositions


clearly


denote


relationship


between


units


within an organization.


There fore,


it should be


observed


that


closer


association between


units


subunits within


organization:


greater will


felt need


joint


decision-making,


less will


the differentiation of


goals,


less


will be


I -I *r I- 9 S


128)


.I





































Felt need


joint


decision


making


Figure


Factors


affecting


intergroup


conflict


within


an organic






Interorganizational


nation.






conflict


Most


writers


on conflict


have


adhered


view


that


interorganizational


conflict


organizational


conflict


are


svnonvmonus


nhenomena.


-A-~ X~n *.- I*-


Marchn


Ci mon


Munificence


environment


number


information


sources


Opera-
tionality
of
organiza-
tion goals


Channeling
of
information
processing


Intergroup
conflict


, I 1 1


I


.


1I J










present heading"


131)


This


assumption


paucity


interest


toward investigating


this


area hereto-


fore has


contributed


fact


that


very


little


literature


can be


found


that


specifically


relates


inter-


organizations.


Moreover,


those


who are beginning


to give


attention


area have


provided sufficient evi-


dence


to support or


contradict


theoretical


propositions


found


literature.


Conflict Resolution


Conflict


represents


a disequilibrium in


system


which generates

ceived. Some wa


motivation

vs in which


to change


this


it when it


might be


per-


accomplished are


presented in


Resolution of


following


individual


sections.


conflict within


the organization


"Conflict when dealt with


correctly,


an experience


of growth


personality.


In fact,


without conflict


there would be


little


need


to develop


new ways


behaving"


(Argyris,


1957,


With


respect


individual


conflict,


March


Simon


1958)


made


following


statements:


Where


the source


of conflict is


uncertainty,


individual


search


will


clarific


first


action of


increase


the consequences


*. S


r .t


I


1










individual


will


alternatives.


tion


to reduce


of search)


bland


search


strength


conflict


depends on


alternatives


(and


the
the


new


the motiva-


thus


rate


availability of


time


pressure


the other


hand,


where the
ability (b
time will


choice will


source


of conflict


ut not acceptability),


short.


Under


such


incompara-
decision
conditions


depend on attention and


sequence
(p. 116)


in which


alternatives


are


presented.


Resolution of


intergroup


conflict within


the organization


Within


organization,


"regularized means


are


involved

channels,


165,


settle


use


114-115)


conflicts,

them as c


course,


or direct


;onstructive


this may


them into

forces"


be done


harmless

(Scott,


in several


ways.


Four ways


presented by


March and Simon


(1958)


were:


problem-solving,


persuasion


, (c)


bargaining,


politicizing.


problem-solving,


it is


assumed


that


ectives


are


shared and


that


deci


sion problem is


identify


129)


assembling


a solution


Essentially,

information,


that satisfies


importance

increasing


shared


placed


criteria"


upon


search behavior


evoking


new alternatives.


Implicit in


use of


persuasion


belief


that,


-9~~~~ .9 9a 91 9


*


i 1'










goals


assumed


to be


fixed.


Hence,


agreement without


persuasion


sought.


other


hand,


politics


differs


from bargaining


that


the disagreement over


goals


fixed.


paper


entitled


"Constructive Conflict,


Mary


Parker


Follett


conflict.


These


proposed


were:


three


ways


domination,


resolution of


compromise


integra-


tion.


Domination


easiest way


of dealing with


conflict,


easiest for


the moment but not usually


successful


long run


. it


a victory


of one


side


over the


other"


31).


Comp romis e


generally


accepted


or approved way


of ending

promise,


controversy.


because


that means


no one


really wants


something will


have


com-


to be


given


Besides


that,


if we


only


compromi


conflict will


come
for


up again and
in compromise,


desire,
to rest


again in some


and because we


there,


whole


give
shal


sometime


our


sire.


other


up part of
1 not be c


shall


(Metcalf


form,
our


ontent
to get
Urwick,


1940,


33-35


use of


integration


resolve


confli


ct involves


three


ference


that


stages.


s into


differences


First,


open,


can be


an effort is made


since


integrated when


to bring


logical


they


dif-


to expect


are










Follett


(cited


in Metcalf


Urwick,


1940)


identified


the breaking up of wholes


into


their


constituent


parts


second step.


This


involves


breaking up


demands


both


sides.


Conversely,


one


often has


to do


opposite,


that is,


find


the whole


demand,


real


demand which


being


obscured by miscellaneous


claims


or by


ineffective


presentation


Anticipation of


response


third and


final


step


of integration.


mean necessarily


anticipation of


avoidance


conflict does


of conflict but simply


playing


interests


game


are


differently.


integrated


That


without making


the different


the moves


Metcalf


Urwick,


1940,


According


Simmel


(1955)


, conflict can actually


become


groups


the means of


within


strengthening


same organization.


relationship


This,


between


course,


illustrates


seldom considered


cons tructive


dimension


of conflict


Conflict Management


Follett


(1940)


and other writers


on conflict


(Burke,


1969;


Derr,


1972;


March


Simon,


1958)


have


presented


management and resolution strategies


dealing with


conflict situations.


In most instances,


however,


these










this


neglect has


contributed


practice


vogue


today


of using


these


concepts


interchangeably.


Conflict


(1977,


414)


disputes.


resolution


involves


However,


as described by


a process which


according


to Schofie


Levi


attempts

id (1975)


Benjamin


to resolve

and


others


(Follett,


1940;


LaTour


et al.,


1976;


March


Simon,


1958)


conflict


organizational


setting


is an


inevitable


phenomenon


which may


occur


or recur


at anytime


This


specific


means


conflict may


not only


not be


that


resolution of


permanent,


that new con-


flict


will


continually


arise within


the organization.


Conflict management,


the other


hand,


is a process


which


involves


controlling


conflict,


minimizing


effect


or bringing


an end


temporarily.


Hence,


compromise


strategy


outlined by


Follett


(1940,


or the bargaining


politicizing


strategies


advocated by March


Simon


(1958,


129)


illustrate


methods by which


conflict may


managed.


An increasing


number


of contemporary writers has


begun


to emphasize


importance of


conflict management con-


cept


tool


example,


dealing with


Feltner


Goodsell


conflict situations.


(1972


For


stated:


important
fundamental


4-1 a rn an F r


4-ha i'


recognize
igredient
n,~n 1 -F4I -i -


that


conflict


of change;
SI m-v /A/


I










adjusting
involves


permanence


instituting


to drain away and
destructive urges


pute.


of conflict


formal mechanisms


to channel


parties


the
to a dis-


. 711)


The Consortium


A review of


literature


revealed


that


consortium


is a phenomenon


which


evolved logically


from modern society.


Johnson


(1967)


advanced


notion


that


"this


phenomenon


is only


fitting modern


version of


voluntarism which


impressed De


Tocqueville


1830's"


343)


Mathews


(1974)


also maintained


that


inevitable


emergence


phenomenon of


institutional


cooperation has


origin


"American Experiment";


genius


getting work


done


through


kind


of voluntary


association observed by


Tocqueville


traveled


through America


1835


Perhaps


a most significant observation


regarding


principle


association


was made


this


prophetic


French-


man


when he


stated:


It is


easy


foresee


that


time


drawing


able


near when man


to produce,


will be
of himse


ess


alone,


commonest nece


(Cited


in Mathews,


ssarles


of life


1974)


consortium of


today


is more


than


informal


association of


individuals.


an organization










scarcity


resources


rendered


institutions


less


able,


individually,


Although


inadequacy


satisfy


literature


research


needs of


review


involving


their


disclosed

consortiu.


constituency.


a general

m, it also


revealed


that


field


inundated


with


synonymous


expressions


as:


alliances,


cooperatives,


federations,


con-


federations,

cooperation,


interinstitutional


multiagency


cooperation,


cooperation,


interagency


interorganizational


cooperation,

diversity as


intergovernmental


Exemplified by


these


agreement.

expressions


Such

incorporates


many


kinds of


associations.


illustrate


further,


Levine


et al.


(1969)


defined


intergovernmental


agreements


"arrangements


under which one


or more governmental


units


conduct an activity


jointly


or in cooperation


with


one


more


governmental


units"


128)


Webster's


New


Inter-


national


Dictionary


defines


consortium as


"any


association


a common


end.


" Hansen


(1974)


described


consortium as


"an association of


interest of


two or more


parties"


However,


purpose of


this


study,


these


trans-


positional


formal


expressions will


association of


refer


explicitly


two or more


autonomous


to a voluntary


institutions.


Within


context of


above


definition,


following


criteria,


as outlined


1977


Consortium


i-i rectonrv .


Were


sat.i fi sfed -


Pa~~h


cn nsonrti urn *


^Was a










tangible


institutions,


evidence of


long-term commitment of member


had multiacademic programs


(Lancaster,


1969;


Patterson,


1975a;


Patterson


Burns,


1977)


Statutory


ephemeral


bodies,


ad hoc


informal bilateral


combinations


agreements,


were excluded.


Historical


Development


the Concept


Lewis


Patterson


(1975b)


asserted


that,


although


organizational


independence has


been a


deeply


rooted


tradi-


tion,


cooperation


by no means a


new phenomenon


For


example,


founding


Oxford


College


1249


been cited by


scholars


the beginning


cooperation


between


institutions


of higher education


Among


American


institutions


of higher


education,


Lewis


Patterson


(1975b)


reported


that


"the


first


voluntary


association


together


of colleges


academic


United


purposes was


States


formally


the Claremont


Coll


joined


eges


in 1925"


Shortly


after


this


beginning,


in 1929,


the Atlanta


University Center was


begun


Patterson,


1974,


Subsequent


this,


however,


the momentum acceler-


ated


such


that


institutions had


formed


consortia


1965


Patterson,


1971b,


Inconsistent with


latter were


results


obtained by


another


1965


survey


which revealed


that


there


were


1,017


consortia


in existence










formal


organization or


independent


government"


342)


1974,


approximately


consortia


involving


nearly


1,000


institutions


of higher


education had been organized


Patterson,


1974,


132-170).


year


later,


this


number


increased


1,100


institutions


consortia


Patterson,


1975a,


As of


this


writing,


a substantial


number


cooperative arrangements


formal


linkage


systems


been


organized


throughout


country


(Connors


et al.,


1974;


Patterson,


1975c,


1976;


Patterson


Burns,


1977).


Consortium Typologies


Although


variety


of characteristics


typical


among


consortia


as well


possible


uniqueness of


each


one


formed makes


it difficult


to categorize


them,


a number


efforts


have been made


sort


them out


provisionally


(Andrew, 1964;

Patterson, 1970


a congruent


Connors

; Wilson,


position


et al.,

1965) .


when he


1974;


Donovan,


Lancaster


advanced


1965;


(1969)


the notion


provided


that


although


the movement


is characterized by


little


consensus


typologies,


the extant


literature


focu


ses


on such


distinguishing


characteristics


voluntary


or statutory,


or multiinstitutional,


partial


and institutionally


'bilateral'
(3)
restricted










In Guide


Interinstitutional Arrangements:


Voluntary


Statutory,


Connors


and associates


(1974)


utilized a


comprehensive


typology which


included


such


categories


as:


formal multipurpose


consortia,


Title


cooperative


arrangements,


cooperative


library


arrangements,


special


purpose consortia,

associations of pr


state


divate


systems,

colleges


interstate


and


compacts,


universities,


state


national


higher


education associations,


international


educational


cooperatives.


Perhaps


the most extensively used


typology


field


today


one


advanced by


Franklin


Patterson


(1974)


This


tripartite


typology


refers


to collaborative


arrange-


ments


cooperative,


service,


Title


consortia


Cooperative


consortia.


primary


purpose of


coopera-


tive


consortia,


to a greater


lesser


degree,


been


joint academic


However,


planning


a secondary


cooperative


and overlapping


academic programming.


purpose has been


provide a


service


function.


Service


consortia.


These


consortia


utilize


cooperation


principally


to provide


their


constituent


institutions


with


one


or more


services.


These may


or may not be


academic


nature.


As of


this


writing,


there


were


three


types


em~~~~~~~~~~mr C' Y tnr 1cn 1% n -C -- ,ah1 -, nl m


-r nt-ti 1. ..r~i v'r'r


nnn rr nvC; 7


rr n. Y1Tlnn


'- lV -^










survival


life.


often


These


isolated


institutions


from


were


the mainstream of


provided assistance


academic


through


provisions


Title


Higher


Education Act of


1965,


such


that


they might be


able


to ameliorate


themselves


through


cooperation


with other


institutions.


They were


more often referred


"developing


institutions"


Patterson,


1974,


24) .


According


to Hodgkinson


(1974),


prior


this


act,


many


institutions


comprising


Title


consortia


. were


in danger


of extinction"


46) .


Economic


Potential


logic


consorting


evolved,


conceptually,


from


the notion

members to


resource


scarce


that


collaboration should enable


benefit economically


pooling,


resources,


through mutual


joint management of


and by


.rticipating

association

latively


efficient allocation of


resources


to satisfy


institutional


needs


Patterson,


1974,


. This


belief,


along with


inherent


possi-


abilities


limiting


duplication


competition,


caused many


contemporary writers


express


con-


currlng


opinions


regarding


great economic potential


the consortium


Johnson,


1967;


Jordan,


1970;


Zimmerman,


1968)


Wells


1967)


stated


that










In addressing


the question of


consortium economics,


Lewis


Patterson


(1971b)


advanced


notion


that


one


regarding
consortia
increase
diminish


few clear
financial


that an


its


cut answers


implications of
institution will


operational


them,


costs,


a result of


joining


a multipurpose


consortium.


A different


opinion


was


provided by


Elliott


(1974)


when he


stated


that


consortium of


educational


institu-


tions


save


usually


two objectives--to


money"


further


improve


quality


justified his


assertion


as he discussed


operations


the consortium in which


institution


a member.


We have
tional


students


broadened and


improved


programs by making


tak e


courses


educa-


it easy r
at several


institutions.


We have


saved money


and


improved


services


through


common


purchasing.


Although


ultimate goal


of cooperation among post-


secondary


institutions may


to expand


educational


opportunities


while


preserving


diversity


among


institu-


tions,


Miller


(1974


believed


that


the end result


should be


more


effic


ient


utilization of


resources


Perhaps


it will


suffice


to conclude


that,


even


though


consortium seems


to have


unlimited


potential,


"until


comprehensive


data


are


acquired


through


research,


their










Organizational


Structure


interinstitutional


consortium usually


involves


institutions


of higher


education


such


as community


colleges,


colleges,


universities.


Each has


a board of


directors,


an executive director,


a staff,


an executive


committee


possibly


numerous


ad hoc and


standing


committees


(Grupe,


1975;


Patterson,


1974)


the majority


these


formal


organizations


Franklin Patterson


(1974)


observed


a simple


form of


gover-


nance.


The board


of directors


consisted


presidents


the member


institutions


and had


responsibility of


formulating policies


the organization.


Beneath


board may


a number of


characteristically,


with


institutional


one member


committees,


from each


institutions


involved.


These


committees were


valuable


the director


that


they provided


for:


an exchange


of novel


ideas


across


institutional


lines,


the development of


the development of


new programs


faculty


consideration,


commitment


organization.


(pp.


43-44


Governance


Decision-making










articles of


incorporation and by-laws,


statements of


agreements,


and oral


agreements


3628A)


According


to Franklin Patterson


(1974),


the economies


consortia


take


their


configuration


in response


to a


continuing


tendency


for participating


institutions


pursue


essentially


autonomous directions,


irrespective


the kind


umbrella


they


are


under.


Secondly,


tendency


participating members


to leave


governance


the hands


institutional


presidents,


who


themselves


represent


institu-


tional


autonomy


who


reflect


competing


constituency


pressures


decision-making processes


internal


their


institutions,


accounts


very


limited


power of


directors.


This


germane


issue could affect


survival


service


consortia


future


Service


consortia.


board


usually very


large


unable


to meet


conveniently with any


great


frequency.


According


to Franklin Patterson


(1974)


as a decision-making
consortium board is


body
less


the
than


service
likely


involve


president-directors deeply


frequently


that a


and one


seat on


gains


the board


impression


service


consortium


tends


rate


very


in a


coll


ege president'


priorities.


In fact,


there


were


instances


where


a member


insti-


tution' s


financial


commitment


a service


consortium


43)


. 45)










reached.


The director's


leadership exists


only


extent


to which he


is able


to persuade


institutions'


presidents.


Most


importantly,


first


perceived


objec-


tive of


institutional


presidents


save money--to


maintain a minimal


investment


consortium operations


with


the hope


that something


good


will happen


Patterson,


1974,


46-48)


Cooperative


consortia.


The cooperative consortium


presents


a different


set of


conditions


governance.


Cooperation requires


participating


that


chief


colleges


executive officers


universities


sit on


governing


board,


as only


presidents


can


commit


their


institutions


significant cooperative


arrangements.


ultimate decision-making power must


therefore be


vested


presidents


Accordingly,


Patterson,


1974,


a consortium of


48-49


this kind


can diffuse


subordinate


institutions


operating


in order


leadership


secure


among


continuing


participating


initiative on


each


campus.


This


possible because


active


involvement


can be maintained


among


participating


institutions


through consortium-related officers


responsible


to both


their


individual


institutions


consortium.


example


this


that


an assistant director


on each


campus










Potential


a good relationship


between


president and


consortium director;


Conmmi tment


concept of


interinstitutional


cooperation


Ambassadorial


general;

ability;


Relationship with


faculty


at home


institution;


Interest


in a


particular


aspect of


consortium operations.


Patterson,


1974,


this


kind


of consortium,


principal mission


assistant


sortium


director


integral


institution'


to work


a part of


own


autonomous


toward making


his or her own


program


con-


campus


Patterson,


1974,


Institutional


autonomy.


consortium evolved


from


an environment

self-government


characterized by


a strong


tradition for


independent development among


colleges


universities.


So deeply


entrenched was


isolationism


among postsecondary


institutions


that only


during


past


decades


have


significant cooperative


arrangements


emerged


(Jordan,


1970,


Aiken and Hage


(1968)


others


(Jordan,


1970;


Patterson,


1974)


observed


that
















resources


915)


For


example,


Averill


(1974)


stated


that


'autonomy'


s a


simple-minded,


fac
be


t


that many


little more


single-minded,


attempt


not


account


f


a consortium appears


than a


clutch


to
or
to


separate


institutions
lust after T


held


itle


together
II funds.


a common


Another view


autonomy


issue


was


provided by


Averill


(1974)


when he


suggested


that


the blame


for the


failure


many


consortia has


been


placed on


institutional


autonomy


rather


than


consortium staff.


In regard


to compulsory


coordination of


postsecondary


institutions


that even


and/or


though


state


there


agencies,


some writers maintain


recognized need


cooperation


coordination among


these entities,


there


also a


general


reluctance


to engage


in such


efforts


(Hansen,


1974;


Wattenbarger


& Hansen,


1975)


Perhaps


this


aversion may


appropriately


summarized by


Institutional


ese


consortia
. Such


days,


ought


following:


autonomy is,
an essential


to protect


compulsory


particularly
value which


perpetuate.


coordination


likely


to have


bad results:


uniformity


provincialism.


(Averill,


1974,


Conflict


Within


the Consortium


When


reality


autonomy


inherent competi-


tion characteristic of


institutions


in a


consortial


rela-










substantially


threatened by


conflict.


Jordan


(1970)


discussing


this


idea,


advanced


the notion


that


inter-


action of


two


forces


that operate within


consortium--the


drive


autonomy


the movement


cooperation--engenders


third


force,


conflict


173)


Another


study


revealed


that cooperation led


competition and


conflict.


However,


most


conflict


was


directed


toward


central


office of


consortium


(Lancaster,


1969,


This


observation


is very much


consistent


with


views


held


West


(1968)


regarding


emergence


of conflict and


competition


with


increased


levels


interdependencies


cooperation and


conflict are basic


inter-


dependent relationship


existing


in a


consortium,


some


writers


Hylton,


have


1962;


stated


West,


(Lancaster,


1968)


1969,


then


1970;


Litwak


possible


that


degree


sortium


age,


of conflict


could


size,


within


correlate


predictable


positively with


heterogeneity


areas


such


number


con-


variables


services


per-


formed.


In support of


preceding


idea


the assertion by


Lancaster


(1969)


that


conflict


which


develops within


consortium seemed


to cluster


around


four


central


problem


r c










Heterogeneity


of member


institutions


attempting


to seek


common goals,


Administrative


procedures


consortium develops.


(pp.


and management as


81-82)


One of


the conclusions


reached by


Silverman


(1970)


subsequent


to his


study


consortium provides


additional

concluded


information on membership heterogeneity.

that


reward


laden


when


function will


be less


the organizational


tives have heterogeneous


operational
tions, or n


goals,
eeds.


conflict-


representa-


or complementary


perspectives,
p. 5213A)


expecta-


an Approach


to Community


Education


Fundamental


consortium concept


coordination necessary


to reduce


is cooperation


competition and


eliminate


waste


caused by unnecessary


duplication of


resources.


basic


tenet of


this


concept,


growth


and development,


in many ways


remarkably


congruent


community


education movement of


today.


The community


educa-


tion


concept emerged


1920s


(Clapp,


1939,


did


consortium concept.


Like


consortium movement,


the community


education movement,


reported by Olsen and


Clark


(1977),


been


gaining momentum in


this


country


past half


century


(pp.


62-73)


In fact,


consortium










the country.


National


Center


of Community


Education


Martin


Seay,


1974,


367) ,


Jacksonville


Consortium


(Ordinance


75-109-68),


Independent


School


District


relationship with


City


of St.


Louis


Park


are


explicit


illustrations.


components of


community


However,


when


education are


philosophy


viewed


in conjunction


with


the basic


apparent


that


premises of


ideals


the consortium,


consortium are


is readily


included


among


those of


community


education.


According


to Clark


(Note


other


proponents


the community


education movement


(Decker,


1975;


Kerensky,


1974)


, community


education.


This


education

philosophy


an operational


emphasizes


philosophy


interinstitutional


interagency


cooperation and


coordination as


one


major


components.


Another


component emphasizes maximum


utilization of


Both


available


these


resources


components


(Olsen


are


Clark,


essential


1977,


the con-


sortium concept.


summary,


perhaps


it suffices


that


community


education


advocates


perceive


the consortium as


an appro-


private


delivery


system


that may


substantially


satisfy


specific


components


this


provocative movement.


This


clearly


evident


views


expressed by


Heath


and Seay










community


agencies


organized


for the


purpose


of coordinating


community


educational


activities"


332)


A 1973


survey


conducted by


the American Association


of Community/Junior


Colleges


provided


concurring


results.


This


survey


revealed


existence


colleges


a common desire


"increase


within


interinstitutional


the community/junior


cooperation as


way


of expanding


services of


community


junior


colleges


to society.


" (Witter,


1974,


The overall design of


study


the methods


utilized


are


presented


following


chapter.

















CHAPTER III

DESIGN AND METHODOLOGY


procedures


utilized


in the


study


are


presented


this


chapter


Design and Methodology.


Five headings


are


provided


this


purpose:


Overview


Study


Design,


ample,


Instrumentation,


Data


Collection,


Data Analysis.


Overview and Study


Design


this


theoreticians


study,


theoretical


advocated


as being


propositions

capable of


which


predicting


conflict


in an


organic


national


interorganizational


setting were


identify


ed from


literature.


The degree


to which


these


propositions


were


effective


in predicting


conflict


the consortium,


an interorganizational


setting,


determined by

presidents of


perceptions of


institutional


consortium directors


members.


Additional


analyses


were


made


to determine


whether


or not relationships


existed between


these


propositions.


Analyses


were also,










literature


suggested


as being probable


determinants


conflict


the consortium.


field


portion


this


study was


conducted


in four


phases.


first


phase


involved


identification of


target


population


subsequent


selection


of a sample


from


this


population.


Phase


involved


the development of


an instrument


which


could appropriately


address


questions


under


investigation


this


study.


This


process


is explained


instrumentation


section below.


Data


gathering was


exclusive


concern of


third


phase.


This


process


involved


sample


population


as well


several


widely used


publications.


fourth


and


final


phase


required


that


the writer


analyze


the data


terms


questions


which


gave


direction


this


study.


For


purpose,


well


established


statistical


procedures


were


utilized.


research


design


this


study


post


fact


involves,


discussions


primarily,


sample,


survey


technique


instrumentation,


In-depth


data


collection


data anal


components


this


technique


are


pro-


vided


following


sections.










references


this endeavor were


1977


Consortium


Directory,


"Profiles


of Consortia"


the book,


Colleges


in Consort.


hundred


fifteen


voluntary


interinstitutional


consortia


were


listed


these


publica-


tions.


sample


population was


derived


from


total


population in a manner which


ensured adequate


representa-


tion


research


questions.


this


respect,


stratification and


randomization


were necessary


components of


sampling procedure.


ensure


an adequate


representation


of consortia


various


sizes,


entire consortium population was


stratified


into


four


groups


consortia:


those


con-


sisting


a membership


, (b)


those


consisting


of a membership between


and 10,


those


consisting of


a membership


between


11 and


those consisting


a membership of


or more.


From


stratification,


five


consortia


from each


group were


randomly


selected


for this


portion of


sample


population.


Randomization was


achieved


through


use


table of


random numbers.


previously


selected


sample


size


variable


was


used


to determine


variable.


This was done by


stratifying


sample


derived


size


variable


into










this


procedure


did not


provide a minimum of


five members


to each


age group,


last


groups


had


fewer


than


five members.


Because


this


situation,


further


selection by


random process


was


conducted


until


each of


these


groups had acquired


minimum number of


five


con-


sortia.


To obtain a


sample


consortia


to represent a broad


continuum of


services


services,


that each


writer


consortium


obtained


provided


number


membership


from


1977


Consortium Directory.


Consortia


previously


selected


size


variables were


then strati


field


into


three groups.


These


stratifications


consisted


consortial


groups


those


that


provided 10


different


services


those


that


provided


dif-


ferent


services,


those


that


provided


or more


different


services.


This


procedure


satisfied


established


criteria


at least


five


consortia


to each


category.

Criter


Therefore,


that were


further

utilized


selection was

to determine


necessary.


whether


not a


consortium i


composed of homogeneous


or heterogeneous


members


were


organized


into


six categories.


principal


references


were


that were


the Education


utilized


Directory


to derive

Colleges


these

and U


categories


universities


-. F' A. -- t .


- -


(b


In~r rri ,I


.. i I


F


P


1










Degrees


Offered by


College and


Subject.


this


respect,


each


consortium was


analyzed


to determine


whether or


institutional members


had approximately


same


enrollment,


same


calendar,


had approxi-


mately


same


financial


status,


were


public or


private,


were


sectarian


or nonsectarian,


were


four-year


institutions,


two-year


institutions,


or graduate


degree


granting


institutions


only.


Homogeneity


or heterogeneity was


determined by


extent


to which


consortium membership differed


in congruency with


these


criteria.


For example,


the members of


a consortium


were not


sectarian,


then


this


represented one


criteria


where


the membership differed.


With


these


parameters


established,


this


portion of


sample


population


was


determined by


grouping


consortia


previously


selected


the age


size


variables


into


categories


those differing


criteria


less,


those dif-


fering


three


four


criteria,


those differing


five


or more


criteria.


Since


this


procedure


satisfied


established


criteria


at least


five


consortia


each


category,


further


selection was


needed.


conclusion of


process


outlined above,


consortia


comprising


secondary


institutions


had


-t .- S .t


r.l rr


r


r


I










Instrumentation


ins trument


used


to collect


data


for this


study


was


a structured opinionnaire.


writer


according


It was


factors


designed by


literature which were


relevant


problem in


A Likert-type


scale


study


consistent with illustrations


cited


Turney


and Robb


(1971,


140)


was


utilized.


This


type


sca


allowed


ass


ignment of


numerical


values


available


responses


eac


h item on


the opinionnaire.


Hence,


respondents


responses


were


readily


transferable


into


numerical


values.


first draft of


instrument was


submitted


several


experts


within


the consortium movement.


These


experts


were


requested


to evaluate


this draft of


instru-


ment


terms


of item appropriateness


clarity.


They


were


also


asked


to make


recommendations


regarding


overall


their


format of


opinion


instrument


would assist


items


in accomplishing


which


objectives


study.


recommendations


that


were


provided


resulted


in a


major


revision of


first


draft of


instrument.


Con-


sequently,


items


wh.,


sought demographic


information,


or data


which


were


already


available










additional


information


included.


Finally,


several


open-


ended


items


were


added


form of .the


instrument which


was

that


designed for

these items


the

would


consortium directors.


d


provide


It was


the writer with


suggested


descriptive


information


that would allow


a better understanding of


respondents'


responses.


Subsequent


this


revision


and consistent


with


recommendations


consortium experts


the writer's


doctoral


committee,


instrument was


then


submitted


another


group of


experts


within


consortium movement.


Information obtained from


this


panel


indicated


that


further


revision


wa s


necessary.


This


study


involved


two


different


groups of


respon-


dents.


Hence,


writer


developed


forms


of parallel


instruments


Appendix C


these


complete


different referent


derivation of


groups.


these


(See


forms of


the data


collection


instruments.)


Data


Collection


procedures


were employed


data


collection


process.


first of


these


involved an


instrument


designed on


order


structured


opinionnaire.


second


procedure


involved


writer


ascertaining


demo-










opinionnaire,


along with a


cover


letter,


general


information sheet,


ana a


return envelope were mailed


referent


were


group members.


subsequently


After


conducted.


thi

Each


mailing,


follow-up


two

took


follow-

place


approximately


days


following


preceding mailing.


Data Analysis


The

study was


principal st

chi-square.


:atistical

According


procedure u

a to Roscoe


tilized in


this


(1975)


others


(Babbie,


1973;


Fox,


1969)


this


statistical


technique


testing


provides


research


researchers


questions


with


a generalized


involving


procedure


tributions


con-


training


was


nominal


utilized,


or higher order


therefore,


data


to determine


whether


Chi-square

the observed


frequency


distribution or


frequency


that


re spon-


dents


selected a


particular


response differed significantly


from


expected


frequency


distribution


these


responses.


An additional


purpose of


chi-square


test


was


to determine


there


were


significant differences


between


responses


of consortium directors


presidents


institutional


members.


For


these


analyses,


level


significance


was


considered


suitable.


Another purpose


the data


analysis was


to determine










computer program


Package


utilized


Social


this


Sciences,


analysis,


included


Statistical


correlational


procedures:


Kendall'


Tau and


Pearson's


Both


these


procedures


were


appropriate


this


study,


since


data representing


three


levels


of measurement were


needed


answer


research questions


study,


Kendall'


Tau being


especially


suited


ordinal


data.


However


satisfy


procedural


consistency


requirement of


one


procedure


within a


study,


Pearson Product Moment


Correla-


tion


was


utilized


principal


correlational


procedure.


Kendall'


was


merely used


substantiate


findings


Pearson's


In conjunction


with


above,


types


of comparisons


were


conducted.


comparison


was


between


responses made


consortium directors


a group


versus


collective


membership of

Secondly, com


presidents of


parsons


institutional members.


were made between responses


provided


consortium directors


presidents


of institu-


tional members


within each


consortium.


Results of


data


analysis


forth


this


chapter


are


presented


in Chapter
















CHAPTER IV

RESULTS AND ANALYSIS OF DATA


This


chapter


first section


presented


is a review of


three sections.

questions under


The

investi-


nation in


this


study.


Secondly,


introduction which


follows

results


questions

presented.


describes the

This section


format by which


contains


a discussion


return rate


initiates


presentation of


data.


third and


final


section


reports


findings


study.


Research


Questions


To what extent do


consortium directors,


institutional


presidents


agree


with


statement,


the greater


membership


s dependency upon


a limited


consortium resource,


joint decision-making


greater


the membership'


regarding


allocation of


desire


that


resource?


What


extent


to which


consortium










activities


to occur,


greater


the desire


joint decision-making


regarding


scheduling?


What


relationship


between


extent


which


consortium


goals


are


achieved


extent


which


consortium goals


perceived by


of institutional members


consortium directors,


and


differ


institutional


presidents?


To what extent do


consortium directors,


institutional


presidents


agree


with


statement,


greater


within


number


consortium,


of independent informational


greater


sources


difference


membership'


perception of


consortium?


To what extent do


consortium directors,


institutional


greater


presidents


channeling


agree


with


of information


statement,


within


consortium,


greater


difference


the membership


s perception


consortium?


What


relationship between


consortium and


to be


engendered


extent


to which


within areas


conflict is


predicted by


perceived

theoretical


propositions?


What effect does


size


consortium


membership


have


upon


extent


to which


conflict is





--










to which

areas pr


conflict is


edicted by


perceived


to be


theoretical


engendered within


propositions?


What effect does homogeneity or


heterogeneity of


consortium membership


have


upon


the extent


to which


conflict


is perceived


to occur within areas


predicted by


theory?


Introduction


Results of


analyses


variables


under


investigation


centages


are


and media


reported

n scores.


terms


Chi-square


frequencies,


tests


per-


and Pearson


Product Moment Correlation


were


also


utilized


purpose


illustrating


interrelationships


among


and be-


tween


the dependent


independent variables.


Statistical


analyses of


these


variables


are


presented


tabular


form


this


section.


In addition


tabular


presentation,


format


data


presentation also


includes


narratives.


These


descriptions outline


the manner


in which


respondents


responded


to each


variable.


Research


questions


one


through


five


represent


theoretical


basis


study.


These questions


contain


the dependent


variables


which


are


reported


this


chapter










other

factor


factors

s are r


associated


with


referred


consortium.


"age,


" "size,


These


" "service,


"homogene i ty/he te rogenei ty"


variables.


total


opinionnaires


were


mailed


adminis-


trators


in 30


consortia.


Included


were


institutional


presidents


consortium directors.


hundred


seventy


-six


questionnaires


were


returned by


these


adminis-


trators.


combined


This


referent


represented


a return


groups.


rate of


opinionnaires


that


were mailed


consortium directors,


23 were completed


returned.


this


This


group.


represented


presidents


a return rate


institutional members


returned


opinionnaires mailed


them.


return rate of


was


achieved


from


this


group of


respon-


dents.


these


returns,


however,


or 53% were


completed.


Only


completed opinionnaires


were


used


statistical


analysis


this


study.


return


rate of


opinionnaire


this


study


reflects


a high


degree of


cooperation among


referent


group


members.


This


was


particularly


gratifying


since


recent research


that involved mailed


questionnaires


this


population did


not achieve


comparable


results.


It was


also


satisfying because


many


authors


research


texts










than


or 50


percent are


common.


Higher


percentages


are


rare "


414)


The obtained


rate


return


was


not without much


effort.


opinionnaires


follow-up


were


requests


conducted.


return of


(See Appendix D


follow-up


were


letters


However


received subsequent


, analy


to each


returns


follow-up


letter


that


did not


reveal


a response


pattern


which


differed


from


initial


returns.


This


suggests


that


returns


received after


follow-ups


were


not biased


in any way.


Results of


a chi-


square


also


comparison of


revealed no


nonrespondents


statistically


respondents


significant difference


between


groups.


Results


Findings


An examination of


responses


provided by


con-


sortium directors


presidents of


institutional


members


revealed


that no difference


existed between


these


respondents'


responses


dependent variables.


There-


fore,


these


data


were


combined


composite


analysis


reported


in Table


This


table


illustrates


frequency


percentage


distributions


responses


dependent variables.


In addition


these


types


-- F











Tabi


A Profile


the Compo


site


Responses


Theoreti


Propositionsa


Variables SAb A N D SD Median


Resource 52 67 23 8 2
(34.2) (44.1) (15.1) (5.3) (1.3) 1.86

Scheduling 46 77 24 5 -
(30.3) (50.7) (15.8) (3.3) 1.89

Goals 32 76 35 8 1
(21.1) (50.0) (23.0) (5.3) ( .7) 2.08

Informational 20 50 46 34 2
Source (13.2) (32.9) (30.3) (22.4) (1.3) 2.63

Information 34 53 48 17 -
Channeling (22.4) (34.9) (31.6) (11.2) 2.29


aNumbr
bi


in parentheses


headings


indi


cate


shown


percentages


" "A


" "N


D," and


represent:
and strongly


s trongl


sagree


agree


agree


neither


agree


nor


agree


, disagree,


respective


upon


limited


membership


allocation


consortium


s desire


that


resource


joint


resource


decis


Tabi


, the


greater


ion-making


shows


regarding


that


res


pondents


were


in agreement


with


this


proposition.


Only


res


pondents


disagreed.


In addition,


median


score


was


well


within


acceptable


range


of median


scores


these


results.










proposition


membership


that


in joint


"the greater


involvement of


activities which require


scheduling


times


activities


to occur,


greater


the desire


joint decision-making


regarding


scheduling.


" Even


though


3.3%


administrators


disagreed with


this


state-


ment,


not one checked


"strongly


disagree"


category.


However,


15.8%,


indicated


that


they


neither


agreed


nor


disagreed.


Table


illustrates


that


respondents were


in agreement


with


theory


pertaining


to goals.


Further


analysis


these data


illustrates


that


21.1% of


administrators


strongly


agreed


with


statement,


while


indicated


that


they


agreed.


the other


hand,


.0% of


respondents


not agree


with


theory.


this


total,


.3% checked


"disagree"


category.


Only


.7% of


the respondents


indicated


strong


disagreement.


Administra-


tors


who could


not agree


or disagree


represented


23.0


respondents.


Data


presented


Table


show


that


respondents


agreed


with


assumption


that


"the greater


the number


of independent


informational


sources


within


consortium,


greater


the difference


the member-


ship


s perception


consortium,


" while


3.7% disagreed.










"information


channeling"


variable


presented


Table


indicates


that 57.3% of


the respondents


agreed


with


assumption


that


"the greater


channeling of


informa-


tion


within


consortium,


the greater


the difference


the membership


s perception


consortium.


this


total,


22.4%


strongly


agreed.


Although


11.2% of


respondents


disagreed with


this


assumption,


not one


these


administrators


disagreed


strongly.


Perhaps


is more


significant


to observe


that


31.6%


the respondents


indicated


that


they


neither


agreed nor


disagreed


with


this


assumption.


Further


ascertain


response


square

chance


examination of


whether


pattern of


statistical


was


the data


was


or not relationships


two groups


treatment at


considered adequate


these


conducted


existed


within


administrators.


level


analyses.


Chi-


signifi-

Results


these analyses


are


reported


following


sequence


tables.


Table


shows


that


institutional


presi-


dents


agreed


with


theoretical


assumption


pertaining


resource


sharing.


This


compares


with


82.6% of


the con-


sortium directors who exhibited a


concurring


opinion.


assumption


was


not agreeable


to 7.0%


presidents


and


Aa ~ ~ ~ ~ nhn~: l 4- ...1 a- r -4 4,.rn A4-r .4 ~rr lrar~Aan4.v ,4


nY I\~;~nnC~


7nrl ;I; rnnCnr~


A 70.


L Lk










Table


Resource


Row
SA A N D SD Total

45 55 20 7 2 129
34.9 42.6 15.5 5.4 1.6 84.9
Presidents 86.5 82.1 87.0 87.5 100.0
29.6 36.2 13.2 4.6 1.3


7 12 3 1 0 23
30.4 52.2 13.0 4.3 0.0 15.1
Directors 13.5 17.9 13.0 12.5 0.0
4.6 7.9 2.0 0.7 0.0

COLUMN 52 67 23 8 2 152
TOTAL 34.2 44.1 15.1 5.3 1.3 100.0


Note:


Chi-square


= 0.99


aNumbers


in each


cell


represent


count,


row


percentage,


column percentage,


Column headings


total


shown as


II N,


percentage.


I,


" and


"SD"


repres


ent:


strongly


agree,


agree


neither


agree


nor


disagree


, di


sagree,


strongly


sagree,


respe


actively.


A chi-square


value of


0.99


level


revealed


that


groups


of respondents did


not differ


in any


statistically


significant degree


the manner


in which


they


responded


this


variable.


It is observable


from


data


Table


that both


groups


administrators


agreed


very


highly with


propo-


" SA


it "A,










Table


Scheduling


b Row
SA A N D SD Total

38 66 21 4 0 129
Presidents 29.5 51.2 16.3 3.1 0.0 84.9
82.6 85.7 87.5 80.0 0.0
25.0 43.4 13.8 2.6 0.0


8 11 3 1 0 23
Directors 34.8 47.8 13.0 4.3 0.0 15.1
17.4 14.3 12.5 20.0 0.0
5.3 7.2 2.0 0.7 0.0

COLUMN 46 77 24 5 0 152
TOTAL 30.3 50.7 15.8 3.3 0.0 100.0


Note:


Chi-square


= 0.45;


aNumbers
percentage,


in each
column i


cell


represent


percentage,


the
the


count,
total p


row


percentage .


Column h


"SD"


represent


sagree


Only


sagree,


3.1% of


agreed with


readings


shown as


strongly


agree,


and strongly


presidents


this


assumption.


" "A,


I" "N,


agree,


disagree,


4.3%


I,"D


neither


" and


agree


nor


respectively


the directors dis-


Those who could


neither


agree nor


presidents


disagree


consisted of


and directors,


13.0%


respectively


also


observable


that not one


respondent


checked


"strongly


disagree"


category.


" SA










Results


presented


in Table


indicate


that both


groups


of administrators


agreed with


the assumption


relating


goals


variable.


The extent of


agreement was


72.9%


institutional


presidents


consortium


directors.


Less


than


these


administrators


were not


in agreement


with


theorists.


presidents


who


responded


this manner


represented


this group as


compared


8.7%


the directors.


Tabi


Goals


Total


Presidents


84.9


75.0


18.4


7


Directors


15.1


47.8
14.5


COLUMN
TOTAL


21.1


50.0


23.0


Note:


Chi-square


2.28;


Numbers


percentage,


in each
column o


cell


erce


represent


ntage,


count,


total


row


percentage.


column headings


shown as


" "N,


" and


" SA r


it II A.


rt oD,


,










Consistent with


2.28


these


level


findings was


of significance.


a chi-square


This


value


value of


chi-square


level.


was


Therefore,


not statistically


significant at


no significant difference


existed be-


tween


the responses


from


these


two


groups


administrators.


Table


"informational


reports


source"


results


variable.


responses


A chi-square computed


(not


significant at


level)


indicated


that


Table


Informational


Source


Total


Presidents


34.9


84.9


Directors


85.0
11.2


3
13.0


21.7
10.0


34.8


15.1


COLUMN
TOTAL


13.2


30.3


100.0


Note:


Chi-square


.35;


aNumbers
percentage,


in each
column D


cell


represent


percentage,


the
the


count
total


row


percentage.


bColumn headincas


shown as


ft "A


ft "IN,


II


" and


" SA


,


,










no significant difference existed between


responses


institutional


administrators


and


consortium administrators.


Further


analysis


revealed


that neither


group of


adminis-


trators


More


agreed with


specifically,


notion


48.1%


advanced by


institutional


theory.


presidents


34.8%


the consortium directors


were


in agreement


with


"informational


source"


assumption.


degree


disparity was


22.5%


and


30.4%


presidents


directors,


respectively.


An even larger percentage of


these


adminis tra tors


responded


this


variable


checking


"neither


agree


nor


disagree"


category.


This


percentage was


29.5%


for the


presidential


group


34.8%


the directors.


A chi-square


value


1.97


compute d


from


the data


Table


indicated


that


there


was


no statistically


signifi-


cant difference


level between


responses


two


administrative


groups.


This


table


also


illustrates


that 58


presidents


47.8%


consortium


administrators were


in agreement with


assumption


relating


channeling


information within


the organi-


zation.


Although


no one


checked


"strongly


disagree"


category


11.6%


presidents


.7% of


con-


sortium directors


were


in agreement with


theoreti-


cians.


A significantly


large


percentage


respondents










Table
Information


7
Channeling


bRow
SA A N D SD Total

29 47 38 15 0 129
Presidents 22.5 36.4 29.5 11.6 0.0 84.9
85.3 83.7 79.2 88.2 0.0
19.1 30.9 25.0 9.9 0.0


5 6 10 2 0 23
Directors 21.7 26.1 43.5 8.7 0.0 15.1
14.7 11.3 20.8 11.8 0.0
3.3 3.9 6.6 1.3 0.0

COLUMN 34 53 48 17 0 152
TOTAL 22.4 34.9 31.6 11.2 0.0 100.0


Note:


Chi-square


1.97


3 df.


aN umbeh


percentage,


in each


column


cell


represent


percentage,


and


the count


total


, row


percentage.


Column headin


shown as


I, 1(A


" "N,


I, cD


" and


"SD"


represent:


disagree


, disagree


strongly
e, and


y agree,
strongly


agree


disagree,


neither


respe


agree


nor


actively


Analysis


independent variables


was


conducted


determine


the extent


to which


consortia


were distributed


across


different categories


these


variables.


Frequency


distributions


were


utilized


this


purpose.


Table


reports


results


variable.


These


results


indicate


that


26.7% of


consortia surveyed


" SA










years


constituted


16.7%.


same percentage,


16 .7%,


represented


those


that were


years


and older.


From


these


results


appears


that most of


these


consortia have been


in existence


less


than


years.


Table


Distribution of
Represented


the Age of
Consortiaa


0-5 6-10 11-15 16+ Total


8 12 5 5 30
(26.7) (40.0) (16.7) (16.7) 100


in parentheses


indicate


percentages.


The results


recorded


in Table


indicate


that


majority


consortia


consist of


less


than


10 institu-


tions.


More


members


specifically


less


category,


, 40.0%


while


were


26.7%


institutional


were


member


category.


The other


categories,


those consortia


that


consisted of


15 members


and those


that


con-


sisted


or more,


were


both


represented by


.7% of


consortia.


Three


cate


gories


service


variable


are


reported


in Table 10.


first category


consists


f consortia


a 1J umb E? r S











Table


Distribution


Size


the Membership


the Consortiaa


0-5 6-10 11-15 16+ Total


12 8 5 5 30
(40.0) (26.7) (16.7) (16.7) 100


aNumbers in parentheses indicate percentages.






Table 10
Distribution of the Number of Services Provided
by the Represented Consortiaa


0-10 11-20 21+ Total


7 10 13 30
(23.3) (33.3) (43.3) 100


a Nmb


Secondly,


different


in parentheses


indicate


consortia


services


percentages.


this


their members.


study provided 11


Thirteen,


3.3%


, of

A mor


these


consortia


equitable


provided more


distribution of


than


services.


consortia


across


categories


provided


Table


This


table


shows


4-k~n4- az~nl' r 4hn a anlnr n 4nr eat rsi i4 f


t h 3 t" d 3 ~11


tn 71. Al t r


nnn C 7 ; nP


AWn,


nr r










either


do not significantly


differ


from each


other


on any


variables


those


who differed


on as


many


variables.


This


category


contains


33.3%


consortia.


Nine


, or 30.0%,


consortia had members


that differed


three


comprises


four variables.


.7% of


third


sample


category


consists of


in Table


consortia


containing


institutional members


who differed on


five


more


variables.


Table


Homogeneity/Heterogeneity D
Consortium Membe


distribution of
rshipab


0-2 3-4 5+ Total

10 9 11 30
(33.3) (30.0) (36.7) 100


aNumbers


in parentheses


indicate


percentages.


b
Numbers
differences


above
among


eac
the


h


column represent


institutional


number


members


A Pearson


Product Moment Correlation was


computed


determine


if relationships


existed between


variables


under


study


For


purpose of


this


comparison,


significant


level


was


utilized.


Results


of the correlation










these


relationships


existed


among


dependent


variables,


whereas


SIX


were


found


among


independent


variables.


However,


only


incidences


of significant


relationship


between


these


groups


variables


were


revealed


these


results.


Table


Correlation


Matri


Variables


-H *-


ctD

SO4-


Resource

Scheduling

Goals


Information

Information


Source


Channeling


Age

Size


Service

Homogeneity/Heterogeneity


indicates


the existence


of a significant


relationship.


alus
Plus










In response


an open-ended question,


consortium


directors


cited


several


factors


as major


causes


conflict


the consortium.


These


factors,


which are


pre-


sented


reported


in descending


to be


order


institutional


of frequency mentioned,


autonomy


were


turfism;


philosophy,


goals


and objectives


problems;


financial


con-


cerns relating

anxiety; and 1


to dues


and benefits;


institutional


competition;


commitment


faculty


to cooperate.


Another


open-ended


question


concerned ways


in which


conflict affected


the effectiveness


consortium.


consortium directors'

frequency mentioned,


responses,

reported cc


in descending


)nflict as


order


factor which:


limits


cooperation;


limits


goal


achievement,


decreases


faculty


staff


commitment;


efficiency.


forces


res


search behavior;


pondent indicated


increases


that membership


polarization


was


also


end result of


conflict


in his


consortium.


Those


factors


which have been most helpful


in enabling


consortium directors


to manage


conflict were


reported


in descending


order


frequency


as:


leadership


experi-


ence


and expertise of


staff;


institutional


commitment;


faculty


involvement;


trustee


public


support and


expec-


station;


size


geographical


distance.


Additional










Open-ended


questions


were


not developed


presidents


institutional members.


Therefore,


attempt was


made


to ascertain


their


opinion


relative


these


areas


concern.


Summary


To answer


five


theoretical


questions,


data


were


subjected


to frequency


percentage


analyses.


Chi-


square


statistics


were


also


applied


these


dependent


variables


to determine


whether


statistically


significant


differences


existed between


responses


referent


groups.


independent or personal


data


variables


were


subjected


to frequency


percentage


examination.


Correla-


tional


analysis


was


utilized


to determine


interrelation-


ships


existed between


variables.


Analyses were


five


theoretical


dependent


and independent


also done within each


assumptions,


group.


no significant


differences


were


found


to exist between


views


held by the


directors


presidents with


regard


these


assump-


tions.


resource,


scheduling


goals


assumptions were


supported by


these


data.


However,


informational


source


information


channeling


assumptions


were


not supported.










incidences


of interrelationship


were


found


between


dependent


independent


variable


es.


A discussion


findings


reported


in Chapter


will


presented in


Chapter


Implications


, conclusions


recommendations


regarding


aforementioned


findings


will


presented.

















CHAPTER V


DISCUSSION,


CONCLUSIONS,


IMPLICATIONS,


AND


RECOMMENDATIONS


Discussion


This


study was


designed


to describe


interorganizational


conflict


in voluntary


interinstitutional


consortia by


studying perceptions


of consortium directors


and presidents


consorting


propositions


institutions


describing


toward March and


organizational


Simon's


conflict in


traditional


organization.


Moreover,


purpose


this


study was


test


extent


to which conflict


theory


developed


for traditional


organizations


applicable


interinstitutional


consortia.


Included


this


investiga-


tion was


an examination of


relationship between


theory


and a


number


of variables


associated


with


consortia.


Thirty voluntary


interinstitutional


consortia


were


randomly


selected


from


throughout


United


States.


These


consortia


comprised a


administrators.


sample

Thirty


population which


these


consisted


administrators were


-.n v1 A


I ~~r -


I -^


*










Eighty


-Six


percent


returned


questionnaires were


used


study.


returns


utilized


study were


omitted be


dents,


cause of


several


incomplete


factors:


returns,


(a)

(c)


improper


too


respon-


limited


experience


possessed by


respondents.


To protect against


improper


respondents,


the design of


instrument was


such


that


this writer


could


readily


discern


whether


or not


each opinionnaire had


been


completed


the respondent


to whom it was


forwarded


or whether


it was


completed by


a subordinate


who


had no consortium experience


and/or


no decis


ion-making


authority within


the organizational


hierarchy


opinionnaire

Several


the consortium.


were designed

reasons were


The


for

given


first


this


two questions


purpose.


for not responding


opinionnaires:


institutional


president


was


vacationing


traveling


abroad,


too much


time


was


needed


to complete


instrument,


staff


members


were


employed,


institution had


participated


consortium only


to a limited


of consortium did not apply


degree,


or did not


lend


this


itself


type


to what


instrument sought


existed


to determine,


presidential


vacancies


offices


Several


previously mentioned


reasons


that


F i


__I i.'


mi


rr 1 'I


I I


I










conj unction


with


previously mentioned


problem of


mailed


questionnaire,


seems


that


a good


representation


was


achieved.


Review of


Theory


Propositions


on conflict advanced by March


and Simon


(1958,


122-128)


to describe


nature


of conflict


organizations


addressed


in this


study


are


follows:


The greater the mutual


dependence on a


limited


resource,


greater


felt need


joint


decision-making with


The greater


respect


interdependence


that resource.


timing


activities,


the greater


felt


need


joint


deci


sion-making with respect


less


to scheduling.


subjective operationality


organi-


national


goals,


the greater


the differentiation


individual


goals


the organization.


The greater


sources,


number of


the greater


independent


information


the differentiation


per-


ceptions within


organization.


greater the


processing,

perceptions


channeling


the greater


within


information-


the differentiation of


the organization.


- -










presidents


ship


agree


with


s dependency upon a


greater


regarding


percent of


the membership


the allocation


institutional


statement,


limited c

's desire


the greater


the member-


'onsortium resource,


joint decision-making


that resource?"


presidents


Seventy-eight


consortium


directors


agreed


with


this


question.


Agreement


with


question necessarily meant agreement with


theoretical


proposition


from which


the question was


properly


derived.


This means,


therefore,


that


theory


as set


forth


Chapter


the Review of


Theory


above


was


supported


these


findings.


It also means


that


assumption


that


.the


theory was


applicable


interorganizational


setting


was


confirmed,


the respondents


who


provided


their per-


ceptions


regarding


this


variable


were


administrators


engaged


in consortium activities.


By providing


support


theory,


these


findings,


conjunction


with


interdependencies


literature,


associated


with


further


limited


suggested


resources


that


created


internal


pressure


institutional


presidents


pro-


tect


their own


resources


more


securely.


This


necessarily


caused


pressure


or a desire


to control


allocation of


those


tional


consortium resources


resources.


that


Accordingly,


impinged


theorists


institu-


described










Pressure


from many


conflict regarding


different sources within


resources


emanated


consortium.


For


example,


some of


conflicts due


resource


sharing


re-


ported


open-ended questions were derived


amount of membership dues


the amount


assessed by


of benefit or perceptions


from:


the consortium,


unequal


benefits

different


accruing


certain members,


institutions,


philosophical


fferent needs

differences,


concerns


about


location of


particular projects,


differences


in institutional


funding,


a general


perception


that


losses will


result


from sharing.


Obviously


these


concerns


in an


interinstitutional


setting may


resolved only


through


participation


the decision-making


process


jointly with


others.


only


natural,


therefore,


know


edgeable


increasingly


desire


institutional


to participate


representatives


joint decision-making


as more of


In addition,


institution's


the evidence


resources


revealed


become


involved.


that within


some


consortia


there


a general


reluctancy on behalf


membership


to engage


in activities


that


will


affect


members'


budget or


staff


substantial


degree.


This


consistent with


the attitudes


many


presidents who


have


been


unwilling


compromise


issues,


continue


a -I -, -


,-, r,, na 4-a F r -' 4 1 1A ~ 4- rnn1 nfl, ri1n rIC L f lCnr


r


~Crl~nnC~


r


r


n .~1.


n hm n n C n F


n ~ In r n 3n ~ t n r p


nr -










need


to consort.


The apparent


failure


institutional


administrators


trust each


other,


the generally


commitment


consortium exemplified by


faculty


and


staff


should


also "be


considered


as causative


factors


that


hindered


cooperation.


Evidence


seems


indicate


that


intensity


desire


joint decision-making


depends


upon


degree


which


the organizational


resources


are


limited.


obvious


that no


problems


are


associated


with dividing


unlimited


pie.


Another


assumption was


forth by


the question:


"What


the extent


to which


consortium directors,


institutional


presidents


agree with


statement,


greater


involvement of


the membership


in joint


activities


which


require


scheduling


times


activities


occur,


the greater


the desire


joint decision-making


regarding


scheduling?"


This question


was


agreed


to by


presidents


consortium directors.


A percentage


this magnitude


in support of


this question also


provided


substantial


support


theory


from which


the question


was derived.


In addition


to confirmation


theory,


these


findings


also supported


assumption


presented by


theorists


that


theory


applies


to both


organizational


-I a I -I


-I










involved


interdependencies


associated


with


sharing


limited


personnel,


resources,

pressure r


i.e.,


'elated


equipment,

to schedule


facilities,

na arises.


and

Usually


this


pressure


internal


to each


institution,


exhibited


the consortium


setting


institutional


president.


Therefore,


pressure


upon


these


administrators


to control


their


own resources


engenders


a desire


to control


timing


activities


that encroach


upon


these resources.


This


creates


a desire


to participate


in decisions made by


other


administrators


relative


to scheduling


use of


shared resources.


Considerable


evidence


in support of


the aforementioned


conditions


be observed


consortia


that are


composed


institutions


these are


in close


types


proximity


of consortia


to each


that may


other.


engage


Typically,


in exten-


sive


interdependencies,


interdependenci


involving


resources


that are


very


basic


to each


institution.


For


example,


one


or more


faculty members may work


on more


than


one


campus,


students


from


the different


campuses may


attend


a common


class,


expensive


laboratory


equipment may


be shared


several


institutions,


utilized by


or a planetarium on one campus may


the consorting


institutions.


situations


such


these,


cooperative


scheduling


essen-


* *~~~~~~~. mn1 -.. -i-z A------------I -


..


i


I L -


I '


~ ur r.


m~ r










decision-making


regarding


scheduling


use of


these


resources.


Seventy-one


percent of


total


responses


from


presidents


directors were


of institutional


in support of


relationship between


members


the extent


consortium


the question:


to which


"What is


consortium


goals


are


achieved and


extent


to which


consortium goals


institutional members


sortium directors,


differ,


as perceived


institutional


con-


presidents?"


These


administrators,


therefore,


substantiated


theory


from


which


the question


was


derived.


They


also


provided addi-


tional

respect


support


notion advanced by


applicability


theory


theorists with

an inter-


organizational


setting.


Although


respondents


indicated


that


there


were goal-related


problems


which


were attributed


per-


ceptions

goals, t


concerning


his


how well


no means


implied


consortium achieved


that all


goal-related


problems could


opposite


be categorized


suggested by


accordingly.


responses


In fact


the open-ended ques-


tions.


Evidence


provided by


these questions


strongly


suggested


that many


problems


this


category


are


caused by


attitudes brought


the consortium by


institu-


__




Full Text
xml version 1.0 encoding UTF-8
REPORT xmlns http:www.fcla.edudlsmddaitss xmlns:xsi http:www.w3.org2001XMLSchema-instance xsi:schemaLocation http:www.fcla.edudlsmddaitssdaitssReport.xsd
INGEST IEID E3I9QMP0Q_84X23P INGEST_TIME 2011-08-30T19:25:03Z PACKAGE AA00002198_00001
AGREEMENT_INFO ACCOUNT UF PROJECT UFDC
FILES



PAGE 1

7+( $33/,&$7,21 2) 0$5&+ $1' 6,021n6 25*$1,=$7,21$/ &21)/,&7 7+(25< 72 7+( 92/817$5< ,17(5,167,787,21$/ &216257,80 :,//,( %5(1121 $ ',66(57$7,21 35(6(17(' 72 7+( *5$'8$7( &281&,/ 2) 7+( 81,9(56,7< 2) )/25,'$ ,1 3$57,$/ )8/),//0(17 2) 7+( 5(48,5(0(176 )25 7+( '(*5(( 2) '2&725 2) 3+,/2623+< 81,9(56,7< 2) )/25,'$

PAGE 2

7R UD\ ZLIH 3HJJ\ DQG RXU WZR GDXJKWHUV 7DUU\Q DQG 0LD GHGLFDWH WKLV ZRUN :LWKRXW WKHLU VXSSRUW DQG HQFRXUDJHPHQW SHUVHYHUDQFH DQG HQGXUDQFH WKLV HQGHDYRU ZRXOG KDYH QHYHU EHHQ FRPSOHWHG

PAGE 3

$&.12:/('*(0(176 7KH ZULWHU DFNQRZOHGJHV KLV LQGHEWHGQHVV WR WKRVH LQGLYLGXDOV IDFXOW\ DQG IULHQGV ZKR FRQWULEXWHG WR KLV SURIHVVLRQDO JURZWK DQG GHYHORSPHQW GXULQJ KLV JUDGXDWH VWXGLHV 6LQFHUH DSSUHFLDWLRQ LV DOVR PHULWHG E\ WKRVH LQGLYLGXDOV ZLWKRXW ZKRP WKLV GLVVHUWDWLRQ ZRXOG QRW KDYH EHFRPH D UHDOLW\ $PRQJ WKHVH VSHFLDO WKDQNV DUH DFFRUGHG WR WKRVH ZKR HQFRXUDJHG WKH ZULWHU WR SXUVXH JUDGXDWH VWXGLHV LQFOXGLQJ KLV EURWKHULQODZ 'U 5D\ILHOG 0 0F*KHH ZKRVH SHUVLVn WHQW HQFRXUDJHPHQW SHUVXDGHG KLP WR DWWHQG WKH 8QLYHUVLW\ RI )ORULGD 7KDQNV DUH H[WHQGHG WR 'U 5DOSK % .LPEURXJK WKH ZULWHUnV DGYLVRU GXULQJ KLV VWXGLHV WRZDUG WKH PDVWHUnV GHJUHH DQG RQH RI VHYHUDO SHUVRQV ZKR HQFRXUDJHG KLP WR SXUVXH GRFWRUDO VWXGLHV 6LQFHUH DSSUHFLDWLRQ LV RIIHUHG WR 'U 0LFKDHO < 1XQQHU\ IRU WKH LQYDOXDEOH DVVLVWDQFH KH SURYLGHG GXULQJ WKH HPEU\RQLF VWDJH RI WKLV ZRUN +LV DVVLVWDQFH ZLWK WKH WKHRU\ PDGH IXUWKHU GHYHORSPHQW RI WKLV VWXG\ VHHP SODXVLEOH 7KH ZULWHU FRQYH\V KLV KHDUWIHOW JUDWLWXGH WR 'U 3KLOOLS $ &ODUN FKDLUPDQ RI KLV GRFWRUDO FRPPLWWHH DQG WR 'UV -DPHV / :DWWHQEDUJHU DQG :LOOLDP + 'UXPPRQG PHPEHUV LQ

PAGE 4

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

PAGE 5

7$%/( 2) &217(176 $&.12:/('*(0(176 /,67 2) 7$%/(6 /,67 2) ),*85(6 YLLL $%675$&7 L[ &+$37(5 ,1752'8&7,21 7KH 3UREOHP %DFNJURXQG RI WKH 3UREOHP 6WDWHPHQW RI WKH 3UREOHP 'HOLPLWDWLRQV DQG /LPLWDWLRQV -XVWLILFDWLRQ IRU WKH 6WXG\ $VVXPSWLRQV 'HILQLWLRQV RI 7HUPV 2UJDQL]DWLRQ RI WKH 5HVHDUFK 5HSRUW ,, &21)/,&7 7+(25< $1' 5(/$7(' /,7(5$785( &RQIOLFW 7KHRU\ 0DUFK DQG 6LPRQnV &RQFHSW ,QGLYLGXDO FRQIOLFW 2UJDQL]DWLRQDO FRQIOLFW LQGLYLGXDO FRQIOLFW ZLWKLQ DQ RUJDQL]DWLRQ 2UJDQL]DWLRQDO FRQIOLFW LQWHUJURXS FRQIOLFW ZLWKLQ DQ RUJDQL]DWLRQ ,QWHURUJDQL]DWLRQDO FRQIOLFW &RQIOLFW 5HVROXWLRQ ? 5HVROXWLRQ RI LQGLYLGXDO FRQIOLFW ZLWKLQ WKH RUJDQL]DWLRQ 5HVROXWLRQ RI LQWHUJURXS FRQIOLFW ZLWKLQ WKH RUJDQL]DWLRQ &RQIOLFW 0DQDJHPHQW 7KH &RQVRUWLXP +LVWRULFDO 'HYHORSPHQW RI WKH &RQFHSW &RQVRUWLXP 7\SRORJLHV (FRQRPLF 3RWHQWLDO 2UJDQL]DWLRQDO 6WUXFWXUH LQ f 9OO 9

PAGE 6

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

PAGE 7

/,67 2) 7$%/(6 $ 7\SRORJ\ RI ,QGLYLGXDO &RQIOLFW $ 3URILOH RI WKH &RPSRVLWH 5HVSRQVHV WR WKH 7KHRUHWLFDO 3URSRVLWLRQV 5HVRXUFH 6FKHGXOLQJ *RDOV ,QIRUPDWLRQDO 6RXUFH ,QIRUPDWLRQ &KDQQHOLQJ 'LVWULEXWLRQ RI WKH $JH RI WKH 5HSUHVHQWHG &RQVRUWLD 'LVWULEXWLRQ RI WKH 6L]H RI WKH 0HPEHUVKLS RI WKH &RQVRUWLD 'LVWULEXWLRQ RI WKH 1XPEHU RI 6HUYLFHV 3URYLGHG E\ WKH 5HSUHVHQWHG &RQVRUWLD +RPRJHQHLW\+HWHURJHQHLW\ 'LVWULEXWLRQ RI WKH &RQVRUWLXP 0HPEHUVKLS &RUUHODWLRQ 0DWUL[ IRU DOO 9DULDEOHV f f 9OO

PAGE 8

/,67 2) ),*85(6 )LJXUH 3DJH 7KH EDUJDLQLQJ DUHD )DFWRUV DIIHFWLQJ LQGLYLGXDO FRQIOLFW DQG LQGLYLGXDO UHDFWLRQ WR FRQIOLFW )DFWRUV DIIHFWLQJ LQGLYLGXDO FRQIOLFW ZLWKLQ RUJDQL]DWLRQV )DFWRUV DIIHFWLQJ LQWHUJURXS FRQIOLFW ZLWKLQ DQ RUJDQL]DWLRQ &RPPXQLFDWLRQ SDWWHUQV DW WKH GHFLVLRQPDNLQJ OHYHO LQ WKH FRQVRUWLXP f f f 9OOO

PAGE 9

$EVWUDFW RI 'LVVHUWDWLRQ 3UHVHQWHG WR WKH *UDGXDWH &RXQFLO RI WKH 8QLYHUVLW\ RI )ORULGD LQ 3DUWLDO )XOILOOPHQW RI WKH 5HTXLUHPHQWV IRU WKH 'HJUHH RI 'RFWRU RI 3KLORVRSK\ 7+( $33/,&$7,21 2) 0$5&+ $1' 6,021n6 25*$1,=$7,21$/ &21)/,&7 7+(25< 72 7+( 92/817$5< ,17(5,167,787,21$/ &216257,80 %\ :,//,( %5(1121 -XQH &KDLUPDQ 'U 3KLOOLS $ &ODUN 0DMRU 'HSDUWPHQW (GXFDWLRQDO $GPLQLVWUDWLRQ 7KH SULPDU\ SXUSRVH RI WKLV VWXG\ ZDV WR GHVFULEH LQWHURUJDQL]DWLRQDO FRQIOLFW LQ YROXQWDU\ LQWHULQVWLWXWLRQDO FRQVRUWLD E\ VWXG\LQJ WKH SHUFHSWLRQV RI FRQVRUWLXP GLUHFn WRUV DQG SUHVLGHQWV RI FRQVRUWLQJ LQVWLWXWLRQV XVLQJ SURSRVLWLRQV GHYHORSHG E\ 0DUFK DQG 6LPRQ VHH SS RI 0DUFK t 6LPRQ + + 2UJDQL]DWLRQV 1HZ
PAGE 10

WKH JUHDWHU WKH IHOW QHHG IRU MRLQW GHFLVLRQPDNLQJ ZLWK UHVSHFW WR WKDW UHVRXUFH Ef 7KH JUHDWHU WKH LQWHUn GHSHQGHQFH RI WLPLQJ RI DFWLYLWLHV WKH JUHDWHU WKH IHOW QHHG IRU MRLQW GHFLVLRQPDNLQJ ZLWK UHVSHFW WR VFKHGXOLQJ Ff 7KH OHVV WKH VXEMHFWLYH RSHUDWLRQDOLW\ RI RUJDQL]DWLRQDO JRDOV WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI LQGLYLGXDO JRDOV LQ WKH RUJDQL]DWLRQ Gf 7KH JUHDWHU WKH QXPEHU RI LQGHSHQGHQW LQIRUPDWLRQ VRXUFHV WKH JUHDWHU WKH GLIIHUHQn WLDWLRQ RI SHUFHSWLRQV ZLWKLQ WKH RUJDQL]DWLRQ Hf 7KH JUHDWHU WKH FKDQQHOLQJ RI LQIRUPDWLRQSURFHVVLQJ WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI SHUFHSWLRQV ZLWKLQ WKH RUJDQL]DWLRQ :KDW LV WKH UHODWLRQVKLS EHWZHHQ WKH H[WHQW WR ZKLFK FRQIOLFW ZDV SHUFHLYHG WR RFFXU LQ WKH DUHDV SUHGLFWHG E\ WKH WKHRU\ DQG IRXU YDULDEOHV DVVRFLDWHG ZLWK WKH FRQn VRUWLXP Df DJH Ef VL]H Ff QXPEHU RI VHUYLFHV SURn YLGHG DQG Gf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

PAGE 11

WKHLU SHUFHSWLRQV RI DQ\ RI WKH YDULDEOHV 7KH IROORZLQJ FRQFOXVLRQV WKHUHIRUH DUH EDVHG RQ WKH UHVXOWV RI WKH FRPSRVLWH DQDO\VLV RI WKHVH JURXSV 7KH H[WHQW WR ZKLFK WKH LQVWLWXWLRQDO PHPEHUV ZHUH PXWXDOO\ GHSHQGHQW XSRQ D OLPLWHG FRQVRUWLXP UHVRXUFH ZDV GLUHFWO\ SURSRUWLRQDO WR WKH PHPEHUVn GHVLUH IRU MRLQW bL GHFLVLRQPDNLQJ UHJDUGLQJ WKH DOORFDWLRQ RI WKDW UHVRXUFH ,QVWLWXWLRQDO PHPEHUVn LQYROYHPHQW LQ LQWHUGHSHQn GHQFLHV UHTXLULQJ WKH WLPLQJ RI DFWLYLWLHV ZDV GLUHFWO\ SURSRUWLRQDO WR WKH PHPEHUVn GHVLUH IRU MRLQW GHFLVLRQn PDNLQJ UHJDUGLQJ VFKHGXOLQJ 7KH H[WHQW WR ZKLFK WKH PHPEHUVKLS ZDV QRW VXFFHVVn IXO LQ DVFHUWDLQLQJ WKH FRQVRUWLXPnV OHYHO RI DFKLHYHPHQW RI VWDWHG JRDOV ZDV LQYHUVHO\ SURSRUWLRQDO WR WKH GLIIHUHQFHV LQ JRDOV DGYRFDWHG IRU WKH FRQVRUWLXP E\ WKH PHPEHUV 7KH QXPEHU RI LQIRUPDWLRQDO VRXUFHV ZLWKLQ WKH LQWHULQVWLWXWLRQDO FRQVRUWLXP GRHV QRW YDU\ GLUHFWO\ ZLWK WKH GHJUHH WR ZKLFK GLIIHUHQFHV H[LVW LQ WKH PHPEHUVKLSnV SHUFHSWLRQ RI WKH FRQVRUWLXP 1R YDOLG FRQFOXVLRQ FRXOG EH GUDZQ IURP WKH ILQGLQJV UHJDUGLQJ WKH FKDQQHOLQJ RI LQIRUPDWLRQ ZLWKLQ WKH FRQVRUWLXP 7KH VL]H RI WKH FRQVRUWLXP VKRZHG D UHODWLRQVKLS ZLWK WKH UHVRXUFH DQG VFKHGXOLQJ YDULDEOHV (YLGHQFH LQGLFDWHG WKDW DQ LQYHUVH UHODWLRQVKLS H[LVWHG DPRQJ WKHVH [L YDULDEOHV

PAGE 12

1R VLJQLILFDQW UHODWLRQVKLS H[LVWHG EHWZHHQ Df DJH Ef QXPEHU RI VHUYLFHV SURYLGHG RU Ff GHJUHH RI KRPRJHQHLW\KHWHURJHQHLW\ RI WKH FRQVRUWLXP PHPEHUVKLS DQG WKH H[WHQW WR ZKLFK FRQIOLFW ZDV SHUFHLYHG WR RFFXU ZLWKLQ DQ\ RI WKH DUHDV SUHGLFWHG E\ WKH WKHRU\ f f ;OO

PAGE 13

&+$37(5 ,1752'8&7,21 &RQIOLFW LV D SKHQRPHQRQ ZKLFK SHUPHDWHV DOO DVSHFWV RI VRFLHW\ ,W LV D IDFW RI OLIH ZKLFK LV XQDYRLGDEOH \HW DQ LQWHJUDO SDUW RI D GHPRFUDWLF VRFLHW\ 6FKRILHOG S f $FFRUGLQJ WR /LSVHW f WKH H[LVWHQFH RI D PRGHUDWH VWDWH RI FRQIOLFW LV LQ IDFW DQRWKHU ZD\ RI GHILQLQJ D OHJLWLPDWH GHPRFUDF\ S f $ UHYLHZ RI WKH OLWHUDWXUH UHYHDOHG WKDW WKHUH LV D JHQHUDO SKHQRPHQRQ RI FRQIOLFW DQG WKHUHIRUH D JHQHUDO WKHRU\ WKDW GHOLQHDWHV D EDVLV IRU GLUHFWLRQ %RXOGLQJ S f 7KLV HYLGHQFH SURYLGHV D EDVLV IRU GHQRWLQJ WKH ZK\ LW SURYLGHV D IRXQGDWLRQ IRU FRQVLVWHQF\ LQ EHKDYLRU DQG LW VHUYHV DV D JXLGH WR QHZ NQRZOHGJH DQG FRQVHTXHQWO\ QHZ EHKDYLRU 6DXQGHUV 3KLOOLSV t -RKQVRQ S f 0RUH VSHFLILFDOO\ D WKHRU\ RI FRQIOLFW KDV EHHQ GHULYHG IURP WKH DQDO\VLV RI SHUVRQDO JURXS DQG RUJDQL]DWLRQDO EHKDYLRU WKDW SXUSRUWV WR SURYLGH XQLYHUVDOLW\ WR WKH SUHGLFWDELOLW\ RI FRQIOLFW VLWXDWLRQV LQ WKHVH UHVSHFWLYH GRPDLQV 7KH HPSKDVLV RI WKLV LQYHVWLJDWLRQ IRFXVHV LQ SDUW RQ WKH TXHVWLRQ RI XQLYHUVDOLW\ RI RUJDQL]DWLRQDO FRQIOLFW

PAGE 14

WKHRU\ 7R WKLV HQG WKH FROODERUDWLYH HQYLURQPHQW DV H[HPSOLILHG E\ WKH FRQVRUWLXP ZLOO VHUYH DV WKH H[HPSODU\ PRGHO 7KH FRQVRUWLXP D IRUPDO DVVRFLDWLRQ RI WZR RU PRUH DXWRQRPRXV LQVWLWXWLRQV KDV D QRQWUDGLWLRQDO RUJDQL]DWLRQDO VWUXFWXUH D KLVWRU\ LQ WKH 8QLWHG 6WDWHV ZKLFK GDWHV EDFN WR DQG D SKHQRPHQRQDO JURZWK UDWH ZKLFK VSDQQHG WKH \HDU SHULRG EHWZHHQ DQG ) 3DWWHUVRQ f SS f +RZHYHU XQWLO WKH V IHZ UHVHDUFKHUV KDG DWWHPSWHG WR REVHUYH DQG GRFXPHQW WKH YDULRXV DVSHFWV RI LWV RUJDQL]DWLRQDO FKDUDFWHULVWLFV 7KLV DSSDUHQW ODFN RI LQWHUHVW UHJDUGLQJ UHVHDUFK RQ WKH FRQVRUWLXP SDUDOOHOV WKH SDXFLW\ RI LQWHUHVW FRQFHUQLQJ WKH QHHG WR VWXG\ WKH FKDUDFWHULVWLFV RI WKH WUDGLWLRQDO RUJDQL]DWLRQ WKDW SHUPHDWHG WKH HDUO\ V %RXOGLQJ f LQ KLV WUHDWLVH HQWLWOHG 7KH 2UJDQL]DWLRQDO 5HYROXWLRQ TXLWH VXFFLQFWO\ H[SUHVVHG WKDW LGHD LQ WKH IROORZLQJ PDQQHU 7KLV UHYROXWLRQ KDV UHFHLYHG OLWWOH VWXG\ DQG LV QRW VRPHWKLQJ RI ZKLFK ZH DUH SDUWLFXODUO\ FRQVFLRXV ,W KDV FUHSW XSRQ XV VLOHQWO\ ,W LV VRPHWKLQJ ZKLFK ZH DFFHSW DV D QDWXUDO DOPRVW ZLWKRXW WKLQNLQJ $QG \HW WKH ZKROH PRYHPHQW UDLVHV SUREOHPV ZLWK ZKLFK ZH DUH LOO HTXLSSHG WR GHDO S f :KHQ WKH HFRQRPLF FRQGLWLRQV H[LVWLQJ LQ WKH V DUH FRQVLGHUHG LQ FRQMXQFWLRQ ZLWK WKH UDWH RI FRQVRUWLDO JURZWK LQ QXPEHU DQG VL]H ) 3DWWHUVRQ / 3DWWHUVRQ Ef LW LV FRQFHLYDEOH WKDW RQH PLJKW FRQFOXGH WKDW IRU

PAGE 15

SRVWVHFRQGDU\ LQVWLWXWLRQV WKH FRQVRUWLXP PD\ EHFRPH WKH GRPLQDQW RUJDQL]DWLRQDO IRUP LQ PRGHUQ VRFLHW\ ,QGHHG LW LV LURQLF WKDW RQO\ OLPLWHG NQRZOHGJH KDV EHHQ DFFXPXODWHG UHJDUGLQJ WKH YDULRXV FKDUDFWHULVWLFV H[HPSOLILHG E\ WKLV RUJDQL]DWLRQDO IRUP ,I WKHRU\ DSSURSULDWHO\ VHUYHV DV D JXLGH WR QHZ NQRZOHGJH DV D PHDQV WR GHOLQHDWH D EDVLV IRU GLUHFWLRQ DQG DV D IRXQGDWLRQ IRU FRQVLVWHQF\ LQ EHKDYLRU WKHQ WKH RUJDQL]DWLRQDO FKDUDFWHULVWLFV RI WKH FRQVRUWLXP HQYLURQn PHQW QHHG WR EH WKRURXJKO\ DQDO\]HG ZLWKLQ D WKHRUHWLFDO FRQWH[W 6XFK DQDO\VLV ZRXOG HQDEOH RQH WR GHWHUPLQH KRZ SUHYLRXVO\ DXWRQRPRXV RUJDQL]DWLRQV ZLWK OLPLWHG UHVRXUFHV FDQ HIIHFWLYHO\ FROODERUDWH DQG DGHTXDWHO\ VHUYH WKH QHHGV RI DOO WKHLU PHPEHUV ,W ORJLFDOO\ IROORZV WKDW D WHVW RI WKH DSSOLFDELOLW\ RI WUDGLWLRQDO FRQIOLFW WKHRU\ WR WKH FRQVRUWLXP VHWWLQJ VKRXOG EH D ILUVW VWHS WRZDUG XQGHUn VWDQGLQJ FKDUDFWHULVWLFV SHUWDLQLQJ WR FRQIOLFW LQ WKH FRQVRUWLXP ,W VKRXOG DOVR EH D ILUVW VWHS WRZDUG GHYHORSn LQJ WKH SRWHQWLDO IRU SUHGLFWLQJ DQG GHVFULELQJ IXWXUH HYHQWV UHJDUGLQJ WKHVH FKDUDFWHULVWLFV 7R WKLV HQG WKH ILHOG SRUWLRQ RI WKLV VWXG\ LQYROYHV FROOHFWLQJ DQG DQDO\]LQJ GDWD JDWKHUHG IURP D VDPSOH SRSXODWLRQ FRQVLVWLQJ RI FRQVRUWLXP GLUHFWRUV DQG SUHVLGHQWV RI LQVWLWXWLRQDO PHPEHUV RI FRQVRUWLD

PAGE 16

7KH 3UREOHP %DFNJURXQG RI WKH 3UREOHP 7KH VFKRODUO\ OLWHUDWXUH RQ FRQIOLFW LQ WKH WUDGLn WLRQDO RUJDQL]DWLRQ KDV UHYHDOHG WKHRUHWLFDO FRQFHSWV WKDW SXUSRUW WR SRVVHVV GHVFULSWLYH KHXULVWLF DQG SUHGLFWLYH TXDOLWLHV 3URSRVLWLRQV WKDW PDLQWDLQ FRQVLVWHQF\ ZLWK WKHVH TXDOLWLHV DQG WKHUHIRUH GHVFULEH WKH QDWXUH RI FRQn IOLFW LQ RUJDQL]DWLRQV KDYH EHHQ SRVWXODWHG E\ 0DUFK DQG 6LPRQ f DV IROORZV 7KH JUHDWHU WKH PXWXDO GHSHQGHQFH RQ D OLPLWHG UHVRXUFH WKH JUHDWHU WKH IHOW QHHG IRU MRLQW GHFLVLRQPDNLQJ ZLWK UHVSHFW WR WKDW UHVRXUFH S f 7KH JUHDWHU WKH LQWHUGHSHQGHQFH RI WLPLQJ RI DFWLYLWLHV WKH JUHDWHU WKH IHOW QHHG IRU MRLQW GHFLVLRQPDNLQJ ZLWK UHVSHFW WR VFKHGXOLQJ S f 7KH OHVV WKH VXEMHFWLYH RSHUDWLRQDOLW\ RI RUJDQL b ]DWLRQDO JRDOV WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI LQGLYLGXDO JRDOV LQ WKH RUJDQL]DWLRQ SS f 7KH JUHDWHU WKH QXPEHU RI LQGHSHQGHQW LQIRUPDWLRQ VRXUFHV WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI SHUFHSWLRQV ZLWKLQ WKH RUJDQL]DWLRQ S f 7KH JUHDWHU WKH FKDQQHOLQJ RI LQIRUPDWLRQn SURFHVVLQJ WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI

PAGE 17

SHUFHSWLRQV ZLWKLQ WKH RUJDQL]DWLRQ S f 0DUFK DQG 6LPRQ DOVR DVVHUWHG WKDW WKH DIRUHPHQWLRQHG SURSRVLWLRQV VKRXOG PDLQWDLQ YDOLGLW\ ZKHQ DSSOLHG WR WKH LQWHURUJDQL]DWLRQDO VHWWLQJ S f +HQFH LW LV WKH LQWHQW RI WKLV VWXG\ WR GHWHUPLQH WKH DSSOLFDELOLW\ RI WKHVH SURSRVLWLRQV WR DQ LQWHURUJDQL]DWLRQDO VHWWLQJ WKH FRQVRUWLXP 6WDWHPHQW RI WKH 3UREOHP 7KH SXUSRVH RI WKLV VWXG\ LV WR GHVFULEH LQWHURUJDQLn ]DWLRQDO FRQIOLFW LQ YROXQWDU\ LQWHULQVWLWXWLRQDO FRQVRUWLD E\ VWXG\LQJ WKH SHUFHSWLRQV RI FRQVRUWLXP GLUHFWRUV DQG SUHVLGHQWV RI FRQVRUWLQJ LQVWLWXWLRQV XVLQJ SURSRVLWLRQV GHYHORSHG E\ 0DUFK DQG 6LPRQ IRU GHVFULELQJ RUJDQL]DWLRQDO FRQIOLFW LQ WUDGLWLRQDO RUJDQL]DWLRQV 0RUH VSHFLILFDOO\ DQVZHUV WR WKH IROORZLQJ TXHVWLRQV ZLOO EH VRXJKW 7R ZKDW H[WHQW GR Df FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO SUHVLGHQWV DJUHH ZLWK WKH VWDWHn PHQW WKH JUHDWHU WKH PHPEHUVKLSnV GHSHQGHQF\ XSRQ D OLPLWHG FRQVRUWLXP UHVRXUFH WKH JUHDWHU LV WKH PHPEHUVKLSnV GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ WKH DOORFDWLRQ RI WKDW UHVRXUFH" :KDW LV WKH H[WHQW WR ZKLFK Df FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO SUHVLGHQWV DJUHH ZLWK WKH VWDWHPHQW WKH JUHDWHU WKH LQYROYHPHQW RI WKH PHPEHUVKLS LQ MRLQW DFWLYLWLHV ZKLFK UHTXLUH

PAGE 18

WKH VFKHGXOLQJ RI WLPHV IRU DFWLYLWLHV WR RFFXU WKH JUHDWHU LV WKH GHVLUH IRU MRLQW GHFLVLRQn PDNLQJ UHJDUGLQJ VFKHGXOLQJ" :KDW LV WKH UHODWLRQVKLS EHWZHHQ WKH H[WHQW WR ZKLFK WKH FRQVRUWLXP JRDOV DUH DFKLHYHG DQG WKH H[WHQW WR ZKLFK FRQVRUWLXP JRDOV RI LQVWLWXWLRQDO PHPEHUV GLIIHU DV SHUFHLYHG E\ Df FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO SUHVLGHQWV" 7R ZKDW H[WHQW GR Df FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO SUHVLGHQWV DJUHH ZLWK WKH VWDWHn PHQW WKH JUHDWHU WKH QXPEHU RI LQGHSHQGHQW LQIRUPDWLRQDO VRXUFHV ZLWKLQ WKH FRQVRUWLXP WKH JUHDWHU LV WKH GLIIHUHQFH LQ WKH PHPEHUVKLSnV SHUFHSWLRQ RI WKH FRQVRUWLXP" 7R ZKDW H[WHQW GR Df FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO SUHVLGHQWV DJUHH ZLWK WKH VWDWHn PHQW WKH JUHDWHU WKH FKDQQHOLQJ RI LQIRUPDWLRQ ZLWKLQ WKH FRQVRUWLXP WKH JUHDWHU LV WKH GLIn IHUHQFH LQ WKH PHPEHUVKLSnV SHUFHSWLRQ RI WKH FRQVRUWLXP" :KDW LV WKH UHODWLRQVKLS EHWZHHQ WKH DJH RI WKH FRQVRUWLXP DQG WKH H[WHQW WR ZKLFK FRQIOLFW LV SHUFHLYHG WR EH HQJHQGHUHG ZLWKLQ DUHDV SUHGLFWHG E\ WKH WKHRUHWLFDO SURSRVLWLRQV" :KDW HIIHFW GRHV WKH VL]H RI WKH FRQVRUWLXPnV PHPEHUVKLS KDYH XSRQ WKH H[WHQW WR ZKLFK FRQIOLFW

PAGE 19

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n QHVV RI SURSRVLWLRQV RQ RUJDQL]DWLRQDO FRQIOLFW LQ WKH WUDGLWLRQDO RUJDQL]DWLRQ LQ GHVFULELQJ FRQIOLFW LQ WKH FRQVRUWLXP )RU WKLV SXUSRVH FRQVRUWLD LQFOXGHG LQ WKLV LQYHVWLJDWLRQ ZHUH RQO\ WKRVH WKDW Df ZHUH FODVVLILHG DV D IRUPDO DVVRFLDWLRQ Ef FRQVLVWHG RI WZR RU PRUH PHPEHUV DQG Ff ZHUH FRPSRVHG SULPDULO\ RI SRVWVHFRQGDU\ LQVWLWXn WLRQV 5HIHUHQW JURXSV ZHUH OLPLWHG WR WKH GLUHFWRUV RI WKH FRQVRUWLD DQG WKH SUHVLGHQWV RI LQVWLWXWLRQDO PHPEHUV &RQILQHPHQW ZDV DOVR H[HPSOLILHG E\ WKH LQFOXVLRQ RI RQO\ H[LVWLQJ FRQVRUWLD WKDW ZHUH RUJDQL]HG LQ WKH FRQWLQHQWDO 8QLWHG 6WDWHV EHWZHHQ DQG 7KHVH VRXUFHV RI UHVWULFWLRQ H[FOXGHG VWDWXWRU\ ERGLHV LQIRUPDO ELODWHUDO DJUHHPHQWV DQG WKH HSKHPHUDO DG KRF FRPELQDWLRQV VR SUHYn DOHQW LQ WKH V

PAGE 20

$ PDMRU OLPLWDWLRQ RI WKLV VWXG\ ZDV WKDW LW LV DQ H[ RVW IDFWR GHVLJQ ,W ZDV WKHUHIRUH VXEMHFWHG WR DOO RI WKH UHVWULFWLRQV DWWULEXWHG WR WKLV W\SH RI UHVHDUFK &RQVLVWHQW ZLWK WKH ODWWHU WKLV UHVHDUFKHU UHFRJQL]HV WKDW WKHUH PD\ KDYH EHHQ OLPLWDWLRQV ZLWK UHVSHFW WR WKH GDWDJDWKHULQJ SURFHVV )RU H[DPSOH PDWXUDWLRQ DV GHVFULEHG E\ &DPSEHOO DQG 6WDQOH\ S f PD\ KDYH EHHQ LQKLELWLQJ WR WKH H[WHQW WKDW UHVSRQGHQWV PD\ QRW KDYH UHn FDOOHG VLJQLILFDQW SDVW HYHQWV )XUWKHUPRUH DV D UHVXOW RI GHYHORSLQJ DQ XQGHUVWDQGLQJ RI WKH FRQVRUWLXP SURFHVVHV WKURXJK ORQJ LQYROYHPHQW ZLWK WKLV RUJDQL]DWLRQDO IRUP VRPH UHVSRQGHQWV PD\ KDYH SHUFHLYHG FRQVRUWLDO FRQIOLFW GLIIHUHQWO\ WRGD\ IURP ZKDW WKH\ GLG DW WKH WLPH VRPH FRQn IOLFW VLWXDWLRQV DFWXDOO\ RFFXUUHG 2WKHU OLPLWDWLRQV RI WKH GDWDJDWKHULQJ SURFHVV ZHUH WKH IDLOXUH RI VRPH RI WKH SRWHQWLDO UHVSRQGHQWV WR UHVSRQG WKH LQFRPSOHWHQHVV RI VRPH RI WKH LQVWUXPHQWV UHWXUQHG DQG WKH LQDSSURSULDWHQHVV RI VRPH RI WKH UHVSRQGHQWV ZKR FRPn SOHWHG WKH LQVWUXPHQW -XVWLILFDWLRQ IRU WKH 6WXG\ 7KH PDMRU MXVWLILFDWLRQ IRU WKLV LQYHVWLJDWLRQ ZDV WKDW LW ZLOO VHUYH WR DGG NQRZOHGJH WR DQ DUHD LQ ZKLFK YHU\ OLPLWHG UHVHDUFK KDV EHHQ GRQH 7KLV LQYHVWLJDWLRQ DOVR UHSUHVHQWHG D GHSDUWXUH IURP WKH WUDGLWLRQDO HPSLULFDOO\ RULHQWHG QRQWKHRUHWLFDO VWXGLHV VLQFH WKHUH KDV EHHQ SUDFWLFDOO\ QR DSSOLFDWLRQ RI RUJDQL]DWLRQDO WKHRULHV WR WKH

PAGE 21

PDQ\ XQLTXH FKDUDFWHULVWLFV RI WKLV RUJDQL]DWLRQDO VHWWLQJ 6HFRQGO\ DV LQGLFDWHG LQ WKH ,QWURGXFWLRQ DQG WKH 5HYLHZ RI WKH 6FKRODUO\ /LWHUDWXUH WKH FRQVRUWLXP PRYHPHQW ZDV H[SHULHQFLQJ SKHQRPHQDO JURZWK )UDQNOLQ 3DWWHUVRQ f LQGLFDWHG WKDW EHWZHHQ DQG RQO\ FRQn VRUWLD ZHUH HVWDEOLVKHG S f (LJKW\ RI WKHVH RUJDQL]Dn WLRQV FRPSULVLQJ LQVWLWXWLRQV ZHUH OLVWHG LQ WKH &RQVRUWLXP 'LUHFWRU\ 7KH &RQVRUWLXP 'LUHFWRU\ OLVWHG FRQVRUWLD *UXSH DQG 0XUSK\nV f 6XUYH\ RI 6WDWHZLGH $JHQF\ &RQVRUWLD 5HODWLRQVKLS UHYHDOHG WKDW ZLWKLQ VWDWHV D WUHQG WRZDUG LQWHUUHODWLQJ FRQVRUWLD DQG FRRUGLQDWLQJ DJHQFLHV >ZDV@ FOHDUO\ LQ HYLGHQFH S f 0RUH VSHFLILFDOO\ LQ D VWXG\ ZDV GRQH LQ &DOLIRUQLD WR GHWHUPLQH WKH IHDVLELOLW\ RI GHYHORSLQJ UHJLRQDO FRQVRUWLD IRU WKH IDFLOLWDWLRQ RI D P\ULDG RI KLJKHU HGXFDWLRQDO HQGHDYRUV *UXSH t 0XUSK\ S f 7KH UHJLRQDO FRQVRUWLD LGHD ZDV FRQVLGHUHG LQ )ORULGD GXULQJ WKH V ,Q IDFW D ELOO HQWLWOHG 6HQDWH %LOO ZDV VXEPLWWHG WR WKH )ORULGD /HJLVODWXUH LQ $OWKRXJK LW GLG QRW SDVV WKH 6HQDWH WKH ELOO ZDV UHYLVHG IRU VXEVHTXHQW VXEn PLVVLRQ 7KH LQWHQW RI WKLV ELOO ZDV WR DPHQG 6HFWLRQ )ORULGD 6WDWXWHV E\ FUHDWLQJ D QHZ VXEVHFWLRQ WKDW ZRXOG SURYLGH IRU WKH LPSOHPHQWDWLRQ RI D V\VWHP RI 5HJLRQDO &RQVRUWLD IRU &RPPXQLW\ (GXFDWLRQDO 6HUYLFHV LQ WKH FRPPXQLW\ FROOHJH GLVWULFWV LQ )ORULGD }

PAGE 22

,Q UHFHQW \HDUV D QXPEHU RI PXQLFLSDOLWLHV DQG VFKRRO GLVWULFWV LQ VHYHUDO VWDWHV KDYH IRUPHG FRQVRUWLD IRU FRPPXQLW\ HGXFDWLRQ HQGHDYRUV 7KH IRUPDWLRQ RI WKH -DFNVRQYLOOH )ORULGD FRQVRUWLXP IRU FRPPXQLW\ HGXFDWLRQ LQ LV LOOXVWUDWLYH RI WKLV PRYHPHQW (FRQRPLFDOO\ WKH FRQVRUWLXP FRQFHSW FRQYH\HG JUHDW SRWHQWLDO IRU LWV PHPEHUV -RUGDQ :HOOV =LPPHUPDQ f 7KLV VHHPHG HYLGHQW ZKHQ LVVXHV RI LQVWLWXWLRQDO VXUYLYDO TXDOLW\ DQG TXDQWLW\ RI HGXFDWLRQDO VHUYLFHV VRFLHWDO DOORFDWLRQ RI UHVRXUFHV IRU HGXFDWLRQ DQG RWKHU IDFWRUV ZHUH FRQVLGHUHG +RZHYHU WKH TXHVWLRQ ZDV KDG WKH JDS EHWZHHQ WKHRU\ DQG SUDFWLFH EHHQ VXFFHVVn IXOO\ EULGJHG WR WKH H[WHQW WKDW SUHYLRXVO\ DXWRQRPRXV LQVWLWXWLRQV ZLWK OLPLWHG UHVRXUFHV FRXOG IRUP D FROODEn RUDWLYH DVVRFLDWLRQ DQG QRW H[SHULHQFH FRQIOLFW ZKLFK ZRXOG WKZDUW WKH HIIHFWLYHQHVV RI WKH RUJDQL]DWLRQ RU EULQJ DERXW LWV GHPLVH" 3HUKDSV WKH DWWULWLRQ UDWH RI FRQVRUWLD DORQJ ZLWK WKH IUHTXHQF\ RI WXUQRYHU DPRQJ FRQVRUWLXP GLUHFWRUV ) 3DWWHUVRQ / 3DWWHUVRQ D 3DWWHUVRQ t %XUQV f FRXOG EH FRQVLGHUHG LQGLFDWLYH RI FRQVLGHUDEOH FRQIOLFW ZLWKLQ WKHVH DVVRFLDWLRQV $FFRUGLQJ WR 6LPPHO f WKH YHU\ SULQFLSOH HPEHGGHG LQ WKH XQLW\ WKDW VHHPV WR EH QHHGHG E\ WKH QRQWUDGLWLRQDO FROODERUDWLYH RUJDQL]DWLRQV PD\ KDYH EHHQ VXEVWDQWLDOO\ WKUHDWHQHG E\ FRQIOLFW +H PDLQWDLQHG WKDW IRU WKLV UHDVRQ WKHUH ZDV D VXEVWDQWLDO QHHG WR LQYHVWLJDWH WKHVH RUJDQL]Dn WLRQV S f )UDQNOLQ 3DWWHUVRQ f DQG RWKHUV -RUGDQ

PAGE 23

/DQFDVWHU / 3DWWHUVRQ E F 6PLWK f DVVHUWHG WKDW FRQVLGHUDEO\ PRUH UHVHDUFK SHUWDLQLQJ WR WKH FRQVRUWLXP VKRXOG EH FRQGXFWHG ,W ZDV IXUWKHU VXJJHVWHG WKDW WKHVH UHVHDUFK UHVXOWV VKRXOG EH GLVVHPLQDWHG DPRQJ DOO VHJPHQWV RI VRFLHW\ / 3DWWHUVRQ SS f 7KH QHHG IRU WKHRUHWLFDOO\ RULHQWHG DQDO\VLV DV ZHOO DV WKH QHHG IRU WKH GHYHORSPHQW RI WKHRU\ IRU LQWHURUJDQL]DWLRQV KDV EHHQ DGGUHVVHG E\ VHYHUDO ZULWHUV &ODUN (W]LRQL 3DUVRQV 6LOYHUPDQ f 7KHUHIRUH LQ DQ HIIRUW WR RYHUFRPH WKH ODFN RI NQRZOHGJH EHWZHHQ WKH UHODWLRQn VKLS RI FRQIOLFW WKHRU\DV UHSRUWHG LQ WKH VFKRODUO\ OLWHUDWXUHf§WR WKH FRQVRUWLXP WKH ILHOG SRUWLRQ RI WKLV VWXG\ LQYROYHG D VDPSOH RI FRQVRUWLD WKURXJKRXW WKH FRQWLQHQWDO 8QLWHG 6WDWHV $VVXPSWLRQV )RXU DVVXPSWLRQV WKDW ZHUH FULWLFDO WR WKH VXFFHVV RI WKLV VWXG\ ZHUH GHYHORSHG E\ WKLV ZULWHU ,W ZDV DVVXPHG WKDW &RQIOLFW LV DQ LQHYLWDEOH SKHQRPHQRQ ZLWKLQ RUJDQL]DWLRQV UHJDUGOHVV RI WKH RUJDQL]DWLRQDO VWUXFWXUH RU SXUSRVHV &RQIOLFW VLWXDWLRQV DUH SUHGLFWDEOH ZKHQ JLYHQ FHUWDLQ FRQGLWLRQV

PAGE 24

&RQIOLFW WKHRU\ GHYHORSHG IRU WUDGLWLRQDO RUJDQL]DWLRQV LV DSSOLFDEOH WR WKH FRQVRUWLXP 7KH SRWHQWLDO UHVSRQGHQWV ZLOO QRW RQO\ SDUWLFLSDWH EXW ZLOO GR VR REMHFWLYHO\ 'HILQLWLRQV RI 7HUPV $XWRQRPRXV LQVWLWXWLRQV 3RVWVHFRQGDU\ HGXFDWLRQDO LQVWLWXWLRQV ZKLFK WUDGLWLRQDOO\ KDYH RSHUDWHG LQGHSHQGn HQWO\ RI HDFK RWKHU &KDQQHOLQJ RI LQIRUPDWLRQ SURFHVVLQJ 7KH SURFHVV RI OLPLWLQJ WKH QXPEHU RI RUJDQL]DWLRQDO PHPEHUV WR ZKRP LQIRUPDWLRQ LV WUDQVPLWWHG &RQIOLFW $ EUHDNGRZQ LQ WKH VWDQGDUG PHFKDQLVPV RI GHFLVLRQPDNLQJ VXFK WKDW DQ LQGLYLGXDO RU JURXS H[SHULn HQFHV GLIILFXOW\ LQ VHOHFWLQJ DQ DFWLRQ DOWHUQDWLYH 0DUFK t 6LPRQ S f &RQVRUWLXP $ YROXQWDU\ DVVRFLDWLRQ RI WZR RU PRUH DXWRQRPRXV LQVWLWXWLRQV IRUPDOO\ RUJDQL]HG IRU WKH SXUSRVH RI VDWLVI\LQJ SHUWLQHQW QHHGV RI WKH PHPEHUVKLS 7KH HPSOR\PHQW RI DQ H[HFXWLYH RIILFHU WKH FRQVRUWLXP GLUHFWRU DQG WKH H[LVWHQFH RI D ERDUG RI GLUHFWRUV DUH UHTXLUHG FULWHULD &RQVRUWLXP GLUHFWRU 7KH FKLHI DGPLQLVWUDWLYH RIILFHU RI WKH FRQVRUWLXP ZKR LV UHVSRQVLEOH IRU WKH LPSOHPHQWDWLRQ RI SROLFLHV HVWDEOLVKHG E\ WKH ERDUG RI GLUHFWRUV

PAGE 25

&RQVRUWLXP UHVRXUFHV 7KH IDFLOLWLHV HTXLSPHQW VWDII HWF RI DQ LQVWLWXWLRQ ZKLFK DUH PDGH DYDLODEOH WR RWKHU LQVWLWXWLRQV DV D UHVXOW RI FRRSHUDWLRQ DQG FRRUGLQDn WLRQ HQJHQGHUHG E\ WKH FRQVRUWLXP *UDQWV DQG WKDW WKH FRQVRUWLXP VWDII VHFXUH IURP RWKHU VRXUFHV DUH LQFOXGHG LQ WKLV GHILQLWLRQ ,QIRUPDWLRQDO VRXUFH $ SHUVRQ IURP ZKRP LQIRUPDWLRQ SHUWDLQLQJ WR WKH FRQVRUWLXP RULJLQDWHV ,QVWLWXWLRQDO SUHVLGHQWV 7KH FKLHI DGPLQLVWUDWLYH RIILFHUV RI WKH LQVWLWXWLRQV SDUWLFLSDWLQJ LQ WKH FRQn VRUWLXP ,QWHUGHSHQGHQFLHV 5HODWLRQVKLSV LQ ZKLFK LQVWLWXn WLRQDO PHPEHUV GHSHQG UHFLSURFDOO\ XSRQ HDFK RWKHU LQ WKH DWWDLQPHQW RI JRDOV 2SHUDWLRQDOLW\ RI JRDOV 7KH H[WHQW WR ZKLFK LW LV SRVVLEOH WR REVHUYH DQG HYDOXDWH KRZ ZHOO RUJDQL]DWLRQDO JRDOV DUH EHLQJ DFKLHYHG 3HUFHSWLRQV RI JRDOV 9LHZV KHOG FRQFHUQLQJ WKH FRQVRUWLXP JRDOV ZKLFK DUH HQJHQGHUHG E\ D PXWXDO GHSHQGn HQF\ RQ OLPLWHG UHVRXUFHV DQG WKH RSHUDWLRQDOLW\ RI WKH FRQVRUWLXP JRDOV 3HUFHSWLRQV RI UHDOLW\ 9LHZV KHOG UHJDUGLQJ DOO DVSHFWV RI WKH FRQVRUWLXP ZKLFK DUH HQJHQGHUHG E\ WKH QXPEHU RI LQIRUPDWLRQDO VRXUFHV DQG WKH QXPEHU RI LQIRUPDn WLRQDO FKDQQHOV 3RVLWLYH IHOW QHHG IRU MRLQW GHFLVLRQ PDNLQJ 7KH GHVLUH RI WKH LQVWLWXWLRQDO SUHVLGHQWV WR PDNH GHFLVLRQV

PAGE 26

UHJDUGLQJ D PXWXDO GHSHQGHQF\ RQ OLPLWHG UHVRXUFHV DQG LQWHUGHSHQGHQFLHV LQYROYLQJ WKH VFKHGXOLQJ RI DFWLYLWLHV E\ JURXS FRQVHQVXV 5HIHUHQW JURXS 7KRVH JURXS PHPEHUV ZLWKLQ WKH VDPSOH SRSXODWLRQ WKDW SURYLGHG WKH QHFHVVDU\ GDWD IRU WKLV VWXG\ 7KHRU\ $ VHW RI DVVXPSWLRQV IURP ZKLFK D VHW RI HPSLULFDO ODZV SULQFLSOHVf PD\ EH GHULYHG *ULIILWKV S f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n WLRQV DQG UHFRPPHQGDWLRQV

PAGE 27

&+$37(5 ,, r &21)/,&7 7+(25< $1' 5(/$7(' /,7(5$785( 7KLV FKDSWHU LV ZULWWHQ LQ WZR VHFWLRQV 7KH ILUVW VHFWLRQ LQFOXGHV D JHQHUDO WUHDWPHQW RI FRQIOLFW WKHRULHV 0DUFK DQG 6LPRQnV WKHRUHWLFDO FRQFHSWV FRQIOLFW UHVROXn WLRQ DQG FRQIOLFW PDQDJHPHQW 6HFWLRQ 7ZR LV FRQFHUQHG VSHFLILFDOO\ ZLWK WKH FRQVRUWLXP &RQIOLFW 7KHRU\ $FFRUGLQJ WR *ULIILWKV f D WKHRU\ LV HVVHQWLDOO\ D VHW RI DVVXPSWLRQV IURP ZKLFK D VHW RI HPSLULFDO ODZV SULQFLSOHVf PD\ EH GHULYHG S f ,W SURYLGHV D EDVLV IRU GLUHFWLRQ ,W VHUYHV DV D JXLGH WR QHZ NQRZOHGJH DQG FRQVHTXHQWO\ QHZ EHKDYLRU 6DXQGHUV 3KLOOLSV t -RKQVRQ S f )XUWKHU DQDO\VLV RI WKH SUDFWLFDO QDWXUH RI WKHRU\ KDV UHFHLYHG FRQVLGHUDEOH DJUHHPHQW DQG XQLIRUPLW\ DPRQJ WKH WKHRUHWLFLDQV 'HZH\ f VWDWHG WKDW WKHRU\ LV LQ WKH HQG WKH PRVW SUDFWLFDO RI DOO WKLQJV S f &DODGDUFL DQG *HW]HOV f DVVHUWHG WKDW HYHQ WKH VHOIQDPHG nSUDFWLFDO PDQn FDQQRW HVFDSH WKHRU\ S f DQG *ULIILWKV f FRQFOXGHG WKDW WKH SUDFWLFDOLW\ >RI

PAGE 28

WKHRU\@ FRPHV IURP WKH DELOLW\ RQH JDLQV IURP WKH NQRZOHGJH RI WKHRU\ ZKLFK HQDEOHV RQH WR DFW LQ VSHFLILF VLWXDWLRQV EHFDXVH KH NQRZV WKH JHQHUDOLW\ RI >WKH@ VLWXDWLRQV S f :KHQ WKHRU\ LV WDNHQ LQ WKH FRQWH[W RI LGHDV FRQWDLQHG LQ WKH VFKRODUO\ OLWHUDWXUH WKDW FRQIOLFW LV LQHYLWDEOH DQG WKDW LW LV SRVVLEO\ UDPSDQW WKURXJKRXW VRFLHW\ %RXOGLQJ )ROOHWW /LSVHW 6FKRILHOG f RQH PLJKW DVN LV WKHUH D JHQHUDO SKHQRPHQRQ RI FRQIOLFW DQG WKHUHIRUH D JHQHUDO WKHRU\ WKDW LV DSSOLFDEOH WR DOO GRPDLQV RI VRFLHW\ HQGRZHG ZLWK FRQIOLFW" &RXOG LW QRW EH VDLG WKDW LI WKHRULHV RI VRFLDO DQG KXPDQ EHKDYLRU GR LQGHHG DGGUHVV WKHPVHOYHV WR WKH GLVWLQFW JRDOV RI SUHGLFWLQJ HYHQWV DQG SURYLGLQJ D EDVLV IRU XQGHUVWDQGLQJ WKHVH HYHQWV DV LQGLFDWHG E\ 'XELQ f WKHQ WKHUH DUH XQLYHUVDOO\ DSSOLFDEOH SULQFLSOHV WKDW XQGHUOLH REVHUYHG DQG FODVVLILHG SKHQRPHQD S f" $FFRUGLQJ WR 6FKRILHOG f WKHRU\ LPSOLFLWO\ FRQWDLQV D SUHGLFWLYH HOHPHQW ZKLFK XQGHUOLHV VSHFLILHG FRQGLWLRQV VR WKDW ZKHQ FHUWDLQ SULQFLSOHV DUH LQ RSHUDWLRQ VSHFLILF UHVXOWV PD\ EH SUHGLFWHG S f %RXOGLQJ f FRQWHQGHG WKDW WKHUH LV D JHQHUDO WKHRU\ RI FRQIOLFW DQG SUHVHQWHG WZR W\SHV RI JHQHUDO PRGHOV WKDW ZHUH SXUSRUWHG WR EH XQLYHUVDOO\ DFFHSWDEOH 7KH FRPPRQDOLWLHV RI WKHVH PRGHOV DQG WKHLU FKDUDFWHUL]LQJ FRPSRQHQWV PD\ EH FRQFHSWXDOL]HG ZKHQ WKH IROORZLQJ VHTXHQFH RI HYHQWV LV REVHUYHG

PAGE 29

7KH SDUW\ $ SDUW\ LV D SDLU RI EHKDYLRU XQLWV SHUVRQV WKHRULHV RU RUJDQL]DWLRQVf WKDW DUH FDSDEOH RI DVVXPLQJ D QXPEHU RI GLIIHUHQW SRVLWLRQV ZKLOH UHWDLQLQJ UHVSHFWLYH LGHQWLWLHV RU ERXQGDULHV S f %HKDYLRU VSDFH 7KLV LV WKH SRVLWLRQ RI D EHKDYLRU XQLW DW D PRPHQW RI WLPH DV GHILQHG E\ D VHW RI YDOXHV RU D VHW RI YDULDEOHV WKDW GHILQHV WKH EHKDYLRU XQLW 7KHVH YDULDEOHV DUH QRW QHFHVVDULO\ FRQWLQXRXV RU TXDQWLWDWLYHO\ PHDVXUn DEOH EXW PXVW EH FDSDEOH RI VLPSOH RUGHULQJ S f &RPSHWLWLRQ &RPSHWLWLRQ LQ LWV EURDGHVW VHQVH H[LVWV ZKHQ SRWHQWLDO SRVLWLRQV RI WZR EHKDYLRU XQLWV DUH PXWXDOO\ LQFRPSDWLEOH S f &RQIOLFW &RQIOLFW LV D VLWXDWLRQ RI FRPSHWLWLRQ LQ ZKLFK WKH DUH DZDUH RI WKH LQFRPSDWLn ELOLW\ RI SRWHQWLDO IXWXUH SRVLWLRQV DQG LQ ZKLFK HDFK SDUW\ ZLVKHV WR RFFXS\ D SRVLWLRQ WKDW LV LQFRPSDWLEOH ZLWK WKH ZLVKHV RI WKH RWKHU S f ,Q )LJXUH 3DUW D &A&A LV D FRQWDFW FXUYH VWUHWFKHG RXW IRU FRQYHQLHQFH LQWR D VWUDLJKW OLQHf &A:A LV WKH DFFHSWDELOLW\ VHW IRU $A DQG AA IrU $n 7KHUH DUH QR SRLQWV FRPPRQ WR ERWK VHWV DQG D EDUJDLQ FDQQRW EH VWUXFN )LJXUH 3DUW E VKRZV WKH EDUH EDUJDLQ FDVH ,Q WKLV VLWXDWLRQ &A: LV WKH DFFHSWDELOLW\ VHW IRU $A DQG IRU

PAGE 30

$ } DQG D EDUJDLQ FDQ EH VWUXFN DW : EXW QR RWKHU SODFH )LJXUH 3DUW F VKRZV D ILHOG RI DFFHSWDELOLW\ WKDW LV WKH PXWXDOO\ DFFHSWDEOH VHW ,Q WKH G\QDPLFV RI EDUJDLQLQJ FKDQJHV LQ WKH DFFHSWDELOLW\ VHW DUH RI ILUVW LPSRUWDQFH %RXOGLQJ S f )LJXUH 7KH EDUJDLQLQJ DUHD 6HYHUDO YHU\ VRSKLVWLFDWHG PRGHOV WKDW GHSLFWHG FRQn IOLFW VLWXDWLRQV ZHUH DOVR SUHVHQWHG E\ %RXOGLQJ f 7KHVH PRGHOV ZHUH GHVFULEHG DV Df 5LFKDUGVRQ 3URFHVV 0RGHOV Ef WKH (FRORJLFDO 0RGHO DQG Ff WKH (SLGHPLROUQLV ORJLFDO 0RGHO SS f

PAGE 31

2WKHU RUJDQL]DWLRQDO WKHRULHV RI FRQIOLFW KDYH DOVR UHFHLYHG UHFHQW DWWHQWLRQ 6RPH RI WKHVH KDYH EHHQ LGHQWLILHG DV WKH ]HURVXP WKHRU\ DQG WKH JDPH DQG EDUJDLQLQJ WKHRULHV 'HXWVFK 0DUFK t 6LPRQ f ,Q UHJDUG WR RUJDQL]DWLRQDO FRQIOLFW VRPH ZULWHUV VWUHVVHG WKDW DWWHQWLRQ VKRXOG EH JLYHQ WR WKH IDFW WKDW DQ RUJDQL]DWLRQ LV D YHU\ FRPSOH[ VRFLDO V\VWHP DQG VKRXOG EH LQYHVWLJDWHG ZLWK WKLV IDFW LQ PLQG 6XFK D V\VWHP FRQn VLVWV RI FHUWDLQ DVSHFWV RI LQSXW RXWSXW DQG LQWHUDFWLRQ RI LQGLYLGXDOV %RXOGLQJ S f +HQFH LQ LWV QRUPDO VWDWH VWUXFWXUH DQG WKH VWDEOH HTXLOLEULXP LW FRQWDLQV VHW WKH QRUPDWLYH FRQVWUDLQWV IRU RUJDQL]DWLRQDO FRQIOLFW .UXSS S f ,Q WKH RSLQLRQ RI 6FRWW f FRQIOLFW RI PDQ\ GHVFULSWLRQVDFWXDO RU SRWHQWLDOLV SUHVHQW LQ RUJDQL]Dn WLRQV S f +RZHYHU LQ WKH YHUQDFXODU RI 0DU\ 3DUNHU )ROOHWW f WKLV FRQIOLFW LV QHLWKHU JRRG QRU EDG ,W PHUHO\ UHSUHVHQWV GLIIHUHQFHV RI RSLQLRQV DQG LQWHUHVWV S f 0DUFK DQG 6LPRQnV $FFRUGLQJ WR 0DUFK DQG 6LPRQ f WKH WHUP >FRQIOLFW@ LV DSSOLHG WR D EUHDNn GRZQ LQ WKH VWDQGDUG PHFKDQLVP RI GHFLVLRQn PDNLQJ VR WKDW DQ LQGLYLGXDO RU JURXS H[SHULHQFHV GLIILFXOW\ LQ VHOHFWLQJ DQ DFWLRQ DOWHUQDWLYH 7KXV FRQIOLFW RFFXUV ZKHQ DQ LQGLYLGXDO RU JURXS H[SHULn HQFHV D GHFLVLRQ SUREOHP S f

PAGE 32

7R VXSSRUW WKLV SRVLWLRQ 0DUFK DQG 6LPRQ f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n FRPH DVVRFLDWHG ZLWK HDFK DOWHUQDWLYH DFWLRQ EXW WKH SUHIHUUHG DOWHUQDWLYH LV LQDGHTXDWH )RU LQFRPSDUDELOLW\ WKH LQGLYLGXDO NQRZV WKH SUREDELOLW\ GLVWULEXWLRQV RI RXWn FRPHV EXW FDQQRW LGHQWLI\ D PRVW SUHIHUUHG DOWHUQDWLYH :LWK UHVSHFW WR XQFHUWDLQW\ WKH LQGLYLGXDO GRHV QRW NQRZ WKH SUREDELOLW\ GLVWULEXWLRQV FRQQHFWLQJ EHKDYLRU FKRLFHV DQG HQYLURQPHQWDO RXWFRPHV 0DUFK t 6LPRQ S f 7R IXUWKHU FKDUDFWHUL]H LQGLYLGXDO FRQIOLFW 0DUFK DQG 6LPRQ f GHYHORSHG WKH IROORZLQJ W\SRORJ\ *RRG DOWHUQDWLYH$Q DOWHUQDWLYH ZKLFK LV DERYH WKH DFFHSWDEOH OHYHO GHILQHG E\ WKH LQGLYLGXDO DQG WKXV LV YLDEOH

PAGE 33

%ODQG DOWHUQDWLYH$Q DOWHUQDWLYH ZKLFK KDV OLWWOH OLNHOLKRRG RI SURGXFLQJ D VWDWH RI DIIDLUV KDYLQJ HLWKHU SRVLWLYH RU QHJDWLYH YDOXH WR WKH LQGLYLGXDO 0L[HG DOWHUQDWLYH$Q DOWHUQDWLYH ZKLFK KDV D KLJK SUREDELOLW\ RI SURGXFLQJ ERWK SRVLWLYHO\ DQG QHJDWLYHO\ YDOXHG RXWFRPHV 3RRU DOWHUQDWLYH$Q DOWHUQDWLYH WKDW LV OLNHO\ WR UHVXOW LQ D GHVLUDEOH RXWFRPH DQG OLNHO\ WR UHVXOW LQ DQ XQGHVLUDEOH RXWFRPH 8QFHUWDLQ DOWHUQDWLYH$Q DOWHUQDWLYH LQ ZKLFK WKH LQGLYLGXDO GRHV QRW KDYH D FRQFHSWLRQ RI WKH SUREDELOLWLHV DWWDFKHG WR LW S f $ VXPPDU\ RI WKHVH W\SRORJLHV DQG WKH W\SH RI FRQIOLFW FUHDWHG E\ WKHLU LQWHUDFWLRQ LV SURYLGHG LQ 7DEOH )LJXUH DOVR SUHVHQWV FRQFHSWXDO IDFWRUV XQGHUO\LQJ LQGLYLGXDO FRQIOLFW :LWKLQ WKH FRQWH[W RI WKH W\SHV RI FRQIOLFW LOOXVn WUDWHG LQ 7DEOH WKH ZULWHUV DGYDQFHG WKH QRWLRQ WKDW RI WKH SRVVLEOH VLWXDWLRQV JLYHQ QR FRQIOLFW LV DQWLFLSDWHG LQ FDVHV EHFDXVH WKH DOWHUQDWLYHV GR QRW SUHVHQW GLIn ILFXOW\ LQ GHFLVLRQPDNLQJ +RZHYHU WKH RWKHU FDVHV GR UHSUHVHQW FRQIOLFW DV YDULRXV IRUPV RI LQFRPSDUDELOLW\ XQDFFHSWDELOLW\ DQG XQFHUWDLQW\ H[LVW ,QGLYLGXDO UHDFWLRQ WR WKHVH FRQIOLFW VLWXDWLRQV LV SURYLGHG LQ )LJXUH r

PAGE 34

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

PAGE 35

6XEMHFWLYH LQFRPSDUDELOLW\ 3HUFHLYHG FRQIOLFW 0RWLYDWLRQ WR UHGXFH FRQIOLFW $YDLODELOLW\ RI $PRXQW RI EODQG DOWHUQDWLYHV WLPH SUHVVXUH 6XEMHFWLYH XQDFFHSWDELOLW\ )LJXUH )DFWRUV DIIHFWLQJ LQGLYLGXDO FRQIOLFW DQG LQGLYLGXDO UHDFWLRQV WR FRQIOLFW 2UJDQL]DWLRQDO FRQIOLFW LQGLYLGXDO FRQIOLFW ZLWKLQ DQ RUJDQL]DWLRQ 2UJDQL]DWLRQDO FRQIOLFW PD\ DULVH LQ WZR ZD\V )LUVW GHFLVLRQ SUREOHPV PD\ DULVH WKDW DUH SULPDULO\ LQWUDn LQGLYLGXDO ,Q WKLV FDVH WKH SUREOHP PD\ EH WKDW QRQH RI WKH PHPEHUV KDV NQRZQ DFFHSWDEOH DOWHUQDWLYHV LQ WHUPV RI KLV RU KHU RZQ JRDO SHUFHSWLRQV 7KH VHFRQG W\SH RI RUJDQLn ]DWLRQDO FRQIOLFW DULVHV IURP GLIIHUHQFHV EHWZHHQ WKH

PAGE 36

FKRLFHV PDGH E\ GLIIHUHQW LQGLYLGXDOV LQ WKH RUJDQL]DWLRQ 7KLV LV WKH VLWXDWLRQ LQ ZKLFK WKH LQGLYLGXDO SDUWLFLSDQWV DUH QRW LQ FRQIOLFW EXW WKH RUJDQL]DWLRQ LV DV D ZKROH 0DUFK t 6LPRQ S f )URP SUHYLRXV K\SRWKHVHV LW LV SRVVLEOH WR SUHGLFW WKDW LQWUDLQGLYLGXDO FRQIOLFW ZLWKLQ WKH RUJDQL]DWLRQ LV PRVW OLNHO\ WR RFFXU ZKHQ WKH FRQGLWLRQV VXUURXQGLQJ WKH RUJDQL]DWLRQDO GHFLVLRQ LQYROYH ZLGHVSUHDG XQFHUWDLQW\ RU D VFDUFLW\ RI DFFHSWDEOH DOWHUQDWLYHV RI DFWLRQV &RQVHn TXHQWO\ LW LV SRVVLEOH WR IRUPXODWH WZR K\SRWKHVHV UHJDUGLQJ IDFWRUV DIIHFWLQJ XQFHUWDLQW\ Df WKH JUHDWHU WKH DPRXQW RI SDVW H[SHULHQFH ZLWK D GHFLVLRQ VLWXDWLRQ WKH OHVV SUREDEOH WKDW LQWUDLQGLYLGXDO RUJDQL]DWLRQDO FRQn IOLFW ZLOO DULVH Ef WKH OHVV WKH FRPSOH[LW\ RI WKH GHFLVLRQ WKH OHVV SUREDEOH WKDW LQWUDLQGLYLGXDO RUJDQL]Dn WLRQDO FRQIOLFW ZLOO DULVH 0DUFK t 6LPRQ S f $V D UHVXOW RI LQWURVSHFWLRQ DQG H[WUDSRODWLRQ RI LQGLYLGXDO EHKDYLRU LW LV SRVVLEOH WR SUHGLFW IDFWRUV DIIHFWLQJ DFFHSWDELOLW\ ZLWK UHVSHFW WR D JHQHUDO GLVSDULW\ EHWZHHQ DVSLUDWLRQV DQG SRVVLEOH DFKLHYHPHQW 7KHQ WKH JUHDWHU WKH GLVSDULW\ EHWZHHQ DVSLUDWLRQ OHYHOV DQG DFKLHYHn PHQW WKH KLJKHU WKH SUREDELOLW\ RI LQGLYLGXDO FRQIOLFW ZLWKLQ WKH RUJDQL]DWLRQ 7KLV XVXDOO\ KDSSHQV ZKHQ WKH PXQLILFHQFH RI WKH HQYLURQPHQW XQGHUJRHV D VXGGHQ FKDQJH LQ GLUHFWLRQ 0DUFK t 6LPRQ SS f )LJXUH VXPPDUL]HV WKH PDMRU SURSRVLWLRQV FRQWDLQHG LQ WKH DERYH UHPDUNV

PAGE 37

0XQLILFHQFH RI WKH HQYLURQPHQW &RPSOH[LW\ RI GHFLVLRQ $VSLUDWLRQ OHYHO DQG DFKLHYHPHQW 6XEMHFWLYH XQDFFHSWDELOLW\ )LJXUH )DFWRUV DIIHFWLQJ LQGLYLGXDO FRQIOLFW ZLWKLQ RUJDQL]DWLRQV 2UJDQL]DWLRQDO FRQIOLFW LQWHUJURXS FRQIOLFW ZLWKLQ DQ RUJDQL]DWLRQ ,Q WKH JHQHUDO DEVHQFH RI LQGLYLGXDO FRQIOLFW XQFHUWDLQW\ DQG XQDFFHSWDELOLW\WKH PHFKDQLVP WKDW SURn GXFHV GLVDJUHHPHQW DPRQJ WKH SDUWLFLSDQWV LQ DQ RUJDQL]DWLRQ DQG WKXV RUJDQL]DWLRQDO FRQIOLFW PD\ EH VXPPDUL]HG LQ WHUPV RI WKUHH YDULDEOHV Df WKH H[LVWHQFH RI D SRVLWLYH IHOW QHHG IRU MRLQW GHFLVLRQ PDNLQJ Ef D GLIIHUHQFH LQ JRDOV RU Ff D GLIIHUHQFH LQ SHUFHSWLRQV RI UHDOLW\ 0DUFK t 6LPRQ S f

PAGE 38

)DFWRUV DIIHFWLQJ WKH IHOW QHHG IRU MRLQW GHFLVLRQn PDNLQJ 6FKDFKWHU FLWHG LQ 0DUFK t 6LPRQ f DVVHUWHG WKDW ZKHUH PDQ\ LQGLYLGXDO GHFLVLRQV EHFRPH MRLQW RUJDQL]Dn WLRQDO GHFLVLRQV WKH SRWHQWLDO DUHDV RI FRQIOLFW DUH VXEVWDQWLDO S f 7KLV LV FRQVLVWHQW ZLWK 0DUFK DQG 6LPRQnV f SRVLWLRQ WKDW D IHOW QHHG IRU MRLQW GHFLVLRQn PDNLQJ LQ DQ RUJDQL]DWLRQ DULVHV WKURXJK WZR FHQWUDO SUREOHPV LQ RUJDQL]DWLRQDO GHFLVLRQPDNLQJ UHVRXUFH DOORFDWLRQ DQG VFKHGXOLQJ 0RUH VSHFLILFDOO\ WKH IROORZLQJ GHULYDWLRQV ZHUH SURYLGHG 7KH JUHDWHU WKH PXWXDO GHSHQGHQFH RQ D OLPLWHG UHVRXUFH WKH JUHDWHU WKH IHOW QHHG IRU MRLQW GHFLVLRQPDNLQJ ZLWK UHVSHFW WR WKDW UHVRXUFH 7KH JUHDWHU WKH LQWHUGHSHQGHQFH RI WLPLQJ RI DFWLYLWLHV WKH JUHDWHU WKH IHOW QHHG IRU MRLQW GHFLVLRQPDNLQJ ZLWK UHVSHFW WR VFKHGXOLQJ S f 7KH PHFKDQLVPV XQGHUO\LQJ WKHVH SURSRVLWLRQV DUH UHDGLO\ DSSDUHQW DV LQHTXDOLW\ DQG DPELJXLW\ LQ WKH DOORFDn WLRQ RI UHVRXUFHV LQYROYH WKH PRVW GUDPDWLF VLWXDWLRQV IRU FRQIOLFW LQ FRPSOH[ RUJDQL]DWLRQV 6KHULI t 6KHULIFLWHG LQ 0DUFK t 6LPRQ f $V ORQJ DV WKHUH DUH LQWHUGHSHQGn HQFLHV DVVRFLDWHG ZLWK VFDUFH UHVRXUFHV RU VFKHGXOLQJ SUREOHPV SUHVVXUH XSRQ RQH WR FRQWURO KLV RU KHU HQYLURQn PHQW ZLOO OHDG WR D GHVLUH WR FRQWURO WKH DOORFDWLRQ RI UHVRXUFHV DQG DFWLYLWLHV WKDW LPSLQJH XSRQ KLV RU KHU RZQ S f

PAGE 39

)DFWRUV DIIHFWLQJ GLIIHUHQWLDWLRQ RI JRDOV 0DQ\ RI WKH FKDUDFWHULVWLFV RI RUJDQL]DWLRQV WKDW DIIHFW GLIIHUn HQWLDWLRQ RI JRDOV DPRQJ SDUWLFLSDQWV ZHUH FDWHJRUL]HG LQWR WKUHH EURDG DUHDV 7KRVH WKDW DIIHFW WKH FRPPRQDOLW\ RI LQGLYLGXDO JRDOV ZLWKLQ WKH RUJDQL]DWLRQ 7KRVH WKDW DIIHFW WKH FODULW\ DQG FRQVLVWHQF\ RI WKH UHZDUG VWUXFWXUH DQG WKHUHIRUH WKH UHLQIRUFHn PHQW V\VWHP 7KRVH WKDW DIIHFW WKH FRPSDWLELOLW\ RI LQGLYLGXDOV )URP WKHVH FKDUDFWHULVWLFV ZDV GHULYHG WKH SURSRVLWLRQ WKH OHVV WKH VXEMHFWLYH RSHUDWLRQDOLW\ RI RUJDQL]DWLRQDO JRDOV WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI LQGLYLGXDO JRDOV LQ WKH RUJDQL]DWLRQ 0DUFK t 6LPRQ S f )DFWRUV DIIHFWLQJ GLIIHUHQWLDWLRQV RI LQGLYLGXDO SHUFHSWLRQV :LWKLQ WKH RUJDQL]DWLRQ WKH FRJQLWLYH SURFHVVHV XQGHUO\LQJ GHFLVLRQPDNLQJ DUH PDMRU IDFWRUV DIIHFWLQJ GLIIHUHQWLDWLRQ RI LQGLYLGXDO SHUFHSWLRQV %Hn FDXVH WKHUH LV D VXEVWDQWLDO LQWHUDFWLRQ EHWZHHQ LQGLYLGXDO JRDOV DQG FRJQLWLRQ WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI LQGLYLGXDO JRDOV WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI LQGLYLGXDO SHUFHSWLRQV DQG YLFH YHUVD $FFRUGLQJ WR 0DUFK DQG 6LPRQ f WKHUH DUH WKUHH PDMRU ZD\V LQ ZKLFK RUJDQL]DWLRQDO FKDUDFWHULVWLFV DIIHFW WKH FRPPRQDOLW\ RI LQIRUPDWLRQ DPRQJ SDUWLFLSDQWV

PAGE 40

2UJDQL]DWLRQ PHPEHUV PD\ VKDUH D FRPPRQ VRXUFH RI LQIRUPDWLRQ 7KH IRUPDO WHFKQLTXH IRU SURFHVVLQJ LQIRUPDWLRQ ZLWKLQ DQ RUJDQL]DWLRQ PD\ SURYLGH IRU ZLGH FRPPXQLFDWLRQ ,QIRUPDO LQIRUPDWLRQ FKDQQHOV PD\ SURYLGH ZLGHn VSUHDG VKDULQJ RI LQIRUPDWLRQ S f )URP WKRVH VWDWHPHQWV WKH IROORZLQJ VHW RI SURSRVLn WLRQV ZDV GHULYHG 7KH JUHDWHU WKH QXPEHU RI LQGHSHQGHQW LQIRUPDWLRQ VRXUFHV WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI SHUn FHSWLRQV ZLWKLQ WKH RUJDQL]DWLRQ S f 7KH JUHDWHU WKH FKDQQHOLQJ RI LQIRUPDWLRQn SURFHVVLQJ WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI SHUFHSWLRQ ZLWKLQ WKH RUJDQL]DWLRQ S f 7KH FRQFHSWXDO IUDPHZRUN SUHVHQWHG LQ )LJXUH YLYLGO\ RXWOLQHV WKH PDMRU SURSRVLWLRQV VHW IRUWK E\ 0DUFK DQG 6LPRQ 7KHVH SURSRVLWLRQV FOHDUO\ GHQRWH WKH UHODWLRQVKLS EHWZHHQ XQLWV ZLWKLQ DQ RUJDQL]DWLRQ 7KHUHIRUH LW VKRXOG EH REVHUYHG WKDW WKH FORVHU WKH DVVRFLDWLRQ EHWZHHQ XQLWV RU VXEXQLWV ZLWKLQ WKH RUJDQL]DWLRQ Df WKH JUHDWHU ZLOO EH WKH IHOW QHHG IRU MRLQW GHFLVLRQPDNLQJ Ef WKH OHVV ZLOO EH WKH GLIIHUHQWLDWLRQ RI JRDOV DQG Ff WKH OHVV ZLOO EH WKH GLIIHUHQWLDWLRQ RI SHUFHSWLRQV

PAGE 41

)LJXUH )DFWRUV DIIHFWLQJ LQWHUJURXS FRQIOLFW ZLWKLQ DQ RUJDQL]DWLRQ ,QWHURUJDQL]DWLRQDO FRQIOLFW 0RVW ZULWHUV RQ FRQIOLFW KDYH DGKHUHG WR WKH YLHZ WKDW LQWHURUJDQL]DWLRQDO FRQIOLFW DQG RUJDQL]DWLRQDO FRQIOLFW DUH V\QRQ\PRXV SKHQRPHQD )RU H[DPSOH 0DUFK DQG 6LPRQ f VWDWHG WKDW PDQ\ RI WKH SKHQRPHQD RI LQWHUJURXS FRQIOLFW ZLWKLQ RUJDQL]DWLRQV DUH DOPRVW LQGLVWLQJXLVKDEOH IURP WKH SKHQRPHQD WKDW >RQH@ PLJKW FRQVLGHU XQGHU WKH

PAGE 42

SUHVHQW KHDGLQJ S f 7KLV DVVXPSWLRQ DQG WKH SDXFLW\ RI LQWHUHVW WRZDUG LQYHVWLJDWLQJ WKLV DUHD KHUHWRn IRUH KDV FRQWULEXWHG WR WKH IDFW WKDW YHU\ OLWWOH OLWHUDWXUH FDQ EH IRXQG WKDW VSHFLILFDOO\ UHODWHV WR LQWHUn RUJDQL]DWLRQV 0RUHRYHU WKRVH ZKR DUH EHJLQQLQJ WR JLYH DWWHQWLRQ WR WKH DUHD KDYH QRW SURYLGHG VXIILFLHQW HYLn GHQFH WR VXSSRUW RU FRQWUDGLFW WKH WKHRUHWLFDO SURSRVLWLRQV IRXQG LQ WKH OLWHUDWXUH &RQIOLFW 5HVROXWLRQ &RQIOLFW UHSUHVHQWV D GLVHTXLOLEULXP LQ WKH V\VWHP ZKLFK JHQHUDWHV PRWLYDWLRQ WR FKDQJH LW ZKHQ LW LV SHUn FHLYHG 6RPH ZD\V LQ ZKLFK WKLV PLJKW EH DFFRPSOLVKHG DUH SUHVHQWHG LQ WKH IROORZLQJ VHFWLRQV 5HVROXWLRQ RI LQGLYLGXDO FRQIOLFW ZLWKLQ WKH RUJDQL]DWLRQ &RQIOLFW ZKHQ GHDOW ZLWK FRUUHFWO\ LV DQ H[SHULHQFH RI JURZWK IRU WKH SHUVRQDOLW\ ,Q IDFW ZLWKRXW FRQIOLFW WKHUH ZRXOG EH OLWWOH QHHG IRU XV WR GHYHORS QHZ ZD\V RI EHKDYLQJ $UJ\ULV S f :LWK UHVSHFW WR LQGLYLGXDO FRQIOLFW 0DUFK DQG 6LPRQ f PDGH WKH IROORZLQJ VWDWHPHQWV :KHUH WKH VRXUFH RI FRQIOLFW LV XQFHUWDLQW\ WKH LQGLYLGXDO ZLOO ILUVW LQFUHDVH KLV VHDUFK IRU FODULILFDWLRQ RI WKH FRQVHTXHQFHV RI DOWHUQDWLYHV DOUHDG\ DVNHG )DLOLQJ LQ WKDW KH ZLOO LQFUHDVH KLV VHDUFK IRU QHZ DOWHUQDWLYHV S f ,I WKH SHUFHLYHG FRQIOLFW LV WKH UHVXOW RI XQDFFHSWn DELOLW\ RI DOWHUQDWLYHV

PAGE 43

WKH LQGLYLGXDO ZLOO VHDUFK IRU QHZ DOWHUQDWLYHV 7KH VWUHQJWK RI WKH PRWLYDn WLRQ WR UHGXFH FRQIOLFW DQG WKXV WKH UDWH RI VHDUFKf GHSHQGV RQ WKH DYDLODELOLW\ RI EODQG DOWHUQDWLYHV DQG WKH WLPH SUHVVXUH S f 2Q WKH RWKHU KDQG ZKHUH WKH VRXUFH RI FRQIOLFW LV LQFRPSDUDn ELOLW\ EXW QRW DFFHSWDELOLW\f GHFLVLRQ WLPH ZLOO EH VKRUW 8QGHU VXFK FRQGLWLRQV FKRLFH ZLOO GHSHQG RQ DWWHQWLRQ DQG WKH VHTXHQFH LQ ZKLFK DOWHUQDWLYHV DUH SUHVHQWHG S f 5HVROXWLRQ RI LQWHUJURXS FRQIOLFW ZLWKLQ WKH RUJDQL]DWLRQ :LWKLQ WKH RUJDQL]DWLRQ UHJXODUL]HG PHDQV DUH LQYROYHG WR VHWWOH FRQIOLFWV RU GLUHFW WKHP LQWR KDUPOHVV FKDQQHOV RU WR XVH WKHP DV FRQVWUXFWLYH IRUFHV 6FRWW SS f 2I FRXUVH WKLV PD\ EH GRQH LQ VHYHUDO ZD\V )RXU ZD\V SUHVHQWHG E\ 0DUFK DQG 6LPRQ f ZHUH Df SUREOHPVROYLQJ Ef SHUVXDVLRQ Ff EDUJDLQLQJ DQG Gf SROLWLFL]LQJ ,Q SUREOHPVROYLQJ LW LV DVVXPHG WKDW REMHFWLYHV DUH VKDUHG DQG WKDW WKH GHFLVLRQ SUREOHP LV WR ,, LGHQWLI\ D VROXWLRQ WKDW VDWLVILHV WKH VKDUHG FULWHULD S f (VVHQWLDOO\ LPSRUWDQFH LV SODFHG XSRQ DVVHPEOLQJ LQIRUPDWLRQ LQFUHDVLQJ VHDUFK EHKDYLRU DQG HYRNLQJ QHZ DOWHUQDWLYHV ,PSOLFLW LQ WKH XVH RI SHUVXDVLRQ LV WKH EHOLHI WKDW DW VRPH OHYHO REMHFWLYHV DUH VKDUHG DQG WKDW GLVDJUHHPHQW RYHU VXEJRDOV FDQ EH PHGLDWHG E\ UHIHUHQFH WR FRPPRQ JRDOV %DUJDLQLQJ LV XVHG LQ VLWXDWLRQV ZKHUH GLVDJUHHPHQW RYHU

PAGE 44

JRDOV LV DVVXPHG WR EH IL[HG +HQFH DJUHHPHQW ZLWKRXW SHUVXDVLRQ LV VRXJKW 2Q WKH RWKHU KDQG SROLWLFV GLIIHUV IURP EDUJDLQLQJ LQ WKDW WKH GLVDJUHHPHQW RYHU JRDOV LV QRW ,Q WKH SDSHU HQWLWOHG &RQVWUXFWLYH &RQIOLFW 0DU\ 3DUNHU )ROOHWW SURSRVHG WKUHH ZD\V IRU WKH UHVROXWLRQ RI FRQIOLFW 7KHVH ZHUH GRPLQDWLRQ FRPSURPLVH DQG LQWHJUDn WLRQ 'RPLQDWLRQ LV WKH HDVLHVW ZD\ RI GHDOLQJ ZLWK WKH FRQIOLFW WKH HDVLHVW IRU WKH PRPHQW EXW QRW XVXDOO\ VXFFHVVIXO LQ WKH ORQJ UXQ LW LV D YLFWRU\ RI RQH VLGH RYHU WKH RWKHU S f &RPSURPLVH LV WKH JHQHUDOO\ DFFHSWHG RU DSSURYHG ZD\ RI HQGLQJ FRQWURYHUV\
PAGE 45

)ROOHWW FLWHG LQ 0HWFDOI t 8UZLFN f LGHQWLILHG WKH EUHDNLQJ XS RI ZKROHV LQWR WKHLU FRQVWLWXHQW SDUWV DV WKH VHFRQG VWHS 7KLV LQYROYHV EUHDNLQJ XS WKH GHPDQGV RI ERWK VLGHV &RQYHUVHO\ RQH RIWHQ KDV WR GR WKH RSSRVLWH WKDW LV WR ILQG WKH ZKROH GHPDQG WKH UHDO GHPDQG ZKLFK LV EHLQJ REVFXUHG E\ PLVFHOODQHRXV FODLPV RU E\ LQHIIHFWLYH SUHVHQWDWLRQ S f $QWLFLSDWLRQ RI UHVSRQVH LV WKH WKLUG DQG ILQDO VWHS RI LQWHJUDWLRQ 7KH DQWLFLSDWLRQ RI FRQIOLFW GRHV QRW PHDQ QHFHVVDULO\ WKH DYRLGDQFH RI FRQIOLFW EXW VLPSO\ SOD\LQJ WKH JDPH GLIIHUHQWO\ 7KDW LV WKH GLIIHUHQW LQWHUHVWV DUH LQWHJUDWHG ZLWKRXW PDNLQJ DOO WKH PRYHV 0HWFDOI t 8UZLFN S f $FFRUGLQJ WR 6LPPHO f FRQIOLFW FDQ DFWXDOO\ EHFRPH WKH PHDQV RI VWUHQJWKHQLQJ WKH UHODWLRQVKLS EHWZHHQ JURXSV ZLWKLQ WKH VDPH RUJDQL]DWLRQ 7KLV RI FRXUVH LOOXVWUDWHV WKH VHOGRP FRQVLGHUHG FRQVWUXFWLYH GLPHQVLRQ RI FRQIOLFW S f &RQIOLFW 0DQDJHPHQW )ROOHWW f DQG RWKHU ZULWHUV RQ FRQIOLFW %XUNH 'HUU 0DUFK t 6LPRQ f KDYH SUHVHQWHG PDQDJHPHQW DQG UHVROXWLRQ VWUDWHJLHV IRU GHDOLQJ ZLWK FRQIOLFW VLWXDWLRQV ,Q PRVW LQVWDQFHV KRZHYHU WKHVH ZULWHUV GLG QRW RUJDQL]H WKHVH VWUDWHJLHV LQWR FRQIOLFW PDQDJHPHQW DQG FRQIOLFW UHVROXWLRQ FDWHJRULHV 3HUKDSV

PAGE 46

WKLV QHJOHFW KDV FRQWULEXWHG WR WKH SUDFWLFH LQ YRJXH WRGD\ RI XVLQJ WKHVH WZR FRQFHSWV LQWHUFKDQJHDEO\ &RQIOLFW UHVROXWLRQ DV GHVFULEHG E\ /HYL DQG %HQMDPLQ S f LQYROYHV D SURFHVV ZKLFK DWWHPSWV WR UHVROYH GLVSXWHV +RZHYHU DFFRUGLQJ WR 6FKRILHOG f DQG RWKHUV )ROOHWW /D7RXU HW DO 0DUFK t 6LPRQ f FRQIOLFW LQ WKH RUJDQL]DWLRQDO VHWWLQJ LV DQ LQHYLWDEOH SKHQRPHQRQ ZKLFK PD\ RFFXU RU UHFXU DW DQ\WLPH S f 7KLV PHDQV QRW RQO\ WKDW WKH UHVROXWLRQ RI D VSHFLILF FRQIOLFW PD\ QRW EH SHUPDQHQW EXW WKDW QHZ FRQn IOLFW ZLOO FRQWLQXDOO\ DULVH ZLWKLQ WKH RUJDQL]DWLRQ &RQIOLFW PDQDJHPHQW RQ WKH RWKHU KDQG LV D SURFHVV ZKLFK LQYROYHV FRQWUROOLQJ FRQIOLFW PLQLPL]LQJ LWV HIIHFW RU EULQJLQJ LW WR DQ HQG WHPSRUDULO\ +HQFH WKH FRPSURPLVH VWUDWHJ\ RXWOLQHG E\ )ROOHWW S f RU WKH EDUJDLQLQJ DQG SROLWLFL]LQJ VWUDWHJLHV DGYRFDWHG E\ 0DUFK DQG 6LPRQ S f LOOXVWUDWH PHWKRGV E\ ZKLFK FRQIOLFW PD\ EH PDQDJHG $Q LQFUHDVLQJ QXPEHU RI FRQWHPSRUDU\ ZULWHUV KDV EHJXQ WR HPSKDVL]H WKH LPSRUWDQFH RI WKH FRQIOLFW PDQDJHPHQW FRQn FHSW DV D WRRO IRU GHDOLQJ ZLWK FRQIOLFW VLWXDWLRQV )RU H[DPSOH )HOWQHU DQG *RRGVHOO f VWDWHG LW LV LPSRUWDQW WR UHFRJQL]H WKDW FRQIOLFW LV D IXQGDPHQWDO LQJUHGLHQW RI FKDQJH WKHUHIRUH WKH ZD\ FRQIOLFW LV PDQDJHG UDWKHU WKDQ VXSSUHVVHG DYRLGHG RU LJQRUHG JDLQV HYHU LQFUHDVLQJ LPSRUWDQFH LQ JRYHUQDQFH WKHRU\ S f $ FRQFXUULQJ RSLQLRQ ZDV H[SUHVVHG ZKHQ /HVOLH f DVVHUWHG WKDW

PAGE 47

DGMXVWLQJ WR WKH SHUPDQHQFH RI FRQIOLFW LQYROYHV LQVWLWXWLQJ IRUPDO PHFKDQLVPV WR GUDLQ DZD\ DQG WR FKDQQHO WKH GHVWUXFWLYH XUJHV RI SDUWLHV WR D GLVn SXWH S f 7KH &RQVRUWLXP $ UHYLHZ RI WKH OLWHUDWXUH UHYHDOHG WKDW WKH FRQVRUWLXP LV D SKHQRPHQRQ ZKLFK HYROYHG ORJLFDOO\ IURP PRGHUQ VRFLHW\ -RKQVRQ f DGYDQFHG WKH QRWLRQ WKDW WKLV SKHQRPHQRQ LV RQO\ D ILWWLQJ PRGHUQ YHUVLRQ RI WKH YROXQWDULVP ZKLFK LPSUHVVHG 'H 7RFTXHYLOOH LQ WKH nV S f 0DWKHZV f DOVR PDLQWDLQHG WKDW WKH LQHYLWDEOH HPHUJHQFH RI WKH SKHQRPHQRQ RI LQVWLWXWLRQDO FRRSHUDWLRQ KDV LWV RULJLQ LQ WKH $PHULFDQ ([SHULPHQW WKH JHQLXV IRU JHWWLQJ ZRUN GRQH WKURXJK WKH NLQG RI YROXQWDU\ DVVRFLDWLRQ REVHUYHG E\ 'H 7RFTXHYLOOH DV KH WUDYHOHG WKURXJK $PHULFD LQ S f 3HUKDSV D PRVW VLJQLILFDQW REVHUYDWLRQ UHJDUGLQJ WKH SULQFLSOH RI DVVRFLDWLRQ ZDV PDGH E\ WKLV SURSKHWLF )UHQFKn PDQ ZKHQ KH VWDWHG ,W LV HDV\ WR IRUHVHH WKDW WKH WLPH LV GUDZLQJ QHDU ZKHQ PDQ ZLOO EH OHVV DQG OHVV DEOH WR SURGXFH RI KLPVHOI DORQH WKH FRPPRQHVW QHFHVVDULHV RI OLIH &LWHG LQ 0DWKHZV f 7KH FRQVRUWLXP RI WRGD\ LV PRUH WKDQ DQ LQIRUPDO DVVRFLDWLRQ RI LQGLYLGXDOV ,W LV DQ RUJDQL]DWLRQ RU IRUPDO DVVRFLDWLRQf HVWDEOLVKHG LQ UHVSRQVH WR LQFUHDVLQJ GHPDQGV XSRQ DXWRQRPRXV LQVWLWXWLRQV 'HPDQGV WR SURYLGH IRU QHHGV DW D WLPH ZKHQ GXSOLFDWLRQ FRPSHWLWLRQ DQG WKH

PAGE 48

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f GHILQHG LQWHUJRYHUQPHQWDO DJUHHPHQWV DV DUUDQJHPHQWV XQGHU ZKLFK RQH RU PRUH JRYHUQPHQWDO XQLWV FRQGXFW DQ DFWLYLW\ MRLQWO\ RU LQ FRRSHUDWLRQ ZLWK RQH RU PRUH JRYHUQPHQWDO XQLWV S f :HEVWHUnV 1HZ ,QWHUn QDWLRQDO 'LFWLRQDU\ GHILQHV FRQVRUWLXP DV DQ\ DVVRFLDWLRQ IRU D FRPPRQ HQG +DQVHQ f GHVFULEHG FRQVRUWLXP DV DQ DVVRFLDWLRQ RI WKH LQWHUHVW RI WZR RU PRUH SDUWLHV S f +RZHYHU IRU WKH SXUSRVH RI WKLV VWXG\ WKHVH WUDQVn SRVLWLRQDO H[SUHVVLRQV ZLOO UHIHU H[SOLFLWO\ WR D YROXQWDU\ DQG IRUPDO DVVRFLDWLRQ RI WZR RU PRUH DXWRQRPRXV LQVWLWXWLRQV :LWKLQ WKH FRQWH[W RI WKH DERYH GHILQLWLRQ WKH IROORZLQJ FULWHULD DV RXWOLQHG LQ WKH &RQVRUWLXP 'LUHFWRU\ ZHUH VDWLVILHG (DFK FRQVRUWLXP Df ZDV D YROXQWDU\ IRUPDO RUJDQL]DWLRQ Ef KDG WZR RU PRUH PHPEHU LQVWLWXWLRQV Ff KDG DW OHDVW RQH IXOOWLPH SURIHVVLRQDO

PAGE 49

Gf KDG WDQJLEOH HYLGHQFH RI ORQJWHUP FRPPLWPHQW RI PHPEHU LQVWLWXWLRQV DQG Hf KDG PXOWLDFDGHPLF SURJUDPV /DQFDVWHU / 3DWWHUVRQ D 3DWWHUVRQ t %XUQV f 6WDWXWRU\ ERGLHV LQIRUPDO ELODWHUDO DJUHHPHQWV DQG HSKHPHUDO DG KRF FRPELQDWLRQV ZHUH H[FOXGHG +LVWRULFDO 'HYHORSPHQW RI WKH &RQFHSW /HZLV 3DWWHUVRQ Ef DVVHUWHG WKDW DOWKRXJK RUJDQL]DWLRQDO LQGHSHQGHQFH KDV EHHQ D GHHSO\ URRWHG WUDGLn WLRQ FRRSHUDWLRQ LV E\ QR PHDQV D QHZ SKHQRPHQRQ S f )RU H[DPSOH WKH IRXQGLQJ RI 2[IRUG &ROOHJH LQ KDV EHHQ FLWHG E\ VFKRODUV DV WKH EHJLQQLQJ RI FRRSHUDWLRQ EHWZHHQ LQVWLWXWLRQV RI KLJKHU HGXFDWLRQ S f $PRQJ $PHULFDQ LQVWLWXWLRQV RI KLJKHU HGXFDWLRQ /HZLV 3DWWHUVRQ Ef UHSRUWHG WKDW WKH ILUVW YROXQWDU\ DVVRFLDWLRQ RI FROOHJHV LQ WKH 8QLWHG 6WDWHV IRUPDOO\ MRLQHG WRJHWKHU IRU DFDGHPLF SXUSRVHV ZDV WKH &ODUHPRQW &ROOHJHV LQ S f 6KRUWO\ DIWHU WKLV EHJLQQLQJ LQ WKH $WODQWD 8QLYHUVLW\ &HQWHU ZDV EHJXQ ) 3DWWHUVRQ S f 6XEVHTXHQW WR WKLV KRZHYHU WKH PRPHQWXP DFFHOHUn DWHG VXFK WKDW LQVWLWXWLRQV KDG IRUPHG FRQVRUWLD E\ / 3DWWHUVRQ E S f ,QFRQVLVWHQW ZLWK WKH ODWWHU ZHUH WKH UHVXOWV REWDLQHG E\ DQRWKHU VXUYH\ ZKLFK UHYHDOHG WKDW WKHUH ZHUH FRQVRUWLD LQ H[LVWHQFH DW WKDW WLPH 0RRUH f +RZHYHU (OGRQ -RKQVRQ f PDLQWDLQHG WKDW WKH YDVW PDMRULW\ RI WKHVH ZHUH ELODWHUDO DUUDQJHPHQWV ODUJHO\ VLQJOHSXUSRVH DQG ZLWKRXW

PAGE 50

IRUPDO RUJDQL]DWLRQ RU LQGHSHQGHQW JRYHUQPHQW S f %\ DSSUR[LPDWHO\ FRQVRUWLD LQYROYLQJ QHDUO\ LQVWLWXWLRQV RI KLJKHU HGXFDWLRQ KDG EHHQ RUJDQL]HG ) 3DWWHUVRQ SS f 2QH \HDU ODWHU WKLV QXPEHU KDG LQFUHDVHG WR LQVWLWXWLRQV DQG FRQVRUWLD / 3DWWHUVRQ D S Yf $V RI WKLV ZULWLQJ D VXEVWDQWLDO QXPEHU RI FRRSHUDWLYH DUUDQJHPHQWV RU IRUPDO OLQNDJH V\VWHPV KDV EHHQ RUJDQL]HG WKURXJKRXW WKH FRXQWU\ &RQQRUV HW DO / 3DWWHUVRQ F 3DWWHUVRQ t %XUQV f &RQVRUWLXP 7\SRORJLHV $OWKRXJK WKH YDULHW\ RI FKDUDFWHULVWLFV W\SLFDO DPRQJ FRQVRUWLD DV ZHOO DV WKH SRVVLEOH XQLTXHQHVV RI HDFK RQH IRUPHG PDNHV LW GLIILFXOW WR FDWHJRUL]H WKHP D QXPEHU RI HIIRUWV KDYH EHHQ PDGH WR VRUW WKHP RXW SURYLVLRQDOO\ $QGUHZ &RQQRUV HW DO 'RQRYDQ / 3DWWHUVRQ :LOVRQ f /DQFDVWHU f SURYLGHG D FRQJUXHQW SRVLWLRQ ZKHQ KH DGYDQFHG WKH QRWLRQ WKDW DOWKRXJK WKH PRYHPHQW LV FKDUDFWHUL]HG E\ OLWWOH FRQVHQVXV RQ W\SRORJLHV WKH H[WDQW OLWHUDWXUH IRFXVHV RQ VXFK GLVWLQJXLVKLQJ FKDUDFWHULVWLFV DV f YROXQWDU\ RU VWDWXWRU\ f nELODWHUDOn RU PXOWLLQVWLWXWLRQDO f SDUWLDO DQG LQVWLWXWLRQDOO\ UHVWULFWHG FRRSHUDWLRQ RU D PRUH RSHQHQGHG f KRPRJHQHLW\ RU KHWHURJHQHLW\ DPRQJ FRQVWLWXHQWV DQG f JHRJUDSKLFDO RU FRPPRQ LQWHUHVW EDVHG S f

PAGE 51

,Q *XLGH WR ,QWHULQVWLWXWLRQDO $UUDQJHPHQWV 9ROXQWDU\ DQG 6WDWXWRU\ &RQQRUV DQG DVVRFLDWHV f XWLOL]HG D FRPSUHKHQVLYH W\SRORJ\ ZKLFK LQFOXGHG VXFK FDWHJRULHV DV IRUPDO PXOWLSXUSRVH FRQVRUWLD 7LWOH ,,, FRRSHUDWLYH DUUDQJHPHQWV FRRSHUDWLYH OLEUDU\ DUUDQJHPHQWV VSHFLDO SXUSRVH FRQVRUWLD VWDWH V\VWHPV LQWHUVWDWH FRPSDFWV VWDWH DVVRFLDWLRQV RI SULYDWH FROOHJHV DQG XQLYHUVLWLHV QDWLRQDO KLJKHU HGXFDWLRQ DVVRFLDWLRQV DQG LQWHUQDWLRQDO HGXFDWLRQDO FRRSHUDWLYHV 3HUKDSV WKH PRVW H[WHQVLYHO\ XVHG W\SRORJ\ LQ WKH ILHOG WRGD\ LV WKH RQH DGYDQFHG E\ )UDQNOLQ 3DWWHUVRQ f 7KLV WULSDUWLWH W\SRORJ\ UHIHUV WR FROODERUDWLYH DUUDQJHn PHQWV DV Df FRRSHUDWLYH Ef VHUYLFH DQG Ff 7LWOH ,,, FRQVRUWLD S f &RRSHUDWLYH FRQVRUWLD 7KH SULPDU\ SXUSRVH RI FRRSHUDn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f 7LWOH ,,, FRQVRUWLD 7KHVH FRQVRUWLD LQYROYH WZR \HDU DQG IRXU\HDU FROOHJHV WKDW ZHUH VWUXJJOLQJ IRU

PAGE 52

VXUYLYDO DQG RIWHQ LVRODWHG IURP WKH PDLQVWUHDP RI DFDGHPLF OLIH 7KHVH LQVWLWXWLRQV ZHUH SURYLGHG DVVLVWDQFH WKURXJK SURYLVLRQV RI WKH 7LWOH ,,, +LJKHU (GXFDWLRQ $FW RI VXFK WKDW WKH\ PLJKW EH DEOH WR DPHOLRUDWH WKHPVHOYHV WKURXJK FRRSHUDWLRQ ZLWK RWKHU LQVWLWXWLRQV 7KH\ ZHUH PRUH RIWHQ UHIHUUHG WR DV GHYHORSLQJ LQVWLWXWLRQV ) 3DWWHUVRQ S f $FFRUGLQJ WR +RGJNLQVRQ f SULRU WR WKLV DFW PDQ\ RI WKH LQVWLWXWLRQV FRPSULVLQJ WKH 7LWOH ,,, FRQVRUWLD ZHUH LQ GDQJHU RI H[WLQFWLRQ S f (FRQRPLF 3RWHQWLDO 7KH ORJLF RI FRQVRUWLQJ HYROYHG FRQFHSWXDOO\ IURP WKH QRWLRQ WKDW FROODERUDWLRQ VKRXOG HQDEOH SDUWLFLSDWLQJ PHPEHUV WR EHQHILW HFRQRPLFDOO\ WKURXJK PXWXDO DVVRFLDWLRQ RU UHVRXUFH SRROLQJ E\ MRLQW PDQDJHPHQW RI UHODWLYHO\ VFDUFH UHVRXUFHV DQG E\ WKH HIILFLHQW DOORFDWLRQ RI UHVRXUFHV WR VDWLVI\ LQVWLWXWLRQDO QHHGV ) 3DWWHUVRQ S f 7KLV EHOLHI DORQJ ZLWK WKH LQKHUHQW SRVVLn ELOLWLHV RI OLPLWLQJ GXSOLFDWLRQ DQG FRPSHWLWLRQ KDV FDXVHG PDQ\ RI WKH FRQWHPSRUDU\ ZULWHUV WR H[SUHVV FRQn FXUULQJ RSLQLRQV UHJDUGLQJ WKH JUHDW HFRQRPLF SRWHQWLDO RI WKH FRQVRUWLXP ( -RKQVRQ -RUGDQ =LPPHUPDQ f :HOOV f VWDWHG WKDW QR VLQJOH LQVWLWXWLRQ ZRUNLQJ DORQH FDQ KRSH WR SURYLGH SURJUDPV RI XQLYHUVDO H[FHOOHQFH LQ DOO ILHOGV >EXW E\@ ZRUNLQJ WRJHWKHU DQG SRROLQJ WKHLU UHVRXUFHV >WKH\@ FDQ FRPH YHU\ QHDU WR WKLV LGHDO S f

PAGE 53

,Q DGGUHVVLQJ WKH TXHVWLRQ RI FRQVRUWLXP HFRQRPLFV /HZLV 3DWWHUVRQ Ef DGYDQFHG WKH QRWLRQ WKDW RQH RI WKH IHZ FOHDU FXW DQVZHUV UHJDUGLQJ ILQDQFLDO LPSOLFDWLRQV RI FRQVRUWLD LV WKDW DQ LQVWLWXWLRQ ZLOO LQFUHDVH LWV RSHUDWLRQDO FRVWV QRW GLPLQLVK WKHP DV D UHVXOW RI MRLQLQJ D PXOWLSXUSRVH FRQVRUWLXP S f $ GLIIHUHQW RSLQLRQ ZDV SURYLGHG E\ (OOLRWW f ZKHQ KH VWDWHG WKDW D FRQVRUWLXP RI HGXFDWLRQDO LQVWLWXn WLRQV XVXDOO\ KDV WZR REMHFWLYHVWR LPSURYH TXDOLW\ DQG WR VDYH PRQH\ S f +H IXUWKHU MXVWLILHG KLV DVVHUWLRQ DV KH GLVFXVVHG WKH RSHUDWLRQV RI WKH FRQVRUWLXP LQ ZKLFK KLV LQVWLWXWLRQ LV D PHPEHU :H KDYH EURDGHQHG DQG LPSURYHG HGXFDn WLRQDO SURJUDPV E\ PDNLQJ LW HDV\ IRU VWXGHQWV WR WDNH FRXUVHV DW VHYHUDO LQVWLWXWLRQV :H KDYH VDYHG PRQH\ DQG LPSURYHG VHUYLFHV WKURXJK FRPPRQ SXUFKDVLQJ S f $OWKRXJK WKH XOWLPDWH JRDO RI FRRSHUDWLRQ DPRQJ SRVWn VHFRQGDU\ LQVWLWXWLRQV PD\ EH WR H[SDQG HGXFDWLRQDO RSSRUWXQLWLHV ZKLOH SUHVHUYLQJ GLYHUVLW\ DPRQJ WKH LQVWLWXn WLRQV 0LOOHU f EHOLHYHG WKDW WKH HQG UHVXOW VKRXOG EH PRUH HIILFLHQW XWLOL]DWLRQ RI UHVRXUFHV S f 3HUKDSV LW ZLOO VXIILFH WR FRQFOXGH WKDW HYHQ WKRXJK WKH FRQVRUWLXP VHHPV WR KDYH XQOLPLWHG SRWHQWLDO XQWLO FRPSUHKHQVLYH GDWD DUH DFTXLUHG WKURXJK UHVHDUFK WKHLU DFDGHPLF DQG HFRQRPLF ZRUWK ZLOO UHPDLQ ODUJHO\ VSHFXODWLYH / 3DWWHUVRQ E S f

PAGE 54

2UJDQL]DWLRQDO 6WUXFWXUH 7KH LQWHULQVWLWXWLRQDO FRQVRUWLXP XVXDOO\ LQYROYHV LQVWLWXWLRQV RI KLJKHU HGXFDWLRQ VXFK DV FRPPXQLW\ FROOHJHV FROOHJHV DQG XQLYHUVLWLHV (DFK KDV D ERDUG RI GLUHFWRUV DQ H[HFXWLYH GLUHFWRU D VWDII DQ H[HFXWLYH FRPPLWWHH DQG SRVVLEO\ QXPHURXV DG KRF DQG VWDQGLQJ FRPPLWWHHV *UXSH ) 3DWWHUVRQ f ,Q WKH PDMRULW\ RI WKHVH IRUPDO RUJDQL]DWLRQV )UDQNOLQ 3DWWHUVRQ f REVHUYHG D VLPSOH IRUP RI JRYHUn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f *RYHUQDQFH DQG 'HFLVLRQPDNLQJ ,Q D VWXG\ /HZLV 3DWWHUVRQ Df LGHQWLILHG WKUHH EDVHV IRU JRYHUQLQJ WKH FRQVRUWLXP 7KHVH LQFOXGHG

PAGE 55

DUWLFOHV RI LQFRUSRUDWLRQ DQG E\ODZV VWDWHPHQWV RI DJUHHPHQWV DQG RUDO DJUHHPHQWV S $f $FFRUGLQJ WR )UDQNOLQ 3DWWHUVRQ f WKH HFRQRPLHV RI FRQVRUWLD WDNH WKHLU FRQILJXUDWLRQ LQ UHVSRQVH WR D FRQWLQXLQJ WHQGHQF\ IRU SDUWLFLSDWLQJ LQVWLWXWLRQV WR SXUVXH HVVHQWLDOO\ DXWRQRPRXV GLUHFWLRQV LUUHVSHFWLYH RI WKH NLQG RI XPEUHOOD WKH\ DUH XQGHU 6HFRQGO\ WKH WHQGHQF\ RI SDUWLFLSDWLQJ PHPEHUV WR OHDYH JRYHUQDQFH LQ WKH KDQGV RI LQVWLWXWLRQDO SUHVLGHQWV ZKR WKHPVHOYHV UHSUHVHQW LQVWLWXn WLRQDO DXWRQRP\ DQG ZKR UHIOHFW WKH FRPSHWLQJ FRQVWLWXHQF\ SUHVVXUHV DQG GHFLVLRQPDNLQJ SURFHVVHV LQWHUQDO WR WKHLU LQVWLWXWLRQV DFFRXQWV IRU WKH YHU\ OLPLWHG SRZHU RI WKH GLUHFWRUV 7KLV JHUPDQH LVVXH FRXOG DIIHFW WKH VXUYLYDO RI VHUYLFH FRQVRUWLD LQ WKH IXWXUH S f 6HUYLFH FRQVRUWLD 7KH ERDUG LV XVXDOO\ YHU\ ODUJH DQG XQDEOH WR PHHW FRQYHQLHQWO\ ZLWK DQ\ JUHDW IUHTXHQF\ $FFRUGLQJ WR )UDQNOLQ 3DWWHUVRQ f DV D GHFLVLRQPDNLQJ ERG\ WKH FRQVRUWLXP ERDUG LV OHVV WKDQ OLNHO\ WR LQYROYH SUHVLGHQWGLUHFWRUV GHHSO\ RU IUHTXHQWO\ DQG RQH JDLQV WKH LPSUHVVLRQ WKDW D VHDW RQ WKH ERDUG RI D FRQVRUWLXP WHQGV WR UDWH YHU\ ORZ LQ D FROOHJH SUHVLGHQWnV SULRULWLHV S f ,Q IDFW WKHUH ZHUH QR LQVWDQFHV ZKHUH D PHPEHU LQVWLn WXWLRQnV ILQDQFLDO FRPPLWPHQW WR D VHUYLFH FRQVRUWLXP H[FHHGHG RQHKDOI RI RQH SHUFHQW RI WKDW LQVWLWXWLRQnV RSHUDWLQJ EXGJHW %H\RQG WKDW DQ\ QHZ SURJUDP RU FKDQJH LQ HPSKDVLV PXVW EH FRQVLGHUHG E\ WKH ERDUG DQG D FRQVHQVXV

PAGE 56

UHDFKHG 7KH GLUHFWRUnV OHDGHUVKLS H[LVWV RQO\ WR WKH H[WHQW WR ZKLFK KH LV DEOH WR SHUVXDGH WKH LQVWLWXWLRQVn SUHVLGHQWV 0RVW LPSRUWDQWO\ WKH ILUVW SHUFHLYHG REMHFn WLYH RI WKH LQVWLWXWLRQDO SUHVLGHQWV LV WR VDYH PRQH\WR PDLQWDLQ D PLQLPDO LQYHVWPHQW LQ WKH FRQVRUWLXP RSHUDWLRQV ZLWK WKH KRSH WKDW VRPHWKLQJ JRRG ZLOO KDSSHQ ) 3DWWHUVRQ SS f &RRSHUDWLYH FRQVRUWLD 7KH FRRSHUDWLYH FRQVRUWLXP SUHVHQWV D GLIIHUHQW VHW RI FRQGLWLRQV IRU JRYHUQDQFH &RRSHUDWLRQ UHTXLUHV WKDW WKH FKLHI H[HFXWLYH RIILFHUV RI WKH SDUWLFLSDWLQJ FROOHJHV DQG XQLYHUVLWLHV VLW RQ WKH JRYHUQLQJ ERDUG DV RQO\ WKH SUHVLGHQWV FDQ FRPPLW WKHLU LQVWLWXWLRQV WR VLJQLILFDQW FRRSHUDWLYH DUUDQJHPHQWV 7KH XOWLPDWH GHFLVLRQPDNLQJ SRZHU PXVW WKHUHIRUH EH YHVWHG LQ WKH SUHVLGHQWV ) 3DWWHUVRQ SS f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

PAGE 57

3RWHQWLDO IRU D JRRG UHODWLRQVKLS EHWZHHQ WKH SUHVLGHQW DQG FRQVRUWLXP GLUHFWRU &RPPLWPHQW WR WKH FRQFHSW RI LQWHULQVWLWXWLRQDO FRRSHUDWLRQ LQ JHQHUDO $PEDVVDGRULDO DELOLW\ 5HODWLRQVKLS ZLWK IDFXOW\ DW KRPH LQVWLWXWLRQ DQG ,QWHUHVW LQ D SDUWLFXODU DVSHFW RI WKH FRQVRUWLXP RSHUDWLRQV ) 3DWWHUVRQ S f ,Q WKLV NLQG RI FRQVRUWLXP WKH SULQFLSDO PLVVLRQ RI WKH DVVLVWDQW GLUHFWRU LV WR ZRUN WRZDUG PDNLQJ WKH FRQn VRUWLXP DV LQWHJUDO D SDUW RI KLV RU KHU RZQ FDPSXV DV LV WKH LQVWLWXWLRQnV RZQ DXWRQRPRXV SURJUDP ) 3DWWHUVRQ S f ,QVWLWXWLRQDO DXWRQRP\ 7KH FRQVRUWLXP HYROYHG IURP DQ HQYLURQPHQW FKDUDFWHUL]HG E\ D VWURQJ WUDGLWLRQ IRU VHOIJRYHUQPHQW DQG LQGHSHQGHQW GHYHORSPHQW DPRQJ FROOHJHV DQG XQLYHUVLWLHV 6R GHHSO\ HQWUHQFKHG ZDV LVRODWLRQLVP DPRQJ SRVWVHFRQGDU\ LQVWLWXWLRQV WKDW RQO\ GXULQJ WKH SDVW IHZ GHFDGHV KDYH VLJQLILFDQW FRRSHUDWLYH DUUDQJHPHQWV HPHUJHG -RUGDQ S f $LNHQ DQG +DJH f DQG RWKHUV -RUGDQ ) 3DWWHUVRQ f REVHUYHG WKDW DXWRQRP\ KDV EHHQ VR LPSRUWDQW WR WKH DFDGHPLF FRPPXQLW\ WKDW PDQ\ LQVWLWXWLRQV ZHUH IRUFHG LQWR LQWHUGHSHQGHQW UHODWLRQVKLSV RQO\ EHFDXVH RI D FULWLFDO QHHG IRU DGGLWLRQDO

PAGE 58

UHVRXUFHV S f )RU H[DPSOH $YHULOO f VWDWHG WKDW nDXWRQRP\n LV D VLQJOHPLQGHG QRW WR VD\ VLPSOHPLQGHG DWWHPSW WR DFFRXQW IRU WKH IDFW WKDW PDQ\ D FRQVRUWLXP DSSHDUV WR EH OLWWOH PRUH WKDQ D FOXWFK RI VHSDUDWH LQVWLWXWLRQV KHOG WRJHWKHU E\ D FRPPRQ OXVW DIWHU 7LWOH ,,, IXQGV S f $QRWKHU YLHZ RI WKH DXWRQRP\ LVVXH ZDV SURYLGHG E\ $YHULOO f ZKHQ KH VXJJHVWHG WKDW WKH EODPH IRU WKH IDLOXUH RI PDQ\ FRQVRUWLD KDV EHHQ SODFHG RQ LQVWLWXWLRQDO DXWRQRP\ UDWKHU WKDQ WKH FRQVRUWLXP VWDII ,Q UHJDUG WR FRPSXOVRU\ FRRUGLQDWLRQ RI SRVWVHFRQGDU\ LQVWLWXWLRQV DQGRU VWDWH DJHQFLHV VRPH ZULWHUV PDLQWDLQ WKDW HYHQ WKRXJK WKHUH LV D UHFRJQL]HG QHHG IRU FRRSHUDWLRQ DQG FRRUGLQDWLRQ DPRQJ WKHVH HQWLWLHV WKHUH LV DOVR D JHQHUDO UHOXFWDQFH WR HQJDJH LQ VXFK HIIRUWV +DQVHQ :DWWHQEDUJHU t +DQVHQ f 3HUKDSV WKLV DYHUVLRQ PD\ EH DSSURSULDWHO\ VXPPDUL]HG E\ WKH IROORZLQJ ,QVWLWXWLRQDO DXWRQRP\ LV SDUWLFXODUO\ LQ WKHVH GD\V DQ HVVHQWLDO YDOXH ZKLFK FRQVRUWLD RXJKW WR SURWHFW DQG SHUSHWXDWH 6XFK FRPSXOVRU\ FRRUGLQDWLRQ LV OLNHO\ WR KDYH WZR EDG UHVXOWV XQLIRUPLW\ DQG SURYLQFLDOLVP $YHULOO S f &RQIOLFW :LWKLQ WKH &RQVRUWLXP :KHQ WKH UHDOLW\ RI DXWRQRP\ DQG WKH LQKHUHQW FRPSHWLn WLRQ FKDUDFWHULVWLF RI LQVWLWXWLRQV LQ D FRQVRUWLDO UHODn WLRQVKLS DUH FRQVLGHUHG LQ OLJKW RI WKH SULQFLSOH HPEHGGHG LQ WKH XQLW\ WKDW VHHPV WR EH QHHGHG LQ WKH FRQVRUWLXP DQ REYLRXV FRQFOXVLRQ LV WKDW WKH RUJDQL]DWLRQ PD\ EH

PAGE 59

VXEVWDQWLDOO\ WKUHDWHQHG E\ FRQIOLFW -RUGDQ f LQ GLVFXVVLQJ WKLV LGHD DGYDQFHG WKH QRWLRQ WKDW WKH LQWHUn DFWLRQ RI WZR RI WKH IRUFHV WKDW RSHUDWH ZLWKLQ WKH FRQVRUWLXPWKH GULYH IRU DXWRQRP\ DQG WKH PRYHPHQW IRU FRRSHUDWLRQf§HQJHQGHUV D WKLUG IRUFH FRQIOLFW S f $QRWKHU VWXG\ UHYHDOHG WKDW FRRSHUDWLRQ OHG WR FRPSHWLWLRQ DQG FRQIOLFW +RZHYHU PRVW RI WKH FRQIOLFW ZDV GLUHFWHG WRZDUG WKH FHQWUDO RIILFH RI WKH FRQVRUWLXP /DQFDVWHU S LLf 7KLV REVHUYDWLRQ LV YHU\ PXFK FRQVLVWHQW ZLWK YLHZV KHOG E\ :HVW f UHJDUGLQJ WKH HPHUJHQFH RI FRQIOLFW DQG FRPSHWLWLRQ ZLWK LQFUHDVHG OHYHOV RI LQWHUGHSHQGHQFLHV S f ,I FRRSHUDWLRQ DQG FRQIOLFW DUH EDVLF WR WKH LQWHUn GHSHQGHQW UHODWLRQVKLS H[LVWLQJ LQ D FRQVRUWLXP DV VRPH ZULWHUV KDYH VWDWHG /DQFDVWHU /LWZDN t +\OWRQ :HVW f WKHQ LW LV SRVVLEOH WKDW WKH GHJUHH RI FRQIOLFW ZLWKLQ SUHGLFWDEOH DUHDV RI WKH FRQn VRUWLXP FRXOG FRUUHODWH SRVLWLYHO\ ZLWK VXFK YDULDEOHV DV DJH VL]H KHWHURJHQHLW\ DQG WKH QXPEHU RI VHUYLFHV SHUn IRUPHG ,Q VXSSRUW RI WKH SUHFHGLQJ LGHD LV WKH DVVHUWLRQ E\ /DQFDVWHU f WKDW FRQIOLFW ZKLFK GHYHORSV ZLWKLQ WKH FRQVRUWLXP VHHPHG WR FOXVWHU DURXQG IRXU FHQWUDO SUREOHP DUHDV 5ROH DQG VFRSH RI WKH FHQWUDO RIILFH 'LVWULEXWLRQ RI OLPLWHG UHVRXUFHV RI DQ LQWHURUJDQL]DWLRQ

PAGE 60

+HWHURJHQHLW\ RI PHPEHU LQVWLWXWLRQV DWWHPSWLQJ WR VHHN FRPPRQ JRDOV DQG $GPLQLVWUDWLYH SURFHGXUHV DQG PDQDJHPHQW DV WKH FRQVRUWLXP GHYHORSV SS f 2QH RI WKH FRQFOXVLRQV UHDFKHG E\ 6LOYHUPDQ f VXEVHTXHQW WR KLV VWXG\ RI WKH FRQVRUWLXP SURYLGHV DGGLWLRQDO LQIRUPDWLRQ RQ PHPEHUVKLS KHWHURJHQHLW\ +H FRQFOXGHG WKDW WKH UHZDUG IXQFWLRQ ZLOO EH OHVV FRQIOLFWn ODGHQ ZKHQ WKH RUJDQL]DWLRQDO UHSUHVHQWDn WLYHV KDYH KHWHURJHQHRXV RU FRPSOHPHQWDU\ RSHUDWLRQDO JRDOV SHUVSHFWLYHV H[SHFWDn WLRQV RU QHHGV S $f $V DQ $SSURDFK WR &RPPXQLW\ (GXFDWLRQ )XQGDPHQWDO WR WKH FRQVRUWLXP FRQFHSW LV FRRSHUDWLRQ DQG WKH FRRUGLQDWLRQ QHFHVVDU\ WR UHGXFH FRPSHWLWLRQ DQG HOLPLQDWH ZDVWH FDXVHG E\ XQQHFHVVDU\ GXSOLFDWLRQ RI UHVRXUFHV 7KH EDVLF WHQHW RI WKLV FRQFHSW LWV JURZWK DQG GHYHORSPHQW LQ PDQ\ ZD\V LV UHPDUNDEO\ FRQJUXHQW WR WKH FRPPXQLW\ HGXFDWLRQ PRYHPHQW RI WRGD\ 7KH FRPPXQLW\ HGXFDn WLRQ FRQFHSW HPHUJHG LQ WKH V &ODSS S f DV GLG WKH FRQVRUWLXP FRQFHSW /LNH WKH FRQVRUWLXP PRYHPHQW WKH FRPPXQLW\ HGXFDWLRQ PRYHPHQW DV UHSRUWHG E\ 2OVHQ DQG &ODUN f KDV EHHQ JDLQLQJ PRPHQWXP LQ WKLV FRXQWU\ IRU WKH SDVW KDOI FHQWXU\ SS f ,Q IDFW WKH FRQVRUWLXP PLJKW EH YLHZHG DV D SUDFWLFDO DSSOLFDWLRQ RI WKH FRPPXQLW\ HGXFDWLRQ SKLORVRSK\ )RU H[DPSOH PDQ\ FROODERUDWLYH HIIRUWV LQ FRPPXQLW\ HGXFDWLRQ DUH LQ HYLGHQFH WKURXJKRXW

PAGE 61

WKH FRXQWU\ 7KH 1DWLRQDO &HQWHU RI &RPPXQLW\ (GXFDWLRQ 0DUWLQ t 6HD\ S f WKH -DFNVRQYLOOH &RQVRUWLXP 2UGLQDQFH f DQG WKH ,QGHSHQGHQW 6FKRRO 'LVWULFW 1R UHODWLRQVKLS ZLWK WKH &LW\ RI 6W /RXLV 3DUN DUH H[SOLFLW LOOXVWUDWLRQV +RZHYHU ZKHQ WKH SKLORVRSK\ DQG FRPSRQHQWV RI FRPPXQLW\ HGXFDWLRQ DUH YLHZHG LQ FRQMXQFWLRQ ZLWK WKH EDVLF SUHPLVHV RI WKH FRQVRUWLXP LW LV UHDGLO\ DSSDUHQW WKDW WKH LGHDOV RI WKH FRQVRUWLXP DUH LQFOXGHG DPRQJ WKRVH RI FRPPXQLW\ HGXFDWLRQ $FFRUGLQJ WR &ODUN 1RWH f DQG RWKHU SURSRQHQWV RI WKH FRPPXQLW\ HGXFDWLRQ PRYHPHQW 'HFNHU .HUHQVN\ f FRPPXQLW\ HGXFDWLRQ LV DQ RSHUDWLRQDO SKLORVRSK\ RI HGXFDWLRQ 7KLV SKLORVRSK\ HPSKDVL]HV LQWHULQVWLWXWLRQDO DQG LQWHUDJHQF\ FRRSHUDWLRQ DQG FRRUGLQDWLRQ DV RQH RI LWV PDMRU FRPSRQHQWV $QRWKHU FRPSRQHQW HPSKDVL]HV PD[LPXP XWLOL]DWLRQ RI DYDLODEOH UHVRXUFHV 2OVHQ t &ODUN S f %RWK RI WKHVH FRPSRQHQWV DUH HVVHQWLDO WR WKH FRQn VRUWLXP FRQFHSW ,Q VXPPDU\ SHUKDSV LW VXIILFHV WR VD\ WKDW FRPPXQLW\ HGXFDWLRQ DGYRFDWHV SHUFHLYH WKH FRQVRUWLXP DV DQ DSSURn SULDWH GHOLYHU\ V\VWHP WKDW PD\ VXEVWDQWLDOO\ VDWLVI\ VSHFLILF FRPSRQHQWV RI WKLV SURYRFDWLYH PRYHPHQW 7KLV LV FOHDUO\ HYLGHQW LQ WKH YLHZV H[SUHVVHG E\ +HDWK DQG 6HD\ f ZKHQ WKH\ VWUHVVHG WKDW WKH QHHGV RI D FRPPXQLW\ ZRXOG EH EHWWHU VHUYHG ZKHQ FRPPXQLW\ FROOHJHV EHJLQ WR HQJDJH LQ D FRRSHUDWLYH PHPEHUVKLS UROH LQ D FRQVRUWLXP RI

PAGE 62

FRPPXQLW\ DJHQFLHV RUJDQL]HG IRU WKH SXUSRVH RI FRRUGLQDWLQJ FRPPXQLW\ HGXFDWLRQDO DFWLYLWLHV S f $ VXUYH\ FRQGXFWHG E\ WKH $PHULFDQ $VVRFLDWLRQ RI &RPPXQLW\-XQLRU &ROOHJHV SURYLGHG FRQFXUULQJ UHVXOWV 7KLV VXUYH\ UHYHDOHG WKH H[LVWHQFH RI D FRPPRQ GHVLUH ZLWKLQ WKH FRPPXQLW\MXQLRU FROOHJHV WR LQFUHDVH LQWHULQVWLWXWLRQDO FRRSHUDWLRQ DV D ZD\ RI H[SDQGLQJ WKH VHUYLFHV RI FRPPXQLW\ DQG MXQLRU FROOHJHV WR VRFLHW\ :LWWHU S f 7KH RYHUDOO GHVLJQ RI WKH VWXG\ DQG WKH PHWKRGV XWLOL]HG DUH SUHVHQWHG LQ WKH IROORZLQJ FKDSWHU

PAGE 63

&+$37(5 ,,, '(6,*1 $1' 0(7+2'2/2*< 7KH SURFHGXUHV XWLOL]HG LQ WKH VWXG\ DUH SUHVHQWHG LQ WKLV FKDSWHU DV WKH 'HVLJQ DQG 0HWKRGRORJ\ )LYH KHDGLQJV DUH SURYLGHG IRU WKLV SXUSRVH Df 2YHUYLHZ DQG 6WXG\ 'HVLJQ Ef 7KH 6DPSOH Ff ,QVWUXPHQWDWLRQ Gf 'DWD &ROOHFWLRQ DQG Hf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

PAGE 64

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n YLGHG LQ WKH IROORZLQJ VHFWLRQV 7KH 6DPSOH 7KH SRSXODWLRQ IRU WKLV VWXG\ ZDV LGHQWLILHG WKURXJK DQ H[DPLQDWLRQ RI WKH OLWHUDWXUH RQ FRQVRUWLD 3ULQFLSDO

PAGE 65

UHIHUHQFHV IRU WKLV HQGHDYRU ZHUH WKH &RQVRUWLXP 'LUHFWRU\ DQG WKH 3URILOHV RI &RQVRUWLD LQ WKH ERRN &ROOHJHV LQ &RQVRUW 2QH KXQGUHG DQG ILIWHHQ YROXQWDU\ LQWHULQVWLWXWLRQDO FRQVRUWLD ZHUH OLVWHG LQ WKHVH SXEOLFDn WLRQV 7KH VDPSOH SRSXODWLRQ ZDV GHULYHG IURP WKH WRWDO SRSXODWLRQ LQ D PDQQHU ZKLFK HQVXUHG DGHTXDWH UHSUHVHQWDn WLRQ IRU DOO UHVHDUFK TXHVWLRQV ,Q WKLV UHVSHFW VWUDWLILFDWLRQ DQG UDQGRPL]DWLRQ ZHUH QHFHVVDU\ FRPSRQHQWV RI WKH VDPSOLQJ SURFHGXUH 7R HQVXUH DQ DGHTXDWH RI FRQVRUWLD RI YDULRXV VL]HV WKH HQWLUH FRQVRUWLXP SRSXODWLRQ ZDV VWUDWLILHG LQWR IRXU JURXSV RI FRQVRUWLD Df WKRVH FRQn VLVWLQJ RI D PHPEHUVKLS RI RU OHVV Ef WKRVH FRQVLVWLQJ RI D PHPEHUVKLS EHWZHHQ DQG Ff WKRVH FRQVLVWLQJ RI D PHPEHUVKLS EHWZHHQ DQG DQG Gf WKRVH FRQVLVWLQJ RI D PHPEHUVKLS RI RU PRUH )URP WKLV VWUDWLILFDWLRQ ILYH FRQVRUWLD IURP HDFK JURXS ZHUH UDQGRPO\ VHOHFWHG IRU WKLV SRUWLRQ RI WKH VDPSOH SRSXODWLRQ 5DQGRPL]DWLRQ ZDV DFKLHYHG WKURXJK WKH XVH RI D WDEOH RI UDQGRP QXPEHUV 7KH SUHYLRXVO\ VHOHFWHG VDPSOH IRU WKH VL]H YDULDEOH ZDV XVHG WR GHWHUPLQH WKH DJH YDULDEOH 7KLV ZDV GRQH E\ VWUDWLI\LQJ WKH VDPSOH GHULYHG IRU WKH VL]H YDULDEOH LQWR IRXU JURXSV Df WKRVH \HDUV RI DJH RU OHVV Ef WKRVH EHWZHHQ WKH DJHV RI DQG Ff WKRVH EHWZHHQ WKH DJHV RI DQG DQG Gf WKRVH \HDUV RI DJH RU ROGHU +RZHYHU

PAGE 66

WKLV SURFHGXUH GLG QRW SURYLGH D PLQLPXP RI ILYH PHPEHUV WR HDFK DJH JURXS DV WKH ODVW WZR DJH JURXSV KDG IHZHU WKDQ ILYH PHPEHUV %HFDXVH RI WKLV VLWXDWLRQ IXUWKHU VHOHFWLRQ E\ WKH UDQGRP SURFHVV ZDV FRQGXFWHG XQWLO HDFK RI WKHVH JURXSV KDG DFTXLUHG WKH PLQLPXP QXPEHU RI ILYH FRQn VRUWLD 7R REWDLQ D VDPSOH RI FRQVRUWLD WR UHSUHVHQW D EURDG FRQWLQXXP RI VHUYLFHV WKH ZULWHU REWDLQHG WKH QXPEHU RI VHUYLFHV WKDW HDFK FRQVRUWLXP SURYLGHG IRU LWV PHPEHUVKLS IURP WKH &RQVRUWLXP 'LUHFWRU\ &RQVRUWLD SUHYLRXVO\ VHOHFWHG IRU WKH DJH DQG VL]H YDULDEOHV ZHUH WKHQ VWUDWLn ILHG LQWR WKUHH JURXSV 7KHVH VWUDWLILFDWLRQV FRQVLVWHG RI FRQVRUWLDO JURXSV RI Df WKRVH WKDW SURYLGHG GLIIHUHQW VHUYLFHV RU OHVV Ef WKRVH WKDW SURYLGHG WR GLIn IHUHQW VHUYLFHV DQG Ff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

PAGE 67

'HJUHHV 2IIHUHG E\ &ROOHJH DQG 6XEMHFW ,Q WKLV UHVSHFW HDFK FRQVRUWLXP ZDV DQDO\]HG WR GHWHUPLQH ZKHWKHU RU QRW WKH LQVWLWXWLRQDO PHPEHUV Df KDG DSSUR[LPDWHO\ WKH VDPH HQUROOPHQW Ef KDG WKH VDPH FDOHQGDU Ff KDG DSSUR[Ln PDWHO\ WKH VDPH ILQDQFLDO VWDWXV Gf ZHUH DOO SXEOLF RU SULYDWH Hf ZHUH DOO VHFWDULDQ RU QRQVHFWDULDQ DQG If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f WKRVH GLIIHULQJ LQ WZR FULWHULD RU OHVV Ef WKRVH GLIn IHULQJ LQ WKUHH WR IRXU FULWHULD DQG Ff WKRVH GLIIHULQJ LQ ILYH RU PRUH FULWHULD 6LQFH WKLV SURFHGXUH VDWLVILHG WKH HVWDEOLVKHG FULWHULD RI DW OHDVW ILYH FRQVRUWLD WR HDFK FDWHJRU\ QR IXUWKHU VHOHFWLRQ ZDV QHHGHG $W WKH FRQFOXVLRQ RI WKH SURFHVV RXWOLQHG DERYH FRQVRUWLD FRPSULVLQJ SRVWVHFRQGDU\ LQVWLWXWLRQV KDG EHHQ VHOHFWHG 7KLV SURYLGHG IRU D VDPSOH SRSXODWLRQ RI UHVSRQGHQWV 2I WKLV WRWDO ZHUH SUHVLGHQWV RI WKH FRQVRUWLQJ LQVWLWXWLRQV DQG ZHUH WKH GLUHFWRUV RI WKHVH FRQVRUWLD

PAGE 68

,QVWUXPHQWDWLRQ 7KH LQVWUXPHQW XVHG WR FROOHFW WKH GDWD IRU WKLV VWXG\ ZDV D VWUXFWXUHG RSLQLRQQDLUH ,W ZDV GHVLJQHG E\ WKH ZULWHU DFFRUGLQJ WR IDFWRUV LQ WKH OLWHUDWXUH ZKLFK ZHUH UHOHYDQW WR WKH SUREOHP LQ WKH VWXG\ $ /LNHUWW\SH VFDOH FRQVLVWHQW ZLWK LOOXVWUDWLRQV FLWHG LQ 7XUQH\ DQG 5REE S f ZDV XWLOL]HG 7KLV W\SH VFDOH DOORZHG IRU WKH DVVLJQPHQW RI QXPHULFDO YDOXHV WR DYDLODEOH UHVSRQVHV IRU HDFK LWHP RQ WKH RSLQLRQQDLUH +HQFH UHVSRQGHQWVn UHVSRQVHV ZHUH UHDGLO\ WUDQVIHUDEOH LQWR QXPHULFDO YDOXHV 7KH ILUVW GUDIW RI WKH LQVWUXPHQW ZDV VXEPLWWHG WR VHYHUDO H[SHUWV ZLWKLQ WKH FRQVRUWLXP PRYHPHQW 7KHVH H[SHUWV ZHUH UHTXHVWHG WR HYDOXDWH WKLV GUDIW RI WKH LQVWUXn PHQW LQ WHUPV RI LWHP DSSURSULDWHQHVV DQG FODULW\ 7KH\ ZHUH DOVR DVNHG WR PDNH UHFRPPHQGDWLRQV UHJDUGLQJ WKH RYHUDOO IRUPDW RI WKH LQVWUXPHQW DQG WR DGG LWHPV ZKLFK LQ WKHLU RSLQLRQ ZRXOG DVVLVW LQ DFFRPSOLVKLQJ WKH REMHFWLYHV RI WKH VWXG\ 7KH UHFRPPHQGDWLRQV WKDW ZHUH SURYLGHG UHVXOWHG LQ D PDMRU UHYLVLRQ RI WKH ILUVW GUDIW RI WKH LQVWUXPHQW &RQn VHTXHQWO\ DOO RI WKH LWHPV ZKLFK VRXJKW GHPRJUDSKLF LQIRUPDWLRQ RU GDWD ZKLFK ZHUH DOUHDG\ DYDLODEOH LQ SXEOLVKHG VRXUFHV ZHUH GHOHWHG IURP WKH LQVWUXPHQW ,W ZDV VXJJHVWHG WKDW WKLV DFWLRQ ZRXOG HQKDQFH WKH UHWXUQ UDWH RI WKH LQVWUXPHQW 2WKHU LWHPV ZHUH UHZRUGHG DQGRU

PAGE 69

DGGLWLRQDO LQIRUPDWLRQ LQFOXGHG )LQDOO\ VHYHUDO RSHQ HQGHG LWHPV ZHUH DGGHG WR WKH IRUP RI WKH LQVWUXPHQW ZKLFK ZDV GHVLJQHG IRU WKH FRQVRUWLXP GLUHFWRUV ,W ZDV VXJJHVWHG WKDW WKHVH LWHPV ZRXOG SURYLGH WKH ZULWHU ZLWK GHVFULSWLYH LQIRUPDWLRQ WKDW ZRXOG DOORZ IRU D EHWWHU XQGHUVWDQGLQJ RI WKH UHVSRQGHQWV UHVSRQVHV 6XEVHTXHQW WR WKLV UHYLVLRQ DQG FRQVLVWHQW ZLWK WKH UHFRPPHQGDWLRQV RI WKH FRQVRUWLXP H[SHUWV DQG WKH ZULWHUnV GRFWRUDO FRPPLWWHH WKH LQVWUXPHQW ZDV WKHQ VXEPLWWHG WR DQRWKHU JURXS RI H[SHUWV ZLWKLQ WKH FRQVRUWLXP PRYHPHQW ,QIRUPDWLRQ REWDLQHG IURP WKLV SDQHO LQGLFDWHG WKDW QR IXUWKHU UHYLVLRQ ZDV QHFHVVDU\ 7KLV VWXG\ LQYROYHG WZR GLIIHUHQW JURXSV RI UHVSRQn GHQWV +HQFH WKH ZULWHU GHYHORSHG WZR IRUPV RI SDUDOOHO LQVWUXPHQWV IRU WKHVH GLIIHUHQW UHIHUHQW JURXSV 6HH $SSHQGL[ & IRU FRPSOHWH GHULYDWLRQ RI WKHVH WZR IRUPV RI WKH GDWD FROOHFWLRQ LQVWUXPHQWVf 'DWD &ROOHFWLRQ 7ZR SURFHGXUHV ZHUH HPSOR\HG LQ WKH GDWD FROOHFWLRQ SURFHVV 7KH ILUVW RI WKHVH LQYROYHG DQ LQVWUXPHQW GHVLJQHG RQ WKH RUGHU RI D VWUXFWXUHG RSLQLRQQDLUH 7KH VHFRQG SURFHGXUH LQYROYHG WKH ZULWHU DVFHUWDLQLQJ GHPRn JUDSKLF GDWD IURP WKH SXEOLFDWLRQV OLVWHG LQ WKH VHFWLRQ RQ VDPSOLQJ

PAGE 70

7KH RSLQLRQQDLUH DORQJ ZLWK D FRYHU OHWWHU D JHQHUDO LQIRUPDWLRQ VKHHW DQG D UHWXUQ HQYHORSH ZHUH PDLOHG WR WKH UHIHUHQW JURXS PHPEHUV $IWHU WKLV PDLOLQJ WZR IROORZn XSV ZHUH VXEVHTXHQWO\ FRQGXFWHG (DFK IROORZXS WRRN SODFH DSSUR[LPDWHO\ GD\V IROORZLQJ WKH SUHFHGLQJ PDLOLQJ 'DWD $QDO\VLV 7KH SULQFLSDO VWDWLVWLFDO SURFHGXUH XWLOL]HG LQ WKLV VWXG\ ZDV FKLVTXDUH $FFRUGLQJ WR 5RVFRH f DQG RWKHUV %DEELH )R[ f WKLV VWDWLVWLFDO WHFKQLTXH SURYLGHV UHVHDUFKHUV ZLWK D JHQHUDOL]HG SURFHGXUH IRU WHVWLQJ UHVHDUFK TXHVWLRQV LQYROYLQJ GLVWULEXWLRQV FRQn WDLQLQJ QRPLQDO RU KLJKHU RUGHU GDWD S f &KLVTXDUH ZDV XWLOL]HG WKHUHIRUH WR GHWHUPLQH ZKHWKHU WKH REVHUYHG IUHTXHQF\ GLVWULEXWLRQ RU WKH IUHTXHQF\ WKDW WKH UHVSRQn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

PAGE 71

FRPSXWHU SURJUDP XWLOL]HG IRU WKLV DQDO\VLV WKH 6WDWLVWLFDO 3DFNDJH IRU WKH 6RFLDO 6FLHQFHV LQFOXGHG WZR FRUUHODWLRQDO SUR .HQGDOOnV 7DX DQG 3HDUVRQ nV U %RWK RI WKHVH SURFHGXUHV ZHUH DSSURSULDWH IRU WKLV VWXG\ VLQFH GDWD UHSUHVHQWLQJ WKUHH OHYHOV RI PHDVXUHPHQW ZHUH QHHGHG WR DQVZHU DOO UHVHDUFK TXHVWLRQV LQ WKH VWXG\ .HQGDOOnV 7DX EHLQJ HVSHFLDOO\ VXLWHG IRU WKH RUGLQDO GDWD +RZHYHU WR VDWLVI\ WKH SURFHGXUDO FRQVLVWHQF\ UHTXLUHPHQW RI RQH SURFHGXUH ZLWKLQ D VWXG\ 3HDUVRQ 3URGXFW 0RPHQW &RUUHODn WLRQ ZDV XWLOL]HG DV WKH SULQFLSDO FRUUHODWLRQDO SURFHGXUH .HQGDOOnV 7DX ZDV PHUHO\ XVHG WR VXEVWDQWLDWH WKH ILQGLQJV RI 3HDUVRQnV U ,Q FRQMXQFWLRQ ZLWK WKH DERYH WZR W\SHV RI FRPSDULVRQV ZHUH FRQGXFWHG 2QH FRPSDULVRQ ZDV EHWZHHQ UHVSRQVHV PDGH E\ FRQVRUWLXP GLUHFWRUV DV D JURXS YHUVXV WKH FROOHFWLYH PHPEHUVKLS RI WKH SUHVLGHQWV RI LQVWLWXWLRQDO PHPEHUV 6HFRQGO\ FRPSDULVRQV ZHUH PDGH EHWZHHQ UHVSRQVHV SURYLGHG E\ WKH FRQVRUWLXP GLUHFWRUV DQG WKH SUHVLGHQWV RI LQVWLWXn WLRQDO PHPEHUV ZLWKLQ HDFK FRQVRUWLXP 5HVXOWV RI WKH GDWD DQDO\VLV DV VHW IRUWK LQ WKLV FKDSWHU DUH SUHVHQWHG LQ &KDSWHU ,9

PAGE 72

&+$37(5 ,9 5(68/76 $1' $1$/<6,6 2) '$7$ 7KLV FKDSWHU LV SUHVHQWHG LQ WKUHH VHFWLRQV 7KH ILUVW VHFWLRQ LV D UHYLHZ RI WKH TXHVWLRQV XQGHU LQYHVWLn JDWLRQ LQ WKLV VWXG\ 6HFRQGO\ WKH LQWURGXFWLRQ ZKLFK IROORZV WKH TXHVWLRQV GHVFULEHV WKH IRUPDW E\ ZKLFK WKH UHVXOWV DUH SUHVHQWHG 7KLV VHFWLRQ FRQWDLQV D GLVFXVVLRQ RI WKH UHWXUQ UDWH DQG LQLWLDWHV WKH SUHVHQWDWLRQ RI GDWD 7KH WKLUG DQG ILQDO VHFWLRQ UHSRUWV WKH ILQGLQJV RI WKH VWXG\ 5HVHDUFK 4XHVWLRQV 7R ZKDW H[WHQW GR Df FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO QWV DJUHH ZLWK WKH VWDWHPHQW WKH JUHDWHU WKH PHPEHUVKLSnV GHSHQGHQF\ XSRQ D OLPLWHG FRQVRUWLXP UHVRXUFH WKH JUHDWHU LV WKH PHPEHUVKLSnV GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ WKH DOORFDWLRQ RI WKDW :KDW LV WKH H[WHQW WR ZKLFK Df FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO SUHVLGHQWV DJUHH ZLWK WKH VWDWHPHQW WKH JUHDWHU WKH LQYROYHPHQW RI WKH PHPEHUVKLS LQ MRLQW DFWLYLWLHV ZKLFK UHTXLUH WKH VFKHGXOLQJ RI WLPHV

PAGE 73

IRU DFWLYLWLHV WR RFFXU WKH JUHDWHU LV WKH GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ VFKHGXOLQJ" :KDW LV WKH UHODWLRQVKLS EHWZHHQ WKH H[WHQW WR ZKLFK WKH FRQVRUWLXP JRDOV DUH DFKLHYHG DQG WKH H[WHQW WR ZKLFK FRQVRUWLXP JRDOV RI LQVWLWXWLRQDO PHPEHUV GLIIHU DV SHUFHLYHG E\ Df FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO 7R ZKDW H[WHQW GR Df FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO SUHVLGHQWV DJUHH ZLWK WKH VWDWHPHQW WKH JUHDWHU WKH QXPEHU RI LQGHSHQGHQW LQIRUPDWLRQDO VRXUFHV ZLWKLQ WKH FRQVRUWLXP WKH JUHDWHU LV WKH GLIIHUHQFH LQ WKH PHPEHUVKLSnV SHUFHSWLRQ RI WKH FRQVRUWLXP" 7R ZKDW H[WHQW GR Df FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO SUHVLGHQWV DJUHH ZLWK WKH VWDWHPHQW WKH JUHDWHU WKH FKDQQHOLQJ RI LQIRUPDWLRQ ZLWKLQ WKH FRQVRUWLXP WKH JUHDWHU LV WKH GLIIHUHQFH LQ WKH PHPEHUVKLSnV SHUFHSWLRQ RI WKH FRQVRUWLXP" :KDW LV WKH UHODWLRQVKLS EHWZHHQ WKH DJH RI WKH FRQVRUWLXP DQG WKH H[WHQW WR ZKLFK FRQIOLFW LV SHUFHLYHG WR EH HQJHQGHUHG ZLWKLQ DUHDV SUHGLFWHG E\ WKH WKHRUHWLFDO SURSRVLWLRQV" :KDW HIIHFW GRHV WKH VL]H RI WKH FRQVRUWLXPnV PHPEHUVKLS KDYH XSRQ WKH H[WHQW WR ZKLFK FRQIOLFW LV SHUFHLYHG WR RFFXU ZLWKLQ DUHDV SUHGLFWHG E\ WKHRU\" :KDW LV WKH UHODWLRQVKLS EHWZHHQ WKH QXPEHU RI VHUYLFHV WKH FRQVRUWLXP SURYLGHV LWV PHPEHUV DQG WKH H[WHQW

PAGE 74

WR ZKLFK FRQIOLFW LV SHUFHLYHG WR EH HQJHQGHUHG ZLWKLQ DUHDV SUHGLFWHG E\ WKH WKHRUHWLFDO SURSRVLWLRQV" :KDW HIIHFW GRHV KRPRJHQHLW\ RU KHWHURJHQHLW\ RI WKH FRQVRUWLXP PHPEHUVKLS KDYH XSRQ WKH H[WHQW WR ZKLFK FRQIOLFW LV SHUFHLYHG WR RFFXU ZLWKLQ DUHDV SUHGLFWHG E\ WKHRU\" ,QWURGXFWLRQ 5HVXOWV RI WKH DQDO\VHV RI DOO YDULDEOHV XQGHU LQYHVWLJDWLRQ DUH UHSRUWHG LQ WHUPV RI IUHTXHQFLHV SHUn FHQWDJHV DQG PHGLDQ VFRUHV &KLVTXDUH WHVWV DQG 3HDUVRQ 3URGXFW 0RPHQW &RUUHODWLRQ ZHUH DOVR XWLOL]HG IRU WKH SXUSRVH RI LOOXVWUDWLQJ LQWHUUHODWLRQVKLSV DPRQJ DQG EHn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

PAGE 75

RWKHU IDFWRUV DVVRFLDWHG ZLWK WKH FRQVRUWLXP 7KHVH IDFWRUV DUH UHIHUUHG WR DV WKH DJH VL]H VHUYLFH DQG KRPRJHQHLW\KHWHURJHQHLW\ YDULDEOHV $ WRWDO RI RSLQLRQQDLUHV ZHUH PDLOHG WR DGPLQLVn WUDWRUV LQ FRQVRUWLD ,QFOXGHG ZHUH LQVWLWXWLRQDO DQG FRQVRUWLXP GLUHFWRUV 2QH KXQGUHG DQG VHYHQW\VL[ TXHVWLRQQDLUHV ZHUH UHWXUQHG E\ WKHVH DGPLQLV 7KLV UHSUHVHQWHG D UHWXUQ UDWH RI b IRU WKH FRPELQHG UHIHUHQW JURXSV 2I WKH RSLQLRQQDLUHV WKDW ZHUH PDLOHG WR WKH FRQVRUWLXP GLUHFWRUV ZHUH FRPSOHWHG DQG UHWXUQHG 7KLV UHSUHVHQWHG D UHWXUQ UDWH RI b IRU WKLV JURXS 7KH SUHVLGHQWV RI LQVWLWXWLRQDO PHPEHUV UHWXUQHG RI WKH RSLQLRQQDLUHV PDLOHG WR WKHP $ UHWXUQ UDWH RI b ZDV DFKLHYHG IURP WKLV JURXS RI UHVSRQn GHQWV 2I WKHVH UHWXUQV KRZHYHU RU b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f UHSRUWHG WKDW UHWXUQV RI OHVV

PAGE 76

WKDQ RU SHUFHQW DUH FRPPRQ +LJKHU SHUFHQWDJHV DUH UDUH S f 7KH REWDLQHG UDWH RI UHWXUQ ZDV QRW ZLWKRXW PXFK HIIRUW 7ZR IROORZXS UHTXHVWV IRU WKH UHWXUQ RI WKH RSLQLRQQDLUHV ZHUH FRQGXFWHG 6HH $SSHQGL[ IRU WKH IROORZXS OHWWHUVf +RZHYHU DQDO\VLV RI WKH UHWXUQV WKDW ZHUH UHFHLYHG VXEVHTXHQW WR HDFK IROORZXS OHWWHU GLG QRW UHYHDO D UHVSRQVH SDWWHUQ ZKLFK GLIIHUHG IURP WKH LQLWLDO UHWXUQV 7KLV VXJJHVWV WKDW WKH UHWXUQV UHFHLYHG DIWHU WKH IROORZXSV ZHUH QRW ELDVHG LQ DQ\ ZD\ 5HVXOWV RI D FKL VTXDUH FRPSDULVRQ RI WKH QRQUHVSRQGHQWV WR WKH UHVSRQGHQWV DOVR UHYHDOHG QR VWDWLVWLFDOO\ VLJQLILFDQW GLIIHUHQFH EHWZHHQ WKH WZR JURXSV 5HVXOWV DQG )LQGLQJV $Q H[DPLQDWLRQ RI WKH UHVSRQVHV SURYLGHG E\ WKH FRQn VRUWLXP GLUHFWRUV DQG WKH SUHVLGHQWV RI LQVWLWXWLRQDO PHPEHUV UHYHDOHG WKDW QR GLIIHUHQFH H[LVWHG EHWZHHQ WKHVH UHVSRQGHQWVn UHVSRQVHV IRU WKH GHSHQGHQW YDULDEOHV 7KHUHn IRUH WKHVH GDWD ZHUH FRPELQHG DQG WKH FRPSRVLWH DQDO\VLV LV UHSRUWHG LQ 7DEOH 7KLV WDEOH LOOXVWUDWHV WKH IUHTXHQF\ DQG SHUFHQWDJH GLVWULEXWLRQV RI UHVSRQVHV WR WKH GHSHQGHQW YDULDEOHV ,Q DGGLWLRQ WR WKHVH W\SHV RI DQDO\VHV PHGLDQ VFRUHV DUH DOVR SUHVHQWHG LQ 7DEOH 7KH UHVRXUFH YDULDEOH UHSUHVHQWV WKH QRWLRQ DGYDQFHG E\ WKH WKHRU\ WKDW WKH JUHDWHU WKH PHPEHUVKLSnV GHSHQGHQF\

PAGE 77

7DEOH $ 3URILOH RI WKH &RPSRVLWH 5HVSRQVHV WR WKH 7KHRUHWLFDO 3URSRVLWLRQVD 9DULDEOHV 6$E $ 1 6' 0HGLDQ 5HVRXUFH f f f f f f 6FKHGXOLQJ r f§ f f f f *RDOV I ? f f f f f ,QIRUPDWLRQDO 6RXUFH f f f f f ,QIRUPDWLRQ f§ &KDQQHOLQJ f f f f D1XPEHUV LQ SDUHQWKHVHV LQGLFDWH SHUFHQWDJHV E&ROXPQ KHDGLQJV VKRZQ DV 6$ $ 1 DQG 6' UHSUHVHQW VWURQJO\ DJUHH DJUHH QHLWKHU DJUHH QRU GLVDJUHH GLVDJUHH DQG VWURQJO\ GLVDJUHH UHVSHFWLYHO\ XSRQ D OLPLWHG FRQVRUWLXP UHVRXUFH WKH JUHDWHU LV WKH PHPEHUVKLSnV GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ WKH DOORFDWLRQ RI WKDW UHVRXUFH 7DEOH VKRZV WKDW b RI WKH UHVSRQGHQWV ZHUH LQ DJUHHPHQW ZLWK WKLV SURSRVLWLRQ 2QO\ b RI WKH UHVSRQGHQWV GLVDJUHHG ,Q DGGLWLRQ WKH PHGLDQ VFRUH RI ZDV ZHOO ZLWKLQ WKH DFFHSWDEOH UDQJH RI PHGLDQ VFRUHV IRU WKHVH UHVXOWV )RU WKH VFKHGXOLQJ YDULDEOH DGPLQLVWUDWRUV FKHFNHG VWURQJO\ DJUHH ZKLOH FKHFNHG DJUHH 7KLV UHSUHn VHQWHG b RI WKH UHVSRQGHQWV ZKR DJUHHG ZLWK WKH

PAGE 78

SURSRVLWLRQ WKDW WKH JUHDWHU WKH LQYROYHPHQW RI WKH PHPEHUVKLS LQ MRLQW DFWLYLWLHV ZKLFK UHTXLUH WKH VFKHGXOLQJ RI WLPHV IRU DFWLYLWLHV WR RFFXU WKH JUHDWHU LV WKH GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ VFKHGXOLQJ (YHQ WKRXJK b RI WKH DGPLQLVWUDWRUV GLVDJUHHG ZLWK WKLV VWDWHn PHQW QRW RQH FKHFNHG WKH VWURQJO\ GLVDJUHH FDWHJRU\ +RZHYHU RU b LQGLFDWHG WKDW WKH\ QHLWKHU DJUHHG QRU GLVDJUHHG 7DEOH LOOXVWUDWHV WKDW b RI WKH UHVSRQGHQWV ZHUH LQ DJUHHPHQW ZLWK WKH WKHRU\ SHUWDLQLQJ WR JRDOV )XUWKHU DQDO\VLV RI WKHVH GDWD LOOXVWUDWHV WKDW b RI WKH DGPLQLVWUDWRUV VWURQJO\ DJUHHG ZLWK WKH VWDWHPHQW ZKLOH b LQGLFDWHG WKDW WKH\ DJUHHG 2Q WKH RWKHU KDQG b RI WKH UHVSRQGHQWV GLG QRW DJUHH ZLWK WKH WKHRU\ 2I WKLV WRWDO b FKHFNHG WKH GLVDJUHH FDWHJRU\ 2QO\ b RI WKH UHVSRQGHQWV LQGLFDWHG VWURQJ GLVDJUHHPHQW $GPLQLVWUDn WRUV ZKR FRXOG QRW DJUHH RU GLVDJUHH UHSUHVHQWHG b RI WKH UHVSRQGHQWV 'DWD SUHVHQWHG LQ 7DEOH VKRZ WKDW b RI WKH UHVSRQGHQWV DJUHHG ZLWK WKH DVVXPSWLRQ WKDW WKH JUHDWHU WKH QXPEHU RI LQGHSHQGHQW LQIRUPDWLRQDO VRXUFHV ZLWKLQ WKH FRQVRUWLXP WKH JUHDWHU LV WKH GLIIHUHQFH LQ WKH PHPEHUn VKLSnV SHUFHSWLRQ RI WKH FRQVRUWLXP ZKLOH b GLVDJUHHG 2I WKH b WKDW GLVDJUHHG b GLG VR YHU\ VWURQJO\ 7KLV PHDQV WKDW b H[SUHVVHG QR RSLQLRQ E\ FKHFNLQJ WKH QHLWKHU DJUHH QRU GLVDJUHH FDWHJRU\

PAGE 79

7KH LQIRUPDWLRQ FKDQQHOLQJ YDULDEOH SUHVHQWHG LQ 7DEOH LQGLFDWHV WKDW b RI WKH UHVSRQGHQWV DJUHHG ZLWK WKH DVVXPSWLRQ WKDW WKH JUHDWHU WKH FKDQQHOLQJ RI LQIRUPDn WLRQ ZLWKLQ WKH FRQVRUWLXP WKH JUHDWHU LV WKH GLIIHUHQFH LQ WKH PHPEHUVKLSnV SHUFHSWLRQ RI WKH FRQVRUWLXP 2I WKLV WRWDO b VWURQJO\ DJUHHG $OWKRXJK b RI WKH UHVSRQGHQWV GLVDJUHHG ZLWK WKLV DVVXPSWLRQ QRW RQH RI WKHVH DGPLQLVWUDWRUV GLVDJUHHG VWURQJO\ 3HUKDSV LW LV PRUH VLJQLILFDQW WR REVHUYH WKDW b RI WKH UHVSRQGHQWV LQGLFDWHG WKDW WKH\ QHLWKHU DJUHHG QRU GLVDJUHHG ZLWK WKLV DVVXPSWLRQ )XUWKHU H[DPLQDWLRQ RI WKH GDWD ZDV FRQGXFWHG WR DVFHUWDLQ ZKHWKHU RU QRW UHODWLRQVKLSV H[LVWHG ZLWKLQ WKH UHVSRQVH SDWWHUQ RI WKH WZR JURXSV RI DGPLQLVWUDWRUV &KL VTXDUH VWDWLVWLFDO WUHDWPHQW DW WKH OHYHO RI VLJQLILn FDQFH ZDV FRQVLGHUHG DGHTXDWH IRU WKHVH DQDO\VHV 5HVXOWV RI WKHVH DQDO\VHV DUH UHSRUWHG LQ WKH IROORZLQJ VHTXHQFH RI WDEOHV 7DEOH VKRZV WKDW b RI WKH LQVWLWXWLRQDO SUHVLn GHQWV DJUHHG ZLWK WKH WKHRUHWLFDO DVVXPSWLRQ SHUWDLQLQJ WR UHVRXUFH VKDULQJ 7KLV FRPSDUHV ZLWK b RI WKH FRQn VRUWLXP GLUHFWRUV ZKR H[KLELWHG D FRQFXUULQJ RSLQLRQ 7KH DVVXPSWLRQ ZDV QRW DJUHHDEOH WR b RI WKH SUHVLGHQWV DQG b RI WKH FRQVRUWLXP GLUHFWRUV 3UHVLGHQWV DQG GLUHFWRUV ZKR QHLWKHU DJUHHG QRU GLVDJUHHG ZLWK WKH WKHRU\ UHSUHn VHQWHG b DQG b RI WKH UHVSRQGHQWV UHVSHFWLYHO\

PAGE 80

7DEOH 5HVRXUFH 6$E $ 1 6' 5RZ 7RWDO 3UHVLGHQWV 'LUHFWRUV &2/801 727$/ 1RWH &KLVTXDUH GI f 1XPEHUV LQ HDFK FHOO UHSUHVHQW WKH FRXQW URZ SHUFHQWDJH FROXPQ SHUFHQWDJH DQG WKH WRWDO SHUFHQWDJH A&ROXPQ KHDGLQJV VKRZQ DV 6$ $ 1 DQG 6' UHSUHVHQW VWURQJO\ DJUHH DJUHH QHLWKHU DJUHH QRU GLVDJUHH GLVDJUHH DQG VWURQJO\ GLVDJUHH UHVSHFWLYHO\ $ FKLVTXDUH YDOXH RI DW WKH OHYHO UHYHDOHG WKDW WKH WZR JURXSV RI UHVSRQGHQWV GLG QRW GLIIHU LQ DQ\ VWDWLVWLFDOO\ VLJQLILFDQW GHJUHH LQ WKH PDQQHU LQ ZKLFK WKH\ UHVSRQGHG WR WKLV YDULDEOH ,W LV REVHUYDEOH IURP WKH GDWD LQ 7DEOH WKDW ERWK JURXSV RI DGPLQLVWUDWRUV DJUHHG YHU\ KLJKO\ ZLWK WKH SURSRn VLWLRQ RQ VFKHGXOLQJ $FFRUGLQJO\ b RI WKH SUHVLGHQWV RI LQVWLWXWLRQDO PHPEHUV DQG b RI WKH FRQVRUWLXP GLUHFWRUV H[SUHVVHG FRQFXUULQJ YLHZV UHJDUGLQJ WKLV YDULDEOH

PAGE 81

7DEOH 6FKHGXOLQJ 6$E $ 1 6' 5RZ 7RWDO 3UHVLGHQWV 'LUHFWRUV &2/801 727$/ 1RWH &KLVTXDUH GI f D1XPEHUV LQ HDFK FHOO [ UHSUHVHQW WKH FRXQW URZ SHUFHQWDJH FROXPQ SHUFHQWDJH DQG WKH WRWDO SHUFHQWDJH A&ROXPQ KHDGLQJV VKRZQ DV 6$ $ 1 DQG 6' UHSUHVHQW VWURQJO\ DJUHH DJUHH QHLWKHU DJUHH QRU GLVDJUHH GLVDJUHH DQG VWURQJO\ GLVDJUHH UHVSHFWLYHO\ 2QO\ b RI WKH SUHVLGHQWV DQG b RI WKH GLUHFWRUV GLVn DJUHHG ZLWK WKLV DVVXPSWLRQ 7KRVH ZKR FRXOG QHLWKHU DJUHH QRU GLVDJUHH FRQVLVWHG RI b DQG b RI WKH SUHVLGHQWV DQG GLUHFWRUV UHVSHFWLYHO\ ,W LV DOVR REVHUYDEOH WKDW QRW RQH UHVSRQGHQW FKHFNHG WKH VWURQJO\ GLVDJUHH FDWHJRU\ )XUWKHU VWDWLVWLFDO DQDO\VLV \LHOGHG D FKLVTXDUH YDOXH DW WKH OHYHO 7KLV LQGLFDWHG WKDW QR VLJQLILFDQW GLIIHUHQFH H[LVWHG EHWZHHQ WKH UHVSRQVHV IURP WKHVH WZR JURXSV RI UHVSRQGHQWV

PAGE 82

5HVXOWV SUHVHQWHG LQ 7DEOH LQGLFDWH WKDW ERWK JURXSV RI DGPLQLVWUDWRUV DJUHHG ZLWK WKH DVVXPSWLRQ UHODWLQJ WR WKH JRDOV YDULDEOH 7KH H[WHQW RI DJUHHPHQW ZDV b IRU WKH LQVWLWXWLRQDO SUHVLGHQWV DQG b IRU WKH FRQVRUWLXP GLUHFWRUV /HVV WKDQ b RI WKHVH DGPLQLVWUDWRUV ZHUH QRW LQ DJUHHPHQW ZLWK WKH WKHRULVWV 7KH SUHVLGHQWV ZKR UHVSRQGHG LQ WKLV PDQQHU UHSUHVHQWHG b RI WKLV JURXS DV FRPSDUHG WR b IRU WKH GLUHFWRUV 7DEOH *RDOV 6$E $ 1 6' 5RZ 7RWDO L 3UHVLGHQWV LL 'LUHFWRUV &2/801 727$/ 1RWH &KLVTXDUH GI D1XPEHUV LQ HDFK FHOO UHSUHVHQW WKH FRXQW URZ SHUFHQWDJH FROXPQ SHUFHQWDJH DQG WKH WRWDO SHUFHQWDJH A&ROXPQ KHDGLQJV VKRZQ DV 6$ $ 1 DQG 6' UHSUHVHQW VWURQJO\ DJUHH DJUHH QHLWKHU DJUHH QRU GLVDJUHH GLVDJUHH DQG VWURQJO\ GLVDJUHH UHVSHFWLYHO\

PAGE 83

&RQVLVWHQW ZLWK WKHVH ILQGLQJV ZDV D FKLVTXDUH YDOXH RI DW WKH OHYHO RI VLJQLILFDQFH 7KLV YDOXH RI FKLVTXDUH ZDV QRW VWDWLVWLFDOO\ VLJQLILFDQW DW WKH OHYHO 7KHUHIRUH QR VLJQLILFDQW GLIIHUHQFH H[LVWHG EHn WZHHQ WKH UHVSRQVHV IURP WKHVH WZR JURXSV RI DGPLQLVWUDWRUV 7DEOH UHSRUWV WKH UHVXOWV RI WKH UHVSRQVHV IRU WKH LQIRUPDWLRQDO VRXUFH YDULDEOH $ FKLVTXDUH FRPSXWHG WR EH QRW VLJQLILFDQW DW WKH OHYHOf LQGLFDWHG WKDW 7DEOH ,QIRUPDWLRQDO 6RXUFH 6$E $ 1 6' 5RZ 7RWDO 3UHVLGHQWV 'LUHFWRUV &2/801 727$/ 1RWH &KLVTXDUH GI f D1XPEHUV LQ HDFK FHOO UHSUHVHQW WKH VRXQW URZ SHUFHQWDJH FROXPQ SHUFHQWDJH DQG WKH WRWDO SHUFHQWDJH A&ROXPQ KHDGLQJV VKRZQ DV 6$ $ 1 DQG 6' UHSUHVHQW VWURQJO\ DJUHH DJUHH QHLWKHU DJUHH QRU GLVDJUHH GLVDJUHH DQG VWURQJO\ GLVDJUHH UHVSHFWLYHO\

PAGE 84

QR VLJQLILFDQW GLIIHUHQFH H[LVWHG EHWZHHQ WKH UHVSRQVHV RI LQVWLWXWLRQDO DGPLQLVWUDWRUV DQG FRQVRUWLXP DGPLQLVWUDWRUV )XUWKHU DQDO\VLV UHYHDOHG WKDW QHLWKHU JURXS RI DGPLQLVn WUDWRUV DJUHHG ZLWK WKH QRWLRQ DGYDQFHG E\ WKH WKHRU\ 0RUH VSHFLILFDOO\ b RI WKH LQVWLWXWLRQDO DQG b RI WKH FRQVRUWLXP GLUHFWRUV ZHUH LQ DJUHHPHQW ZLWK WKH LQIRUPDWLRQDO VRXUFH DVVXPSWLRQ 7KH GHJUHH RI GLVSDULW\ ZDV b DQG b IRU WKH SUHVLGHQWV DQG GLUHFWRUV UHVSHFWLYHO\ $Q HYHQ ODUJHU SHUFHQWDJH RI WKHVH DGPLQLVWUDWRUV UHVSRQGHG WR WKLV YDULDEOH E\ FKHFNLQJ WKH QHLWKHU DJUHH QRU GLVDJUHH FDWHJRU\ 7KLV SHUFHQWDJH ZDV b IRU WKH SUHVLGHQWLDO JURXS DQG b IRU WKH GLUHFWRUV $ FKLVTXDUH YDOXH RI FRPSXWHG IURP WKH GDWD LQ 7DEOH LQGLFDWHG WKDW WKHUH ZDV QR VWDWLVWLFDOO\ VLJQLILn FDQW GLIIHUHQFH DW WKH OHYHO EHWZHHQ WKH UHVSRQVHV RI WKH WZR DGPLQLVWUDWLYH JURXSV 7KLV WDEOH DOVR LOOXVWUDWHV WKDW b RI WKH SUHVLGHQWV DQG b RI WKH FRQVRUWLXP DGPLQLVWUDWRUV ZHUH LQ DJUHHPHQW ZLWK WKH DVVXPSWLRQ UHODWLQJ WR WKH FKDQQHOLQJ RI LQIRUPDWLRQ ZLWKLQ WKH RUJDQLn ]DWLRQ $OWKRXJK QR RQH FKHFNHG WKH VWURQJO\ GLVDJUHH FDWHJRU\ b RI WKH SUHVLGHQWV DQG b RI WKH FRQn VRUWLXP GLUHFWRUV ZHUH QRW LQ DJUHHPHQW ZLWK WKH WKHRUHWLn FLDQV $ VLJQLILFDQWO\ ODUJH SHUFHQWDJH RI UHVSRQGHQWV b RI WKH SUHVLGHQWV DQG b RI WKH GLUHFWRUVf QHLWKHU DJUHHG QRU GLVDJUHHG ZLWK WKH WKHRU\ UHODWLYH WR WKLV YDULDEOH

PAGE 85

7DEOH ,QIRUPDWLRQ &KDQQHOLQJ 6$E $ 1 6' 5RZ 7RWDO 3UHVLGHQWV 'LUHFWRUV &2/801 727$/ 1RWH &KLVTXDUH GI f D1XPEHUV LQ HDFK FHOO UHSUHVHQW WKH FRXQW URZ SHUFHQWDJH FROXPQ SHUFHQWDJH DQG WKH WRWDO SHUFHQWDJH A&ROXPQ KHDGLQJV VKRZQ DV 6$ $ 1 DQG 6' UHSUHVHQW VWURQJO\ DJUHH DJUHH QHLWKHU DJUHH QRU GLVDJUHH GLVDJUHH DQG VWURQJO\ GLVDJUHH UHVSHFWLYHO\ $QDO\VLV RI WKH LQGHSHQGHQW YDULDEOHV ZDV FRQGXFWHG WR WKH H[WHQW WR ZKLFK WKH FRQVRUWLD ZHUH GLVWULEXWHG DFURVV WKH GLIIHUHQW FDWHJRULHV RI WKHVH YDULDEOHV )UHTXHQF\ GLVWULEXWLRQV ZHUH XWLOL]HG IRU WKLV SXUSRVH 7DEOH UHSRUWV WKH UHVXOWV RI WKH DJH YDULDEOH 7KHVH UHVXOWV LQGLFDWH WKDW b RI WKH FRQVRUWLD VXUYH\HG KDG EHHQ HVWDEOLVKHG IRU D SHULRG RI ILYH \HDUV RU OHVV +RZHYHU b RI WKHVH RUJDQL]DWLRQV KDG EHHQ LQ H[LVWHQFH WR \HDUV 7KRVH WKDW KDG EHHQ LQ H[LVWHQFH WR

PAGE 86

\HDUV FRQVWLWXWHG b 7KH VDPH SHUFHQWDJH b UHSUHVHQWHG WKRVH WKDW ZHUH \HDUV DQG ROGHU )URP WKHVH UHVXOWV LW DSSHDUV WKDW PRVW RI WKHVH FRQVRUWLD KDYH EHHQ LQ H[LVWHQFH IRU OHVV WKDQ \HDUV 7DEOH 'LVWULEXWLRQ RI WKH $JH RI WKH 5HSUHVHQWHG &RQVRUWLD 7RWDO f f f f 1XPEHUV LQ SDUHQWKHVHV LQGLFDWH SHUFHQWDJHV 7KH UHVXOWV UHFRUGHG LQ 7DEOH LQGLFDWH WKDW WKH PDMRULW\ RI WKH FRQVRUWLD FRQVLVW RI OHVV WKDQ LQVWLWXn WLRQV 0RUH VSHFLILFDOO\ b ZHUH LQ WKH LQVWLWXWLRQDO PHPEHUV RU OHVV FDWHJRU\ ZKLOH b ZHUH LQ WKH WR PHPEHU FDWHJRU\ 7KH RWKHU WZR FDWHJRULHV WKRVH FRQVRUWLD WKDW FRQVLVWHG RI WR PHPEHUV DQG WKRVH WKDW FRQn VLVWHG RI RU PRUH ZHUH ERWK UHSUHVHQWHG E\ b RI WKH FRQVRUWLD 7KUHH FDWHJRULHV IRU WKH VHUYLFH YDULDEOH DUH UHSRUWHG LQ 7DEOH 7KH ILUVW FDWHJRU\ FRQVLVWV RI FRQVRUWLD WKDW SURYLGHG WR GLIIHUHQW VHUYLFHV 7ZHQW\WKUHH SHUFHQW RI WKH FRQVRUWLD DUH UHSUHVHQWHG LQ WKLV FDWHJRU\

PAGE 87

7DEOH 'LVWULEXWLRQ RI WKH 6L]H RI WKH 0HPEHUVKLS RI WKH &RQVRUWLD 7RWDO f f f f 1XPEHUV LQ SDUHQWKHVHV LQGLFDWH SHUFHQWDJHV f 'LVWULEXWLRQ RI E\ WKH 7DEOH WKH 1XPEHU 5HSUHVHQWHG RI 6HUYLFHV 3URYLGHG &RQVRUWLD 7RWDO f f f D1XPEHUV LQ SDUHQWKHVHV LQGLFDWH SHUFHQWDJHV 6HFRQGO\ b RI WKH FRQVRUWLD LQ WKLV VWXG\ SURYLGHG WR GLIIHUHQW VHUYLFHV IRU WKHLU PHPEHUV 7KLUWHHQ RU b RI WKHVH FRQVRUWLD SURYLGHG PRUH WKDQ VHUYLFHV $ PRUH HTXLWDEOH GLVWULEXWLRQ RI WKH FRQVRUWLD DFURVV DOO FDWHJRULHV LV SURYLGHG LQ 7DEOH 7KLV WDEOH VKRZV WKDW HDFK RI WKHVH FDWHJRULHV FRQWDLQV DSSUR[LPDWHO\ RQH WKLUG RI WKH RUJDQL]DWLRQV XQGHU VWXG\ &RQVRUWLD UHSRUWHG LQ WKH ILUVW FDWHJRU\ FRQVLVW RI LQVWLWXWLRQDO PHPEHUV ZKR

PAGE 88

HLWKHU GR QRW VLJQLILFDQWO\ GLIIHU IURP HDFK RWKHU RQ DQ\ RI WKH YDULDEOHV RU WKRVH ZKR GLIIHUHG RQ DV PDQ\ DV WZR YDULDEOHV 7KLV FDWHJRU\ FRQWDLQV b RI WKH FRQVRUWLD 1LQH RU b RI WKH FRQVRUWLD KDG PHPEHUV WKDW GLIIHUHG RQ WKUHH WR IRXU YDULDEOHV 7KH WKLUG FDWHJRU\ LQ 7DEOH FRPSULVHV b RI WKH VDPSOH DQG FRQVLVWV RI FRQVRUWLD FRQWDLQLQJ LQVWLWXWLRQDO PHPEHUV ZKR GLIIHUHG RQ ILYH RU PRUH YDULDEOHV 7DEOH +RPRJHQHLW\+HWHURJHQHLW\ 'LVWULEXWLRQ RI WKH &RQVRUWLXP 0HPEHUVKLSnE 7RWDO f f f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

PAGE 89

WKHVH UHODWLRQVKLSV H[LVWHG DPRQJ WKH GHSHQGHQW YDULDEOHV ZKHUHDV VL[ ZHUH IRXQG DPRQJ WKH LQGHSHQGHQW YDULDEOHV +RZHYHU RQO\ WZR LQFLGHQFHV RI VLJQLILFDQW UHODWLRQVKLS EHWZHHQ WKHVH WZR JURXSV RI YDULDEOHV ZHUH UHYHDOHG E\ WKHVH UHVXOWV 7DEOH &RUUHODWLRQ 0DWUL[ IRU DOO 9DULDEOHVnN 5HVRXUFH 6FKHGXOLQJ *RDOV ,QIRUPDWLRQDO 6RXUFH ,QIRUPDWLRQ &KDQQHOLQJ $JH 6L]H 6HUYLFH !L f§ S LG ? f+ LG LG WQ R LG 3 F D f+ + f+ f+ 3 S Lf§, &' W3 R Lf§ UG IG Df LG X 3 V 2 LG R 3 &4 S 8 FG f+ WS Lf§L 3 IG &' 3 8f G G 2 1 S % D LG FQ LG X &Q f+ G W FR R + 0 & FR &2 B +RPRJHQHLW\+HWHURJHQHLW\ 3OXV LQGLFDWHV WKH H[LVWHQFH RI D VLJQLILFDQW UHODWLRQVKLS 0LQXV LQGLFDWHV WKDW QR VLJQLILFDQW UHODWLRQVKLS H[LVWV I

PAGE 90

,Q UHVSRQVH WR DQ RSHQHQGHG TXHVWLRQ FRQVRUWLXP GLUHFWRUV FLWHG VHYHUDO IDFWRUV DV PDMRU FDXVHV RI FRQIOLFW LQ WKH FRQVRUWLXP 7KHVH IDFWRUV ZKLFK DUH SUHn VHQWHG LQ GHVFHQGLQJ RUGHU RI IUHTXHQF\ PHQWLRQHG ZHUH UHSRUWHG WR EH LQVWLWXWLRQDO DXWRQRP\ DQG WXUILVP SKLORVRSK\ JRDOV DQG REMHFWLYHV SUREOHPV ILQDQFLDO FRQn FHUQV UHODWLQJ WR GXHV DQG EHQHILWV FRPSHWLWLRQ IDFXOW\ DQ[LHW\ DQG ORZ LQVWLWXWLRQDO FRPPLWPHQW WR FRRSHUDWH $QRWKHU RSHQHQGHG TXHVWLRQ FRQFHUQHG ZD\V LQ ZKLFK FRQIOLFW DIIHFWHG WKH HIIHFWLYHQHVV RI WKH FRQVRUWLXP 7KH FRQVRUWLXP GLUHFWRUVn UHVSRQVHV LQ GHVFHQGLQJ RUGHU RI IUHTXHQF\ PHQWLRQHG UHSRUWHG FRQIOLFW DV D IDFWRU ZKLFK OLPLWV FRRSHUDWLRQ OLPLWV JRDO DFKLHYHPHQW GHFUHDVHV IDFXOW\ FRPPLWPHQW IRUFHV VHDUFK EHKDYLRU DQG LQFUHDVHV VWDII HIILFLHQF\ 2QH UHVSRQGHQW LQGLFDWHG WKDW PHPEHUVKLS SRODUL]DWLRQ ZDV DOVR WKH HQG UHVXOW RI FRQIOLFW LQ KLV FRQVRUWLXP 7KRVH IDFWRUV ZKLFK KDYH EHHQ PRVW KHOSIXO LQ HQDEOLQJ WKH FRQVRUWLXP GLUHFWRUV WR PDQDJH FRQIOLFW ZHUH UHSRUWHG LQ GHVFHQGLQJ RUGHU RI IUHTXHQF\ DV OHDGHUVKLS H[SHULn HQFH DQG H[SHUWLVH RI VWDII LQVWLWXWLRQDO FRPPLWPHQW IDFXOW\ LQYROYHPHQW WUXVWHH DQG SXEOLF VXSSRUW DQG H[SHFn WDWLRQ DQG VL]H DQG JHRJUDSKLFDO GLVWDQFH $GGLWLRQDO UHVRXUFHV ZDV PHQWLRQHG RQ WZR RFFDVLRQV ZKLOH OHJLVODWLYH LQIOXHQFH ZDV PHQWLRQHG RQFH 6WDWLVWLFDO SURFHGXUHV ZHUH QRW DSSOLHG WR WKHVH TXHVWLRQV

PAGE 91

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n WLRQDO DQDO\VLV ZDV XWLOL]HG WR GHWHUPLQH LI LQWHUUHODWLRQn VKLSV H[LVWHG EHWZHHQ WKH GHSHQGHQW DQG LQGHSHQGHQW YDULDEOHV $QDO\VHV ZHUH DOVR GRQH ZLWKLQ HDFK JURXS 2I WKH ILYH WKHRUHWLFDO DVVXPSWLRQV QR VLJQLILFDQW GLIIHUHQFHV ZHUH IRXQG WR H[LVW EHWZHHQ YLHZV KHOG E\ WKH GLUHFWRUV DQG WKH SUHVLGHQWV ZLWK UHJDUG WR WKHVH DVVXPSn WLRQV 7KH UHVRXUFH VFKHGXOLQJ DQG JRDOV DVVXPSWLRQV ZHUH VXSSRUWHG E\ WKHVH GDWD +RZHYHU WKH LQIRUPDWLRQDO VRXUFH DQG LQIRUPDWLRQ FKDQQHOLQJ DVVXPSWLRQV ZHUH QRW VXSSRUWHG ,QWHUUHODWLRQVKLSV H[LVWHG EHWZHHQ HLJKW RI WKH GHSHQGHQW YDULDEOHV DQG VL[ RI WKH SHUVRQDO GDWD YDULDEOHV

PAGE 92

7ZR LQFLGHQFHV RI LQWHUUHODWLRQVKLS ZHUH IRXQG EHWZHHQ WKH GHSHQGHQW DQG LQGHSHQGHQW YDULDEOHV $ GLVFXVVLRQ RI WKH ILQGLQJV UHSRUWHG LQ &KDSWHU ,9 ZLOO EH SUHVHQWHG LQ &KDSWHU 9 ,PSOLFDWLRQV FRQFOXVLRQV DQG UHFRPPHQGDWLRQV UHJDUGLQJ WKH DIRUHPHQWLRQHG ILQGLQJV ZLOO DOVR EH SUHVHQWHG

PAGE 93

&+$37(5 9 ',6&866,21 &21&/86,216 ,03/,&$7,216 $1' 5(&200(1'$7,216 'LVFXVVLRQ 7KLV VWXG\ ZDV GHVLJQHG WR GHVFULEH LQWHURUJDQL]DWLRQDO FRQIOLFW LQ YROXQWDU\ LQWHULQVWLWXWLRQDO FRQVRUWLD E\ VWXG\LQJ SHUFHSWLRQV RI FRQVRUWLXP GLUHFWRUV DQG SUHVLGHQWV RI FRQVRUWLQJ LQVWLWXWLRQV WRZDUG 0DUFK DQG 6LPRQnV SURSRVLWLRQV IRU GHVFULELQJ RUJDQL]DWLRQDO FRQIOLFW LQ WKH WUDGLWLRQDO RUJDQL]DWLRQ 0RUHRYHU WKH SXUSRVH RI WKLV VWXG\ ZDV WR WHVW WKH H[WHQW WR ZKLFK FRQIOLFW WKHRU\ GHYHORSHG IRU WUDGLWLRQDO RUJDQL]DWLRQV LV DSSOLFDEOH WR LQWHULQVWLWXWLRQDO FRQVRUWLD ,QFOXGHG LQ WKLV LQYHVWLJDn WLRQ ZDV DQ H[DPLQDWLRQ RI WKH UHODWLRQVKLS EHWZHHQ WKHRU\ DQG D QXPEHU RI YDULDEOHV DVVRFLDWHG ZLWK FRQVRUWLD 7KLUW\ YROXQWDU\ LQWHULQVWLWXWLRQDO FRQVRUWLD ZHUH UDQGRPO\ VHOHFWHG IURP WKURXJKRXW WKH 8QLWHG 6WDWHV 7KHVH FRQVRUWLD FRPSULVHG D VDPSOH SRSXODWLRQ ZKLFK FRQVLVWHG RI DGPLQLVWUDWRUV 7KLUW\ RI WKHVH DGPLQLVWUDWRUV ZHUH FRQVRUWLXP GLUHFWRUV DQG ZHUH SUHVLGHQWV RI LQVWLWXn WLRQDO PHPEHUV 2QH KXQGUHG DQG VHYHQW\VL[ RU b RI WKH RSLQLRQ QDLUHV PDLOHG WR WKHVH DGPLQLVWUDWRUV ZHUH UHWXUQHG

PAGE 94

(LJKW\VL[ SHUFHQW RI WKH UHWXUQHG TXHVWLRQQDLUHV ZHUH XVHG LQ WKH VWXG\ 7KH UHWXUQV QRW XWLOL]HG LQ WKH VWXG\ ZHUH RPLWWHG EHFDXVH RI VHYHUDO IDFWRUV Df LPSURSHU UHVSRQn GHQWV Ef LQFRPSOHWHG UHWXUQV DQG Ff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f WKH LQVWLWXWLRQDO SUHVLGHQW ZDV YDFDWLRQLQJ RU WUDYHOLQJ DEURDG Ef WRR PXFK WLPH ZDV QHHGHG WR FRPSOHWH WKH LQVWUXPHQW Ff WRR IHZ VWDII PHPEHUV ZHUH HPSOR\HG Gf WKH LQVWLWXWLRQ KDG SDUWLFLSDWHG LQ WKH FRQVRUWLXP RQO\ WR D OLPLWHG GHJUHH Hf WKLV W\SH RI FRQVRUWLXP GLG QRW DSSO\ RU GLG QRW OHQG LWVHOI WR ZKDW WKH LQVWUXPHQW VRXJKW WR GHWHUPLQH DQG If YDFDQFLHV H[LVWHG LQ WKH SUHVLGHQWLDO RIILFHV 6HYHUDO RI WKH SUHYLRXVO\ PHQWLRQHG UHDVRQV WKDW DIIHFWHG WKH UHWXUQ UDWH ZHUH H[SHFWHG 7KHVH H[SHFWDWLRQV ZHUH GXH WR WKH IDFW WKDW WKH GDWD ZHUH JDWKHUHG GXULQJ WKH +RZHYHU ZKHQ WKHVH IDFWRUV ZHUH FRQVLGHUHG LQ W VXPPHU

PAGE 95

FRQMXQFWLRQ ZLWK WKH SUHYLRXVO\ PHQWLRQHG SUREOHP RI WKH PDLOHG TXHVWLRQQDLUH LW VHHPV WKDW D JRRG UHSUHVHQWDWLRQ ZDV DFKLHYHG 5HYLHZ RI WKH 7KHRU\ 3URSRVLWLRQV RQ FRQIOLFW DGYDQFHG E\ 0DUFK DQG 6LPRQ SS f WR GHVFULEH WKH QDWXUH RI FRQIOLFW LQ RUJDQL]DWLRQV DQG DGGUHVVHG LQ WKLV VWXG\ DUH DV IROORZV 7KH JUHDWHU WKH PXWXDO GHSHQGHQFH RQ D OLPLWHG UHVRXUFH WKH JUHDWHU WKH IHOW QHHG IRU MRLQW GHFLVLRQPDNLQJ ZLWK UHVSHFW WR WKDW UHVRXUFH 7KH JUHDWHU WKH LQWHUGHSHQGHQFH RI WLPLQJ RI DFWLYLWLHV WKH JUHDWHU WKH IHOW QHHG IRU MRLQW GHFLVLRQPDNLQJ ZLWK UHVSHFW WR VFKHGXOLQJ 7KH OHVV WKH VXEMHFWLYH RSHUDWLRQDOO\ RI RUJDQLn ]DWLRQDO JRDOV WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI LQGLYLGXDO JRDOV LQ WKH RUJDQL]DWLRQ 7KH JUHDWHU WKH QXPEHU RI LQGHSHQGHQW LQIRUPDWLRQ VRXUFHV WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI SHUn FHSWLRQV ZLWKLQ WKH RUJDQL]DWLRQ 7KH JUHDWHU WKH FKDQQHOLQJ RI LQIRUPDWLRQn SURFHVVLQJ WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI SHUFHSWLRQV ZLWKLQ WKH RUJDQL]DWLRQ )LQGLQJV 7KH ILUVW TXHVWLRQ DGGUHVVHG LQ WKLV VWXG\ ZDV 7R ZKDW H[WHQW GR Df FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO

PAGE 96

SUHVLGHQWV DJUHH ZLWK WKH VWDWHPHQW WKH JUHDWHU WKH PHPEHUn VKLSnV GHSHQGHQF\ XSRQ D OLPLWHG FRQVRUWLXP UHVRXUFH WKH JUHDWHU LV WKH PHPEHUVKLSnV GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ WKH DOORFDWLRQ RI WKDW UHVRXUFH" 6HYHQW\HLJKW SHUFHQW RI WKH LQVWLWXWLRQDO SUHVLGHQWV DQG FRQVRUWLXP GLUHFWRUV DJUHHG ZLWK WKLV TXHVWLRQ $JUHHPHQW ZLWK WKH TXHVWLRQ QHFHVVDULO\ PHDQW DJUHHPHQW ZLWK WKH WKHRUHWLFDO SURSRVLWLRQ IURP ZKLFK WKH TXHVWLRQ ZDV SURSHUO\ GHULYHG 7KLV PHDQV WKHUHIRUH WKDW WKH WKHRU\ DV VHW IRUWK LQ &KDSWHU DQG LQ WKH 5HYLHZ RI WKH 7KHRU\ DERYH ZDV VXSSRUWHG E\ WKHVH ILQGLQJV ,W DOVR PHDQV WKDW WKH DVVXPSWLRQ WKDW WKH WKHRU\ ZDV DSSOLFDEOH WR WKH LQWHURUJDQL]DWLRQDO VHWWLQJ ZDV FRQILUPHG DV WKH UHVSRQGHQWV ZKR SURYLGHG WKHLU SHUn FHSWLRQV UHJDUGLQJ WKLV YDULDEOH ZHUH DGPLQLVWUDWRUV HQJDJHG LQ FRQVRUWLXP DFWLYLWLHV %\ SURYLGLQJ VXSSRUW IRU WKH WKHRU\ WKHVH ILQGLQJV LQ FRQMXQFWLRQ ZLWK WKH OLWHUDWXUH IXUWKHU VXJJHVWHG WKDW LQWHUGHSHQGHQFLHV DVVRFLDWHG ZLWK OLPLWHG UHVRXUFHV FUHDWHG LQWHUQDO SUHVVXUH RQ WKH LQVWLWXWLRQDO SUHVLGHQWV WR SURn WHFW WKHLU RZQ UHVRXUFHV PRUH VHFXUHO\ 7KLV QHFHVVDULO\ FDXVHG SUHVVXUH RU D GHVLUH WR FRQWURO WKH DOORFDWLRQ RI WKRVH FRQVRUWLXP UHVRXUFHV WKDW LPSLQJHG RQ WKH LQVWLWXn WLRQDO UHVRXUFHV $FFRUGLQJO\ WKH WKHRULVWV GHVFULEHG WKH PHFKDQLVP IRU DFKLHYLQJ D GHJUHH RI FRQWURO RYHU WKH FRQn VRUWLXP UHVRXUFHV DV SDUWLFLSDWLRQ LQ WKH MRLQW GHFLVLRQn PDNLQJ SURFHVV

PAGE 97

3UHVVXUH DQG FRQIOLFW UHJDUGLQJ UHVRXUFHV HPDQDWHG IURP PDQ\ GLIIHUHQW VRXUFHV ZLWKLQ WKH FRQVRUWLXP )RU H[DPSOH VRPH RI WKH FRQIOLFWV GXH WR UHVRXUFH VKDULQJ UHn SRUWHG LQ WKH RSHQHQGHG TXHVWLRQV ZHUH GHULYHG IURP Df WKH DPRXQW RI PHPEHUVKLS GXHV DVVHVVHG E\ WKH FRQVRUWLXP Ef WKH DPRXQW RI EHQHILW RU SHUFHSWLRQV RI XQHTXDO EHQHILWV DFFUXLQJ FHUWDLQ PHPEHUV Ff GLIIHUHQW QHHGV RI GLIIHUHQW LQVWLWXWLRQV Gf SKLORVRSKLFDO GLIIHUHQFHV Hf FRQFHUQV DERXW WKH ORFDWLRQ RI SDUWLFXODU SURMHFWV If GLIIHUHQFHV LQ LQVWLWXWLRQDO IXQGLQJ DQG Jf D JHQHUDO SHUFHSWLRQ WKDW ORVVHV ZLOO UHVXOW IURP VKDULQJ 2EYLRXVO\ WKHVH FRQFHUQV LQ DQ LQWHULQVWLWXWLRQDO VHWWLQJ PD\ EH UHVROYHG RQO\ WKURXJK SDUWLFLSDWLRQ LQ WKH GHFLVLRQPDNLQJ SURFHVV MRLQWO\ ZLWK RWKHUV ,W LV RQO\ QDWXUDO WKHUHIRUH IRU NQRZOHGJHDEOH LQVWLWXWLRQDO UHSUHVHQWDWLYHV WR LQFUHDVLQJO\ GHVLUH WR SDUWLFLSDWH LQ MRLQW GHFLVLRQPDNLQJ DV PRUH RI WKH LQVWLWXWLRQnV UHVRXUFHV EHFRPH LQYROYHG ,Q DGGLWLRQ WKH HYLGHQFH UHYHDOHG WKDW ZLWKLQ VRPH FRQVRUWLD WKHUH LV D JHQHUDO UHOXFWDQF\ RQ EHKDOI RI WKH PHPEHUVKLS WR HQJDJH LQ DFWLYLWLHV WKDW ZLOO DIIHFW WKH PHPEHUVn EXGJHW RU VWDII WR DQ\ VXEVWDQWLDO GHJUHH 7KLV LV FRQVLVWHQW ZLWK WKH DWWLWXGHV RI PDQ\ SUHVLGHQWV ZKR KDYH EHHQ XQZLOOLQJ WR FRPSURPLVH LVVXHV EXW FRQWLQXH WR FRPSHWH IRU VWXGHQWV IDFXOW\ DQG IXQGV 3HUKDSV WKLV VLWXDWLRQ HPDQDWHG IURP ZKDW DSSHDUV WR EH D GLFKRWRP\ EHn WZHHQ DQ LQKHUHQW GULYH WRZDUG DXWRQRP\ DQG D VXEVWDQWLDO

PAGE 98

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f FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO SUHVLGHQWV DJUHH ZLWK WKH VWDWHPHQW WKH JUHDWHU WKH LQYROYHPHQW RI WKH PHPEHUVKLS LQ MRLQW DFWLYLWLHV ZKLFK UHTXLUH WKH VFKHGXOLQJ RI WLPHV IRU DFWLYLWLHV WR RFFXU WKH JUHDWHU LV WKH GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ VFKHGXOLQJ" 7KLV TXHVWLRQ ZDV DJUHHG WR E\ b RI WKH SUHVLGHQWV DQG FRQVRUWLXP GLUHFWRUV $ SHUFHQWDJH RI WKLV PDJQLWXGH LQ VXSSRUW RI WKLV TXHVWLRQ DOVR SURYLGHG VXEVWDQWLDO VXSSRUW IRU WKH WKHRU\ IURP ZKLFK WKH TXHVWLRQ ZDV GHULYHG ,Q DGGLWLRQ WR FRQILUPDWLRQ RI WKH WKHRU\ WKHVH ILQGLQJV DOVR VXSSRUWHG WKH DVVXPSWLRQ SUHVHQWHG E\ WKH WKHRULVWV WKDW WKH WKHRU\ DSSOLHV WR ERWK RUJDQL]DWLRQDO DQG LQWHURUJDQL]DWLRQDO VWUXFWXUHV ,W LV FOHDU WKDW WKHVH UHVXOWV DUH FRQVLVWHQW ZLWK WKH OLWHUDWXUH ZKLFK VXJJHVWHG WKDW ZKHQ LQVWLWXWLRQV EHFRPH

PAGE 99

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n VLYH LQWHUGHSHQGHQFLHV LQWHUGHSHQGHQFLHV LQYROYLQJ UHVRXUFHV WKDW DUH YHU\ EDVLF WR HDFK LQVWLWXWLRQ )RU H[DPSOH RQH RU PRUH IDFXOW\ PHPEHUV PD\ ZRUN RQ PRUH WKDQ RQH FDPSXV VWXGHQWV IURP WKH GLIIHUHQW FDPSXVHV PD\ DWWHQG D FRPPRQ FODVV H[SHQVLYH ODERUDWRU\ HTXLSPHQW PD\ EH VKDUHG E\ VHYHUDO LQVWLWXWLRQV RU D SODQHWDULXP RQ RQH FDPSXV PD\ EH XWLOL]HG E\ DOO RI WKH FRQVRUWLQJ LQVWLWXWLRQV ,Q VLWXDWLRQV VXFK DV WKHVH FRRSHUDWLYH VFKHGXOLQJ LV HVVHQn WLDO 7KHUHIRUH DV LQVWLWXWLRQDO UHVRXUFHV EHFRPH LQFUHDVLQJO\ LQYROYHG LQ LQWHUGHSHQGHQFLHV WKH JUHDWHU LV WKH LQYROYHPHQW RI LQVWLWXWLRQDO UHSUHVHQWDWLYHV LQ MRLQW

PAGE 100

GHFLVLRQPDNLQJ UHJDUGLQJ VFKHGXOLQJ WKH XVH RI WKHVH UHVRXUFHV 6HYHQW\RQH SHUFHQW RI WKH WRWDO UHVSRQVHV IURP WKH SUHVLGHQWV RI LQVWLWXWLRQDO PHPEHUV DQG WKH FRQVRUWLXP GLUHFWRUV ZHUH LQ VXSSRUW RI WKH TXHVWLRQ :KDW LV WKH UHODWLRQVKLS EHWZHHQ WKH H[WHQW WR ZKLFK WKH FRQVRUWLXP JRDOV DUH DFKLHYHG DQG WKH H[WHQW WR ZKLFK FRQVRUWLXP JRDOV RI LQVWLWXWLRQDO PHPEHUV GLIIHU DV SHUFHLYHG E\ Df FRQn VRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO SUHVLGHQWV" 7KHVH DGPLQLVWUDWRUV WKHUHIRUH VXEVWDQWLDWHG WKH WKHRU\ IURP ZKLFK WKH TXHVWLRQ ZDV GHULYHG 7KH\ DOVR SURYLGHG DGGLn WLRQDO VXSSRUW WR WKH QRWLRQ DGYDQFHG E\ WKH WKHRULVWV ZLWK UHVSHFW WR WKH DSSOLFDELOLW\ RI WKH WKHRU\ WR DQ LQWHU RUJDQL]DWLRQDO VHWWLQJ $OWKRXJK b RI WKH UHVSRQGHQWV LQGLFDWHG WKDW WKHUH ZHUH JRDOUHODWHG SUREOHPV ZKLFK ZHUH DWWULEXWHG WR SHUn FHSWLRQV FRQFHUQLQJ KRZ ZHOO WKH FRQVRUWLXP DFKLHYHG LWV JRDOV WKLV E\ QR PHDQV LPSOLHG WKDW DOO JRDOUHODWHG SUREOHPV FRXOG EH FDWHJRUL]HG DFFRUGLQJO\ ,Q IDFW WKH RSSRVLWH LV VXJJHVWHG E\ UHVSRQVHV WR WKH RSHQHQGHG TXHVn WLRQV (YLGHQFH SURYLGHG E\ WKHVH TXHVWLRQV VWURQJO\ VXJJHVWHG WKDW PDQ\ RI WKH SUREOHPV LQ WKLV FDWHJRU\ DUH FDXVHG E\ DWWLWXGHV EURXJKW WR WKH FRQVRUWLXP E\ LQVWLWXn WLRQDO UHSUHVHQWDWLYHV )RU H[DPSOH D ODFN RI WUXVW RI RWKHU DGPLQLVWUDWRUV D GHVLUH WR SURWHFW LQVWLWXWLRQDO DXWRQRP\ VKDOORZ FRPPLWPHQW WR FRRSHUDWH RU D ODFN RI

PAGE 101

FRPPLWPHQW E\ NH\ SHUVRQQHO SUHVVXUHV GXH WR IDFXOW\ DQ[LHW\ FRQFHUQV DERXW ZKR UHFHLYHV WKH JUHDWHVW EHQHILW WKH H[LVWHQFH RI YDULRXV LQWHQVLWLHV RI FRPSHWLWLRQ WXUILVP ZKR KDV WKH DXWKRULW\ RU WKH ZKR FDOOV WKH VKRWV V\QGURPHf DV ZHOO DV D JHQHUDO XQZLOOLQJQHVV WR FRPSURPLVH KDYH DLO EHHQ FLWHG DV IDFWRUV ZKLFK FUHDWHG FRQIOLFW LQ WKH LQWHULQVWLWXWLRQDO FRQVRUWLXP ,QGLFDWLRQV ZHUH WKDW WKHVH ZHUH RQO\ D IHZ RI WKH SUREOHPV ZKLFK LPSHGHG WKH JRDO VHWWLQJ SURFHVV WKH SURFHVV WKURXJK ZKLFK WKH GHYHORSn PHQW RI D SKLORVRSK\ DQG WKH HVWDEOLVKPHQW RI JRDOV DQG REMHFWLYHV DUH DFFRPSOLVKHG 7KH DERYH YLHZV LQ FRQMXQFWLRQ ZLWK WKH EHOLHI H[SUHVVHG E\ VHYHUDO FRQVRUWLXP GLUHFWRUV WKDW D ODFN RI XQGHUVWDQGLQJ RI WKH FRQVRUWLXP FRQFHSW H[LVWHG DUH DODUPLQJ )RU WKH YHU\ IRXQGDWLRQ QHFHVVDU\ IRU FRRSHUDn WLRQ DQ XQGHUVWDQGLQJ RI WKH FRQFHSW RI FRRSHUDWLRQ DQG VRPH HQDEOLQJ SURFHVVHVf KDV EHHQ LJQRUHG RU UHMHFWHG DSSDUHQWO\ DV XQQHFHVVDU\ &RQFHUQV VHHP WR EH GLUHFWHG PRUH WRZDUG WKH SRWHQWLDO HQGV DQG QRW WRZDUG WKH PHDQV 7KHUH LV DOVR HYLGHQFH WKDW LQ VRPH FDVHV WKH FRQVRUWLXPVn SKLORVRSKLHV PD\ QRW KDYH EHHQ RSHUDWLRQDO ,Q RWKHU FDVHV WKH JRDOV DQG REMHFWLYHV ZHUH QRW DOZD\V FOHDU $OO RI WKHVH HYLGHQFHV VHHP WR VXJJHVW WKDW LQ VRPH LQVWDQFHV LQ WKH FRQVRUWLXP WKH JRDO VHWWLQJ SURFHVV LQFOXGLQJ WKH GHILQLQJ SULRULWL]LQJ DQG HYDOXDWLRQ RI WKH DFKLHYHPHQW RI VWDWHG JRDOV PD\ QRW EH DGHTXDWH 7KLV LV REYLRXV ZKHQ ,

PAGE 102

FRQVLGHUDWLRQ LV JLYHQ WR WKH FRPPHQW RI RQH SUHVLGHQW ZKHQ KH VDLG WKDW RYHU D SHULRG RI \HDUV PHPEHUVKLS LQ D FRQVRUWLXP YHU\ OLWWOH FDQ EH SRLQWHG WR WKDW KDV EHHQ SDUWLFXODUO\ KHOSIXO WR KLV LQVWLWXWLRQ &RQVRUWLXP GLUHFWRUV DQG SUHVLGHQWV RI FRQVRUWLQJ LQVWLWXWLRQV GLG QRW DJUHH LQ VXIILFLHQW QXPEHU WR VXEn VWDQWLDWH WKH TXHVWLRQ 7R ZKDW H[WHQW GR Df FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO SUHVLGHQWV DJUHH ZLWK WKH VWDWHPHQW WKH JUHDWHU WKH QXPEHU RI LQGHSHQGHQW LQIRUPDn WLRQDO VRXUFHV ZLWKLQ WKH FRQVRUWLXP WKH JUHDWHU LV WKH GLIIHUHQFH LQ WKH PHPEHUVKLSnV SHUFHSWLRQ RI WKH FRQVRUWLXP" 7KH WKHRU\ ZDV UHIXWHG EHFDXVH RQO\ b RI WKH UHVSRQGHQWV ZHUH LQ DJUHHPHQW ZLWK WKLV TXHVWLRQ 7KLV SRVLWLRQ ZLWK UHVSHFW WR WKH ILQGLQJV UHODWHV RQO\ WR FRQVRUWLD RI SRVWn VHFRQGDU\ LQVWLWXWLRQV 1R YDOLG DVVXPSWLRQV RU FRQFOXVLRQV FDQ EH GUDZQ UHJDUGLQJ WKH WKHRU\ DQG WKH WUDGLWLRQDO RUJDQLn ]DWLRQ +RZHYHU DQ H[SODQDWLRQ ZLWK UHVSHFW WR WKH LQWHUn RUJDQL]DWLRQ VHWWLQJ LV SURYLGHG ,Q D VWXG\ %ODFNZRRG IRXQG WKDW GLUHFW FRPPXQLFDn WLRQ IDFHWRIDFH LQWHUFKDQJHV DQG SHUVRQWRJURXS UHODn WLRQVKLSVf ZDV HVVHQWLDO IRU VXFFHVVIXO FRRSHUDWLYH HQGHDYRUV &RPPXQLFDWLRQ SUREOHPV ZHUH FRQVLGHUHG WR EH PDMRU IDFWRUV WKDW KLQGHUHG FRRSHUDWLRQ ,W ZDV DOVR REVHUYHG WKDW WKH PRVW HIIHFWLYH PHDQV RI FRPPXQLFDWLRQ ZLWKLQ WKH FRQVRUWLXP ZDV WKURXJK PHHWLQJV S f ,Q UHIHUHQFH WR WKH LPSRUWDQFH RI FRPPXQLFDWLRQ LQ WKH RUJDQL]DWLRQ %DUQDUG f VWUHVVHG WKDW VWUXFWXUH

PAGE 103

H[WHQVLYHQHVV DQG VFRSH RI WKH RUJDQL]DWLRQ LV DOPRVW HQWLUHO\ GHWHUPLQHG E\ FRPPXQLFDWLRQ WHFKQLTXH S f 7KLV VWDWHPHQW LPSOLHV WKDW WKH XQLTXHQHVV RI WKH RUJDQLn ]DWLRQDO VWUXFWXUH DWWULEXWHG WR WKH FRQVRUWLXP FRXOG SURYLGH DQ H[SODQDWLRQ DV WR ZK\ WKH UHVSRQGHQWV GLG QRW DJUHH ZLWK WKH LQIRUPDWLRQDO VRXUFH DVVXPSWLRQ 7KHVH UHVXOWV LQ FRQMXQFWLRQ ZLWK WKH OLWHUDWXUH LOOXVWUDWH D FRPPXQLFDWLRQ SDWWHUQ ZKLFK VXJJHVWV DQ RUJDQLn ]DWLRQDO VWUXFWXUH WKDW DSSURDFKHV ZLWK D IHZ H[FHSWLRQV WKH SDUWLFLSDWLRQDO PRGHO GHVFULEHG E\ 5LFKDUGVRQ %ORFNHU DQG %HQGHU S ,OOf 2QH H[FHSWLRQ LV WKDW HDFK SDUWLFLSDQW RFFXSLHV WKH VDPH OHYHO RI DXWKRULW\ )XUWKHUn PRUH WKH QXPEHU RI SDUWLFLSDQWV LV GHWHUPLQHG E\ JURXS QRUPV DV GHVFULEHG LQ WKH DVVRFLDWLRQnV FRQVWLWXWLRQ RU E\n ODZV $QRWKHU H[FHSWLRQ LV WKDW HDFK SDUWLFLSDQW LV D UHSUHVHQWDWLYH RI D VHSDUDWH HQWLW\ )LJXUH LOOXVWUDWHV WKLV FRQFHSW )LJXUH &RPPXQLFDWLRQ SDWWHUQV DW WKH GHFLVLRQPDNLQJ OHYHO LQ WKH FRQVRUWLXP

PAGE 104

7KH HQWLW\ 3 LQ )LJXUH UHSUHVHQWV WKH SUHVLGHQW WKH FKLHI DGPLQLVWUDWLYH RIILFHU RI HDFK LQVWLWXWLRQDO PHPEHU (DFK LQVWLWXWLRQ UHSUHVHQWV D KLHUDUFKLDO VWUXFn WXUH ZKLFK LV FRQVLVWHQW ZLWK WKH EXUHDXFUDWLF PRGHO ILUVW GHVFULEHG E\ :HEHU f DQG ODWHU PRGLILHG WR WKH FROOHJLDO FRQFHSW GHVFULEHG E\ 0RUSKHW -RKQV DQG 5HOOHU b f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n WDWH DGHTXDWH LQIRUPDWLRQ IORZ WR IDFXOW\ DQG VWDII 7KXV WKH VRXUFH RI LQIRUPDWLRQ FDQ EH SHUFHLYHG DV EHLQJ QDUURZO\ GHILQHG RU OLPLWHG WR D VHOHFW IHZ :LWK WKH W\SH RI RUJDQL]DWLRQDO VWUXFWXUH GHVFULEHG DERYH LW LV DSSDUHQW ZK\ WKH FRQVRUWLXP DGPLQLVWUDWRUV GLG QRW SHUFHLYH WKH QXPEHU RI VRXUFHV RI LQIRUPDWLRQ LQ WKH FRQVRUWLXP DV FDXVLQJ SHUFHSWLRQ SUREOHPV )RU ERWK WKH

PAGE 105

VRXUFH DQG WKH IORZ RI LQIRUPDWLRQ ZHUH FRQWUROOHG RU OLPLWHG WR IHZ LQGLYLGXDOV 7KH TXHVWLRQ SHUWDLQLQJ WR WKH LQIRUPDWLRQ FKDQQHOLQJ DVVXPSWLRQ ZDV 7R ZKDW H[WHQW GR Df FRQVRUWLXP GLUHFWRUV DQG Ef LQVWLWXWLRQDO SUHVLGHQWV DJUHH ZLWK WKH VWDWHPHQW WKH JUHDWHU WKH FKDQQHOLQJ RI LQIRUPDWLRQ ZLWKLQ WKH FRQVRUWLXP WKH JUHDWHU LV WKH GLIIHUHQFH LQ WKH PHPEHUn VKLSn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n WLRQDO VWUXFWXUH RI WKH FRQVRUWLXP DQG WKH FRPPXQLFDWLRQ V\VWHP LW SURYLGHV OLPLWHG WKH GRZQZDUG IORZ RI LQIRUPDWLRQ 7KLV LV LQFRQVLVWHQW ZLWK ZKDW VKRXOG H[LVW DFFRUGLQJ WR PDQ\ RI WKH RUJDQL]DWLRQ DQG FRPPXQLFDWLRQ WKHRULVWV )RU H[DPSOH %DUQDUG f VDLG WKH ILUVW H[HFXWLYH IXQFWLRQ LV WR GHYHORS DQG PDLQWDLQ D V\VWHP RI FRPPXQLFDWLRQ S f

PAGE 106

$FFRUGLQJ WR -RKQVRQ HW DO f WKH IXQFWLRQ RI WKH RUJDQL]DWLRQ LV WR IDFLOLWDWH WKH IORZ RI LQIRUPDWLRQ DQG WKH PDNLQJ RI DSSURSULDWH GHFLVLRQV S f /LPLWLQJ WKH IORZ RI LQIRUPDWLRQ GRZQZDUG FRXOG EH D QDWXUDO FDXVH RI IDFXOW\ DQ[LHW\ UHJDUGLQJ WKH FRQVRUWLXP DV UHSRUWHG LQ WKH RSHQHQGHG TXHVWLRQV 7KLV ZRXOG DOVR SURYLGH DQ H[SODQDWLRQ IRU WKH ORZ FRPPLWPHQW RI IDFXOW\ DQG VWDII WRZDUG WKH FRQVRUWLXP WKDW VHHPV WR EH W\SLFDO RI PDQ\ RI WKH FRQVRUWLD VXUYH\HG $Q[LHW\ DQG ORZ FRPPLWPHQW WKHUHIRUH PD\ EH GXH WR SHUFHSWLRQ SUREOHPV HQJHQGHUHG E\ LQDGHTXDWH FRPPXQLFDWLRQ 7KLV LQIRUPDWLRQ SURYLGHV VXSSRUW IRU WKH WKHRUHWLFDO SURSRVLWLRQ ZKLFK VWDWHV WKDW WKH JUHDWHU WKH FKDQQHOLQJ RI LQIRUPDWLRQSURFHVVLQJ WKH JUHDWHU WKH GLIIHUHQWLDWLRQ RI SHUFHSWLRQV ZLWKLQ WKH RUJDQL]DWLRQ 0DUFK t 6LPRQ S f 5HVWDWHG WKH SURSRVLWLRQ PHDQV WKDW WKH PRUH OLPLWHG WKH IORZ RI LQIRUn PDWLRQ LQ WKH RUJDQL]DWLRQ WKH JUHDWHU DUH WKH GLIIHUHQFHV LQ WKH PHPEHUVn SHUFHSWLRQV ZLWKLQ WKH RUJDQL]DWLRQ ,WHP ZDV WKH RQO\ TXHVWLRQ ZKLFK ZDV GHVLJQHG WR GLUHFWO\ DVVHVV WKH LQIRUPDWLRQ FKDQQHOLQJ DVVXPSWLRQ 8QIRUWXQDWHO\ WKLV TXHVWLRQ ZDV HUURQHRXVO\ FKDQJHG GXULQJ WKH ILQDO VWDJH RI WKH GHYHORSPHQW RI WKH LQVWUXPHQW $V D UHVXOW WKH PHDQLQJ RI WKH DVVXPSWLRQ LOOXVWUDWHG DERYH EHFDPH DV WKH QXPEHU RI LQGLYLGXDOV WKDW LQIRUPDWLRQ SDVVHV WKURXJK LQFUHDVHV GLIIHUHQFHV EHWZHHQ WKH PHPEHUVn SHUFHSWLRQV RI WKH FRQVRUWLXP LQFUHDVH $OWKRXJK b RI

PAGE 107

WKH DGPLQLVWUDWRUV DJUHHG ZLWK WKLV PHDQLQJ RI WKH DVVXPSn WLRQ WKLV SHUFHQWDJH ZDV LQDGHTXDWH WR VXEVWDQWLDWH WKLV DVVXPSWLRQ %XW LW FDQ EH VDLG WKDW D PDMRULW\ RI WKH DGPLQLVWUDWRUV SHUFHLYHG WKDW DV LQIRUPDWLRQ LV WUDQVPLWWHG IURP RQH SHUVRQ WR DQRWKHU LW LV FKDQJHG 7KLV FKDQJH WHQGV WR FUHDWH GLIIHUHQW SHUFHSWLRQV DV WKH LQIRUPDWLRQ IORZV WKURXJK WKH RUJDQL]DWLRQ ,Q WKH WUDGLWLRQDO RUJDQL]DWLRQ LQIRUPDWLRQ WUDQVn PLVVLRQ WDNHV WKH IRUP RI RUDO FRPPXQLFDWLRQ YLD WHOHSKRQH RU IDFHWRIDFH FRQYHUVDWLRQVf RU ZULWWHQ FRPPXQLFDWLRQ YLD PHPRV DQG OHWWHUVf WKH IRUPHU EHLQJ PRUH VXVFHSWLEOH WR SURFHVVLQJ WKDQ WKH ODWWHU +RZHYHU WKH FRQVRUWLXP KDV D GLIIHUHQW VWUXFWXUH IRU FRPPXQLFDWLRQ 0RVW FRPPXQLFDWLRQ LV IDFLOLWDWHG E\ IDFHWRIDFH FRQYHUVDWLRQV ZKLFK JUHDWO\ UHGXFH WKH RSSRUWXQLW\ IRU LQIRUPDWLRQ WR EHFRPH FKDQJHG (YLGHQFH SURYLGHG E\ WKH RSHQHQGHG TXHVWLRQV VWURQJO\ VXJJHVWHG WKDW HQRXJK DGGLWLRQDO VXSSRUW ZRXOG KDYH EHHQ DFTXLUHG WR VXEVWDQWLDWH WKH WKHRU\ LI WKH SULQFLSDO TXHVn WLRQ KDG EHHQ SURSHUO\ GHULYHG IURP WKH WKHRU\ %HFDXVH WKLV ZDV QRW GRQH QR FRQFOXVLRQV ZKLFK UHODWH GLUHFWO\ WR WKH WKHRU\ PD\ EH VWDWHG $GGLWLRQDO LQIRUPDWLRQ ZKLFK PD\ VHUYH WR HYDOXDWH WKHVH ILQGLQJV KDV EHHQ SURYLGHG E\ WKH FRUUHODWLRQ PDWUL[ 7KHVH UHVXOWV LQGLFDWHG WKDW D GHILQLWH UHODWLRQVKLS H[LVWHG EHWZHHQ PDQ\ RI WKH GHVFULEHG YDULDEOHV

PAGE 108

7KH PDWUL[ LOOXVWUDWHG VHYHUDO FDWHJRULHV RI UHODWLRQn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f DJH Ef VL]H Ff QXPEHU RI VHUYLFHV SURYLGHG DQG Gf WKH GHJUHH RI KRPRJHQHLW\KHWHURJHQHLW\ RI WKH PHPEHUVKLS 6LJQLILFDQW UHODWLRQVKLSV LQYROYLQJ WKH GHSHQGHQW DQG LQGHSHQGHQW YDULDEOHV LQFOXGHG FRUUHODWLRQ EHWZHHQ Df UHVRXUFH DQG VL]H DQG Ef VFKHGXOLQJ DQG VL]H %RWK RI WKHVH FRUUHODWLRQV ZHUH QHJDWLYH 7KLV LQGLFDWHG WKH H[LVWHQFH RI DQ LQYHUVH UHODWLRQVKLS ,Q WKH ILUVW FDVH ZKHQ FRQVRUWLD RI GLIIHUHQW VL]HV ZHUH FRPSDUHG WR WKH UHVRXUFH YDULDEOH LW ZDV IRXQG WKDW DV WKH VL]H RI WKH FRQVRUWLD LQFUHDVHG IHZHU RI WKH SUHVLGHQWV DQG FRQVRUWLXP GLUHFWRUV DJUHHG ZLWK WKH DVVXPSWLRQ UHODWLYH WR WKLV YDULDEOH 7KLV PHDQV WKDW LQ WKHVH VLWXDWLRQV IHZHU LQFLn GHQFHV RI FRQIOLFW ZHUH SHUFHLYHG E\ WKHVH DGPLQLVWUDWRUV 1RUPDOO\ RQH ZRXOG H[SHFW WKDW DV WKH PHPEHUVKLS VL]H LQFUHDVHV VR ZRXOG WKH OHYHO RI FRQIOLFW DQG WKH

PAGE 109

LQHIIHFWLYHQHVV RI WKH RUJDQL]DWLRQ +RZHYHU LQ VWXG\LQJ WKH FRPPLWWHH SURFHVVHV RI FRRUGLQDWLQJ FRXQFLOV LQ WKH FRPPXQLW\ FROOHJH GLVWULFWV RI )ORULGD *DOORQ f IRXQG WKDW WKH PRVW HIIHFWLYH FRXQFLOV ZHUH QRW WKRVH RI VPDOO VL]HV EXW UDWKHU WKH ODUJHU RQHV S f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n GHQFLHV LQYROYLQJ UHVRXUFHV WKDW DUH OHVV OLNHO\ WR FDXVH VXEVWDQWLDO FRQIOLFW *HRJUDSKLFDO GLVWDQFH EHWZHHQ WKH LQVWLWXWLRQV LQ PDQ\ RI WKH ODUJH FRQVRUWLD UHTXLUHG WKDW PRVW RI WKH VHUYLFHV EH RI WKH QDWXUH RI OLEUDU\ H[FKDQJH VWXGHQW H[FKDQJH FRPSXWHU QHWZRUN VKDULQJ MRLQW SXEOLFDWLRQV YLVLWLQJ VFKRODUV UHVHDUFK SODQQLQJ FRQVXOWLQJ VHUYLFHV DQG RWKHUV

PAGE 110

WKDW DUH QRW DIIHFWHG E\ GLVWDQFH ,Q FRQWUDVW IDFLOLWLHV VKDULQJ MRLQW VWDIILQJ FURVV UHJLVWUDWLRQ MRLQW FRXUVHV HTXLSPHQW VKDULQJ FRRSHUDWLYH FRXQVHOLQJ MRLQW OLEUDU\ VHUYLFHV DPRQJ RWKHUV DUH W\SLFDO RI FRQVRUWLD RI FROOHJHV DQG XQLYHUVLWLHV LQ FORVH SUR[LPLW\ WR HDFK RWKHU /DUJH FRQVRUWLD LQ FRQWUDVW WR VPDOOHU RQHV LQYROYH WKH VKDULQJ RI UHVRXUFHV ZKLFK DUH PXFK HDVLHU WR EH VFKHGXOHG $PRQJ WKH GHSHQGHQW YDULDEOHV VLJQLILFDQW UHODWLRQn VKLSV H[LVWHG EHWZHHQ Df VFKHGXOLQJ DQG JRDOV Ef VFKHGXOLQJ DQG LQIRUPDWLRQ FKDQQHOLQJ Ff JRDOV DQG LQIRUn PDWLRQDO VRXUFH Gf JRDOV DQG LQIRUPDWLRQ FKDQQHOLQJ DQG Hf LQIRUPDWLRQDO VRXUFH DQG LQIRUPDWLRQ FKDQQHOLQJ ,Q HDFK FDVH WKH FRQVRUWLXP GLUHFWRU DQG WKH SUHVLGHQW SHUn FHLYHG ERWK SDLUV RI YDULDEOHV VLPLODUO\ 7KDW LV WKH\ WHQGHG WR DJUHH RU GLVDJUHH ZLWK WKH DVVXPSWLRQV DGYDQFHG E\ ERWK SDLUV RI YDULDEOHV WR WKH VDPH GHJUHH ,QWHUUHODWLRQVKLSV H[LVWHG EHWZHHQ DOO RI WKH LQGHSHQn GHQW YDULDEOHV 6RPH RI WKHVH UHODWLRQVKLSV ZHUH SRVLWLYH ZKLOH RWKHUV ZHUH QHJDWLYH )RU H[DPSOH WKH UHODWLRQVKLS EHWZHHQ WKH DJH DQG VL]H YDULDEOHV LQGLFDWHG WKDW WKH ODUJHU FRQVRUWLD ZHUH QRW DV ROG DV WKH VPDOOHU FRQVRUWLD 7KH DJH DQG WKH VHUYLFH YDULDEOH LQGLFDWHG WKDW WKH \RXQJHU FRQVRUWLD SURYLGHG IHZHU VHUYLFHV WKDQ WKH ROGHU RQHV &RUUHODWLRQ EHWZHHQ DJH DQG WKH KRPRJHQHLW\KHWHURJHQHLW\ YDULDEOH LQGLFDWHG WKDW WKH \RXQJHU FRQVRUWLD KDG D PRUH KHWHURJHQHRXV PHPEHUVKLS WKDQ WKH ROGHU FRQVRUWLD

PAGE 111

(YLGHQFH VHHPV WR LQGLFDWH WKDW UHJDUGOHVV RI WKH DJH RI D FRQVRUWLXP WKH WHQGHQF\ KDV EHHQ IRU LWV PHPEHUVKLS WR EH KHWHURJHQHRXV +HWHURJHQHLW\ PD\ EH D IDFWRU ZKLFK SUHYHQWV FRRSHUDWLRQ IURP OHDGLQJ WR VWURQJHU FRPSHWLWLRQ DQG FRQVHTXHQWO\ PRUH FRQIOLFW HVSHFLDOO\ FRQIOLFW ZKLFK FRXOG OLPLW WKH HIIHFWLYHQHVV RI WKH FRQVRUWLXP RU EULQJ DERXW LWV GHPLVH 6XSSRUWLQJ GDWD IURP UHODWHG UHVHDUFK DQG WKH OLWHUDWXUH LQ JHQHUDO VXJJHVWHG WKDW FRQVRUWLD ZKRVH PHPEHUn VKLS DSSUR[LPDWHG KRPRJHQHLW\ HQFRXQWHUHG PRUH FRQIOLFW WKDQ WKRVH WKDW ZHUH PRUH KHWHURJHQHRXV 7KH H[SODQDWLRQ IRU WKLV PD\ EH WKDW WKH PHPEHUVKLS RI WKHVH W\SHV RI FRQn VRUWLD GR QRW FRPSHWH ZLWK HDFK RWKHU ZLWK WKH VDPH GHJUHH RI LQWHQVLW\ QRU GR WKH\ IUHTXHQWO\ FRPSHWH ZLWK HDFK RWKHU IRU WKH VDPH UHVRXUFHV ,W LV LQHYLWDEOH WKDW ZKHQ VLPLODU LQVWLWXWLRQV KDYLQJ VLPLODU QHHGV FROODERUDWH LQ DQ HIIRUW WR VDWLVI\ WKHLU QHHGV FRQIOLFW ZLOO UHVXOW 7KLV VLWXDWLRQ WHQGV WR OHQG LWVHOI WR FRQIOLFW EHFDXVH LW SURn YLGHV IHZHU DUHDV IRU EDUJDLQLQJ DQG WUDGLQJ RII ([FHSW IRU LQVWDQFHV ZKHUH WKH VXUYLYDO RI WKH LQVWLWXn WLRQV LV RI SDUDPRXQW LPSRUWDQFH DQG LW EHFRPHV QHFHVVDU\ IRU OLPLWHG PHUJLQJ LH MRLQW GHJUHH MRLQW SURJUDPV DQG MRLQW VWDII FRPSHWLWLRQ PD\ EH DQ DVVHW WR WKH LQVWLWXn WLRQDO PHPEHUV RI D KRPRJHQHRXVO\ RULHQWHG FRQVRUWLXP )RU FRPSHWLWLRQ DQG WKH FRQIOLFW HQJHQGHUHG E\ LW KHOS WR GHILQH LQVWLWXWLRQDO ERXQGDULHV DQG WKHUHIRUH HQDEOH LQVWLn WXWLRQV WR PDLQWDLQ D GHJUHH RI DXWRQRP\ r

PAGE 112

&RUUHODWLRQDO UHVXOWV DOVR LQGLFDWHG WKDW WKH ODUJHU WKH VL]H RI WKH FRQVRUWLXP IHZHU WKH QXPEH VHUYLFHV LW SURYLGHG IRU LWV PHPEHUVKLS 6L]H DOVR FRUUHn ODWHG SRVLWLYHO\ ZLWK KRPRJHQHLW\KHWHURJHQHLW\ +HQFH WKH ODUJHU WKH VL]H RI WKH FRQVRUWLXP KHWHURJHQHn RXV ZDV WKH PHPEHUVKLS 7KH UHODWLRQVKLS EHWZHHQ WKH VHUYLFH YDULDEOH DQG WKH KRPRJHQHRXVKHWHURJHQHRXV YDULDEOH ZDV QHJDWLYH 7KLV LQGLFDWHG WKDW WKH PRUH KHWHURJHQHRXV WKH FRQVRUWLXP PHPEHUVKLS EHFDPH WKH IHZHU VHUYLFHV ZHUH SURYLGHG IRU WKH PHPEHUV 7KHVH ILQGLQJV LQGLFDWHG WKDW DV WKH FRQVRUWLXP PHPEHUn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n WLRQ

PAGE 113

(YLGHQFH IURP WKLV VXUYH\ LQGLFDWHG WKDW QR VLJQLILFDQW GLIIHUHQFH H[LVWHG EHWZHHQ WKH SHUFHSWLRQV RI WKH WZR DGPLQLVWUDWLYH JURXSV RQ DQ\ RI WKH YDULDEOHV DQDO\]HG KHQFH WKH FRPSRVLWH DQDO\VLV RI WKHVH JURXSV SURYLGHG WKH EDVLV IRU WKH FRQFOXVLRQV VHW IRUWK LQ WKLV FKDSWHU 0RUHn RYHU WKHVH FRQFOXVLRQV SURYLGHG WKH IROORZLQJ UHVSRQVHV WR WKH TXHVWLRQV WKDW WKLV VWXG\ VRXJKW WR DQVZHU 7KH H[WHQW WR ZKLFK WKH LQVWLWXWLRQDO PHPEHUV ZHUH PXWXDOO\ GHSHQGHQW XSRQ D OLPLWHG FRQVRUWLXP UHVRXUFH ZDV GLUHFWO\ SURSRUWLRQDO WR WKH PHPEHUVn GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ WKH DOORFDWLRQ RI WKDW UHVRXUFH 7KH H[WHQW WR ZKLFK WKH LQVWLWXWLRQDO PHPEHUV EHFDPH LQYROYHG LQ LQWHUGHSHQGHQFLHV UHTXLULQJ WKH WLPLQJ RI DFWLYLWLHV ZDV GLUHFWO\ SURSRUWLRQDO WR WKH PHPEHUV GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ VFKHGXOLQJ 7KH H[WHQW WR ZKLFK WKH PHPEHUVKLS ZDV QRW VXFFHVVn IXO LQ DVFHUWDLQLQJ WKH FRQVRUWLXPnV OHYHO RI DFKLHYHPHQW RI VWDWHG JRDOV ZDV LQYHUVHO\ SURSRUn WLRQDO WR WKH GLIIHUHQFHV LQ JRDOV DGYRFDWHG IRU WKH FRQVRUWLXP E\ WKH PHPEHUV 7KH QXPEHU RI LQIRUPDWLRQDO VRXUFHV ZLWKLQ WKH LQWHULQVWLWXWLRQDO FRQVRUWLD GLG QRW YDU\ GLUHFWO\ ZLWK WKH GHJUHH WR ZKLFK GLIIHUHQFHV H[LVW LQ WKH PHPEHUVKLSnV SHUFHSWLRQ RI WKH FRQVRUWLXP +HQFH

PAGE 114

WKH VWDWHPHQW WKH JUHDWHU WKH QXPEHU RI LQGHSHQn GHQW LQIRUPDWLRQDO VRXUFHV ZLWKLQ WKH FRQVRUWLXP WKH JUHDWHU LV WKH GLIIHUHQFH LQ WKH PHPEHUVKLSnV SHUFHSWLRQ RI WKH FRQVRUWLXP ZDV SURYHQ WR EH DQ LQYDOLG DVVXPSWLRQ LQ WKLV W\SH RI RUJDQL]DWLRQDO VHWWLQJ 1R YDOLG FRQFOXVLRQ FRXOG EH GHULYHG IURP WKH ILQGLQJV UHJDUGLQJ WKH FKDQQHOLQJ RI LQIRUPDWLRQ ZLWKLQ WKH FRQVRUWLXP DQG WKH PHPEHUVKLSnV SHUn FHSWLRQ LQ WKLV RUJDQL]DWLRQ +RZHYHU HYLGHQFH H[LVWHG ZKLFK VWURQJO\ VXJJHVWHG WKDW XQGHU GLIn IHUHQW FRQGLWLRQV WKHUH PD\ EH VXEVWDQWLDO VXSSRUW IRU YHULILFDWLRQ RI WKLV DVVXPSWLRQ 1R VLJQLILFDQW UHODWLRQVKLS H[LVWHG EHWZHHQ WKH DJH RI WKH FRQVRUWLXP DQG WKH ILYH WKHRUHWLFDO SURSRVLWLRQV 7KH VL]H RI WKH FRQVRUWLXP VKRZHG D UHODWLRQVKLS ZLWK WKH UHVRXUFH DQG VFKHGXOLQJ YDULDEOHV (YLn GHQFH LQGLFDWHG WKDW DQ LQYHUVH UHODWLRQVKLS H[LVWHG DPRQJ WKHVH YDULDEOHV 0HPEHUV RI ODUJH FRQVRUWLD VKRZHG OHVV RI D PXWXDO GHSHQGHQF\ XSRQ OLPLWHG UHVRXUFHV DQG OHVV GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ WKH DOORFDWLRQ RI UHn VRXUFHV WKDQ GLG WKH PHPEHUV RI VPDOOHU FRQVRUWLD 0HPEHUV RI ODUJH FRQVRUWLD ZHUH OHVV LQYROYHG ZLWK VFKHGXOLQJ DQG H[SUHVVHG OHVV RI D GHVLUH

PAGE 115

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n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

PAGE 116

RI WKH SDUWLFLSDWLRQDO PRGHO &RPSUHKHQVLYH XVH RI WKLV PRGHO ZRXOG HQKDQFH WKH FRQVRUWLXP EHFDXVH LW ZRXOG JUHDWO\ LPSURYH WKH IORZ RI FRPPXQLFDWLRQ ZLWKLQ WKLV LQWHURUJDQL ]DWLRQDO VHWWLQJ FRPPXQLFDWLRQ IURP VXSHURUGLQDWHV WR VXERUGLQDWHV DQG YLFH YHUVD )RUPDO FRPPXQLFDWLRQV ZRXOG IORZ IURP WKH FRQVRUWLXP WR WKH IDFXOW\ VWDII DQG VWXGHQWV YLD WKH RIILFH RI WKH LQVWLWXWLRQDO SUHVLGHQW &RPPXQLFDn WLRQV IURP VXERUGLQDWHV ZRXOG IUHHO\ IORZ XS WKH RUJDQL]Dn WLRQ ,QIRUPDO FRPPXQLFDWLRQV EHWZHHQ WKH LQVWLWXWLRQV ZRXOG EH HQFRXUDJHG DV WKLV ZRXOG EH D QHFHVVDU\ FRPSRQHQW IRU WKH HIILFLHQW VFKHGXOLQJ RI VKDUHG UHVRXUFHV 2UJDQL]DWLRQDO HIILFLHQF\ PD\ EH JUHDWO\ HQKDQFHG WKURXJK DGHTXDWH SODQQLQJ DQG HYDOXDWLRQ 7KLV LQFOXGHV GHILQLQJ DQG GHYHORSLQJ SULRULWLHV IRU JRDOV IRU WKH RUJDQLn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n VRUWLXP GLUHFWRUV LQ WKH JRDOVHWWLQJ SURFHVV 7KHUHIRUH FRQVLGHUDEOH DWWHQWLRQ VKRXOG EH JLYHQ WR WKH SURIHVVLRQDO SUHSDUDWLRQ RI WKHVH DGPLQLVWUDWRUV

PAGE 117

7KH WKHRU\ GHVFULEHG D GHVLUH IRU MRLQW GHFLVLRQn PDNLQJ DV D FRQGLWLRQ RI FRQIOLFW 7KLV FRQGLWLRQ LQ FRQMXQFWLRQ ZLWK WKH HYLGHQFH REWDLQHG IURP WKH VXUYH\ UHYHDOHG WKDW WKH FRQVRUWLXP H[SHULHQFHV FRQVLGHUDEOH FRQn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

PAGE 118

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n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n VRUWLXP GLUHFWRUV WR EH HIIHFWLYH DGPLQLVWUDWRUV

PAGE 119

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

PAGE 120

$33(1',; $ &216257,$ 3$57,&,3$7,1* ,1 7+( 678'<

PAGE 121

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

PAGE 122

$33(1',; % /(77(5 0$,/(' 72 &216257,80 ',5(&7256 5(48(67,1* ,1)250$7,21

PAGE 123

$33(1',; % /(77(5 0$,/(' 72 &216257,80 ',5(&7256 5(48(67,1* ,1)250$7,21 'HDU 6LU
PAGE 124

$33(1',; % &RQWLQXHGf 5(63216( )250 n 7KLV FRQVRUWLXP SURYLGHG GLIIHUHQW VHUYLFHV SURJUDPV SURMHFWV DFWLYLWLHV HWFf IRU LWV PHPEHUV GXULQJ WKH ILVFDO \HDU 7KH QDPH RI WKH DGPLQLVWUDWRU RI HDFK PHPEHU LQVWLWXWLRQ ZKR SRVVHVVHV DXWKRULW\ DQGRU UHVSRQVLELOLW\ IRU GHFLVLRQPDNLQJ UHJDUGLQJ Df WKH DOORFDWLRQ RI LQVWLWXWLRQDO UHVRXUFHV WR WKH FRQVRUWLXP DQG Ef WKH IRUPXODWLRQ DQG HYDOXDWLRQ RI WKH FRQVRUWLXP JRDOV LV 1$0( 1$0( 1$0( 7,7/( 7,7/( 7,7/( ,167,787,21 ,167,787,21 ,167,787,21 1$0( 1$0( 1$0( 7,7/( 7,7/( 7,7/( ,167,787,21 ,167,787,21 ,167,787,21 1$0( 1$0( 1$0( 7,7/( 7,7/( 7,7/( ,167,787,21 ,167,787,21 ,167,787,21 1$0( 1$0( 1$0( 7,7/( 7,7/( 7,7/( ,167,787,21 ,167,787,21 ,167,787,21 1$0( 1$0( 1$0( 7,7/( 7,7/( 7,7/( ,167,787,21 ,167,787,21 ,167,787,21

PAGE 125

$33(1',; & (77(5 *(1(5$/ ,1)250$7,21 $1' ,16758&7,216 $1' '$7$ &2//(&7,21 ,167580(176

PAGE 126

$33(1',; & /(77(5 'HDU 6LU DP HQJDJHG LQ D VWXG\ DW WKH 8QLYHUVLW\ RI )ORULGD RQ 9ROXQWDU\ ,QWHULQVWLWXWLRQDO &RQVRUWLD 7KH SXUSRVH RI WKLV OHWWHU LV WR UHTXHVW \RXU KHOS LQ SURYLGLQJ LQIRUPDWLRQ WR FRPSOHWH WKLV VWXG\ 7KH HQFORVHG TXHVWLRQQDLUH LV EHLQJ IRUZDUGHG WR WKH FRQn VRUWLXP GLUHFWRUV DQG WR WKH SUHVLGHQWV RI LQVWLWXWLRQDO PHPEHUV RI UDQGRPO\ VHOHFWHG 9ROXQWDU\ ,QWHULQVWLWXWLRQDO &RQVRUWLD 7KH GDWD FROOHFWHG IURP WKLV LQVWUXPHQW ZLOO SURYLGH DGGLWLRQDO LQIRUPDWLRQ IRU OLQHV WR LQFUHDVH WKH HIIHFWLYHQHV WKH GHYHORSPHQW RI JXLGH V RI WKHVH DVVRFLDWLRQV 7KLV VWXG\ LV EHLQJ FRQGXFWHG ZLWK WKH HQGRUVHPHQW RI 'U -DPHV / :DWWHQEDUJHU 'LUHFWRU RI WKH ,QWHU,QVWLWXWLRQDO 5HVHDUFK &RXQFLO 8QLYHUVLW\ RI )ORULGD DQG ZLWK WKH JXLGn DQFH RI 'U 3KLOOLS $ &ODUN 'LUHFWRU RI WKH &HQWHU IRU &RPPXQLW\ (GXFDWLRQ 8QLYHUVLW\ RI )ORULGD )LHOG WHVWLQJ RI WKH LQVWUXPHQW ZDV DFKLHYHG WKURXJK WKH SDUWLFLSDWLRQ RI 'U )ULW] *UXSH &KDLUPDQ RI WKH &RXQFLO IRU WKH ,QWHULQVWLWXWLRQDO 7DVN )RUFH IRU &RQVRUWLXP 5Hn VHDUFK 'U /HZLV 3DWWHUVRQ ([HFXWLYH 'LUHFWRU RI WKH &RXQFLO IRU ,QWHULQVWLWXWLRQDO /HDGHUVKLS DQG RWKHU RIILFHUV DQG PHPEHUV RI WKH %RDUG RI 'LUHFWRUV RI WKH &RXQFLO IRU ,QWHULQVWLWXWLRQDO /HDGHUVKLS
PAGE 127

$33(1',; & &RQWLQXHGf *(1(5$/ ,1)250$7,21 $1' ',5(&7,216 7KLV TXHVWLRQQDLUH LV GHVLJQHG WR DVFHUWDLQ \RXU SHUn FHSWLRQ UHJDUGLQJ WKH DSSURSULDWHQHVV RI VHOHFWHG FRQGLWLRQV RU YDULDEOHV LQ GHVFULELQJ ZKHWKHU RU QRW FRQIOLFW RFFXUV LQ WKH FRQVRUWLXP DV SUHGLFWHG E\ WUDGLWLRQDO RUJDQL]DWLRQ WKHRU\ &RQGLWLRQV VSHFLILFDOO\ LQFOXGHG LQ WKH TXHVWLRQn QDLUH DUH WKRVH WKDW UHODWH WR Df UHVRXUFH VKDULQJ DQG GHFLVLRQPDNLQJ Ef DFWLYLW\ VFKHGXOLQJ DQG GHFLVLRQPDNLQJ Ff JRDO DVFHUWDLQPHQW DQG SHUFHSWLRQV ZLWKLQ WKH FRQVRUWLXP Gf LQIRUPDWLRQDO VRXUFHV DQG SHUFHSWLRQV ZLWKLQ WKH FRQn VRUWLXP Hf LQIRUPDWLRQ FKDQQHOLQJSURFHVVLQJ DQG SHUn FHSWLRQV ZLWKLQ WKH FRQVRUWLXP DQG If WKH UHODWLRQVKLS EHWZHHQ WKH DERYH FRQGLWLRQV DQG WKH FRQVRUWLXPnV f VL]H f DJH f PHPEHUVKLS KRPRJHQHLW\ RU KHWHURJHQHLW\ DQG f WKH QXPEHU RI VHUYLFHV SURYLGHG 6RPH RI WKH LWHPV UHTXHVW \RXU RSLQLRQ UDWKHU WKDQ D VSHFLILF DQVZHU ,Q WKLV VLWXDWLRQ VHOHFW WKH DQVZHU PRVW FOHDUO\ UHSUHVHQWDWLYH RI \RXU SDUWLFXODU VHWWLQJ 7KH QXPEHU RQ WKH TXHVWLRQQDLUH LV WKH FRGH DVVLJQHG WR \RXU FRQVRUWLXP 1R VLJQDWXUH VKRXOG EH SODFHG RQ WKLV LQVWUXPHQW DV DOO UHVSRQVHV DUH FRQILGHQWLDO 3OHDVH REVHUYH WKH GHILQLWLRQ RI WHUPV EHIRUH UHVSRQGn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

PAGE 128

$33(1',; & &RQWLQXHGf 48(67,211$,5( )RU 3UHVLGHQWV RI &RQVRUWLQJ ,QVWLWXWLRQV 3$57 7KLV SDUW RI WKH TXHVWLRQQDLUH UHODWHV WR GHPRn JUDSKLF GDWD 3OHDVH UHVSRQG WR HDFK RI WKH LWHPV OLVWHG EHORZ E\ ILOOLQJ LQ WKH DSSURSULDWH EODQNVf +RZ PDQ\ \HDUV KDYH \RX VHUYHG DV D PHPEHU RI D FRQn VRUWLXPnV ERDUG RI GLUHFWRUV" (QWHU \HDUV KHUHf ,QGLFDWH \RXU WRWDO H[SHULHQFH LQ ZRUNLQJ ZLWK FRQn VRUWLXPV E\ OLVWLQJ WKH MRE WLWOHV DQG WKH QXPEHU RI \HDUV \RX KHOG HDFK WLWOH GXULQJ \RXU LQYROYHPHQW ZLWK FRQVRUWLXP DFWLYLWLHV -RE 7LWOHV 3$57 ,, 7KH IROORZLQJ SDUW RI WKH TXHVWLRQQDLUH FRQWDLQV VWDWHPHQWV ZLWK ZKLFK \RX PD\ DJUHH RU GLVDJUHH &LUFOH WKH V\PERO ZKLFK EHVW UHSUHVHQWV \RXU SHUFHSWLRQ RI \RXU SDUWLFXODU VHWWLQJ IRU HDFK VWDWHPHQW DV IROORZV 6$6WURQJO\ $JUHH $$JUHH 1f§1HLWKHU DJUHH QRU GLVDJUHH ''LVDJUHH 6'6WURQJO\ 'LVDJUHH 6$ $ 1 6' $V WKH PHPEHUVKLS EHFRPHV PRUH GHSHQGHQW XSRQ D VFDUFH FRQVRUWLXP UHVRXUFH WKH GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ WKH DOORFDn WLRQ RI WKDW UHVRXUFH LQFUHDVHV 6WURQJ DJUHHPHQW ZRXOG LQGLFDWH WKDW f $V FRQVRUWLQJ LQVWLWXWLRQV EHFRPH PRUH LQYROYHG LQ IDFLOLW\HTXLSPHQW VKDULQJ WKH QHHG IRU MRLQW GHFLVLRQn PDNLQJ UHJDUGLQJ WKH XVH RI WKHVH

PAGE 129

$33(1',; & &RQWLQXHGf IDFLOLWLHVHTXLSPHQW LQFUHDVHV f $V FRQVRUWLQJ LQVWLWXWLRQV EHFRPH PRUH LQYROYHG LQ OLEUDU\ H[FKDQJH FURVV UHJLVWUDWLRQ IDFXOW\ VKDULQJ MRLQW DSSRLQWPHQWV HWF WKH GHVLUH RI WKHVH LQVWLWXWLRQV IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ SODQQLQJ RUJDQL]LQJ FRRUGLQDWLQJ DQG WKH GLVWULEXWLRQ RI WKHVH VHUYLFHV LQFUHDVHV f $V WKH FRQVRUWLXP VWDII EHFRPHV PRUH VXFFHVVIXO LQ WKH SURn FXUHPHQW RI JUDQWV DQG JLIWV WKH PHPEHUVKLSnV GHVLUH IRU MRLQW GHFLVLRQn PDNLQJ ZLWK UHVSHFW WR WKH GLVWULEXn WLRQ RI WKHVH UHVRXUFHV LQFUHDVHV 6$ $ 1 6' 7KH GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ VFKHGXOLQJ LQFUHDVHV DV PHPEHUV EHFRPH PRUH LQYROYHG LQ MRLQW DFWLYLWLHV 6WURQJ DJUHHPHQW ZRXOG LQGLFDWH WKDW f 7KH GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ WKH VFKHGXOLQJ RI D WLPH GXULQJ ZKLFK IDFLOLWLHV DQGRU HTXLSPHQW PD\ EH XWLOL]HG LQFUHDVHV DV LQVWLWXWLRQV EHFRPH PRUH LQYROYHG LQ IDFLOLW\ HTXLSPHQW VKDULQJ f $V WKH QHHG IRU IDFXOW\ VKDULQJMRLQW DSSRLQWPHQWV LQFUHDVHV WKH PHPEHUVKLSnV QHHG IRU MRLQW GHFLVLRQPDNLQJ ZLWK UHVSHFW WR WKH VFKHGXOLQJ RI FRXUVHV DQG IDFXOW\ DVVLJQPHQWV LQFUHDVHV 6$ $ 1 6' 'LIIHUHQFHV EHWZHHQ WKH PHPEHUVn JRDOV IRU WKH FRQVRUWLXP LQFUHDVH DV LW EHFRPHV OHVV SRVVLEOH WR REVHUYH DFKLHYHPHQW RI VWDWHG JRDOV 6WURQJ DJUHHPHQW ZRXOG LQGLFDWH WKDW WKH JRDOV WKDW HDFK FRQVRUWLQJ LQVWLWXWLRQ FRQVLGHUV GHVLUDEOH IRU WKH FRQVRUWLXP LQFUHDVLQJO\ GLIIHU IURP WKH JRDOV RI RWKHU PHPEHUV DV LW EHFRPHV OHVV DQG OHVV SRVVLEOH IRU WKH LQVWLWXWLRQV WR REVHUYH WKH H[WHQW WR ZKLFK WKH FRQn VRUWLXPnV VWDWHG JRDOV DUH EHLQJ DFKLHYHG 6$ $ 1 6' 'LIIHUHQFHV EHWZHHQ WKH PHPEHUVn SHUn FHSWLRQV RI WKH FRQVRUWLXP LQFUHDVH DV

PAGE 130

$33(1',; 6$ $ 1 &RQWLQXHGf WKH QXPEHU RI LQIRUPDWLRQDO VRXUFHV ZLWKLQ WKH FRQVRUWLXP LQFUHDVHV 6WURQJ DJUHHPHQW ZRXOG LQGLFDWH WKDW f 7KH SHUFHSWLRQV WKDW HDFK FRQn VRUWLQJ LQVWLWXWLRQ KDV RI WKH FRQn VRUWLXP LWV VWDII LWV HIIHFWLYHQHVV LWV FRRUGLQDWLRQ RI WKH XVH RI UHVRXUFHV HWFf ZLOO LQFUHDVLQJO\ GLIIHU DV WKH QXPEHU RI SHUVRQV SURn YLGLQJ LQIRUPDWLRQ DERXW WKH FRQn VRUWLXP EHFRPHV PRUH QXPHURXV f 7KH SHUFHSWLRQV WKDW HDFK FRQVRUWLQJ LQVWLWXWLRQ KDV RI LWV FRQVRUWLXP SHUIRUPDQFH LQ IDFLOLWDWLQJ WKH SODQn QLQJ RUJDQL]LQJ DQG FRRUGLQDWLQJ RI MRLQW FXUULFXOXP GHYHORSPHQW MRLQW SURJUDP HYDOXDWLRQ MRLQW VWDII GHYHORSPHQW HWFf ZLOO LQFUHDVLQJO\ GLIIHU DV WKH QXPEHU RI SHUVRQV SURn YLGLQJ LQIRUPDWLRQ DERXW WKH SHUIRUn PDQFH LQFUHDVHV 6' 'LIIHUHQFHV EHWZHHQ WKH PHPEHUVn SHUn FHSWLRQV RI WKH FRQVRUWLXP LQFUHDVH DV WKH QXPEHU RI LQGLYLGXDOV WKDW LQIRUPDn WLRQ SDVVHV WKURXJK LQFUHDVHV 6WURQJ DJUHHPHQW ZRXOG LQGLFDWH WKDW WKH SHUn FHSWLRQV WKDW HDFK FRQVRUWLQJ LQVWLWXWLRQ KDV RI LWV FRQVRUWLXP SHUIRUPDQFH UHJDUGLQJ WKH SODQQLQJ RU FRRUGLQDWLRQ RI MRLQW SODFHPHQW MRLQW SXEOLFDWLRQV HWFf ZLOO LQFUHDVLQJO\ GLIIHU DV WKH QXPEHU RI LQGLYLGXDOV WKDW LQIRUPDWLRQ SDVVHV WKURXJK HQ URXWH IURP GHFLVLRQPDNHUV LQ WKH FRQn VRUWLXP WR GHFLVLRQPDNHUV LQ WKH LQVWLWXWLRQV RU YLFH YHUVDf LQFUHDVHV

PAGE 131

$33(1',; & &RQWLQXHGf 48(67,211$,5( )RU &RQVRUWLXP 'LUHFWRUV 3$57 7KLV SDUW RI WKH TXHVWLRQQDLUH UHODWHV WR GHPRn JUDSKLF GDWD 3OHDVH UHVSRQG WR HDFK RI WKH LWHPV OLVWHG EHORZ E\ ILOOLQJ LQ WKH DSSURSULDWH EODQN Vf +RZ PDQ\ \HDUV KDYH \RX VHUYHG DV D FRQVRUWLXP GLUHFWRU" (QWHU \HDUV KHUHf ,QGLFDWH \RXU WRWDO FRQVRUWLXP H[SHULHQFH E\ OLVWLQJ WKH LRE WLWOHV DQG WKH QXPEHU RI \HDUV MRE WLWOH GXULQJ \RXU LQYROYHPHQW ZLWK \RX KHOG HDFK FRQVRUWLXP DFWLYLW HV -RE 7LWOHV 3$57 ,, 7KH IROORZLQJ SDUW RI WKH TXHVWLRQQDLUH FRQWDLQV VWDWHPHQWV ZLWK ZKLFK \RX PD\ DJUHH RU WKH V\PERO ZKLFK EHVW UHSUHVHQWV \RXU SHUFHSWLRQ RI \RXU SDUWLFXODU VHWWLQJ IRU HDFK VWDWHPHQW DV IROORZV 6$6WURQJO\ $JUHH $$JUHH 1f§1HLWKHU DJUHH QRU GLVDJUHH ''LVDJUHH 6'f§6WURQJO\ 'LVDJUHH 6$ $ 1 6' $V WKH PHPEHUVKLS EHFRPHV PRUH GHSHQGHQW XSRQ D VFDUFH FRQVRUWLXP UHVRXUFH WKH GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ WKH DOORFDn WLRQ RI WKDW UHVRXUFH LQFUHDVHV 6WURQJ DJUHHPHQW ZRXOG LQGLFDWH WKDW f $V FRQVRUWLQJ LQVWLWXWLRQV EHFRPH PRUH LQYROYHG LQ IDFLOLW\HTXLSPHQW VKDULQJ WKH QHHG IRU MRLQW GHFLVLRQn PDNLQJ UHJDUGLQJ WKH XVH RI WKHVH

PAGE 132

$33(1',; & &RQWLQXHGf IDFLOLWLHVHTXLSPHQW LQFUHDVHV f $V FRQVRUWLQJ LQVWLWXWLRQV EHFRPH PRUH LQYROYHG LQ OLEUDU\ H[FKDQJH FURVV UHJLVWUDWLRQ IDFXOW\ VKDULQJ MRLQW DSSRLQWPHQWV HWF WKH GHVLUH RI WKHVH LQVWLWXWLRQV IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ SODQQLQJ RUJDQL]LQJ FRRUGLQDWLQJ DQG WKH GLVn WULEXWLRQ RI WKHVH VHUYLFHV LQFUHDVHV f $V WKH FRQVRUWLXP VWDII EHFRPHV PRUH VXFFHVVIXO LQ WKH SURFXUHPHQW RI JUDQWV DQG JLIWV WKH PHPEHUVKLSnV GHVLUH IRU MRLQW GHFLVLRQPDNLQJ ZLWK UHVSHFW WR WKH GLVWULEXWLRQ RI WKHVH UHVRXUFHV LQFUHDVHV 6$ $ 1 6' 7KH GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ VFKHGXOLQJ LQFUHDVHV DV PHPEHUV EHFRPH PRUH LQYROYHG LQ MRLQW DFWLYLWLHV 6WURQJ DJUHHPHQW ZRXOG LQGLFDWH WKDW f 7KH GHVLUH IRU MRLQW GHFLVLRQPDNLQJ UHJDUGLQJ WKH VFKHGXOLQJ RI D WLPH GXULQJ ZKLFK IDFLOLWLHV DQGRU HTXLSPHQW PD\ EH XWLOL]HG LQFUHDVHV DV LQVWLWXWLRQV EHFRPH PRUH LQYROYHG LQ IDFLOLW\ HTXLSPHQW VKDULQJ f $V WKH QHHG IRU IDFXOW\ VKDULQJMRLQW DSSRLQWPHQWV LQFUHDVHV WKH PHPEHUVKLSnV QHHG IRU MRLQW GHFLVLRQPDNLQJ ZLWK UHVSHFW WR WKH VFKHGXOLQJ RI FRXUVHV DQG IDFXOW\ DVVLJQPHQWV LQFUHDVHV 6$ $ 1 6' 'LIIHUHQFHV EHWZHHQ WKH PHPEHUVn JRDOV IRU WKH FRQVRUWLXP LQFUHDVH DV LW EHFRPHV OHVV SRVVLEOH WR REVHUYH DFKLHYHPHQW RI VWDWHG JRDOV 6WURQJ DJUHHPHQW ZRXOG LQGLFDWH WKDW WKH JRDOV WKDW HDFK FRQVRUWLQJ LQVWLWXWLRQ FRQVLGHUV GHVLUDEOH IRU WKH FRQVRUWLXP LQFUHDVLQJO\ GLIIHU IURP WKH JRDOV RI RWKHU PHPEHUV DV LW EHFRPHV OHVV DQG OHVV SRVVLEOH IRU WKH LQVWLXWLRQV WR REVHUYH WKH H[WHQW WR ZKLFK WKH FRQn VRUWLXPnV VWDWHG JRDOV DUH EHLQJ DFKLHYHG 6$ $ 1 6' 'LIIHUHQFHV EHWZHHQ WKH PHPEHUVn SHUn FHSWLRQV RI WKH FRQVRUWLXP LQFUHDVH DV

PAGE 133

$33(1',; 6$ $ 1 &RQWLQXHGf WKH QXPEHU RI LQIRUPDWLRQDO VRXUFHV ZLWKLQ WKH FRQVRUWLXP LQFUHDVHV 6WURQJ DJUHHPHQW ZRXOG LQGLFDWH WKDW f 7KH SHUFHSWLRQV WKDW HDFK FRQn VRUWLQJ LQVWLWXWLRQ KDV RI VRUWLXP LWV VWDII LWV HIIHFWLYHQHVV LWV FRRUGLQDWLRQ RI WKH XVH RI HWFf ZLOO LQFUHDVLQJO\ WKH QXPEHU RI WKH FRQ SHUVRQV SURn YLGLQJ LQIRUPDWLRQ DERXW WKH FRQn VRUWLXP EHFRPHV PRUH QXPHURXV f 7KH SHUFHSWLRQV WKDW HDFK FRQVRUWLQJ LQVWLWXWLRQ KDV RI LWV FRQVRUWLXP SHUIRUPDQFH LQ IDFLOLWDWLQJ WKH SODQn QLQJ RUJDQL]LQJ DQG FRRUGLQDWLQJ RI MRLQW FXUULFXOXP GHYHORSPHQW MRLQW SURJUDP HYDOXDWLRQ MRLQW VWDII GHYHORSPHQW HWFf ZLOO LQFUHDVLQJO\ GLIIHU DV WKH QXPEHU RI SHUVRQV SURn YLGLQJ LQIRUPDWLRQ DERXW WKH LQFUHDVHV 6' 'LIIHUHQFHV EHWZHHQ WKH PHPEHUVn SHUn FHSWLRQV RI WKH FRQVRUWLXP LQFUHDVH DV WKH QXPEHU RI LQGLYLGXDOV WKDW LQIRUn PDWLRQ SDVVHV WKURXJK LQFUHDVHV 6WURQJ DJUHHPHQW ZRXOG LQGLFDWH WKDW WKH SHUFHSWLRQV WKDW HDFK FRQVRUWLQJ LQVWLWXWLRQ KDV RI LWV FRQVRUWLXP SHUIRUPDQFH UHJDUGLQJ WKH SODQQLQJ RU FRRUGLQDWLRQ RI MRLQW SODFHPHQW MRLQW SXEOLFDWLRQV HWFf ZLOO LQFUHDVLQJO\ GLIIHU DV WKH QXPEHU RI LQGLYLGXDOV WKDW LQIRUPDWLRQ SDVVHV WKURXJK HQ URXWH IURP GHFLVLRQPDNHUV LQ WKH FRQn VRUWLXP WR GHFLVLRQPDNHUV LQ WKH LQVWLWXWLRQV RU YLFH YHUVDf LQFUHDVHV

PAGE 134

$33(1',; & &RQWLQXHGf 3$57 ,,, 3OHDVH DQVZHU WKH TXHVWLRQV OLVWHG EHORZ E\ ZULWLQJ \RXU UHVSRQVH WR HDFK VWDWHPHQW LQ WKH VSDFH SURn YLGHG ,I DGGLWLRQDO VSDFH LV QHHGHG \RX PD\ ZULWH RQ WKH EDFN RI WKH TXHVWLRQQDLUH RU DWWDFK DGGLWLRQDO SDJHV :KDW KDYH EHHQ WKH PDMRU FDXVHV RI FRQIOLFW GLVDJUHHn PHQW RU GHFLVLRQ SUREOHPVf LQ \RXU FRQVRUWLXP" ,Q ZKDW ZD\V KDV FRQIOLFW DIIHFWHG WKH HIIHFWLYHQHVV RI \RXU FRQVRUWLXP" :KDW IDFWRUV KDYH EHHQ PRVW KHOSIXO LQ HQDEOLQJ \RX WR PDQDJH FRQIOLFW LQ \RXU FRQVRUWLXP"

PAGE 135

$33(1',; )2//2:83 /(77(56

PAGE 136

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

PAGE 137

$33(1',; &RQWLQXHGf 'HDU 6LU 7KLV OHWWHU LV DQG -XQH D IROORZXS LQ ZKLFK WR HDUOLHU OHWWHUV GDWHG -XQH UHTXHVWHG \RXU KHOS LQ YLGLQJ PH ZLWK LQIRUPDWLRQ WR FRPSOHWH D GRFWRUDO SURn VWXG\ DP FRQGXFWLQJ DW WKH 8QLYHUVLW\ RI )ORULGD
PAGE 138

5()(5(1&( 127( &ODUN 3 $ FRQFHSWXDO PRGHO RI FRPPXQLW\ HGXFDWLRQ 3DSHU SUHVHQWHG DW D FRPPXQLW\ HGXFDWLRQ VHPLQDU DW WKH 8QLYHUVLW\ RI )ORULGD *DLQHVYLOOH )HEUXDU\

PAGE 139

5()(5(1&(6 $JUHHPHQW EHWZHHQ WKH FLW\ RI 6W LQGHSHQGHQW VFKRRO GLVWULFW HVWDEOLVKPHQW DQG RSHUDWLRQ FRPPXQLW\ HGXFDWLRQ SURJUDP 0LQQHVRWD -DQXDU\ -L /RXLV 3DUN DQG WKH UHODWLQJ WR WKH RI D MRLQWO\ VSRQVRUHG 6W /RXLV 3DUN $LNHQ 0 t +DJH 2UJDQL]DWLRQDO LQWHUGHSHQGHQFH DQG LQWUDRUJDQL]DWLRQDO VWUXFWXUH $PHULFDQ 6RFLRORJLFDO 5HYLHZ $PHULFDQ 8QLYHUVLWLHV DQG &ROOHJHV WK HGf : 7 )XUQLVV HGf :DVKLQJWRQ '& $PHULFDQ &RXQFLO RQ +LJKHU (GXFDWLRQ $QGUHZ : : &RRSHUDWLRQ ZLWKLQ $PHULFDQ KLJKHU HGXFDWLRQ :DVKLQJWRQ '& $VVRFLDWLRQ RI $PHULFDQ &ROOHJHV $UJ\ULV & 3HUVRQDOLW\ DQG RUJDQL]DWLRQ 1HZ
PAGE 140

%RXOGLQJ $ SXUH WKHRU\ RI FRQIOLFW DSSOLHG WR RUJDQLn ]DWLRQV ,Q ( %RXOGLQJ 7 &RDWHV t % :LOLHU HGVf &RQIOLFW PDQDJHPHQW LQ RUJDQL]DWLRQ )RXQGDWLRQ IRU 5HVHDUFK RQ +XPDQ %HKDYLRU $QQ $UERU 0LFK 8QLYHUVLW\ RI 0LFKLJDQ 3UHVV %RXOGLQJ &RQIOLFW DQG GHIHQVH $ JHQHUDO WKHRU\ 1HZ
PAGE 141

'RQRYDQ ) (Gf &ROOHJH DQG XQLYHUVLW\ LQWHULQVWL WXWLRQDO FRRSHUDWLRQ :DVKLQJWRQ '& &DWKROLF 8QLYHUVLW\ RI $PHULFD 3UHVV 'XELQ 5 7KHRU\ EXLOGLQJ 1HZ
PAGE 142

+DQVHQ *RYHUQDQFH E\ FRQVRUWLXP 6\UDFXVH 1< 6\UDFXVH 8QLYHUVLW\ 3UHVV +HDWK 3 5 t 6HD\ 0 ) 7KH UROH RI WKH FRPPXQLW\ FROOHJH LQ FRPPXQLW\ HGXFDWLRQ ,Q 0 ) 6HD\ HW DO &RPPXQLW\ (GXFDWLRQ $ GHYHORSLQJ FRQFHSW 0LGODQG 0LFK 3HQGHOO 3XEOLVKLQJ &R +RGJNLQVRQ + / +RZ PXFK FKDQJH IRU D GROODU" $ ORRN DW 7LWOH ,,, :DVKLQJWRQ '& $PHULFDQ $VVRFLDWLRQ IRU +LJKHU (GXFDWLRQ -RKQVRQ ( / &RQVRUWLD LQ KLJKHU HGXFDWLRQ (GXFDWLRQDO 5HFRUG -RKQVRQ 5 $ .DVW ) ( t 5RVHQ]ZHLJ ( 7KH WKHRU\ DQG PDQDJHPHQW RI V\VWHPV 1HZ
PAGE 143

/HVOLH : &RQIOLFW PDQDJHPHQW LQ WKH DFDGHP\ $Q H[SORUDWLRQ RI WKH LVVXHV -RXUQDO RI +LJKHU (GXFDn WLRQ /HYL $ 0 t %HQMDPLQ $ )RFXV DQG IOH[LELOLW\ LQ D PRGHO RI FRQIOLFW UHVROXWLRQ -RXUQDO RI &RQIOLFW 5HVROXWLRQ /HYLQH / :DOWHU :DUQH $ 0DVWHUV t )RUDQ 7 7KH SRWHQWLDO IRU KXPDQ UHVRXUFHV DQG HFRQRPLF JURZWK LQ D GHFOLQLQJ ORFDO FRPPXQLW\ D VRFLRHFRQRPLF VWXG\ RI -RKQVWRZQ 8QLYHUVLW\ 3DUN 3HQQ 3HQQV\OYDQLD 6WDWH (5,& 'RFXPHQW 5HSURGXFWLRQ 6HUYLFH 1R f /LSVHW 6 0 3ROLWLFDO PDQ 1HZ
PAGE 144

0RUSKHW ( / -RKQV 5 / t 5HOOHU 7 / (GXFDWLRQDO RUJDQL]DWLRQ DQG DGPLQLVWUDWLRQ FRQFHSWV SUDFWLFHV DQG LVVXHV (QJOHZRRG &OLIIV 13UHQWLFH+DOO ,QF 2OVHQ ( t &ODUN 3 $ /LIHFHQWHULQJ HGXFDWLRQ 0LGODQG 0LFK 3HQGHOO 3XEOLVKLQJ &R 2UGLQDQFH -DFNVRQYLOOH )OD 0DUFK 3DUVRQV 7 6XJJHVWLRQ IRU D VRFLDO DSSURDFK WR WKH WKHRU\ RI RUJDQL]DWLRQV 3DUW $GPLQLVWUDWLYH 6FLHQFH 4XDUWHUO\ @A 3DWWHUVRQ ) &ROOHJHV LQ FRQVRUW 6DQ )UDQFLVFR -RVVH\ %RVV ,QF 3DWWHUVRQ / &RQVRUWLD LQ $PHULFDQ KLJKHU HGXFDWLRQ :RUFHVWHU 0DVV :RUFHVWHU 6WDWH &ROOHJH 3UHVV (5,& 'RFXPHQW 5HSURGXFWLRQ 6HUYLFH 1R f 3DWWHUVRQ / $ GHVFULSWLYH VWXG\ RI WKH JRYHUQDQFH RI VHOHFWHG YROXQWDU\ DFDGHPLF FRRSHUDWLYH DUUDQJHPHQWV RQ KLJKHU HGXFDWLRQ 'RFWRUDO GLVVHUWDWLRQ 8QLYHUVLW\ RI 0LVVRXUL f 'LVVHUWDWLRQ $EVWUDFWV ,QWHU QDWLRQDO D $$ 8QLYHUVLW\ 0LFURILOPV 1R f 3DWWHUVRQ / 7KH SRWHQWLDO RI FRQVRUWLD &RPSDFW 2FWREHU E f 3DWWHUVRQ / &RQVRUWLXP 'LUHFWRU\ :DVKLQJWRQ '& $PHULFDQ $VVRFLDWLRQ IRU +LJKHU (GXFDWLRQ 3DWWHUVRQ / &RQVRUWLXP 'LUHFWRU\ :DVKLQJWRQ '& $PHULFDQ $VVRFLDWLRQ IRU +LJKHU (GXFDWLRQ D 3DWWHUVRQ / 7KH FRQVRUWLXP PRYHPHQW ,Q 7 3URQR HGf 7KH QRUWKHDVW FRPPXQLW\ HGXFDWLRQ FRQVRUWLXP :RUFHVWHU 0DVV :RUFHVWHU 6WDWH &ROOHJH 3UHVV E 3DWWHUVRQ / (YROYLQJ SDWWHUQV RI FRRSHUDWLRQ 5HVHDUFK &XUUHQWV :DVKLQJWRQ '& 7KH *HRUJH :DVKLQJWRQ 8QLYHUVLW\ F (5,& &OHDULQJKRXVH RQ +LJKHU (GXFDWLRQf 3DWWHUVRQ / &RQVRUWLXP GLUHFWRU\ XSGDWH :DVKLQJWRQ '& &RXQFLO IRU ,QWHULQVWLWXWLRQDO /HDGHUVKLS

PAGE 145

3DWWHUVRQ / t %XUQV 5 / &RQVRUWLXP 'LUHFWRU\ 8QLYHUVLW\ $OD &RXQFLO IRU ,QWHULQVW[WXWLRQDO /HDGHUVKLS 3RGROVN\ $ t 6PLWK & 5 (GXFDWLRQ 'LUHFWRU\ &ROOHJHV DQG 8QLYHUVLWLHV :DVKLQJWRQ '& 86 *RYHUQPHQW 3ULQWLQJ 2IILFH 5LFKDUGVRQ 5 & %ORFNHU & ( t %HQGHU / : *RYHUQDQFH IRU WKH WZR\HDU FROOHJH (QJOHZRRG &OLIIV 13UHQWLFH+DOO ,QF 5RVFR 7 )XQGDPHQWDO UHVHDUFK VWDWLVWLFV IRU WKH EHKDYLRUDO VFLHQFHV QG HGf 1HZ
PAGE 146

:HOOV + % $ FDVH VWXG\ RQ LQWHULQVWLWXWLRQDO FRRSHUDn WLRQ (GXFDWLRQDO 5HFRUG )DOO :HVW ( 2SHUDWLQJ SUREOHPV WKDW DULVH EHWZHHQ FRRSHUDWLQJ LQVWLWXWLRQV /LEHUDO (GXFDWLRQ :LOVRQ / (Gf (PHUJLQJ SDWWHUQV LQ $PHULFDQ KLJKHU HGXFDWLRQ :DVKLQJWRQ '& $PHULFDQ &RXQFLO RQ (GXFDWLRQ :LWWHU 5 0 7ZR\HDU FROOHJHV UHDFK RXW ,Q 7 'LHQHU t / 3DWWHUVRQ HGVf 7UHQGV DQG ,VVXHV LQ &RRSHUDWLRQ :DVKLQJWRQ '& $PHULFDQ $VVRFLDWLRQ IRU +LJKHU (GXFDWLRQ =LPPHUPDQ : $ IRXQGDWLRQ H[HFXWLYHnV DVVHVVPHQW RI WKH FROOHJH FRQVRUWLD PRYHPHQW ,Q / 3DWWHUVRQ 3DSHUV RI WKH DFDGHPLF FRQVRUWLD VHPLQDU RQ DVVHVVLQJ WKH FRQVRUWLXP PRYHPHQW 0LPHRJUDSKHG .DQVDV &LW\ 0R .DQVDV &LW\ 5HJLRQDO &RXQFLO IRU +LJKHU (GXFDn WLRQ

PAGE 147

%,2*5$3+,&$/ 6.(7&+ :LOOLH %UHQQRQ ZDV ERUQ LQ UXUDO 0F,QWRVK &RXQW\ *HRUJLD RQ $SULO $IWHU FRPSOHWLQJ HOHPHQWDU\ HGXFDWLRQ LQ WKH SXEOLF VFKRROV RI 0F,QWRVK &RXQW\ KH DWWHQGHG %RRNHU 7 :DVKLQJWRQ -XQLRU DQG 6HQLRU +LJK 6FKRRO LQ 0LDPL )ORULGD JUDGXDWLQJ LQ +H UHFHLYHG WKH GHJUHH RI %DFKHORU RI $UWV ZLWK D PDMRU LQ SUHPHGLFLQH IURP )ORULGD $ t 0 8QLYHUVLW\ 7DOODKDVVHH )ORULGD LQ $XJXVW RI ,Q 6HSWHPEHU KH EHJDQ KLV WHDFKLQJ FDUHHU LQ WKH 9ROXVLD &RXQW\ 6FKRRO 6\VWHP $IWHU HLJKW VXFFHVVIXO \HDUV RI FODVVURRP WHDFKLQJ KH ZDV HQFRXUDJHG WR FRQVLGHU EHFRPLQJ D SXEOLF VFKRRO DGPLQLVWUDWRU 8SRQ UHFHLYLQJ D VDEEDWLFDO OHDYH IURP WKH 9ROXVLD &RXQW\ 6FKRRO 6\VWHP LQ KH EHJDQ VWXG\LQJ WRZDUG WKH PDVWHUnV GHJUHH LQ HGXFDWLRQDO DGPLQLVWUDWLRQ DW WKH 8QLYHUVLW\ RI )ORULGD 7KLV GHJUHH ZDV DZDUGHG WR KLP LQ $XJXVW RI +H FRQWLQXHG JUDGXDWH VWXGLHV DW WKH 8QLYHUVLW\ RI )ORULGD FRPSOHWLQJ DOO FRXUVH ZRUN IRU WKH GRFWRUDWH E\ -XQH RI 6KRUWO\ WKHUHDIWHU KH UHWXUQHG WR WKH 9ROXVLD &RXQW\ 6FKRRO 6\VWHP DQG UHFHLYHG DQ DVVLVWn DQW SULQFLSDOnV DVVLJQPHQW

PAGE 148

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

PAGE 149

, FHUWLI\ WKDW KDYH UHDG WKLV VWXG\ DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ DQG LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ \ $fn D ‘ Ln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f V:M L G DL fnf L e‘ &n :LOOLDP + 'UXPPRQG 3URIHVVRU RI &XUULFXOXP DQG ,QVWUXFWLRQ 7KLV GLVVHUWDWLRQ ZDV VXEPLWWHG WR WKH *UDGXDWH )DFXOW\ RI WKH 'HSDUWPHQW RI (GXFDWLRQDO $GPLQLVWUDWLRQ LQ WKH &ROOHJH RI (GXFDWLRQ DQG WR WKH *UDGXDWH &RXQFLO DQG ZDV DFFHSWHG DV SDUWLDO IXOILOOPHQW RI WKH UHTXLUHPHQWV IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ -XQH 'HDQ *UDGXDWH 6FKRRO