Case Study About Trust Report Essay Example for Free

Case Study About Trust Report Essay Trust is the ability to rely confidently, either on an individual or in this scenario the company’s product. It is judged on three dimensions; namely, the ability to be technically competent, its benevolence, that is, the interests and motives, and, finally, the integrity. Positive judgment is a good reflect on the customers’ will to take part in the organization’s dealings. This act may involve buying the company’s products, investing in its stocks, or being an employee. In case any of the attributes become questionable, it may make the customers wary and reluctant in risk taking (Kourdi Bibb, 2007). Distrust in the organization may increase inefficiencies of innovation and damage relationships. Causes leading to the loss of trust Toyota Motor Corporation is a Japan based motor manufacturer. Its headquarters are in Aichi, Japan. This corporation was founded in 1937 and had been since among the best performing motor manufacturers and dealers in the world. With more than 3 billion yen as profit in a fiscal year, as per the financial report of 2013, Toyota could be said to be among what Forbes magazine would name the top 100 best corporations (Kourdi Bibb, 2007). Since the year 2004 to 2010, there had been several complains on Toyota Motors concerning engines and accelerators. On 28 August 2009, a tragic accident occurred in San Diego involving a family travelling in a Toyota Lexus. The car lost control and all the passengers died. Toyota, known for its impeccable repute for reliability and quality products suddenly had to deal with trust crisis. A deficiency in attributes that lead to trust of the company’s products and services in form of a scandal can lead to instant lack of trust (Blackshaw, 2008). An effective response to a trust scandal or failure needs interventions that are aimed at curbing distrust and  rebuilding trustworthiness. Distrust regulation can be done through enforcing controls, conditions, and constraints to employees in order to rectify the failure. Intervening may require the removal of guilty parties, the change of the cultural norms of the organization, and introduction of new or the revision of incentives (Blackshaw, 2008). This is not sufficient. Statements and actions too are needed to demonstrate trustworthiness. Statements that show the company’s compelling ability, integrity, and benevolence are required. Apologies, transparency, and ethical practice are required as well. How effective do you consider the taken mitigation actions? Effective repair of trust should undergo simple steps. The first is immediate response to Toyota Corporation belated communications; belated recalls and public apologies damaged its reputation more than the original accident (Liker, 2004). The company ended up losing its sales, investors, and market share. They also lost customer confidence. Toyota Company expressed concern by realizing a statement where they apologized to the family of the victims. It also pledged to carry out investigations. However, the company, regrettably, did not point out the possible causes. This seems like an effective immediate response but it is required for a company to point out to possible causes. Later, the floor mats were suspected to be the likely cause of two accidents that had occurred earlier, but this did not prompt the company into issuing a customer warning (Liker, 2004). They acted upon the suspicions five days after the analysis of the cause was confirmed. This was nineteen days after the fatal accidents. In order to rebuild customer, employee, and investor trust, Toyota Motors released a statement assuring their customers that the floor mats were in good conditions and safe. They praised them as being among the safest mats. This statement was later challenged by NHTSA who accused the company of releasing misleading and inaccurate reports. In a bid to save itself from further downfall, Toyota Motors reacted by giving a remedy to the sticky floor mats. This action caused discretion among investors who thought of the company to have had unclear motives when they released the first statement (Liker, Hoseus, Center for Quality People and Organizations, 2008). This further dented the trust of the shareholders. The mitigation process of the Toyota Company took  a long time, hence more damage to be controlled. It was ineffective at the beginning, which was a blow to the shareholders. Although the company founder Akio Toyoda later sent out apologies and through the wall street journal expressed his commitment to reforming the company towards better and safe products with the aim of repairing the damage that had been done (Liker, Hoseus, Center for Quality People and Organizations, 2008). The company through the court compensated the family that had lost their relatives through the accident. This was a step to convey the company’s acceptance of the guilt. Consequences of not addressing trust issues Failure to respond to issues and address the remedies publicly can lead to severe disciplinary actions on a company. These actions may include its termination and payment of fine; Toyota Company due to its sluggish manner of responding to the claims against its products was fined $16.4million (Pelletier, 2005). This is because the company failed to warn its customers thereafter. Toyota accepted its penance. Do you believe that the company’s reputation can be re-build, or will they suffer the consequences also in the years to come? Despite the tarnishing of Toyota Corporation’s reputation, the customers’ and investors’ trust will be rebuilt. The actions that the company undertook such as restricting the company’s management team and procuring a new safety system have seen the company rise to becoming once again among the most profitable companies in the world (Pelletier, 2005). The company is rebuilding itself since the 2009 failure. It has had numerous innovations and recently announced mass hiring of employees. References Bibb, S., Kourdi, J., Bibb, S. (2007). A question of trust: The crucial nature of trust and how to build it in your work and life. London: Cyan. Blackshaw, P. (2008). Satisfied customers tell three friends, angry customers tell 3,000: Running a business in todays consumer driven world. New York: Doubleday. Liker, J. K. (2004). The Toyota way: 14 management principles from the worlds greatest manufacturer. New York: McGraw-Hill.Top of Form Top of FormLiker, J. K., Hoseus, M., Center for Quality People and Organizations. (2008). Toyota culture: The heart and soul of the Toyota way. New York: McGraw-Hill. Pelletier, R. (2005). Its all about service: How to lead your people to care for your customers. Hoboken, N.J: John Wiley Sons Bottom of Form Bottom of Form

Arduino-Based Temperature Automated Curtain Railing System

Arduino-Based Temperature Automated Curtain Railing System CHAPTER 5 THE SOLUTION 5.1Â  Overview The goal of Arduino-Based Temperature Automated Curtain Railing System is to ease the daily operation of residential curtains by automating the curtains where the curtains doesnt require human effort and operates by using electric powered motors. Based on the implementation methods discussed in the previous chapter, the proposed solution to achieve the goal and objectives is thoroughly explained and evaluated in this chapter. Arduino-Based Temperature Automated Curtain Railing System has two methods of application. A temperature module sensor is integrated into the system to read and send temperature data which then the systems evaluates and decides in closing and opening the curtains. Also, a Bluetooth module is added to give the system the capability to be connected and controlled by users through a smart phone. For this application, an existing Android app is used to establish the connection between the smartphone and the Arduino microcontroller. The prime language used in this sy stem is C++. 5.2Â  Arduino Microcontroller #include #define btRX 3 // BT RX pin #define btTX 4 // BT TX pin #define ledClose 9 // Close indicator LED #define ledOpen 10 // Open indicator LED #define swClose 11 // Curtain Close limit switch input #define swOpen 12 // Curtain Open limit switch input #define ledOn 13 // Power ON and RECV indicator LED #define LM35pin A0 // LM35 temp pin #define motRev A5 // Motor Reverse control pin #define motFor A4 // Motor Forward control pin Figure 5.1: Declaring the pins The microcontroller pins are first declared. Each module is assigned to a pin. The declared value is used later on throughout the code instead of the pins. 5.3Â  Initializing System Components void measTemp() { reading = analogRead(LM35pin); // Read sensor tempC = reading / 9.31; // Convert to Celcius delay(100); } Figure 5.2: Initialize LM35 Temperature sensor System reads the value produced from the LM35 pin. The value produced by the sensor is in voltage metric and is converted to Celsius. The parameter delay is set to 0.1 seconds. measTemp(); // Take a temperature reading if (HC05.available()>0) { char inByte = HC05.read(); delay(100); Figure 5.3: Initialize HC-05 Bluetooth module Bluetooth module reads the temperature data from temperature sensor and sends the data to any smartphone device connected through Bluetooth. The parameter delay is set to 0.1 seconds. void blinkLED() { digitalWrite(ledOn, LOW); delay(50); digitalWrite(ledOn, HIGH); delay(50); } Figure 5.4: Initialize LED indicator LED is set to blink by turning on and off for 0.05 second intervals. This is used later on as to indicate the system is running. 5.3Â  Curtain Initializing Functions void chkStatus() { openStat = digitalRead(swOpen); closeStat = digitalRead(swClose); if (openStat == HIGH closeStat == LOW) // Curtain is open { digitalWrite(ledOpen, HIGH); digitalWrite(ledClose, LOW); HC05.println(Curtain OPEN); } else if (openStat == LOW closeStat == HIGH) // Curtain is closed { digitalWrite(ledOpen, LOW); digitalWrite(ledClose, HIGH); HC05.println(Curtain CLOSED); } else if (openStat == LOW closeStat == LOW) // Curtain state not known { // so close it first HC05.println(Initialise..); delay(500); HC05.println(Waiting to CLOSE); //displays this while curtain closing { blinkLED(); closeStat = digitalRead(swClose); digitalWrite(motRev, HIGH); digitalWrite(motFor, LOW); }while (closeStat == LOW); //Wait until Close Sw = HIGH digitalWrite(motRev, LOW); digitalWrite(ledOpen, LOW); digitalWrite(ledClose, HIGH); HC05.println(Curtain CLOSED); } Figure 5.5: Function to initialize the curtain The curtain functions are presented above. The function detects if the open switch is engaged and the close switch is not. If its true, then red LED is switched on indicating the curtain is open and Curtain OPEN character is sent to the Bluetooth module which later sends to any connected smartphone. Else if, the yellow LED is switched on indicating curtain is closed and Curtain CLOSE character is displayed on smartphone. Else if the function is unable to read the switch or if the curtain state is unknown, the curtain is closed first by default and only then system begins its function. Waiting to CLOSE is displayed while curtain is closing. 5.4Â  AUTO/MANUAL Mode Selection case 3: // Select Manual Mode on smartphone HC05.println(Manual ON); autoStat = 0; break; Figure 5.8: MANUAL mode selection The code above switches the default auto mode to manual, giving access to Bluetooth module to receive and send command from connected smartphones. Manual ON is displayed in smartphone indicating that manual mode has been enabled and ready. The case switch statement here is set as case 3. case 4: // Select Auto mode on smartphone HC05.println(Auto ON); autoStat = 1; break; Figure 5.9: AUTO mode selection The code in Figure 5.6 switches from manual mode to auto, enabling the temperature module to control the whole system automatically based on temperature.Auto ON is displayed in smartphone indicating that auto mode has been enabled and live. The user has no control on the system in this mode, unless select manual mode. The case switch statement here is set as case 4. 5.4Â  Bluetooth Initializing Functions (MANUAL MODE) switch (inByte) { case 1: // Open Curtain MANUAL MODE HC05.println(Waiting to OPEN); do { blinkLED(); openStat = digitalRead(swOpen); digitalWrite(motFor, HIGH); digitalWrite(motRev, LOW); }while (openStat == LOW); digitalWrite(motFor, LOW); digitalWrite(ledOpen, HIGH); digitalWrite(ledClose, LOW); HC05.println(Curtain OPEN); break; Figure 5.6: OPEN Curtain Bluetooth Command The code on top shows the OPEN curtain function through Bluetooth connection. The code also enables the Bluetooth module to send curtain status in real time. Once curtain is fully open, the red LED is switched indicating the curtain is fully open. The green LED blinks, indicating the motor is running and executing. Curtain OPEN is displayed on smartphone screen when the curtain has successfully completed the open process. The function above is declared as a case switch statement giving it case 1. The Android application installed in the smartphone recognizes the case 1 function when the command setting for a specific button is set to 1. case 2: // Close Curtain MANUAL MODE HC05.println(Waiting to CLOSE); do { blinkLED(); closeStat = digitalRead(swClose); digitalWrite(motRev, HIGH); digitalWrite(motFor, LOW); }while (closeStat == LOW); //Wait until Close Sw = HIGH digitalWrite(motRev, LOW); digitalWrite(ledOpen, LOW); digitalWrite(ledClose, HIGH); HC05.println(Curtain CLOSED); break; Figure 5.7: CLOSE Curtain Bluetooth Command The code on top shows the CLOSE curtain function. Yellow LED is turned on when the curtain is fully closed. As the curtain closes fully, Curtain CLOSED is displayed on smartphone screen. The case switch statement here is set as case 2. 5.4Â  Temperature Sensor Initializing Function (AUTO MODE) else if (autoStat == 1 tempC > 32 openStat == HIGH openClose == 1) // Temperature exceeds 32 { measTemp(); HC05.println(tempC,1); // Send Temperature data //HC05.println(Waiting to CLOSE); //displays this when curtain closing do { blinkLED(); closeStat = digitalRead(swClose); digitalWrite(motRev, HIGH); digitalWrite(motFor, LOW); }while (closeStat == LOW); // Wait until Close Sw = HIGH digitalWrite(motRev, LOW); digitalWrite(ledOpen, LOW); digitalWrite(ledClose, HIGH); HC05.println(Auto CLOSED); // display when curtain closed openClose = 0; } Figure 5.10: Curtain CLOSE when temperature high The above code initializes the curtain to close when the temperature exceeds 32-degree Celsius in automatic mode. When temperature exceeds the fixed value, the temperature data is sent to Bluetooth module and is displayed to connected smartphone. While closing, the LED is set to blink indicating the system is running and Waiting to CLOSE is displayed on smartphone. When the curtain is fully closed and the close switch is engaged, AUTO CLOSED is displayed on smartphone. else if (autoStat == 1 tempC { measTemp(); HC05.println(tempC,1); // Send Temp data //HC05.println(Waiting to OPEN); //displays this when curtain opening do { blinkLED(); openStat = digitalRead(swOpen); digitalWrite(motFor, HIGH); digitalWrite(motRev, LOW); }while (openStat == LOW); // Wait until Open Sw = HIGH (Open switch click) digitalWrite(motFor, LOW); digitalWrite(ledOpen, HIGH); digitalWrite(ledClose, LOW); HC05.println(Auto OPEN); //displays this when curtain fully opened openClose = 1; } Figure 5.11: Curtain OPEN when temperature low (AUTO) The above code initializes the curtain to open when the temperature goes below 32-degree Celsius in automatic mode. When temperature goes below the fixed value, the temperature data is sent to Bluetooth module and is displayed to connected smartphone. While opening, the LED is set to blink indicating the system is running and Waiting to OPEN is displayed on smartphone. When the curtain is fully opened and the open switch is engaged, AUTO OPEN is displayed on smartphone.

The Contrast of Virginia Woolf and Alice Walker Essay -- Writers Moral

The Contrast of Virginia Woolf and Alice Walker After reading the four essays assigned to this sequence, it becomes interesting to contrast two author's points of view on the same subject. Reading one professional writer's rewriting of a portion of another professional writer's essay brings out many of each of their characteristics and views. Also, the difference in writing styles could be drastic, or slight. Nevertheless, the writers display how versatile the English language can be. Alice Walker was born in 1944 as a farm girl in Georgia. Virginia Woolf was born in London in1882. They have both come to be highly recognized writers of their time, and they both have rather large portfolios of work. The scenes the might have grown up seeing and living through may have greatly influenced their views of subjects which they both seem to write about. In her essay "In Search of Our Mothers' Gardens," Alice Walker speaks first about the untouchable faith of the black women of the post-Reconstruction South. She speaks highly of the faith and undying hope of these women and their families. She even comes to recognize them as saints as she describes their faith as "so intense, deep, unconscious, the they themselves were unaware of the richness they held" (Walker 694). In a passage in which she speaks about the treatment and social status of the women of the sixteenth century, Woolf explains that a woman who might have had a truly great gift in this time "would have surely gone crazy, shot herself, or ended up in some lonely cottage on the outside of town, half witch, half wizard, feared and mocked" (Woolf 749). Her use of some of these powerful nominative shows that she feels strongly about what she is writing. Also for her, life growing up and stories she may have heard may have influenced this passage greatly. In her passage she imagines what it may have been like had William Shakespeare had a sister. She notices how difficult it would be even given the same talents as Shakespeare himself, to follow throughout and utilize them in her life. It is clear after reading further into Woolf's passage that obviously she lived in a different time period, only about fifty years apart though. The way she relates and tells a very similar story with an entirely different setting shows without the reader even knowing that she wa... ... Whether this style that Virginia Woolf uses is correct or not, it is powerful and it pauses the reader and , most importantly, helps the reader think in exactly the same manner as she was when she wrote it. The pauses she experienced in her thoughts when she wrote the story about the story about the writer's sister are simulated and relived when the reader crosses them. Both writers do a fine job of stressing the morals in their writing. The reader can, in Walker's essay, put himself in the first person and imagine the South very easily because of how descriptive she is in her narration. The reader of Woolf's essay clearly can understand and come to realize the unfairness and downright cruelty of the pure neglect of hidden talent among many women throughout time. She does this through simply telling a good story. This perhaps show that Virginia Woolf may have been fond of Walker's work. Woolf chooses to clearly state and agree with the same points Walker makes and shows the ideas in a different light because indeed she is a different person with different attributes. This shows up dominantly in her rewriting of Walker's "In Search of Our Mothers' Gardens."

Free Essays on A Dolls House: Breaking Away :: A Dolls House Essays

Breaking Away in A Doll's House The central theme of A Doll's House is secession from society. It is demonstrated by several of its characters breaking away from the social standards of their time and acting on their own terms. No one character demonstrates this better than Nora. During the time in which the play took place society frowned upon women asserting themselves. Women were supposed to play a role in which they supported their husbands, took care of their children, and made sure everything was perfect around the house. Work, politics, and decisions were left to the males. Nora's first secession from society was when she broke the law and decided to borrow money to pay for her husbands treatment. By doing this, she not only broke the law but she stepped away from the role society had placed on her of being totally dependent on her husband. She proved herself not to be helpless like Torvald implied: "you poor helpless little creature!" Nora's second secession from society was shown by her decision to leave Torvald and her children. Society demanded that she take a place under her husband. This is shown in the way Torvald spoke down to her saying things like: "worries that you couldn't possibly help me with," and "Nora, Nora, just like a woman." She is almost considered to be property of his: "Mayn't I look at my dearest treasure? At all the beauty that belongs to no one but me -that's all my very own?" By walking out she takes a position equal to her husband and brakes society's expectations. Nora also brakes society's expectations of staying in a marriage since divorce was frowned upon during that era. Her decision was a secession from all expectations put on a woman and a wife by society. Nora secessions are very deliberate and thought out. She knows what society expects of her and continues to do what she feels is right despite them. Her secessions are used by Ibsen to show faults of society. In the first secession Ibsen illustrates that despite Nora doing the right thing it is deemed wrong and not allowed by society because she is a woman. While the forgery can be considered wrong, Ibsen is critical of the fact that Nora is forced to forge. Ibsen is also critical of society's expectations of a marriage. He illustrates this by showing how Nora is forced to play a role than be herself and the eventual deterioration of the marriage.

Free YGB Essay - Innocence vs Reality in Hawthornes Young Goodman Brown :: Young Goodman Brown YGB

The story Young Goodman Brown presents two themes; loss of innocence and coping with reality. Loss of Innocence is a major theme of the story and is easily seen. A loss of innocence is when those that do not know something horrible or do not believe in its existence come to an understanding of that horrible thing that forever changes them. The innocents in the story are Goodman Brown and his wife, Faith. Faith, we see is capable of attaining heaven(577), a good place where evil is unknown. Brown is also an innocent as shown by when the devil reveals to him a series of horribles as the two walk through the woods-namely that his grandfather, his mentor, and the preacher have all communed with the devil before (578-580). In the passage, the devil puts it upon himself to rectify this lack of understanding by informing those who had hoped for good, that their very nature is evil. The truth is what Goodman Brown had said before "There is no good on earth; and sin is but a name. Come, devil ! for to thee is this world given(581)."   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Coping with reality becomes a major issue after the loss of innocence. Both of our innocents must devise a way of dealing with the new found horribles. The devil, in our passage, suggests : "Evil must be your only happiness." When Brown denies the devil's truth(584), he chooses the alternative. Brown lives out his life an uphappy and distrustful man (584). His wife, once a happy person, due to evidence of the contrary, did not change and lived a happy life. So we can see there were two paths to follow once innocence has been lost-accepantance of the horrible truth which leads to happiness or the constant denial of it and consequent gloom (585).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   These two themes point out two very separate beliefs of the sociohistorical period during which Hawthorne wrote. Puritanism had held sway over American thought for many generations prior to Hawthorne. It presented the idea that all men are born sinful due to Original Sin. That understanding was the basis for the loss of innocence theme described earlier. At Hawthorne's time puritanical beliefs were transforming. The new theology emphasized a connection of man to nature. Any truths to be found in nature were right and true. This presented the second theme or question of coping with reality.

Crime Relate on Television

Crime relate On Television The crime rate in many cities is rising alarmingly. Some people have the idea that violent TV programs are the cause of real crime. However, many others disagree that TV violence can be blame are supported by good reasons. Violent TV programs cause crime give many reasons. First, many viewers are children who have not fromed a strong understanding what is right and wrong. The viewers imitate what they see. If a person on TV gets what he or she wants by stealing it, a child may copy this behavior.Thus the child has learned unacceptable values. Second, many heroes in today's programs achieve their goals by violent means. Unfortunately, viewers might use similar means to achieve their objective. Finally, people get ideas about how to commit crimes from watching TV. Violent programs have no relation to crime rates. First they claim that social factors, such as unemployment and homeless are to blame. Second some argue that watching violence on TV is an aceptable way to reduce aggressive feeling.In other words, people may become less aggressive through viewing criminal and violent scenes. Third even though children learn by imitation, their parents are the most influential models. Finally the villains are usually punished for their crimes. Whether or not violent programs are a factor in the rising crime rate. Some TV programs have to remove for the following reasons. First, some people enjoy them, and those who can change channels or turn their TV off.Second violent programs can be censored, perhaps other programs which may be important for our well being will also be censored. There are many things parents can do to help their children not get affect by television violence. One of the things parents can do is limit the number of hours their children watch television. Instead of letting them sit in front of the TV and wasting their time way, they can go out and be active. They can join a club or sport where they can interact with other chil dren and be social.By go out and getting involved, the children are using their time very wisely and their parents do not have to worry about their children being influenced negatively. One of the problems facing this solution is children are sometimes lazy. They are not willing to go out active but rather sit on the couch and do nothing but relax. Children also need to realize that their parents are not trying to stop them for watching TV and making their life miserable, but trying to help them get active and be a balanced person. Children need to know that here are other sources of fun then just sitting home and watching television all day. Parents should guide what their children watch on television and how much. This is an old recommendation  that can be given new teeth with the help of modern technology. It is now feasible to fit a television set with an electronic lock that permits parents to preset which programs, channels, and times they wish the set to be available for, i f a particular program or time of day is locked. the set won't turn on for that time or channel.Television violence is harmful to viewers. TV violence is a negative impact on children. TV violence corrupts the mind of children, causes them to behave in an aggressive manner, and puts unrealistic pictures of the world in their mind. TV violence is having a negative effective on the teenager of America. Parents cannot limit the influence of television violence on children, but with the combine effort of parents and children, television violence can have little or no influence on the young people of America.

Company as a Separate Legal Entity Essay

A legal entity, typically a business, that is defined as detached from another business or individual with respect to accountability. A separate legal entity may be set up in the case of a corporation or a limited liability company, to separate the actions of the entity from those of the individual or other company. Meaning: If a business is a separate legal entity, it means it has some of the same rights in law as a person. It is, for example, able to enter contracts. In New Zealand, a company is a separate legal entity from its owners (shareholders) and can, for example, be sued, and enter into contracts in the name of the company, not the shareholders. Sole traders and partnerships are not separate legal, entities from the owners. Some Business entities like corporation, LLC can exist separately from its owners. In a common language that a corporation is a separate entity of its owners and corporation itself is an entity like human being created through legal or official process. Corporation lives and does its activities at its own existences and is treated in its own capacity. It does the business, it generates the revenue, it can incur losses, it hires the employees and it pays its own taxes. It is a better form of existence for the reason it takes its responsibilities itself, owners are free from their personal liabilities and owners enjoy limited personal liability (risk) only up to their investments in stocks, though there may be certain situations where their personal responsibilities can exceed from limited liability concept. Separate Entity Concept is better choice and it has better features because corporation enjoys separate entity concept, has indefinite life (perpetual). Management and ownership may change but corporation will exist indefinitely at its own existence, unless it is officially dissolved or merged. Corporation has a better scope for large & multiple businesses, expending business, securing debts, attracting investors, retaining professional setup and engaging professional management, promoting & achieving new ideal, expanding its activities at local to global level. Under Separate Entity Concept, Corporation is treated in its own capacity, but it is not a human being, it is an artificial being, therefore, it has to be managed by people in different capacities such as owners, The shareholders were Mr. Salomon,his wife, daughter and four sons. Two of his sons became directors; Mr. Salomon himself was managing director. Mr. Salomon owned 20,001 of the company’s 20,007 shares – the remaining six were shared individually between the other six shareholders. Mr. Salomon sold his business to the new corporation for almost ? 39,000, of which ? 10,000 was a debt to him. He was thus simultaneously the company’s principal shareholder and its principal creditor. Transfer of the business took place on June 1, 1892. The purchase money the company paid to Mr. Salomon for the business was ? 20,000. The company also gave Mr. Salomon ? 10,000 in debentures: that is, Salomon gave the company a ? 10,000 loan, secured by a charge over the assets of the company. The balance paid went to extinguish the business’s debts (? 1,000 of which was cash to Salomon). Soon after Mr. Salomon incorporated his business a series of strikes in the shoe industry led the government, Salomon’s main customer, to split its contracts among more firms. The government wanted to diversify its supply base to avoid the risk of its few suppliers being crippled by strikes. His warehouse, as a consequence, was full of unsold stock. He and his wife lent the company money, and he cancelled his debentures, but the company needed more money, so they sought ? 5,000 from a Mr. Edmund Broderip. Mr. Salomon assigned Broderip his debenture, the loan with ten per cent interest and secured by a floating charge. But Salomon’s business still failed, and he could not keep up with the interest payments. In October 1893, Broderip sued to enforce his security. The company was put into liquidation. Broderip was repaid his ? ,000, and the debenture was reassigned to Salomon, who retained the floating charge over the company JUDGMENT High Court: When the company went into liquidation, the liquidator argued that the debentures used by Mr. Salomon as security for the debt were invalid, on the grounds of fraud. The judge, Vaughan Williams J. accepted this argument, ruling that since Mr. Salomon had created the company solely to transfer his business to it, the company was in reality his agent and he as principal was liable for debts to unsecured creditors. Court Of Appeal: The Court of Appeal also ruled against Mr. Salomon, though on the grounds that Mr. Salomon had abused the privileges of incorporation and limited liability, which the Legislature had intended only to confer on â€Å"independent bona fide shareholders, who had a mind and will of their own and were not mere puppets†. The Lords: The House of Lords unanimously overturned this decision, rejecting the arguments from agency and fraud. They held that there was nothing in the Act about whether the subscribers (i. e. he shareholders) should be independent of the majority shareholder. The company was duly constituted in law and it was not the function of judges to read into the statute limitations they themselves considered expedient. The 1862 Act created limited liability companies as legal persons separate and distinct from the shareholders. Lord Halsbury stated that the statute â€Å"enacts nothing as to the extent or degree of interest which may be held by each of t he seven [shareholders] or as to the proportion of interest or influence possessed by one or the majority over the others. Lord Halsbury remarked that – even if he were to accept the proposition that judges were at liberty to insert words to manifest the intention they wished to impute to the Legislature – he was unable to discover what affirmative proposition the Court of Appeal’s logic suggested. He considered that identifying such an affirmative proposition represented an â€Å"insuperable difficulty† for anyone putting forward the argument propounded by the lord justices of appeal. Lord Herschell noted the potentially â€Å"far reaching† implications of the Court of Appeal’s logic and that in recent years many companies had been set up in which one or more of the seven shareholders were â€Å"disinterested persons† who did not wield any influence over the management of the company. Anyone dealing with such a company was aware of its nature as such, and could by consulting the register of shareholders become aware of the breakdown of share ownership among the shareholders. Lord Macnaghten asked what was wrong with Mr. Salomon taking advantage of the provisions set out in the statute, as he was perfectly legitimately entitled to do. It was not the function of judges to read limitations into a statute on the basis of their own personal view that, if the laws of the land allowed such a thing, they were â€Å"in a most lamentable state†, as Malins V-C had stated in an earlier case in point, In Re Baglan Hall Colliery Co. , which had likewise been overturned by the House of Lords.