Human Resource Management At Walt Disney World Resort Tourism Essay

Human Resource Management At Walt Disney World Resort Tourism Essay Theres probably no place on earth as magical as the Walt Disney World Resort in Florida. The theme park continues to thrill, delight and exceed its guests expectations nearly 40 years after its opening. The secret to Disneys success is its well-trained, enthusiastic and motivated work force. Its a secret that the founder, Walt Disney himself realized years ago. You can dream, create, design and build the most wonderful place in the world but it requires people to make the dream a reality, he said. A Brief History The Walt Disney World Resort, is the worlds largest and most visited recreational resort, covering 30,080-acres near Orlando, Florida, USA. The resort was founded with the opening of the Magic Kingdom theme park in 1971. It consists of four theme parks, two water parks, 23 resort hotels, lodges and time-share properties, sports facilities complex, and other recreational venues and entertainment. Epcot park was added in 1982, Disneys Hollywood Studios in 1989 and Disneys Animal Kingdom in 1998. This world famous resort was inspired by the dreams of Walt Disney and his creation of Disneyland in California. The resort is the largest single-site employer in the United States, employing 42,000 people, with over 3,000 different job classifications. More than 1000 people work in the security department alone. Hiring Disney is renowned for being a fun and friendly place at which to work. Its ability to offer attractive incentives make it a desirable place to work and it is constantly evaluating the market to ensure their wages remain competitive. All Disney employees participate in training programs that update them on the latest service techniques, product knowledge, and technology being used in their parks. Disney recruit both internally and externally, advertising vacancies on their website, via the press, job fairs, employment exchanges and colleges. There is a large quantity of college students working in Disney. Employment representatives also travel to Puerto Rico to recruit for positions such as housekeeping, custodial and food and beverage. It s 4 major employment strategies are: Hire the right people Develop people to deliver service quality Provide needed support systems Retain the best people Once potential employees have been identified, interviews follow. The skills and abilities that managers generally look for are: Excellent communication skills Good team player Self motivated Analytical ability Problem solver Leadership potential Strong computer skills Project management skills Relationships-builder Able to manage expectations Personal and professional style Strong business judgment Ability to facilitate and multitask A guest service orientation Disney theme parks promise to provide a superior service in order to create a à ¢Ã¢â€š ¬Ã‚ ¦imaginary world where visitors can escape the themes of the real world. To achieve this, the company has to employ people with the proper skills and personalities, who are also motivated, with a clear knowledge of the companys marketing objectives and strategies. Staff have to be polite, well dressed, energetic, enthusiastic, and people-loving, always serving guests whole-heartedly. All staff are provided with an extensive knowledge of the park facilities, rides, and sites. HRM Practises Disney believes in investing in its staff and provide various training programs and learning opportunities for employees to work their way into higher positions. The company promotes from within 70% of the time. Almost everyone including the managers start out in an entry-level hourly job (Disney almost completely promotes from within). There is a program to help hourly workers who want to become part of management, there is another that lets them transfer to the technical unions like plumbers and electricians as an apprentice. That program involves four years of training leading to a very well-paid job. Disney also give educational reimbursement for those who are continuing their education while working for Disney full-time. Supervisors try to create a family-like atmosphere in Disney by offering flexible schedules and on-site day care programs for working parents. . The company also host numerous special events for its employees that are held in the park after hours. Present day human resources practices at Disney are considered to be extraordinary, with all staff being trained in excellent customer satisfaction policies. However HR practices were very poor in the early years of Disney. The Walt Disney Company originated back in 1923, when Walt and Roy Disney started their first animated recording studio. Early animation production was highly labour-intensive. Rigid division of tasks was further delineated on gender lines. By 1941, the Walt Disney Company employed 1,100 people. Ellwood (1998) describes Walt Disney as a notorious workaholic, a perfectionist who pushed his staff relentlessly. Both paternalistic and domineering he rewarded loyalty and punished dissidents. There were no women or black people promoted to senior positions during this period. The company was the only Hollywood studio without union representation and as such was targeted by the American Federation of Labour. Eventually, animators took industrial action over conditions an d lack of recognition in 1941. By the end of the 1990s, the Walt Disney Company had developed into a $23 billion media conglomerate. Cast Members Employees in Disney are called cast members. Quality cast members are a direct result of quality hiring practices. Bonuses are paid to workers who refer new hires. Disney believes its important to have people who have actually worked in different parts of the company, to do the hiring. So these cast members working in the casting office, come from all different parts of the Disney organization, and work on 12-month assignments. While prospective cast members wait for their initial interviews, they watch a short video that describes the interview process and outlines what the company expects of them, if theyre successful. Once hired, all new cast members go through the same 1 and a half day training program called Traditions. Its here they learn the basics of being good cast members, from Disney history to direction on how to meet and exceed guest expectations. Cast members learn they must adhere to the companys strict 13 page manual of dress codes, known as the Disney Look. The Disney Look is a rigid code of cast member appearance that imposes a well-scrubbed, all-American look. It details the size of earrings allowed, to the size of finger nails, to the no tolerance rule regarding facial hair and dyed hair for both females and males. Disneys grooming standards make sense when you consider employees to be part of a cast of characters so there is no room for non-conformity. Every employee is instructed in the Seven Guidelines to Guest Service which highlights the need to smile and to be cheerful. From the very start, staff are encouraged to implement a have a nice day! mentality, and to smile the Disney smile all day. Casting Employees are routinely assigned jobs according to age and appearance, a process officially known as casting. The most presentable get the most popular front-line jobs and shifts. For example: Young and pretty workers get jobs that involve a lot of interaction with customers; Haitian women generally work in housekeeping; Older women sell in the shops Older men work in security Puerto Recons work in food preparation African Americans work as stewards or cooks, More than a 100 Africans are employed in the Animal Kingdom, to lend authentic flavour. Anyone who might appear less presentable work on the night shift Cast Members receive some excellent benefits including: Health, Dental, Life Insurance Complimentary Theme Park Passports Learning and Development Opportunities Paid holidays, vacations, and sick days Retirement plan. Scholarship Program 30% Discount on park merchandise Employee Stock Purchase Program Access to a Cast Member-only lake and recreation area with tennis, volleyball, and an Olympic-size swimming pool. Educational Reimbursement Educational Matching Gifts Program Service Awards Employee Cast Member Contests Childcare Centres Credit Unions Employee Stores Cast Members usually work 40 hours or more each week, with quality service being the responsibility of every one. Each one measures service quality levels, establish benchmarks and set goals, as there is no person in charge of quality. Instead of one quality director, Disney has 42,000 of them. (Paton S. M. Service Quality, Disney Style, Quality Digest) Disney University Many hours have been devoted to designing successful employee universities which train workers in the Disneyland philosophy. Walt Disney established the Disney University to teach these unique skills. The University provides cast members with free world-class training in diverse skills including computer applications, professional development, management/leaderships development, health safety, interviewing, business, etc. Empowerment Disney is committed to employee empowerment. Employees are empowered to resolve all guest issues on their own, with managers only getting involved in extreme circumstances. Managers use service measurement teams to empower employees. 1 or 2 employees from each department take note of any service issues that might take from a guests stay at the resort. By keeping records of every problem, and how it was dealt with, helps to reduce the chances of it happening again. To keep up-to-date with their guests expectations, Disney also collects huge amounts of data about guests from opinion polls, surveys, focus groups etc. From this information, the company know that the top three things that guests expect are for the parks to be clean, friendly and fun. Every worker, from the CEO to cleaner, know these 3 expectations well, and is empowered to make them happen. All employees know, too, the definition of quality at Disney: Disney defines quality as attention to detail and exceeding guest expectations. Performance Appraisals Management use performance appraisals and performance surveys, to measure internal service quality. The annual performance appraisal is designed to give the employee a broad perspective of his/her accomplishment from the previous year and to identify upcoming challenges. Another strategy employed by managers to deliver service quality, are monthly development action plans. (DAPs) (Zeithaml and Bitner, 2000) Rewards Disney certainly know the true value of retaining productive employees. Annual turnover amongst its employees is only 20%. This low turnover is made possible by treating employees like resort guests, and the extensive employees reward programs, Disney offers. There are in excess of 50 different reward and recognition programs, that are geared towards maintaining high employee morale, the most prestigious award being the Partners in Excellence program. This award involves one employee nominating another employee (who has excellent attendance and no disciplinary action record). The nominated employee then receives a bronze statue of the company founder, Walt Disney, and is invited to a dinner ceremony where he/she is individually recognized for his/her outstanding accomplishments by company executives. Disney also rewards employees through service pins, attendance awards, and Recognition-O-Grams (ROGs). Recipients usually wear service pins on their uniforms, which they receive service pins on their first, fifth, tenth, twentieth and twenty-fifth anniversaries. Attendance awards are also offered to employees after one, three, five, ten and fifteen years of perfect attendance. The awards range from honorary certificates to a $2000 gift certificate. Recession hits  Disney Theme Parks Like many other industries, the entertainment industry has been affected by the world economic downturn. Early this year, Disney reported a 32% drop in net income for its fiscal first quarter of 2010, attributing the results to the recessions effects on its studio, television and parks. The Walt Disney Co. axed 1,900 jobs from its theme parks in California and Florida. Walt Disney World in Orlando eliminated 1,400 jobs. The original Disneyland Resort in Anaheim, California, axed 300 positions. The rest of the jobs were eliminated at the companys corporate headquarters at Burbank. These decisions are not made lightly, but are essential to maintaining our leadership in family tourism and reflect todays economic realities, said Mike Griffin, a Walt Disney World spokesman. Those laid off received a 60-day paid administrative leave, a severance package that is based on their years of service, extended medical benefits, and job placement. According to the Los Angeles Times: Disney is bracing for an extended downturn as people skip theme parks to save money. The recession, and the recent decline, has really hit the theme park industry, but it has hit the destination parks more than the regional parks, People are staying closer to home, the newspaper said. Trade Unions Workers are represented by 34 unions, the biggest being the Service Trade Council Union (STCU), The STCU represents about 22,000 F/T and 5,000 P/T workers at Disney World. The SEIU is part of the STCU, a consortium of six trade unions that is the only group certified to bargain with the Disney company. In the last two years alone, Disneyland Resort has successfully negotiated nine agreements with the union. These agreements included wage increases, sick pay and access to seven affordable and reliable health care plans offered through Disneys Signature benefits package for full-time cast members. Conclusion This essay looked at the human resource practises that have been adopted at Disney in order to maximize the delivery of superior guest services. Reasons for the companys success include emphasis on customer service, and a focus on the elements of efficiency, courtesy, show, and safety. It has shown how employee strategies at Disney lead to the attainment of exceptional service quality. Disney takes a lot of care with its casting department and regularly assess its pay packages and new ways of recruiting. It offers a competitive package of wages and incentives to its staff, such as free park admission and discounts on park merchandise. In the past, Disneys theme parks has been fairly recession-proof. But this year, fewer people found their way to the Magic Kingdom as profits were down from 2008-10. Disney said the company manages its operation based on demand, and like any other business it is subject to the ups and downs of the economy Its important that management stress to workers that employee development and empowerment is an on-going process, as the actions of empowered employees have enabled Disney to develop a lasting relationship with millions of guests worldwide. The human resource department must continually develop successful recruiting strategies and effective reward and recognition programs to maintain high morale and promote teamwork.

Amazon PORTER’S FIVE FORCES MODEL

AMAZON. COM PORTER’S FIVE FORCES MODEL Bargaining power of suppliers The power of suppliers is medium-high. Suppliers have a medium power in the sense that much of Amazon’s own inventory could be obtained from numerous suppliers across the country or even across the globe. Suppliers have a higher power given that Amazon. com cannot compete with suppliers. Amazon. com does not run any production plants. Bargaining power of buyers The bargaining power of buyers is high. Amazon. com’s customers have the option of buying the products and services they desire on the hundreds of thousands of other retail web sites on the internet.If Amazon. com does not offer low prices to satisfy the customer then the customer will search the Internet until they find that low price. Rivalry among competing firms Despite Amazon. com is one of the first companies into the e-commerce field, rivalry is high (Barnes and Noble  , Google, Walmart, Ebay etc. ) Threats of substitute products Amazon. com has innovated their services and products along the years and the name of amazon. com is well recognized and trusted into the field, but still the threat for substitutes is high (Books can be purchased at Barnes and Noble Books, Books-A-million, and Half Price Books.Books are additionally sold at newsstands, drugstores, and discount stores. Books can also be borrowed for free at university libraries, music can also be purchased at discount retailers) Threats of new entry Threat of new entrants is low. It would be virtually impossible for a new company to reach the magnitude of inventory and status that Amazon. com maintains. Amazon. com has been in the internet marketplace for about thirteen years now- it would be extremely difficult for a start-up company in the industry to raise enough capital to even compete with Amazon. com on a lower level.

Booker T vs Washington

Booker T Washington and W. E. B Du Bois offered different strategies for dealing with the problems of poverty and discrimination faced by black Americans at the end of the 19th and beginning of the 20th centuries. By using my knowledge of the documents and my knowledge of the period 1877-1915, I was able to asses the appropriateness of each of the strategies in the historical context in which it was developed. I came to the conclusion that Booker T Washington’s strategy was more appropriate for the time period 1877-1915 then was W. E. B Du Bois’ strategy. A summarization of Booker T Washington’s strategy presented in The Atlanta Compromise Address or â€Å"Document D† would be to say that he wanted all black Americans to learn trades. He wanted them to pass on those skills, and use those skills so their families could have a better life. â€Å"Cast down your bucket where you are†¦while doing this you can be sure in the future, as in the past, that you and your families will be surrounded by the most patient, faithful, law-abiding, and un resentful people that the world has seen. †-Document D. This excerpt from the document basically says that when we are taught a specific trade and teach it to our families, they can in turn be successful and live good lives in the future. Because of you learning this skill and in turn teaching it to your family, they will be better off. A summarization of W. E. B Du Bois strategy can be described as ceaseless agitation stated in â€Å"The Niagara Movement†- â€Å"The Niagara Movement proposes to gain these ends†¦. If we expect to gain our rights by nerveless acquiescence in wrong, then we expect to do what no other nation ever did. What must we do then? We must complain. Yes, plain, blunt complain, ceaseless agitation, unfailing exposure of dishonesty and wrong- this is the ancient, unerring way to liberty, and we must follow it. †-Document F I disagree with his strategy for the period 1877-1915 for he only thought about a small number of the black race, the top ten percent. He was going to send them to Harvard and some how they were going to become the intelligence for the black race as a whole. This also appoints only specific figures as a mini government of the black race. Mainly in Booker T Washington’s proposal, it just seems as if he included the whole race as opposed to W. E. B’s proposal pertaining to only a small select few. By looking at the â€Å"School Enrollment Graph† in Document A, it seems as if the W. E. B strategy would have a better chance of working in a later time period. In the time period of 1877-1915, there really were not a lot of black Americans enrolled in school. The rate does rise; showing that after 1915 there would be a much better chance of any percent of Black Americans getting into college. I can also be seen in Document B-â€Å"Illiteracy by Race†, that Black people were becoming more and more literate, allowing them to thus go to college. It appears that in the ladder of the time period we are discussing, that there is a much larger opportunity for black Americans to go to college and progress while there, than there is a chance for them to go to go to college in the beginning of the time period being discussed. Another reason it seems the Booker T Washington’s way is more appropriate is because it worked. By looking at Document C- â€Å"Lynchings by Race†, the amounts of black lynchings were becoming more and scarcer. This is perceived by me in a number of ways. First off, black Americans were learning skills now by the way of Booker T, and were not only becoming smarter, but they were becoming more important to other persons. Their skills were needed by others which not only gave people a reason not to lynch them, but it also introduced many people to more black Americans, thus putting a personal perspective of actually knowing someone. A person would much rather lynch someone that they did not know personally, than someone that they get potatoes from. In Document G, Booker T is praised by T. Thomas Fortune, a black activist and newspaper editor who writes about BTW in the nationally circulated black periodical, â€Å"Christian Recorder. He is spoken of as a man whose value is impossible to estimate. His work involving Tuskegee College is hailed for having 400 students, great teachers, splendid farm equipments, stock-raising, fruit culture, laundry work, practical housekeeping, blacksmithing, wheelwrighting, carpentering, and more, all this while a normal school system is maintained. â€Å"No time is wasted on dead languages or superfluous studies of any kind. What is practical, what will best fit these young people for the work of life, and that is taught, and is aimed at. This shows that his approach was actually working and this is evidence enough for me to say that I believe by using my knowledge of the documents and my knowledge of the period 1877-1915, I was able to asses the appropriateness of each of the strategies in the historical context in which it was developed. W. E. B just might have been a little before his time with his views. Maybe later when the literacy rate would be higher and more black Americans were being accepted to college, his idea could have worked, but there would be many smart and skilled black Americans all from the concept given by Booker T Washington.

Exponential Generalized Autoregressive Conditional Heteroskedascity Finance Essay - Free Essay Example

Sample details Pages: 7 Words: 2069 Downloads: 1 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? This study investigates the effect of exchange rate volatility on the stock market in Malaysia, and also determined whether other macroeconomic variables have an effect on stock market volatility. In this study, the Exponential Generalized Autoregressive Conditional Heteroskedascity (EGARCH) model which is created by Nelson (1991) was used to measure the volatility of exchange rate and volatility of stock market. EGARCH model is an extension of widely used model, GARCH. Don’t waste time! Our writers will create an original "Exponential Generalized Autoregressive Conditional Heteroskedascity Finance Essay" essay for you Create order It used monthly time series data for 3 years period between January 2009 until December 2011. The result of this research found that, exchange rate volatility have negatively relationship with stock market returns where, in the long-run, depreciation in currency value will cause an in increase in stock market return. While in the short-run, depreciation in currency value will reduces stock market returns. This study also reveals that, other macroeconomic variables such as interest rate, and inflation also affect stock market volatility. 1.0 Introduction Stock market is the main institution in every country around the world because from the position of the stock market itself, people can measure the efficiency and the effectiveness of the economy in that country. Macroeconomic variables for example, exchange rate, interest rate, inflation rate, capital investment, money supply, and industrial production have been steadily rising due to combination of internal and external factors. Growing inflation will lead pressurize interest rates to rise higher, and this kind of situation may result in investors moving from the equities market to the bonds market to get higher return (CMA,2011). Interest rate, inflation and exchange rate are the most important determinant of countrys relative level of economic performances. Any changes in these factors will give big consequences in economic performances whether in short-run or long-run. Exchange rates play a vital role and it become one of the important economic factor that affect the common stock market (Hyde,2007,Vazz et.al.,2008). Besides that, any change in exchange rates might affect business field. It may causes an increases or decreases in price of product sold abroad and price of imported raw materials also may change. This will lead to the changes in price of competitors product in home market and indirectly, this will affect stock market return. Firms profitability, price stability, and countrys stability also will be affected because of exchange rate volatility since exchange rate volatility have real economic cost (Benita,Lauterbach,2004). Theoretically, the relationship between exchange rate and stock market can be proved positively, negatively, or either a weak or no relation at all. In a positive way, currency depreciation will makes the local firm more competitive which leading to an increase in exportation as a result while in a negative way, if a production is dependent on imported product, cost of production will increase as a result of currency depreciation, thus reduce profitability and this condition lead to a decline in stock returns. Whereas, there is a weak or no relation between exchange rate and stock market if an export oriented firms prices rises with currency depreciation since input cost is also affected by this currency depreciation than the effect would be nullified to some extent because of increases in cost of production. Many researchers have noted that stock market volatility changes over time and these changes is relate to the changes in macroeconomic variables (Officer, 1973). Other macroeconomic variables also can influences investors decision whether to make an investment or not and indirectly, this will affect stock market return whether in the short-run or in the long-run. Arbitrage Pricing Theory (ATP) , developed by Ross (1976), Chen et al (1986) is an example of study about how to capture the effect of economic forces on stock returns in different countries. This study used some macroeconomic variables to explain the stock returns in US stock markets. The authors found that changes in risk premiums, changes in terms structure, and industrial production are positively related to the expected stock return while, both anticipated and unanticipated inflation rates were negatively related to the stock returns. The paper begins with a general introduction about the exchange rate and stock returns and also a little bit about macroeconomic variables. Section two focuses more on the literature review while Section 3 explain about data and methodology used in this study. The last section present the findings and conclusion. Problem statement Stock return volatility has become the important thing that has been given full attention in the financial sector around the world. This is because, fluctuation in macroeconomic variables will give big impact on stock return volatility, thus will affect economy stability. Poon and Tong (2010), stated that high volatility of stock return is attributable to high risk, and since most investors are risk averse, they will stay away from the market due to the uncertainty in expected returns. High market volatility will also increase unfavorable market risk premium. So, it is difficult for policy maker to reduce the stock market volatility and finally enhance economy stability. There is need to determine factors affecting stock market volatility with some evidence from past researchers indicates that exchange rate fluctuations give a big impact on stock return volatility while some others contradicting. Objectives This study is to determine the following : Whether the exchange rate volatility give an impact on Malaysia stock market volatility, If other macroeconomic variables have effect on stock market volatility in Malaysia. LITERATURE REVIEW Relationship between Exchange Rate Volatility and Stock Market Volatility There are two main theories that relate the interaction between exchange rate and stock market. First, the flow-approach models (Dornbusch and Fischer,1980 and Gavin, 1989) and the other one is stock-approach models (Branson, 1983 and Frankel,1983). Flow-approach models state that the exchange rate is mainly determined by trade flows of an economy. The models point out that, any changes in exchange rate will affect trade balance and this will give impact on the real macroeconomic variables and indirectly, it will affect stock prices. Any changes in stock price on the stock market also will affect aggregate demand through wealth, liquidity effects and exchange rate. Generally, we can say that, the reduction in stock prices will reduces wealth of local investors and further reduces the liquidity in the economy. The reduction in liquidity will lead to the reducing in interest rates which in turn induce capital outflows and in turn will causes currency appreciation. On the other side, wh en currency depreciation occurs, this condition will make local investors become more competitive, and leading to an increase in their exports and indirectly will raises stock prices. Consequently, the flow-approach model suggests a positive relationship between exchange rates and stock prices, thus will result in stock market volatility. On the other hand, stock-approach model are based on the assumption that the demand and supply of financial assets such as equities and bond will reflect the exchange rate. Stock-approach models can be differentiated into the portfolio monetary model and balance model. The portfolio balance model shows that there exist negative relationship between exchange rate and stock price and that stock prices affect exchange rates (Frankel,1983 ; Branson and Henderson,1985). The expectations of relative exchange rate volatility have a significant impact on price movements of financially held assets. Thus, stock price volatility may influence or be influenced by exchange rate volatility. For example, if Ringgit Malaysia depreciates against foreign currency (for example, the US dollar), it will increase returns of the foreign currency (US dollar). This situation will encourage local investors to move funds from domestic assets (stocks) towards US dollar assets, which is depressing stock prices. Thus, a depreciating in currency value will give negative impact on stock market returns (Adjasi and Biekpe,2005). This models also state that, individuals hold domestic and foreign assets, including currencies, while exchange rates plays the vital role of balancing the demand and supply of the assets. Increasing in the domestic stock prices leads individuals to demand more domestic assets and in order to purchase more domestic assets, local investors have to sell foreign assets since they are relatively less attractive, causing local currency appreciation. Consequently, the relationship between exchange rate and stock price is negative. The study about the relation between exchange rates and stock prices have been explored by many researchers around the world. Soenen and Hennigan (1988) proved that, there are negative correlation between these two variables, exchange rate and stock prices. However, Frank and Young (1972) found no significant relation between these two variables and Jorion (1990) found a moderate relationship between the stock returns of US multinational companies and the effective US dollar exchange rate for the period 1971 to 1987. The analysis of relation between exchange rate and stock prices in US have been made by Bahmani-Oskooee and Sohrabian (1992). Their study found that, there are no long-run relationship among these variables but a dual casual relation in the short-run. Also, Abdalla and Murinde (1997) studied about the relationship between stock price and exchange rates in the emerging financial markets in few countries such as India, Korea, Pakistan and Philippines and they found these t wo variables does not have any significant interaction in India, Korea, and Pakistan. However, in Philippines it is contrary because the reverse causation was found in that country. Besides Bahmani-Oskooee and Sohrabian, Ong and Izan (1999) and Smyth and Nandha (2003) also agreed that there is no long-run relationship between exchange rate and stock price. Relationship between other Macroeconomic Variables and Stock Market Volatility Further, this study also found that, other macroeconomic variables such as interest rate and inflation rate also effected stock market volatility. VECM (Johansen, 1998) was applied to analyze the relationship between Japanese Stock Market and exchange rate, inflation rate, money supply, real economic activity, long-term government bond rate, and call money rate (Mukherjee and Naka, 1995). Their study concluded that there existed co-integrating relation and that stock price contributed to this relation. While, study that have been made by Maysami and Koh (2000) found that changes in short and long term interest rate, inflation, money supply growth, and variation in exchange rate result in a co-integrating relation with changes in economy in Singapore and all these factors affect stock market levels in that country. In related studies, Mao and Kao (1990) revealed that, there is another issue regarding the interaction between stock prices at the macro and micro level. They also found exporting firms stock price become more sensitive to the fluctuation in foreign exchange rates. In their findings on macro level, Ma and Kao revealed that a currency value appreciation give negative impact on domestic economic market for an export-dominant country while it gives positive impact on the domestic stock market for an import-dominant country, which seems to be consistent with good market theory. 2.2.1 Interest Rate Volatility and Stock Return Volatility Chen et.al indicated that interest rate had a positive effect on stock return while Wongbangpo et al(2002) observed interest rate had a negative effect on southeast Asian countries. Rapach et.al(2005) stated that interest rate was the most reliable variable but however, Chen et.al(1998) thought interest rate does not linked to the with stock return. In addition, Jefferis and Okeahalam (2000) proved that stock market in South Africa, Zimbabwe, and Bostwana are negatively influenced by the long-term interest rate when they investigated relationship between stock prices and selected macroeconomic variables. An increase in interest rate will lead to the increase in required rate of return and then will cause the share price to decrease and increasing in interest rate also will effect opportunity costs of holding cash, and this would lead to a reducing in stock prices. French et.al(1987) concluded that the stock returns responded negatively to both the long term and short term interest rates. However, studied that have been made by Allen and Jagtianti (1997) found that the sensitivity of interest rate toward stock returns has decreased dramatically because of invention of interest rate derivatives contracts used for hedging purposes. 2.2.2 Inflation Rate Volatility and Stock Return Volatilty Inflation rate can be defined as the rate of increase of a price index and it also the percentage ratio of change in price level over time. Studies by Fama and Schwert (1977), Chen, Roll and Ross (1986), Nelson (1976) and Jaffe and Mandelker (1976) pointed out a negative correlation between inflation and stock prices. Besides that, the movement in inflation and real output have weak predictive power on volatility of stock market and return (Schwert,1989) while Yaya and Shittu (2010) in their findings stated that the previous inflation rates has significant effect on conditional stock market volatility. These result are in agreement with Fishers effect in international stock market.