Module 7, Article Critique Example

The article in question is, “Employee Stock Ownership Plans (ESOPs): An international comparison and analysis,” written by Roger W. Clark and George C. Philippatos, and published in Managerial Finance 24.4: 19-29, in 1998. The purpose of the authors in writing the article was to briefly examine the performance of ESOPs in foreign countries and provide a source of recommendation and advice for U.S. companies wishing to expand the practice of ESOPs to their international branches.

The authors accomplish their goal with only a few weaknesses. The beginning of the article is repetitive in stating and restating the thesis. There is some confusion in the context of the material. In reading the article I was at times unsure which country to attribute the activity being described. For example, in the section comparing Japan’s ESOP practices with the United State’s ESOP practices, which country was being discussed was not always clear at first. I noted a couple instances toward the end of the article where the sentence wording did not make sense, as though one sentence had been started and then changed without erasing the previous words. However the article was organized and transitioned from topic to topic smoothly. The information was validated and note was made where original resources were lacking in the footnotes. There was a large amount of understandable and relevant information presented in a brief article.

ESOPs apply to financial management in the way of individual financial planning. An ESOP is itself a qualified retirement plan and should be handled by a financial manager in the same way other retirement plans are and included in the individual’s long-term financial planning. On the company’s side, ESOPs are important to financial management because they provide many benefits to the company, such as reduced interest costs, reduced income taxes, and quicker reduction of debts.

References

Clark, R. and Philippatos, G. “Employee Stock Ownership Plans (ESOPs): An international comparison and analysis.” Managerial Finance, 1998: 24.4, 19-29.