At Enron, executives used various mechanisms, such as attention, reaction to crisis, role modeling, allocation of awards, and criteria for selection and dismissal to create a culture that promoted unethical practices (according to Shein, 1985). Enron’s executives valued profit more than accountability to shareholders. This value was so deeply embedded within the organization that the company 's leadership promoted and retained only those employees that produced consistently, with little regard to ethics. (Sims & Brinkman, 2003, p. 250) Greed drove Enron’s organizational culture. Their practices were illegal and created an organizational culture that resulted in unethical behavior and the eventual fall of the company.
A high number signifies a healthy firm; whereas a ratio below 1 means that the firm is unable to pay its interest obligations due to insufficient earnings. Creditors look at this ratio to evaluate the probability of payment if the firm got into financial distress. Bond investors also look at this ratio to judge the security of the bill. This ratio is also important to shareholders as it can affect a firm’s share price. 3.4.
MID-AMERICAN JOURNAL OF BUSINESS,(2006). Relationship between efficiency level of working capital management and return on total assets the fact that the sales of firms have decreased and cash flows have slowed down in this globule crisis emphasizes the importance of working flows have slowed down in this globule crises emphasizes the importance of working capital management for financial decision-taking mechanisms. While obscurity for the future keeps firms away from steady capital investment;;toss, the only intervention area is like3luy to be the assets group called working capital in terms of increasing and preserving profitability;,
Insurance giant AIG, the giant commercial BANK, CITI BANK, and of Fannies Mea and Freddie MAC, because the federal government is huge fiscal relief from destruction. Step in Europe America into recession. In a recession in the developed economies, most of Japan's recession. China is the least damage of the crisis in developing countries, the direct loss is small, but the indirect impact is significant in the global financial storm, the import and export industry in the forefront of the most direct impact was the most serious. First of all, from financial crisis to the economic level, a direct impact on exports.
The financial irregularities revealed by the firm's founder, were trailed by other assertions, such as that Satyam executives raised employee counts, siphoned off money and fled the country. Mercurial economics In every industry, although cost production improvements occur, few do the underlying economics move as fast as they do in IT. For example, as given by James J. Tucker et al., a mainframe that cost a million dollar in 1965 costs less than $30,000 today and may cost 20% to 30% later which complicates the decision makers to evaluate costs of outsourcing bids. Less flexibility The outsourcing vendor offers the level of IT services mentioned in the contract using the technological platform it considers appropriate. James J. Tucker says that one may get locked in unless specifically spelled out in the contract; a firm may lose the pliability of shifting to new computing platforms.
One simple substitute of the strategy can be computed by equating the portfolio weights of the Lambda Star strategy to the current relative dividends. This assumption makes sense when we come to the fact that the dividend payments by firms are generally “sticky”, meaning most companies set absolute dividends and stick with those dividends through good and bad times. Managers of most companies are generally reluctant to cut dividends because investors often interpret a reduction in dividend as bad news and the stock prices will consequently drop. Lintner (1956) propose the concept of dividend smoothing, which states that the firms strive to main the dividend stability and consistency with the past dividend policy. The dividend paid during the current year is governed by the dividends paid during the previous year and variations in the earnings should not be reflected in the dividend payout.
Upon the discovery, the stock price of the company reduced by 33% leading to a loss of over $6 billion by the investors (SEC, 2002). This meant that Waste Management Inc. had breached the principle of integrity and credibility as stipulated by the Institute of Management Accountant in the statement of Ethical Professional Practice. The Waste Management Inc. scandal was activated by a number of reasons that can be categorized as incentive factors, opportunity factors, and attitude factor. To start with, attitude factors included the need to meet predetermined earnings target through increased profit while pushing down the expenses. The chief officers realized that revenues were not increasing as fast as they were expecting.
Corporate Governance has its advantages and disadvantages, and it works like a double-edged sword, as the agency problem indicated in 2007 and 2008 management was interested in its own remunerations and bonuses and forgot how to manage its corporation for the long term and looked for getting their salaries increases by the end of the year. Corporate Governance was implemented in a fraud-full manner, managers deceiving shareholders, board of directors and other related members to the company. If there was ever a new financial crisis in the horizon, Corporate Governance could help in preventing such crisis. However, corporate governance has shown some weaknesses that are demonstrated
Its alleged successes in the early 1980s, in particular the rapid disinflation and the flattening of the Phillips curve, were obtained through a harsh redistribution of income and power from workers to entrepreneurs, and from the poor to the rich. The neoliberal policy makers sought greater flexibility in labour markets and industrial relations by increasing the precariousness of jobs and by reducing the rights of workers. What neoliberal advocates considered a success for the economy as a whole, and was certainly a success for most entrepreneurs and shareholders, was instead an epoch-making defeat for blue and white collars that started the decline of the middle and lower classes. Moreover, this alleged success from the point of view of macroeconomic performance materialised only at the cost of serious side effects that in the longer period would have provoked the outbreak of the recent crisis. First, the transfer of power from labour to capital soon translated in an analogous transfer of income and wealth within most OECD countries and many developing countries adopting similar policies.
That question has never had a satisfactory answer, but in recent years it has become a hot button issueAt the same time, the world was suffering through a crippling economic downturn made worse by unscrupulous business practices. . According to the Bureau of Economic Analysis, corporate profits soared to all time highs in 2011. The vast disparity between corporations and their customers has made ethical business practices an extremely relevant issue. It seeks to promote honesty, fairness, and responsibility in all advertising .