As discussed in the first question, banks are a crucial part of the economy and they use largely use derivatives to hedge the risks. During Lehman Brothers meltdown, banks did not fully understand the level of losses that could incurred on derivatives trade with Lehman and others and as a result, it created great panic in the financial markets. Therefore, it is important to have clear rules regulating these risky products 3. Derivatives can be considered one of the ways to share or distribute risks. It is requires financial engineering of different products and there is no fixed contract/combination that will guarantee profits.
In Carroll’s survey, 64% of the managers surveyed agreed that “manager today feel under pressure to compromise personal standards to achieve company goals” but those agreeing 50% of top managers, 65%of middle manager, and 84% of lower manager agreed with the statement.] (Snoeveenbos, Almeder, and Huembes 2001 p.136) In the United States and around the world, state and governments create rules on how a business should be run. Lack of ethic make some people to break the rules in order to appear very competitive to increase its profit. Lack of ethic can conduct employees to perform poorly on their task. When this lack became public, it will lead the company to lose credibility.
FDR regulated banking and finance through the first of his many programs, the Federal Deposit Insurance Corporation (FDIC). Established in 1933 by the Glass-Steagall Act, the FDIC federally insured bank accounts with up to $5,000. Federal insurance of bank accounts encouraged confidence in the banking system. In the past, banks recklessly used deposits and investments to purchase stock and give loans, as a result, customers lost much of their life savings when the stock market crashed. With federal regulation, banks were encouraged to preserve their customers’ money by spending wisely.
The environment in which Costcutter operates is currently very complex and highly competitive. Therefore, they are seeking differentiation and the establishment of competitive advantages over their competitors. To achieve these goals, they have engaged Palmer and Harvey for implementation of logistics, which should be understood as the strategic management of the flows of materials and related information to lead efficiently and effectively products from a source to a destination. Globalization, the change in consumer behavior, reducing the life cycle of products and the weakening of the brands require organizations to acquire and develop new skills to win and keep customers. Expand the dimensions of competitiveness, which is no longer regional to be global.
Sunbeam was pressured to fix their financial issues, and were looking at all options on how to solve their internal crisis. They brought in Chainsaw Al, who had a reputation of cutting companies to the bone. Sunbeam senior management wanted to, “create the illusion of a successful restructuring of Sunbeam in orderto inflate its stock price and thus improve its value as an acquisition,” (Mintz & Morris,2014). Chainsaw Al’s fraudulent actions as CEO gave Sunbeam a market price of $52 per share, which in 1998, fell to $34.63 per share. When Arthur Anderson conducted their audits, they should have considered the fact that Sunbeam went from financially risky to successful in a short amount of time.
Friedman criticizes some of the executives’ speeches about business responsibility, which reflects a wrong image about business and corporations. According to Friedman the corporation is being treated as a person but the corporations is not a real person it can be described as a
It is the reputation of the firm with the various audiences. These groups who have a stake in the company are known as stakeholders. Stakeholders are affected by the actions of the company and in turn, their actions can affect the company. Consequently, its image in the eyes of its stakeholders is important to the company. In today’s globalised and borderless market; customers create a challenge for the survival and growth of all firms.
Problem Statement Since politics and power plays are rampant in organizations, PwC is also not exception. The political behavior of the previous CEO of the business have negatively affected the enterprise consulting department’s performance. This also brought a negative image to the company. Political and Power Behaviors The CEO had a close relationship with the client of the EC department, for the reasons to manipulate pricing of the department. For favorable clients, CEO provided an executive order to reduce prices.
Al-Harkan (2005) reports that the importance of separating the responsibilities of the chairman and the CEO will help companies achieve an effective corporate governance system. A number of barriers affect the effectiveness of the Board of Directors, some of which are the lack of rotation plans, committee structure not functioning properly, lack of strategic plans, and the failure to take unproductive members off the
1. INTRODUCTION 1.1. Introduction Intense competition in the field of business with the growth of information and communication technologies creates significant challenges for companies to be able to survive, managers become more demanding for information in order to success by better logistics and cost reduction. Good information is that which is accurate, relevant, complete, reliable, communicated in time and secure. Of course, these characteristics have developed over time together with the development of information systems.