A high leverage and high risk business mode followed by Lehman Brothers Holdings Inc. was similar to that of its peers. Almost all of the largest investment banks took on greater leverage so as to lead up to the crisis. This strategy was helpful for the company in pursuing a greater growth and increased profits also, while maintaining limited
(Corporate social, 2004) In accordance to Estallo, Fuente & Miquela (2007), they claimed that companies can yield higher level of profit with a long term socially responsible behavior and which might become a competitive advantage. In another research, according to Ahmad, Sulaiman & Siswantoro (2003), in Malaysia, there are various NGOs and environmental pressure groups which suggest that stakeholders care about businesses which are responding to social responsibility concerns. On the other hand, corporate commitment to green ethics and support of socially responsible programs is playing an increasingly influential role in consumer‟s purchasing behavior. (The Nielsen,
The CEO has a direct responsibility to his or her employers. That responsi¬bility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while con¬forming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. Friedman is very clear in his belief that if a CEO has a “social responsibility”, it must mean that he is to act in some way that is not in the interest of his employers. He uses an example of not increasing the price of the product in order to contribute to the social objective of preventing inflation, even though a price increase would be in the best interests of the corporation. Or hiring long-term un-employed instead of better qualified available workmen to contribute to the social objective of reducing poverty.
But with a huge difference: this time it was to securitized the assets and sell them to others investors, they keep all those assets recently bough in their trading books hoping for greater profit. As a result at the end of 2007 Lehman Brothers was exposed to 111 billions in commercial or residential related assets and securities. The issue is that with a significant position on the real estate market it became more difficult for the bank to raise cash, sell its assets, hedge the risk and reduce the
CSR is important for the multinationals to perform in foreign countries because of the growing competition and other challenges that are faced by an organization; the management theory is used as a tool to encounter such challenges ( Ismail, 2009). Donaldson (1989, cited in Secchi, 2007 :359) CSR also acts upon the firms managerial decisions when there are problems such as clashes, protests and strikes, these lay down the moral values, above profit maximization. Managerial theories performance depends on stakeholders trust, co operation and acceptance. Garrige and Mele ( 2004) Detomasi( 2008) were all of a view that social power drives the social responsibility as the corporation is a corporate citizen, who has investment in the community. Davies (1960) stated that CSR is a political power and therefore must be used responsibly as a business is social institution; its power comes from both within and outside.
Introduction CSR (Corporate Social Responsibility) standard is always problematic to define. As an approach to manage the variation between organizational behaviors, social values, and community’s expectations, CSR works a tool for strategic issues management. It also becomes a theoretical basis for a company to develop a harmonious relationship with the community (Community Development). Therefore, CSR is the moral responsibility that a company has to conduct for its strategic stakeholders, especially for the community around the operational areas. It is the commitment of a company to account for the impact of its operation in social, economic, and environmental dimensions (Achda, 2006).
In the beginning periods of Alibaba, he endeavored to bring stores up in Silicon Valley, the tech in the United States which was a disappointment. Jack Ma’s business was criticized that it was unsustainable and unprofitable, but eventually he succeeded in getting investments from Goldman Sachs as 5 USD$ Million and 20 USD$ Million from the Soft Bank to Alibaba respectively. From a foreign venture capital investment in October 1999 and January 2000 Alibaba won 25 USD$ Million two times. The program was relied upon to enhance the local web based business market and immaculate an online business stage for Chinese endeavors, particularly small and medium-sized ventures to address World Trade Organization challenges. As the "website" blast period
No doubt, Alibaba subjugated the e-commerce market but it disastrous to make a smudge in the Chinese web search market because of the occurrence of overriding performers like Google and Baidu. The barricades to admittance the internet manufacturing truncated to the extent that start-up expenditures well thought out. There are some other issues in china, which discourage some extraneous performers from inflowing the market like political intervention and supervisory
Corporate Social Responsibility and Stakeholder Theory The concept of corporate social responsibility as discussed earlier means that organizations not only have responsibilities to earn a fair return for investors and comply with the law, but also have moral, ethical and humanitarian responsibilities. Traditionally, a corporation is viewed bearing its primary, if not sole, responsibility is to its owners, or stockholders. However, CSR requires organizations to adopt a broader view of its responsibilities that includes not only stockholders, but many other constituencies as well, including employees, suppliers, customers, the local community, local, state, and federal governments, environmental groups, and other special interest groups, which
Lehman Brothers Holdings Inc. was well-known as a global financial services firm. Lehman was the fourth-largest investment bank in the United States, doing business in investment banking, equity and fixed-income sales and trading (especially U.S. Treasury securities), research, investment management, private equity, and private banking. Lehman was operational for 158 years from its founding in 1850 until 2008 (Wikipedia). On September 15, 2008, the firm filed for Chapter 11 bankruptcy protection, what went wrong within this big firm? First, I found that Internal Control has not played the role of risk oriented audit.