...Table of Contents Case Summary 2 Affected Stakeholders 3 Ethical Dilemma 4 Why would a $500,000 salary cap prompt personnel to leave for other banks? 5 Was stripping of Lewis’ chairmanship a significant move on the part of BoA shareholders? 6 How could Thain justify spending $1.2 million on his office when Merrill Lynch was on the verge of bankruptcy? 7 What did Ken Lewis hope to gain by claiming that he was “pressured” into completing the Merrill Lynch deal? 9 Of all decisions made by Ken Lewis in this case study, which one do you think did the most damage to his reputation? And why? 10 What should Lewis have done? 12 Conclusion 13 References 14 Case Summary Bank of America (BoA), founded in 1998 is an American multinational banking and financial services corporation. They were notably a key player in the global financial crisis that struck in 2008. Ken Lewis, a former CEO acquired Countrywide Financial and Merrill Lynch. To his dismay, the acquisitions turned out to be disastrous as the first week of January 2009 enlightened the problems that existed within Countrywide Financial and Merrill Lynch; they were bankrupt with assets in their balance sheet that set a new mark for toxicity in the financial market. This required attention and direct aid from the Federal Government itself. However, following this month BoA fell by 65 percent. Just a month after the first quarter of 2009, Ken Lewis was made CEO and stripped off chairmanship by the shareholders’...
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...Running head: CAPSTONE PAPER CAPSTONE PAPER Theoretical and Practical Change in Strategic Organizational Leadership By: John King BSM 3-200 MGT 499 Capstone: Strategic Organizational Leadership Executive Summary The rationale or objective of this Capstone Paper is not to support or defend a particular type of strategic organizational leadership; but, to explore and analyze the theoretical and practical changes that cause organizational leadership to alter its goals and effectiveness, by way of strategic variables or necessity. The understanding and significance of theoretical and practical change in organizational leadership is fundamental to the nature and trends of business and government goals and their effectiveness. Organizational leadership is a planned social process that a person or persons in charge, lead or organize groups of people to achieve a common objective. This process may be orchestrated on a large or small scale and for profit or power. This strategic process is not normally the vision of a manager initially, but the dream or idea of the true leader. The strategies used by the leader of an organization often establish the culture of the organization (Flamholtz, & Randle, 2008). Theoretical and practical change in organizational leadership appears to be involved heavily with organizational culture or behavior. The history and background of organizational leadership has...
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...NAME: HAMZA .S. MAKANDE STUDENT NUMBER: TP027192 INTAKE CODE: UC2F1501IBM BM061-3.5-2-BEG MODULE NAME: BUSINESS ETHICS GOVERNANCE TOPIC: BANK OF AMERICA’S MOST TOXIC ASSET (CASE B) INDIVIDUAL ASSIGNMENT LECTURER: FARAHIDA BINTI ABDUL JAAFAR DATE ASSIGNED: 06th MARCH 2015 DATE DUE: 17th APRIL 2015 Table of Contents INTRODUCTION. 3 Summary. 3 Ethical Dilemma. 3 Affected Stakeholders. 4 ANSWER FOR QUESTION 1. 4 ANSWER FOR QUESTION 2. 5 ANSWER FOR QUESTION 3. 6 ANSWER FOR QUESTION 4. 7 ANSWER FOR QUESTION 5. 8 ANSWER FOR QUESTION 6. 8 CONCLUSION. 9 REFERENCES. 10 BANK OF AMERICA’S MOST TOXIC ASSET (CASE B). INTRODUCTION. Summary. Ken Lewis was a Chief executive officer of Bank of America, he was appointed as American Banker’s "banker of the year "after purchasing Countrywide Financial and Merrill Lynch. The bank acquisition of Merrill Lynch in 2008 made Bank of America the world's largest wealth management Corporation and a major player in the investment banking market. The deals were applauded and made Ken Lewis even more worth being named as American Banker’s “banker of the year” During first week of January 2009 both Countrywide Financial and Merrill Lynch were bankrupt with assets in their balance sheet which set a new standard for toxicity in financial market, resulting in forfeiture for the bank and requiring financial assistance from the Federal Government. Bank of America was forced to welcoming U.S. taxpayers as the company’s largest...
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...Business Research Ethics Paper Wayne Bell University of Phoenix RES/351 Business Research Robert Caldwell July 24, 2015 The Goldman Sachs Case When we think of the word ethics, we think of rules and regulations to keep us honest or to know the difference between right and wrong. Another way of defining ‘ethics’ focuses on the disciplines that study standards of conduct, such as philosophy, theology, law, psychology, or sociology” (Resnik, 2011). Considered by many economists to be the worst financial crisis since the Great Depression, the financial crisis of 2007 was primarily due to the collapse of the housing industries subprime mortgage market. Residential mortgage-backed securities are commonly issued bonds that are backed by thousands of residential real estate mortgages. The Goldman Sachs case was comprised of subprime mortgages. Most business organization possess a mission statement, a code of ethics or rules to follow to be able to limit the ethical issues that may arise within the Institution, Goldman Sachs did not have any of these. In exploring ethical behavior in the banking and financial institutions whose sole existent is to increase profits through the sale of consumer loans. In 2005, the banking industry started issuing subprime mortgage loans to consumers regardless of their income qualification. “The collapse in prices precipitated the collapse in banking profits, prompting a call...
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...The Role of Accounting in the Financial Crisis: Lessons for the Future S.P. Kothari kothari@mit.edu 617-253-0994 and Rebecca Lester rlester@mit.edu MIT Sloan School of Management E60-382, 30 Memorial Drive Cambridge, MA 02421 December 14, 2011 ABSTRACT: The advent of the Great Recession in 2008 was the culmination of a perfect storm of lax regulation, a growing housing bubble, rising popularity of derivatives instruments, and questionable banking practices. In addition to these causes, management incentives, as well as certain US accounting standards, contributed to the financial crisis. We outline the significant effects of these incentive structures, and the role of fair value accounting standards during the crisis, and discuss implications and relevance of these rules to practitioners, standard-setters, and academics. This article is based on a presentation by Deputy Dean and Professor SP Kothari of the Sloan School of Management, Massachusetts Institute of Technology, at Baruch College on October 25, 2010. 1 Electronic copy available at: http://ssrn.com/abstract=1972354 The Role of Accounting in the Financial Crisis: Lessons for the Future I. Introduction The Great Recession that started in 2008 has had significant effects on the US and global economy; estimates of the amount of US wealth lost are approximately $14 trillion (Luhby 2009). Various causes of the financial crisis have been cited, including lax regulation over mortgage lending,...
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...[pic] CASE STUDY GROUP 1 ASSIGNMENT 1 CASE STUDY SUMMARY Kinetic Company was formed in 1972 by H.K Firodia then taken over by his son in Arun Firodia in 1985. Kinetic then merged with Honda to form Kinetic Honda Motor Ltd with stakes of 28.56% each concentrating on scooters and spare parts. Kinetic Honda Manufactured Scooters while Kinetic engineering manufactured mopeds. In the 80s Kinetic Honda had the largest market share of mopeds which dropped in the 90s by half to 22%. There was also competition in the two wheeler industry by Suzuki and hero Honda. This led to a further poor performance of Kinetic in the market. The poor performance was brought about by conflicts of interests between Honda and Kinetic; each wanting their brand promoted more than it was at the time. Honda also competed with Kinetic Honda through hero Honda in the larger two wheeler market. The poor performance of the scooter industry was leading to a diminishing market. Kinetic realized that their brand was slowly diminishing and decided to pull away from the merger; Honda shared the same sentiments and asked Kinetic to buy them off or vice versa. Firodia bought the 51% stake of Honda and gained full control of the Organization. The new company was called Kinetic motor Company; the company restructured and was able to implement decisions much better. There was better promotion and growth in sales and revenue of Mopeds and Scooters. In 2001...
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...Running head: CAPSTONE PAPER CAPSTONE PAPER Theoretical and Practical Change in Strategic Organizational Leadership By: John King BSM 3-200 MGT 499 Capstone: Strategic Organizational Leadership Cardinal Stritch University Instructor: Todd Penske September 12, 2010 Executive Summary The rationale or objective of this Capstone Paper is not to support or defend a particular type of strategic organizational leadership; but, to explore and analyze the theoretical and practical changes that cause organizational leadership to alter its goals and effectiveness, by way of strategic variables or necessity. The understanding and significance of theoretical and practical change in organizational leadership is fundamental to the nature and trends of business and government goals and their effectiveness. Organizational leadership is a planned social process that a person or persons in charge, lead or organize groups of people to achieve a common objective. This process may be orchestrated on a large or small scale and for profit or power. This strategic process is not normally the vision of a manager initially, but the dream or idea of the true leader. The strategies used by the leader of an organization often establish the culture of the organization (Flamholtz, & Randle, 2008). Theoretical and practical change in organizational leadership appears to be involved heavily with organizational culture or...
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...Answer of the Case Questions: 1. Answer: Summary of the Case: Kaniz Almas Khan, the pioneer who established Persona as a brand in the beauty industry, is the name of a successful entrepreneur not only among the women entrepreneur but also among all the entrepreneur of Bangladesh. With a deep passion on beautification of human being and a great wish to do something different and big, she started her journey in the beauty industry. In her journey to become a successful woman entrepreneur in the beauty industry of Bangladesh, she got all types of necessary supports from her mother, in laws, husband and peer groups. With the aim to provide the clients with the best quality skin and hair care services, and also bridal makeover, Kaniz opened beauty salon Glamour at her residence in Kalabagan in 1990, with nine workers and an initial investment of Tk 2 lakh which she borrowed from Micro Industries Development Assistance and Services (MIDAS). After being successful to win the love of the clients , she got countrywide recognition as an expert in hair care and inspired many small entrepreneurs to get involved in this business by becoming the 'brand ambassador' for Sunsilk in 1991. As the result of the successful journey, Glamour was turned into Persona Hair and Beauty Ltd. In 1998.Now she is thee successful entrepreneur of two companies: Persona Hair and Beauty Ltd and Persona Beauty Care Ltd. Persona Hair and Beauty Ltd also runs an independent studio and monthly publication...
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...THE SUBPRIME CREDIT CRISIS AND CONTAGION IN FINANCIAL MARKETS Francis A. Longstaff∗ Abstract. We conduct an empirical investigation into the pricing of subprime assetbacked CDOs and the resulting contagion effects on other markets. Using data for the ABX indexes of subprime CDO prices, we find strong evidence of contagion effects. In particular, we find that contagion effects spread first from lower-rated ABX indexes to higher-rated ABX indexes, and then from the subprime markets to the Treasury bond and stock markets. ABX index returns forecast stock and Treasury bond returns as much as three weeks ahead during the crisis. Furthermore, ABX index shocks are significantly related to contractions in the size of the short-term credit markets and increases in the trading activity of financial stocks over the next several weeks. These results provide support for the hypothesis that financial contagion was spread through liquidity and risk-premium channels. Current version: August 2008. UCLA Anderson School and NBER. I am very grateful for helpful discussions with Joshua Anderson, Vineer Bhansali, Bruce Carlin, Richard Clarida, Rajna Gibson, Rob- ert Gingrich, Hanno Lustig, Alfred Murata, Steve Schulist, and Jiang Wang, and for the comments of seminar participants at New York University, Pimco, and UCLA. All errors are my responsibility. ∗ 1. INTRODUCTION During the past year, financial markets have suffered catastrophic losses from the ongoing credit crisis. This crisis was initially...
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...Assignment 3 American Military University Assignment 3 Progressively more western organizations are turning into international contender able of intimidating any national organization industry on the market in merchandise excellence, improvement, and to include executive quality. When an organization goes global there are a number of significant reasons which could be practical and hasty ones. The practical are comprise of compensation and possibilities consisting of further resources, entitlements, reduced expenses, innovative or extended markets, development of organizations particular benefits, tax entitlements, economies of scale, synergy, authority, status, as well as to guard the residence industry through obtaining the offensive in contenders markets (Pearce & Robinson 2012). Also, an organization may go global to diversify and gain new ideas as well as the aid of further technology. An organization that has employees with a diverse backgrounds and cultures could bring different innovative ideas which can aid the organization development. For instance, corporations like IBM are aggressively employing people from various cultures since it believes it's a competitive benefit that propel improvements and benefits consumers (Nixon, J. C., & West, J. F. (2000). The hasty grounds are founded on exterior incidence comprised of exchange obstacles, global clientele, worldwide opposition, policies, and possibility of frequency. When an organization...
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...environment, Organization climate, organization politics etc. Resource Behaviour Distinctive competence - Any advantage a company has over its competitor - it can do something which they cannot or can do better - opportunity for an organization to capitalize - low cost, Superior Quality, R&D skills etc. METHODS & TECHNIQUES USED FOR ORGANIZATIONAL APPRAISAL Comprehensive, long term Financial Analysis - Ratio Analysis, EVA, ABC Key factor rating - Rating of different factors through different questions Value chain analysis VRIO framework METHODS & TECHNIQUES USED FOR ORGANIZATIONAL APPRAISAL « BCG, GE Matrix , PIMS, McKinsey 7S Balanced Scorecard Competitive Advantage Profile Strategic Advantage profile Internal Factor Analysis Summary SWOT ANALYSIS Identify & classify firm¶s resources-S&W Combine firm¶s strength into specific capabilities ± Corporate capability- may be distinctive competence Strategy that best exploits the firms resources Identify resource gaps & Invest in upgrading ORGANIZATIONAL APPRAISAL Organizational Capability Profile (OCP) - Weakness(-5), Normal(0), Strength(5) Financial Capability Profile (a) Sources of funds (b) Usage...
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...Creating Your Dream Job Student’s Name Course Name and Number Instructor Institutional Affiliation Date Job Description Ideally, my dream job is being an airline manager of one of the most highly rated airlines in the world such as the Delta Airlines. An airline manager is basically responsible for carrying out discussions with the Airline personnel who often oversees design certification, test and turn up, installation, maintenance of airline equipments, as well as other activities involved in the company’s maintenance department. The manager assts in the development along with the implementation of procedures and practices, whilst making sure that all the operating goals are adequately met. In terms of the education or experience requirements, a successful candidate ought to possess a Bachelor’s degree in the field of management, with at least 2 years experience in a broad range of airline operations or any other related tasks. The skills required for the job include; excellent oral and writing skills, ability to multitask, advanced knowledge for data input along with record keeping, capacity to handle staff effectively and solve problems when they arise, and knowledge of more than one language. In review, the specific work elements for this job include assigning tasks to staff, keeping up-to-date with the airline’s technical operations, ensuring aircraft logs a along with maintenance records are as correct as possible...
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...My View of Business Ethics Summary Paper of My ‘Ethical Position’ From My Experience, Knowledge And What I Have Gleaned From The Business Ethics Class. ABSTRACT The ability to recognize and deal with complex business ethics issues has become a significant priority in twenty-first century companies. In recent years, a number of well publicized scandals resulted in public outrage about deception and fraud in business and a demand for improved business ethics and greater corporate responsibility. The publicity and debate surrounding highly visible legal and ethical lapses at a number of well known firms, including AIG, Countrywide Financial and Fannie Mae, highlight the need for businesses to integrate ethics and responsibility into all business decisions. The field of business ethics deals with questions about whether specific business practices are acceptable. For example, should a salesperson omit facts about a product’s poor safety records in sales presentation to a client? Should an accountant report inaccuracies that he or she discovered in an audit of a client, knowing the auditing company will probably be fired by the client for doing so? Should an automobile tire manufacturer intentionally conceal safety concerns to avoid a massive and costly tire recall? Regardless of their legality, others will certainly judge the actions taken in such situations as right or wrong, ethical or unethical. By this very nature, the field of business ethics is controversial...
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...CHAPTER 6 THE FINANCIAL SERVICES INDUSTRY FINANCE COMPANIES Outline I. Introduction II. Size, Structure, and Composition of the Industry A. Major Types of Finance Companies III. Balance Sheet and Recent Trends A. Consumer Loans B. Residential and Commercial Mortgages C. Business Loans III. Regulation LECTURE NOTES LO – Compare and contrast finance companies to commercial banks using information throughout the chapter. I. INTRODUCTION LO – Know the definition of finance companies (basically, the contents of the following paragraph). ● The primary function of finance companies is to make loans to both individuals and corporations. Services provided by finance companies include consumer lending, business lending, and mortgage financing. Some of the loans are similar to commercial bank loans, such as consumer and auto loans, but others are more specialized. Finance companies differ from banks in that they do not accept deposits, but instead rely on short- and long-term debt. Additionally, finance companies often lend to customers commercial banks find too risky. II. SIZE, STRUCTURE, AND COMPOSITION OF THE INDUSTRY ● Finance companies were originated during the depression when General Electric Corp. created General Electric Capital Corp. (GECC) as a means of financing appliance sales customers unable to get installment credit from banks. By the late 1950s, banks were more willing to make installment...
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...Change Management Concept Paper Submitted to Northcentral University Graduate Faculty of the School of XXXXXXXXXXX in Partial Fulfillment of the Requirements for the Degree of DOCTOR OF BUSINESS MANAGEMENT by KIM S JOHNSON Prescott Valley, Arizona October 2012 Table of Contents [Note: this is a non-inclusive sample and will vary depending on your subheadings] Introduction………………………………………………………………………………..1 Statement of the Problem………………………………………………………….1 Purpose of the Study………………………………………………………………1 Brief Review of the Literature…………………………………………………………….2 Research Method………………………………………………………………………….3 Appendix: Annotated Bibliography……………………………………………………….6 Introduction [One of the most serious tests associations meet today is managing change. Since steady changes facing some amount of modification and development can and must transpire continuously. Every employee, organization, and position is manipulated by of variables that influence the accomplishment of each sole change attempt. Some workers seem to search for an out and encourage change and next can successfully amend and develop their job presentation as quickly as the change occasion is determined or the change demand is made. Others may be unwilling and may require time and teaching to become prepared to carry and successfully contribute in the recommended changes. Some, nevertheless, may decide not to contribute and may essentially prevent the association's best presentation because...
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