...Business Ethics and Crisis Management: Circumstances for a Second Chance Dr. Stefan MAYR Researcher at the Institut für Controlling und Consulting, Johannes Kepler Universität Linz, Austria Johannes Kepler Universität Linz Institut für Controlling und Consulting Altenberger Straße 69 4040 Linz Austria Stefan.mayr@jku.at Keywords: Corporate responsibility, corporate restructuring, enterprise crisis, bankruptcy 1238 Abstract Discourse regarding ethics and corporate responsibility arose in the last years linked with an increasing number of accounting fraud scandals. The recent financial crisis has had a lasting negative influence on corporate profits. Companies have had to satisfy the interests of several stakeholders, such as its employees, banks, customers and the community, and at the same time successfully manage the consequences of the crisis. An empirical qualitative study which was conducted in Austria in 2008 is presented in this paper aimed at investigating business ethics and crisis management. The stakeholder theory will be used as a reference framework. This paper concludes with lessons that can be learned and political recommendations and policies put forth to grant failed businesses a second chance. 1. Introduction In the past few years, an increasing number of fraud cases and accounting scandals is linked to fierce discourse with respect to ethics and corporate accountability. Business ethics has likewise become a current research subject in...
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...Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Other reasons for restructuring include a change of ownership or ownership structure, demerger, or a response to a crisis or major change in the business such as bankruptcy, repositioning, or buyout. Restructuring may also be described as corporate restructuring, debt restructuring and financial restructuring. Executives involved in restructuring often hire financial and legal advisors to assist in the transaction details and negotiation. It may also be done by a new CEO hired specifically to make the difficult and controversial decisions required to save or reposition the company. It generally involves financing debt, selling portions of the company to investors, and reorganizing or reducing operations. The basic nature of restructuring is a zero-sum game. Strategic restructuring reduces financial losses, simultaneously reducing tensions between debt and equity holders to facilitate a prompt resolution of a distressed situation. Corporate debt restructuring is the reorganization of companies’ outstanding liabilities. It is generally a mechanism used by companies which are facing difficulties in repaying their debts. In the process of restructuring, the credit obligations are spread out over longer duration with smaller payments. This allows...
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...Korea—Economic policy. 3. Thailand—Economic policy. 4. International Monetary Fund—Indonesia. 5. International Monetary Fund—Korea. 6. International Monetary Fund—Thailand. I. Lane, Timothy D. (Timothy David), 1955- II. Occasional paper (International Monetary Fund); no. 178. HC447.I44 1999 Price: US$18.00 (US$15.00 to full-time faculty members and students at universities and colleges) Please send orders to: International Monetary Fund, Publication Services 700 19th Street, N.W., Washington, D.C. 20431, U.S.A. Tel.: (202) 623-7430 Telefax: (202) 623-7201 E-mail: publications@imf.org Internet: http://www.imf.org recycled paper Contents Preface I Overview Timothy Lane and Marianne Schulze-Ghattas References II Background to the Crisis Javier Hamann Financial Vulnerabilities Macroeconomic Considerations Asset Price Deflation and Bank Failures References III Program Design Timothy Lane Basic Strategy Exchange Rates References IV Program Financing and Market Reactions Timothy Lane and Marianne Schulze-Ghattas Official Financing and Program Projections Market Reactions V Macroeconomic Environment Timothy Lane and Steven Phillips Output...
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...The Reaction of Corporate Human Resources Management to the Economic Crisis Finding the ways-out in HR KINGA ILONA BÁRDOSa - ERIKA VARGAb Dobó István Grammar School Széchenyi út 19, Eger 3300, Hungary cetebe@hotmail.com b Károly Róbert College Mátrai út 36, Gyöngyös 3200, Hungary evarga@karolyrobert.hu a T he cyclical movement of the economy is a natural process but, fortunately, a global economic crisis is a rare phenomenon. The credit crunch starting in September 2008 has grown into a global one primarily affecting car manufacturing and then it has its percussions in the whole economy-gradually reaching all the players. The crisis management in human resources implies layoffs, redundancies or shorter working hours and weeks. In many cases there were not wellthought corporate strategies for crisis management as managers as well as employees had to face a problem they had never experienced before. One of the corporate operative steps is to examine and realise how deeply the organisation itself is affected in the crisis. Our objective is to present what theoretical and practical solutions were or are invented besides the ones already mentioned. Keywords: crisis management, human resources management, atypical employment 1. About the crisis in general About a year ago the credit crunch became widespread primarily hitting the financial institutions worldwide and had its impacts felt in the motor industry reaching all players of the economic life. There were no companies...
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...global financial crisis of 2007-09 has been well documented. World per capita output, which typically expands by about 2.2 percent annually, contracted by 1.8 percent in 2009, the largest contraction the global economy experienced since World War II. During the crisis, markets around the world experienced colossal disruptions in asset and credit markets, massive erosions of wealth, and unprecedented numbers of bankruptcies. Five years after the crisis began, its lingering effects are still all too visible in advanced countries and emerging markets alike: the global recession left in its wake a worldwide increase of 30 million in the number of people unemployed. These are painful reminders of why there is a need to improve our understanding of financial crises. This book serves this purpose by bringing together a number of innovative studies on the causes and consequences of financial crises and policy responses to them. Although there is a rich literature on financial crises, there has been no publication since the recent financial crisis providing in one place a broad overview of this research and distilling its policy lessons. The book fills this critical gap. It covers a wide range of crises, including banking, balance-of-payments, and sovereign debt crises. It reviews the typical patterns prior to crises and considers lessons on their antecedents, analyzes the evolution of crises and examines various policy responses––in terms of macroeconomic policies, restructuring of banks, households...
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...Study Guide 3 1. Education and Social Movements a. Education America 2011- schools are there to hand out degrees not an education i. Bush and Obama: policy, emphasis, goals. ii. SDSU administration: policy, emphasis, goals. b. 1960s and Social Movements: characteristics, examples, successes... c. Backlash: Crisis of Democracy and making social movements invisible i. According to Samuel Huntington what was the “crisis of democracy” and what was the solution? ii. According to Huntington, the University contributed to the “crisis.” Why did he say this and how was restructuring the University a solution to the problem? iii. How have the changes at SDSU reflected Huntington’s solution to the “crisis” and the restructuring of the University? d. Education as a gatekeeper: funding, resources, knowledge, success. Terms: No Child Left Behind, Race to the Top, credentialism, Output efficiency: How many people can u graduate standardized testing, grassroots, astroturf, business model, quality education, tracking, Ability grouping: also called tracking standardized testing Rodriguez v. San Antonio: says that quality education is not guaranteed by the us constitution only a desk Property tax: taxes on residential and commercial property in a school district to fund the school, Foundations: A way to funnel private money into a school The Houston Miracle: the basis for no student left behind, ended up being a lie 2. Crime and the Criminal...
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...A Review on Corporate Strategies during the Global Downturn: Initiating a Forward-Looking Debate By: Klaus E. Meyer Corporate Strategies during the Global Downturn: Initiating a Forward-Looking Debate: Article Review 1. Main purpose of the paper This paper aims to initiate a forward-looking debate on generating ideas on how to move forward, in time of the global economic downturn rather than to provide definitive answers on the origin of the crisis. The global financial crisis has created a structural break in the global economy. Businesses thus need to reassess the strategies they have developed to operate in a highly integrated global economy. Initial reactions have often been defensive as companies downsize and call for government support. However, times of crisis are also times of opportunity. In the short-term, opportunities arise for instance in ‘value for money’ segments. Long term opportunities require managers to develop foresight to use the crisis to position themselves for the next upswing. Business leaders thus need to develop scenarios of the new economy, and envisage their role in it. The author felt that it is time to look forward to addressing the questionon how can businesses can survive the crisis, and position themselves for the recovery whenever it may come. 2. What is the Global Financial Crisis Trends The financial crisis originated from problems in the financial sector in the U.S.A. and the U.K. At the core appear to have...
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...How To Make Restructuring Work for Your Company Published: | October 1, 2001 | Author: | Stuart C. Gilson | Executive Summary: A bungled corporate restructuring can turn a good idea into disaster. In an excerpt from his new book, HBS professor Stuart Gilson outlines the keys for a successful corporate makeover. Plus: Gilson Q&A. About Faculty in this Article: Stuart Gilson is the Steven R. Fenster Professor of Business Administration at Harvard Business School. * More Working Knowledge from Stuart C. Gilson * Stuart C. Gilson - Faculty Research Page Editor's Note: The following excerpt is taken from the "Lessons of Restructuring" section of Gilson's introduction to Creating Value through Corporate Restructuring. Although the case studies in this book span a wide range of companies, industries, and contexts, some common issues and themes emerge. Taken together, they suggest there are three critical hurdles or challenges that management faces in any restructuring program: 1. Design. What type of restructuring is appropriate for dealing with the specific challenge, problem, or opportunity that the company faces? 2. Execution. How should the restructuring process be managed and the many barriers to restructuring overcome so that as much value is created as possible? 3. Marketing. How should the restructuring be explained and portrayed to investors so that value created inside the company is fully credited to its stock price? Failure to address any one of...
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...BACKGROUND 5 METHODOLOGY 6 FINDINGS 7 INTERNAL PROBLEMS 7 EXTERNAL PROBLEMS 8 RECOMMENDATIONS 10 PORTFOLIO RESTRUCTURING 10 ORGANIZATIONAL RESTRUCTURING 11 PRODUCT DIVERSIFICATION 11 STAKEHOLDERS CONCILIATION 12 CONCLUSION 13 REFERENCES 14 Abstract This report focuses on the United States-based ice cream producer, Dreyer’s, Inc., which used to be the largest ice cream company in America. In order to consolidate the ice cream industry, Rogers and Cronk, CEO of Dreyer’s, carried out some advancing operation philosophies including the launch of a strategic plan named the “Grand Plan” in the year 1994. The report gives a description of the expectations of the “Grand Plan” and their company culture in details and demonstrates why they are unlikely to be implemented successfully. Therefore, the 4 years from 1994 to 1998 witnessed a dramatic sales performance downturn. After analyzing the strategies and the industry situation, it appears that both the internal and external problems, such as the huge spending of the Grand Plan, fierce competition among rivals and increased costs raised by raw material prices, etc. led to Dreyer’s failure. Based on the findings, this report gives recommendations on portfolio restructuring, corporate restructuring, product diversification, and stakeholder conciliation. The aim is to help Dreyer’s manage through the current crisis and establish a firm ground in the market. Introduction Dreyer’s grand ice cream company was founded in 1928...
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...Assignment Title: Understanding Ireland’s Economic Crisis and Recovery Words Count: 1500 words (Excluding references) Introduction In 2008 Ireland plunged into one of its most severe economic crisis recorded since pre-war times. This paper looks at the monetary policies and conditions during Ireland’s recessionary years and in conjunction the key features and policies that were introduced by monetary authorities in order to restore financial stability in Ireland. This includes looking at policies such as the recapitalisation of banks and blanket guarantee in order to stabilize the banking system. Following this an insight into Ireland’s people and the banking systems combined. This deals with restructuring loans given to households and companies. A huge emphasis was placed on mortgages given to households during the boom times. Prevailing monetary conditions and policy context for the Irish Economic Crisis When Ireland was announced “in recession” back in 2008 numerous monetary conditions and policies were to blame. Ireland had issues with its banking systems. Its banks needed urgent and constant capital injection to the point the government alone could no longer support them. This soon highlighted that there were clearly further solvency issues underlying. The cause of the recession was blamed on the ever expanding property market to its bust point. This played a significant factor but was not the...
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...commodities markets and advising and intermediating for institutional investors in those markets. (2) Corporate Finance and public finance (often referred to as investment banking) advising corporations and governments on their financing needs, including the underwriting of securities, on their merger and acquisition activities, or on their restructuring. Securities and capital markets divisions Clients are usually * Institutional investors, corporates or public entities, not private clients; * Mutual funds asset managers; * Pension Fund asset managers; * The insurance companies; * Private Banks; * Hedge Funds; * The treasury departments of large banks or large companies. Capital markets divisions * Equity division: equity research, equity sales, equity trading on cash, flow derivatives and structured products * FIRC or FICC (Fixed Income, currencies and derivatives): * Fixed income cash products, interest and credit derivatives, structured products; * FX: all currency transactions, from plain vanilla spot currency trades to sophisticated derivatives; * Commodities. Investment banking divisions * M&A (Mergers and acquisitions); * Advising on and underwriting securities issues; * Advising on restructurings. Clients are usually government/public bodies, corporates (quoted and...
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...information that is transmitted through these channels. Ordinarily, the role of digital media is to act as a medium of communication. However, in the case that the accuracy of the information is not controlled, it can lead to various impacts to the society. The digital media played a very significant role in the financial crisis through the spread of information. As such, this paper analyses digital media ethics in relation to the global financial crisis and its effects to the society. The World Financial Crisis The global economic crisis has caused many problems nearly to all the sectors of the economy in the world. Many countries have suffered deep in their growth domestic product while recession has a common experience all over the world. The severity of the crisis has persisted to the recent times, but this can be attributed to the debts incurred by some developed economies like Greece even after strong support from other countries. As a result, the world’s financial system experiencing these global economic crisis of severe staggering magnitude, there are those who believe that it will continue to be experienced across all sectors of the economy. The financial crisis is thought to have been caused by the United States mortgage market through its decision to sell sub-prime mortgages to an expanded number of consumers and, which resulted to modest or insufficient...
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...ASSIGNMENT QUESTIONS: 1) An organisation coporate planning and strategy will be fruitless without the synergistic work of functional department. 2) What do you understand by organisational restructuring. 3) Pick a typical Nigerian business organisation and explain vividly your own understanding of business restructuring. Q1. Coporate planning is a systematic approach to clarifying objectives, strategic decision making and checking progress towards objectives. A corporate plan is a set of instructions to managers of an organisation describing what role each department is expected to fufil in achievement of organisational objectives. Another word for coporate planning is strategic management. Strategic planning on the other hand, is an organisation's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. Every single organisation is working properly with the basic and necessary departments. There exist many arguements about which functional area would be the most important one for the long-term development for an organisation. Normally, there are four main functional areas in an organisation, involving marketing, human resource, operation and finance. They are working as whole, and they are interrelated and interacted during the course of the operation of an organisation. While some people believe human resource management drives the whole organisation, others think marketing should be the most...
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...Trisha LaFleur Econ 375 McNeil 17 November 2014 IMF’s Role on Asian Crisis In July of 1997 Thailand devalued the Baht and thus began the ‘Asian Crisis’ that would soon affect other Southeast Asian countries including the other two that were hit the hardest Indonesia and South Korea. Each country had no choice but to seek help from The International Monetary Fund (IMF). The IMF would have to pull through in aiding these countries out of this crisis, after carefully reviewing each country and see to what extent their financial problems had developed. As you can see below on Graph 1 each country’s exchange rate had depreciated tremendously during the crisis. With the demise of each Country’s currency their public debt, as shown on Chart 2 below, had grown tremendously. Thailand, Indonesia, and South Korea each developed specific financial restructuring measures that were agreed upon with the IMF. Graph 1: Chart 2: It all started on May 14th 1997 when Thailand started pouring foreign currency into the market in order to ‘to defend the Thai baht against speculative attacks,’ according to the “TimeLine of the Crisis” written by PBS. Two months later the Baht had reached an all-time low of 20% devaluation. Indonesia started to widen its ‘trading band for the rupiah in a move to discourage speculators’ only seven days after Indonesia’s reach for assistance (PBS). No more than two weeks pass until the Singapore dollar starts to devalue. Shortly after that, the...
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...Ques.-:Write a note on any one organisation whole restructuring process? Before start the restructuring process about any organization let we know brief description about the restructuring process. Introduction to Restructuring process Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Alternate reasons for restructuring include a change of ownership or ownership structure, demerger or a response to a crisis or major change in the business such as bankruptcy repositioning or buyout. Restructuring may also be described as corporate restructuring, debt restructuring and financial restructuring. Name of the Organization – STATE BANK OF INDIA [pic] [pic] Introduction to SBI The State Bank of India (SBI) is the largest Indian banking and financial services company (by turnover and total assets) with its headquarters in Mumbai, India. It is state-owned. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. SBI has five associate-: • State bank of Hyderabad • State bank of Jaipur • State bank of Mysore • State bank of Patiala • State bank of Travancore ...
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