Decision making in leadership has important implications on the health of an organization. The more effective companies tend to have senior leaders who incorporate tools and processes that help insure accuracy and reduce biases in their decision making. For those companies without such leaders, lapses in judgment can have serious repercussions. More than ever, today’s global information age requires leaders to display a flexible and comprehensive approach to problem solving, conflict management, and decision making. This study will analyze how former CEO of Merrill Lynch, Stan O’Neal’s poor decisions ultimately ended Merrill Lynch as an independent entity and contributed to the 2008 financial crisis.
The document provides an overview of risk management frameworks and concepts. It discusses corporate governance and operational risk analysis. It begins with an open discussion on corporate cultures and governance. It then presents the COSO and ISO 31000 risk management frameworks. It also discusses risk appetite, culture and behavior, and how human biases can impact risk assessment and decision making. Key models for assessing financial, infrastructure, marketplace and reputational risks are presented. The document emphasizes the importance of risk management processes and having a structured approach to identify, evaluate and respond to risks.
This document discusses the history of risk management. It began after World War II as a way to protect individuals and companies from losses using insurance. In the 1950s and 1960s, alternatives to insurance like self-insurance and risk prevention emerged. In the 1970s, derivatives were introduced as risk management tools and financial risk management became important. International regulation began in the 1980s, but failed to prevent the 2007 financial crisis. The document outlines the major developments in risk management's evolution and critiques its application leading up to the crisis.
Risk management as a conduit of effective corporate governance and financial ...Alexander Decker
This document discusses the relationship between corporate governance, risk management, and financial performance of small and medium enterprises (SMEs) in Ghana. It argues that risk management should be incorporated into corporate governance frameworks as an important measure of effective governance. The document reviews literature showing that both corporate governance and risk management positively impact financial performance by reducing costs and improving access to resources. Empirical studies of SMEs in Ghana demonstrate relationships between governance practices like board composition and size, and financial metrics like profitability. The document concludes that including risk management assessments can help SMEs obtain external funding by demonstrating consistent governance.
Dilemma theory and path to cross cultural hrm synergy within multinational firmsAlexander Decker
This document discusses the dilemma that multinational companies face in managing human resources across borders. MNCs must balance integrating subsidiaries globally with parent company practices, while also responding to local conditions in host countries. This is known as the local responsiveness vs global integration dilemma. The author uses dilemma theory to analyze how MNCs navigate transferring HR practices between countries. While both local responsiveness and global integration are important, the author argues that local responsiveness is a bigger concern for overseas subsidiaries due to differing cultural, economic and legal environments. MNCs attempt to build synergy between these two extremes through various strategic options like ethnocentric, polycentric and global approaches to HR.
This document presents an alternative "upstream-downstream hypothesis" regarding the relationship between a firm's internationalization and its risk and leverage. It suggests that whether internationalization increases or decreases a firm's risk and leverage depends on whether the firm is from a more developed or less developed economy, and whether it invests in more developed or less developed markets. Specifically, it hypothesizes that firms from developed economies that invest downstream in less developed markets will see increased risk and reduced leverage, while firms from less developed economies that invest upstream in developed markets will see decreased risk and increased leverage. The paper provides theoretical arguments and empirical analysis of international firms to support this hypothesis.
This document provides an overview of key concepts in health economics. It discusses how health economics analyzes the allocation of scarce health resources and examines the special features of medical care as a commodity. The document also explains why health economics is an important field, noting that it provides tools and methods for health policy evaluation and helps understand the large and growing size of the health sector in many countries. Finally, it discusses how the medical care market differs from other markets due to factors like uncertainty in demand, the large role of non-profit providers, and the role of government subsidies and public provision.
This document discusses country of origin effects on human resource management practices in multinational companies. It reviews literature showing differences in how companies from different countries, like the US, Japan, and Europe, manage HR in their foreign subsidiaries. The literature provides evidence that a company's country of origin significantly influences its behavior and HR practices abroad, though practices related more to local norms tend to resemble the host country. However, the literature has gaps, relying heavily on surveys and focusing more on ownership effects than detailed comparisons of HR/IR practices between specific countries like Germany, France, and the UK. More qualitative case studies are needed to better understand the complex links between country of origin and HR management in multinational operations.
This document discusses a study that examines human resource management (HRM) practices in subsidiaries of US, Japanese, and German multinational corporations (MNCs). The study aims to disentangle the effects of country of origin, localization, and dominance on HRM practices. It reviews debates on convergence vs divergence of management practices and standardization vs localization within MNCs. The study finds that for Japanese and German subsidiaries, HRM practices converge to dominant US practices rather than reflecting country of origin or localization effects, suggesting convergence in this function despite its local nature.
The document provides an overview of risk management frameworks and concepts. It discusses corporate governance and operational risk analysis. It begins with an open discussion on corporate cultures and governance. It then presents the COSO and ISO 31000 risk management frameworks. It also discusses risk appetite, culture and behavior, and how human biases can impact risk assessment and decision making. Key models for assessing financial, infrastructure, marketplace and reputational risks are presented. The document emphasizes the importance of risk management processes and having a structured approach to identify, evaluate and respond to risks.
This document discusses the history of risk management. It began after World War II as a way to protect individuals and companies from losses using insurance. In the 1950s and 1960s, alternatives to insurance like self-insurance and risk prevention emerged. In the 1970s, derivatives were introduced as risk management tools and financial risk management became important. International regulation began in the 1980s, but failed to prevent the 2007 financial crisis. The document outlines the major developments in risk management's evolution and critiques its application leading up to the crisis.
Risk management as a conduit of effective corporate governance and financial ...Alexander Decker
This document discusses the relationship between corporate governance, risk management, and financial performance of small and medium enterprises (SMEs) in Ghana. It argues that risk management should be incorporated into corporate governance frameworks as an important measure of effective governance. The document reviews literature showing that both corporate governance and risk management positively impact financial performance by reducing costs and improving access to resources. Empirical studies of SMEs in Ghana demonstrate relationships between governance practices like board composition and size, and financial metrics like profitability. The document concludes that including risk management assessments can help SMEs obtain external funding by demonstrating consistent governance.
Dilemma theory and path to cross cultural hrm synergy within multinational firmsAlexander Decker
This document discusses the dilemma that multinational companies face in managing human resources across borders. MNCs must balance integrating subsidiaries globally with parent company practices, while also responding to local conditions in host countries. This is known as the local responsiveness vs global integration dilemma. The author uses dilemma theory to analyze how MNCs navigate transferring HR practices between countries. While both local responsiveness and global integration are important, the author argues that local responsiveness is a bigger concern for overseas subsidiaries due to differing cultural, economic and legal environments. MNCs attempt to build synergy between these two extremes through various strategic options like ethnocentric, polycentric and global approaches to HR.
This document presents an alternative "upstream-downstream hypothesis" regarding the relationship between a firm's internationalization and its risk and leverage. It suggests that whether internationalization increases or decreases a firm's risk and leverage depends on whether the firm is from a more developed or less developed economy, and whether it invests in more developed or less developed markets. Specifically, it hypothesizes that firms from developed economies that invest downstream in less developed markets will see increased risk and reduced leverage, while firms from less developed economies that invest upstream in developed markets will see decreased risk and increased leverage. The paper provides theoretical arguments and empirical analysis of international firms to support this hypothesis.
This document provides an overview of key concepts in health economics. It discusses how health economics analyzes the allocation of scarce health resources and examines the special features of medical care as a commodity. The document also explains why health economics is an important field, noting that it provides tools and methods for health policy evaluation and helps understand the large and growing size of the health sector in many countries. Finally, it discusses how the medical care market differs from other markets due to factors like uncertainty in demand, the large role of non-profit providers, and the role of government subsidies and public provision.
This document discusses country of origin effects on human resource management practices in multinational companies. It reviews literature showing differences in how companies from different countries, like the US, Japan, and Europe, manage HR in their foreign subsidiaries. The literature provides evidence that a company's country of origin significantly influences its behavior and HR practices abroad, though practices related more to local norms tend to resemble the host country. However, the literature has gaps, relying heavily on surveys and focusing more on ownership effects than detailed comparisons of HR/IR practices between specific countries like Germany, France, and the UK. More qualitative case studies are needed to better understand the complex links between country of origin and HR management in multinational operations.
This document discusses a study that examines human resource management (HRM) practices in subsidiaries of US, Japanese, and German multinational corporations (MNCs). The study aims to disentangle the effects of country of origin, localization, and dominance on HRM practices. It reviews debates on convergence vs divergence of management practices and standardization vs localization within MNCs. The study finds that for Japanese and German subsidiaries, HRM practices converge to dominant US practices rather than reflecting country of origin or localization effects, suggesting convergence in this function despite its local nature.
11.repositioning the nigerian insurance industry for sustainable developmentAlexander Decker
This document discusses repositioning the Nigerian insurance industry for sustainable development from a risk management perspective. It emphasizes the need to move from a reactive to proactive approach to risk management. Currently, risk management in Nigeria relies on addressing risks after they occur, which is unsustainable. The document argues that modernizing the insurance industry through products innovation, awareness programs, and strengthening regulation can help individuals and businesses better manage risks. When insurance policies help mitigate losses from unexpected events, it reduces economic waste and promotes sustainable development. Overall, the document analyzes business and individual risk exposures and argues that a strengthened, modernized insurance sector is key to managing risks and supporting sustainable development in Nigeria.
The document summarizes Martin Wolf's lecture on the failures of global finance and capital flows that have led to emerging market crises. Some key points:
1. Financial liberalization in emerging markets led to excessive risk-taking and poor regulation, fueling credit growth and asset bubbles.
2. Macroeconomic imbalances like fiscal deficits and currency pegs exacerbated risks. Currency crises then triggered financial crises as foreign debt overwhelmed many countries and companies.
3. Major crises included the Latin American debt crisis in the 1980s, the Mexican "Tequila" crisis of 1994-95, the Asian Financial crisis of 1997-98, and the Argentine crisis of 2001-02. The Asian crisis
The document summarizes key concepts from Chapter 1 of an economics textbook. It introduces three core economic principles: the scarcity principle, which states that having more of one good requires having less of another; the cost-benefit principle, which states an action should only be taken if benefits exceed costs; and the incentive principle, which states people's behavior can be predicted by their incentives. It then discusses three common pitfalls in economic reasoning and the importance of opportunity costs, marginal analysis, and differentiating positive from normative economic statements.
This study investigates cash holding behavior of Tunisian firms over the period of 2003-2013. We attempted to identify the different determinants of the corporate cash holding. We are focusing on the importance of cash flow, the effect of the leverage, other liquid assets, the ability to access to capital markets and the growth opportunities. Our results show that both trade off theory and pecking order theory are important to explain the determinants of cash holding of Tunisian companies. Generally, the results of our study support the tradeoff theory of cash holding. The motif of precaution and transaction are important in explaining the determinants of cash for Tunisian companies. Leverage, managerial ownership, growth opportunities, size, cash flow and liquid assets are important determinants of cash holding of Tunisian companies.
How To Make Money From Indian Stock MarketAshish Sanghvi
This file will help you to understand everything you need to know about stock market including how to make investments and achieve your financial goals in life. With the presentation one can become an expert in the Indian Stock Market.
If you want to learn how to analyze and calculate the risk level of a listed Indian company and find multi-bagger companies for investment under 5 minutes then you can contact me at the following email address:
sanghviashish105@gmail.com
Thank you!
This document provides an introduction to corporate governance. It begins by defining corporate governance and discussing key theories, including the principal-agent model. It notes the separation of ownership and control in modern corporations. The document outlines various agency problems that can arise, such as between shareholders and managers, and majority vs minority shareholders. It also discusses alternative forms of organization like mutual organizations and employee-owned partnerships.
Mba1034 cg law ethics week 2 corporate governance introStephen Ong
This document provides an introduction to corporate governance. It begins by defining corporate governance and discussing the key theoretical models, including:
1) Principal-agent theory, which describes the conflicts of interest that can arise between managers (agents) and shareholders (principals) due to information asymmetries.
2) The separation of ownership and control in modern corporations, where professional managers control companies owned by dispersed shareholders.
3) The agency problems that can result from this separation, such as managers prioritizing their own interests through perks or empire building rather than maximizing shareholder value.
The document then discusses alternative forms of corporate organization beyond public companies, such as mutual organizations, before concluding with definitions
Determinants of capital_structure_an_empR Ehan Raja
This document summarizes a research paper that investigates the determinants of capital structure for manufacturing firms in Pakistan. The paper reviews various capital structure theories and identifies firm-specific factors that may influence a firm's debt ratio. An empirical analysis is then conducted using data from 160 Pakistani manufacturing firms to determine which factors, such as profitability, size, liquidity, etc., are significantly related to the debt ratios of these firms. The findings indicate several factors predicted by trade-off theory, pecking order theory, and agency theory help explain the financing behavior of Pakistani firms, suggesting some universal applicability of capital structure models from Western settings.
The document provides an overview of the business environment in India. It discusses the nature, components, dynamics and importance of the business environment. It describes the internal and external factors that comprise the business environment and how they impact business decisions. It also analyzes risks in the business environment like political risk and country risk. Key points covered include the industrial policy framework in India, trends in foreign direct investment, and India's approach to industrialization over time.
The document discusses Stanley O'Neal's career and leadership at Merrill Lynch. It describes how he rose from humble beginnings to become one of the highest ranking African Americans on Wall Street. As CEO of Merrill Lynch, he tried to transform the company's culture and increase profits, but the company suffered major losses during the subprime mortgage crisis. His aggressive leadership style and pursuit of risk led to his ouster. The document also discusses criticisms of his performance and Merrill Lynch's decline under his leadership.
Economic systems decision making chapter2week1anobles
The document discusses different types of economic systems:
1) Traditional economies rely on customs and have stable predictable lives but discourage new ideas.
2) Command economies give central authorities control over decisions but lack flexibility and consumer choice.
3) Market economies allow individual freedom and decentralized decision making which drives variety and innovation but can fail to meet needs and cause uncertainty.
It then evaluates the goals of different systems and the tradeoffs between economic freedom, security, growth and other factors in capitalistic systems.
Growth and Financial Performance of MFIs using Survival AnalysisJovi Dacanay
This document discusses growth, financial performance, and survival analysis in the microfinance industry of the Philippines. It begins by introducing microfinance and the risks involved in micro-lending. It then states the objectives of analyzing the life cycle and financial indicators of microfinance firms to understand their financial performance. The document reviews relevant literature on analyzing the stages small firms go through and relating this to their financial structure and needs. It also discusses using survival analysis to model failure rates of financial indicators and score firms' financial performance.
This document provides an overview of international financial markets, including the foreign exchange market, eurocurrency market, eurocredit market, eurobond market, and international stock markets. It discusses the history and development of each market, how they work, key participants, and motives for companies and investors to use these global financial systems. The markets allow multinational corporations to raise funds, invest globally, and facilitate international trade and currency exchange.
This document discusses 3 studies on the relationship between economics education and greed. Study 1 found that economics majors and those who took multiple economics courses kept more money in dictator games. Study 2 found economics education was associated with more positive attitudes towards greed and one's own greedy behavior. Study 3 aimed to experimentally test the findings of Studies 1 and 2 by manipulating exposure to statements about self-interest to see if it increased the moral acceptability of greed. The document provides theoretical background on how economics education, with its emphasis on self-interest and rational choice, could unintentionally promote greed by de-emphasizing consequences for others, encouraging a coolly analytical approach, and creating a false consensus that others are also self-interested.
IMF: Analysis of Policy Recommendations after the Global Financial CrisisUNDP Policy Centre
IMF policy recommendations are often criticised for being orthodox, restrictive and prociclycal in their policy recommendations for developing countries. The global financial and economic crisis has led the Fund to publish papers and organize conferences that show some rethinking on these positions. But, to which extent IMF recent willingness to rethinking has led to actual changes in its policy advice to the developing countries?
This new paper by the Brasilia-based International Policy Centre for Inclusive Growth (IPC-IG) analyses recent recommendations given by the IMF to 26 developing countries to assess whether this ‘change’ discourse has been translated into action in the field. Our analysis looked at the recommendations around exchange rate, inflation, fiscal consolidation, employment and social protection policies. It also covers the theoretical debate behind the policies recommended: the underlying arguments, the criticisms received and the IMF’s position.
An Enterprise Risk Management (ERM) programme can help organizations achieve strategic objectives more effectively by taking a systematic approach to identifying, assessing, and addressing risks across the whole organization rather than operating in silos. Key aspects of an effective ERM programme include linking risk strategy to business strategy, establishing clear risk management responsibilities, and using risk information to improve decision-making and investment choices. Regular risk assessment and monitoring can optimize risk management and control activities while supporting organizational learning and competitiveness.
This document summarizes a study that analyzed the determinants of financial behavior in young Indonesian investors' decisions to invest in Islamic stocks. The study examined the effects of three determinants: heuristics, herding, and prospects. It surveyed 141 young investors aged 17-25 in 6 major Indonesian cities. The study found that heuristics had a positive and significant effect on investment decisions, while herding and prospects had a positive but not significant effect. The document provides background on behavioral finance and its key theories of prospect theory and heuristics. It also defines investment decision-making and the role of psychology in financial behavior.
Uday salunkhe managing work force diversityudaysalunkhe
This article talks about managing work force diversity within the organisation. It has been co- authored by Dr. Uday Salunkhe, Director of the prestigious Welingkar Institute of Management and Research.
Running head RISK MANAGEMENT CITI GROUP BANKTHE RISK MANAGEM.docxMARRY7
Running head: RISK MANAGEMENT CITI GROUP BANK
THE RISK MANAGEMENT – CITI GROUP BANK 2
Risk Management – Citi Group Bank
Author Note
.
The Risk Management – Citi Group Bank
Introduction
The banking sector in the United States has numerous banks that are listed on the New York stock exchange. This research plan will base around the Citi group holdings. Citigroup holdings have active shares traded and the New York stock exchange. Citi is an American banking unit that has its headquarters in New York Manhattan. It exists as a result of a historic merger between the Citicorp and the financial conglomerate Travelers group back in the year 1998. Statistics taken by the end of 2015 showed that it was among the top five largest holding banks in the United States ranking at position three. Being a multinational company it has approximately 16000 offices worldwide spanning 140 countries. Its shareholders from various regions in the world. The majority shareholders in the Citi group holdings originate from the Middle East and Singapore (Bejjani, 2009, p.155).
Before the recent global financial crisis, Citi was the world’s largest bank and company regarding total assets accrued. Citibank deals in all financial services as well as offering financial assistance regarding advice to its members. This research plan will include various areas of study including general knowledge about Citi group holdings, risk management measures, the success of the company, challenges and what they need to do as a company to return to the top(Bejjani, 2009, p.163).
Risks Management
There are some risks that banking industries go through, and Citi is no difference to other banking firms who trade on the New York stock exchange. This entails a file that managers in institutions formulates to project any risks that are like to occur in the process of striving to achieve the set target for a given firm. During working periods banks are invariably faced with different types of risk depending on the area of occurrence within the firm. It includes proper risk identification, measurement, and assessment to observe the outcome of the said risk. It is, therefore, advisable for banking institutions to formulate a certain section that would help in risk identification and analysis of the risk. Some of these risks include financial risks, strategic risks, operational, liquidity, and credit and compliance risks among others (Stone and Brewster, 2004, p.115).
Risk Types
Risks are unplanned for negative occurrences in business firms. There are numerous risk types that management ought to address before they damage the firms image in the public eye. They include the following among others.
Financial Risks
These are risks that come about majorly due to the changing economic conditions in the countries or regions of operations. In the year 2008 when there was a global economic meltdown, Citi suffered the most. It was only rescued by the United St ...
This document is the preface to the 7th edition of the textbook "Managerial Economics" by authors William F. Samuelson and Stephen G. Marks. The preface outlines the key objectives, features and innovations of the textbook. It emphasizes that the textbook focuses on real-world managerial decision making problems and uses economic analysis to help guide managers' decisions. It highlights the early introduction of optimal decision analysis, expanded coverage of game theory and decision making under uncertainty, integration of international topics and applications, and inclusion of end-of-chapter spreadsheet problems.
This document is the preface to the 7th edition of the textbook "Managerial Economics" by authors William F. Samuelson and Stephen G. Marks. The preface outlines the key objectives, features and innovations of the textbook. It emphasizes that the textbook focuses on real-world managerial decision making problems and uses economic analysis to help guide managers' decisions. It highlights the inclusion of new topics like game theory and decision making under uncertainty. It also notes the integration of international applications and the addition of spreadsheet problems.
This document is the title page and copyright information for the 7th edition of the textbook "Managerial Economics" by William F. Samuelson and Stephen G. Marks. It lists the publishing company, various production roles, and copyright details. The preface provides an overview of the objectives, features, organization, and coverage of the textbook, with an emphasis on managerial decision making and the integration of new topics like game theory, decision making under uncertainty, and international applications. It is intended for use in undergraduate, MBA, and executive education courses.
11.repositioning the nigerian insurance industry for sustainable developmentAlexander Decker
This document discusses repositioning the Nigerian insurance industry for sustainable development from a risk management perspective. It emphasizes the need to move from a reactive to proactive approach to risk management. Currently, risk management in Nigeria relies on addressing risks after they occur, which is unsustainable. The document argues that modernizing the insurance industry through products innovation, awareness programs, and strengthening regulation can help individuals and businesses better manage risks. When insurance policies help mitigate losses from unexpected events, it reduces economic waste and promotes sustainable development. Overall, the document analyzes business and individual risk exposures and argues that a strengthened, modernized insurance sector is key to managing risks and supporting sustainable development in Nigeria.
The document summarizes Martin Wolf's lecture on the failures of global finance and capital flows that have led to emerging market crises. Some key points:
1. Financial liberalization in emerging markets led to excessive risk-taking and poor regulation, fueling credit growth and asset bubbles.
2. Macroeconomic imbalances like fiscal deficits and currency pegs exacerbated risks. Currency crises then triggered financial crises as foreign debt overwhelmed many countries and companies.
3. Major crises included the Latin American debt crisis in the 1980s, the Mexican "Tequila" crisis of 1994-95, the Asian Financial crisis of 1997-98, and the Argentine crisis of 2001-02. The Asian crisis
The document summarizes key concepts from Chapter 1 of an economics textbook. It introduces three core economic principles: the scarcity principle, which states that having more of one good requires having less of another; the cost-benefit principle, which states an action should only be taken if benefits exceed costs; and the incentive principle, which states people's behavior can be predicted by their incentives. It then discusses three common pitfalls in economic reasoning and the importance of opportunity costs, marginal analysis, and differentiating positive from normative economic statements.
This study investigates cash holding behavior of Tunisian firms over the period of 2003-2013. We attempted to identify the different determinants of the corporate cash holding. We are focusing on the importance of cash flow, the effect of the leverage, other liquid assets, the ability to access to capital markets and the growth opportunities. Our results show that both trade off theory and pecking order theory are important to explain the determinants of cash holding of Tunisian companies. Generally, the results of our study support the tradeoff theory of cash holding. The motif of precaution and transaction are important in explaining the determinants of cash for Tunisian companies. Leverage, managerial ownership, growth opportunities, size, cash flow and liquid assets are important determinants of cash holding of Tunisian companies.
How To Make Money From Indian Stock MarketAshish Sanghvi
This file will help you to understand everything you need to know about stock market including how to make investments and achieve your financial goals in life. With the presentation one can become an expert in the Indian Stock Market.
If you want to learn how to analyze and calculate the risk level of a listed Indian company and find multi-bagger companies for investment under 5 minutes then you can contact me at the following email address:
sanghviashish105@gmail.com
Thank you!
This document provides an introduction to corporate governance. It begins by defining corporate governance and discussing key theories, including the principal-agent model. It notes the separation of ownership and control in modern corporations. The document outlines various agency problems that can arise, such as between shareholders and managers, and majority vs minority shareholders. It also discusses alternative forms of organization like mutual organizations and employee-owned partnerships.
Mba1034 cg law ethics week 2 corporate governance introStephen Ong
This document provides an introduction to corporate governance. It begins by defining corporate governance and discussing the key theoretical models, including:
1) Principal-agent theory, which describes the conflicts of interest that can arise between managers (agents) and shareholders (principals) due to information asymmetries.
2) The separation of ownership and control in modern corporations, where professional managers control companies owned by dispersed shareholders.
3) The agency problems that can result from this separation, such as managers prioritizing their own interests through perks or empire building rather than maximizing shareholder value.
The document then discusses alternative forms of corporate organization beyond public companies, such as mutual organizations, before concluding with definitions
Determinants of capital_structure_an_empR Ehan Raja
This document summarizes a research paper that investigates the determinants of capital structure for manufacturing firms in Pakistan. The paper reviews various capital structure theories and identifies firm-specific factors that may influence a firm's debt ratio. An empirical analysis is then conducted using data from 160 Pakistani manufacturing firms to determine which factors, such as profitability, size, liquidity, etc., are significantly related to the debt ratios of these firms. The findings indicate several factors predicted by trade-off theory, pecking order theory, and agency theory help explain the financing behavior of Pakistani firms, suggesting some universal applicability of capital structure models from Western settings.
The document provides an overview of the business environment in India. It discusses the nature, components, dynamics and importance of the business environment. It describes the internal and external factors that comprise the business environment and how they impact business decisions. It also analyzes risks in the business environment like political risk and country risk. Key points covered include the industrial policy framework in India, trends in foreign direct investment, and India's approach to industrialization over time.
The document discusses Stanley O'Neal's career and leadership at Merrill Lynch. It describes how he rose from humble beginnings to become one of the highest ranking African Americans on Wall Street. As CEO of Merrill Lynch, he tried to transform the company's culture and increase profits, but the company suffered major losses during the subprime mortgage crisis. His aggressive leadership style and pursuit of risk led to his ouster. The document also discusses criticisms of his performance and Merrill Lynch's decline under his leadership.
Economic systems decision making chapter2week1anobles
The document discusses different types of economic systems:
1) Traditional economies rely on customs and have stable predictable lives but discourage new ideas.
2) Command economies give central authorities control over decisions but lack flexibility and consumer choice.
3) Market economies allow individual freedom and decentralized decision making which drives variety and innovation but can fail to meet needs and cause uncertainty.
It then evaluates the goals of different systems and the tradeoffs between economic freedom, security, growth and other factors in capitalistic systems.
Growth and Financial Performance of MFIs using Survival AnalysisJovi Dacanay
This document discusses growth, financial performance, and survival analysis in the microfinance industry of the Philippines. It begins by introducing microfinance and the risks involved in micro-lending. It then states the objectives of analyzing the life cycle and financial indicators of microfinance firms to understand their financial performance. The document reviews relevant literature on analyzing the stages small firms go through and relating this to their financial structure and needs. It also discusses using survival analysis to model failure rates of financial indicators and score firms' financial performance.
This document provides an overview of international financial markets, including the foreign exchange market, eurocurrency market, eurocredit market, eurobond market, and international stock markets. It discusses the history and development of each market, how they work, key participants, and motives for companies and investors to use these global financial systems. The markets allow multinational corporations to raise funds, invest globally, and facilitate international trade and currency exchange.
This document discusses 3 studies on the relationship between economics education and greed. Study 1 found that economics majors and those who took multiple economics courses kept more money in dictator games. Study 2 found economics education was associated with more positive attitudes towards greed and one's own greedy behavior. Study 3 aimed to experimentally test the findings of Studies 1 and 2 by manipulating exposure to statements about self-interest to see if it increased the moral acceptability of greed. The document provides theoretical background on how economics education, with its emphasis on self-interest and rational choice, could unintentionally promote greed by de-emphasizing consequences for others, encouraging a coolly analytical approach, and creating a false consensus that others are also self-interested.
IMF: Analysis of Policy Recommendations after the Global Financial CrisisUNDP Policy Centre
IMF policy recommendations are often criticised for being orthodox, restrictive and prociclycal in their policy recommendations for developing countries. The global financial and economic crisis has led the Fund to publish papers and organize conferences that show some rethinking on these positions. But, to which extent IMF recent willingness to rethinking has led to actual changes in its policy advice to the developing countries?
This new paper by the Brasilia-based International Policy Centre for Inclusive Growth (IPC-IG) analyses recent recommendations given by the IMF to 26 developing countries to assess whether this ‘change’ discourse has been translated into action in the field. Our analysis looked at the recommendations around exchange rate, inflation, fiscal consolidation, employment and social protection policies. It also covers the theoretical debate behind the policies recommended: the underlying arguments, the criticisms received and the IMF’s position.
An Enterprise Risk Management (ERM) programme can help organizations achieve strategic objectives more effectively by taking a systematic approach to identifying, assessing, and addressing risks across the whole organization rather than operating in silos. Key aspects of an effective ERM programme include linking risk strategy to business strategy, establishing clear risk management responsibilities, and using risk information to improve decision-making and investment choices. Regular risk assessment and monitoring can optimize risk management and control activities while supporting organizational learning and competitiveness.
This document summarizes a study that analyzed the determinants of financial behavior in young Indonesian investors' decisions to invest in Islamic stocks. The study examined the effects of three determinants: heuristics, herding, and prospects. It surveyed 141 young investors aged 17-25 in 6 major Indonesian cities. The study found that heuristics had a positive and significant effect on investment decisions, while herding and prospects had a positive but not significant effect. The document provides background on behavioral finance and its key theories of prospect theory and heuristics. It also defines investment decision-making and the role of psychology in financial behavior.
Uday salunkhe managing work force diversityudaysalunkhe
This article talks about managing work force diversity within the organisation. It has been co- authored by Dr. Uday Salunkhe, Director of the prestigious Welingkar Institute of Management and Research.
Running head RISK MANAGEMENT CITI GROUP BANKTHE RISK MANAGEM.docxMARRY7
Running head: RISK MANAGEMENT CITI GROUP BANK
THE RISK MANAGEMENT – CITI GROUP BANK 2
Risk Management – Citi Group Bank
Author Note
.
The Risk Management – Citi Group Bank
Introduction
The banking sector in the United States has numerous banks that are listed on the New York stock exchange. This research plan will base around the Citi group holdings. Citigroup holdings have active shares traded and the New York stock exchange. Citi is an American banking unit that has its headquarters in New York Manhattan. It exists as a result of a historic merger between the Citicorp and the financial conglomerate Travelers group back in the year 1998. Statistics taken by the end of 2015 showed that it was among the top five largest holding banks in the United States ranking at position three. Being a multinational company it has approximately 16000 offices worldwide spanning 140 countries. Its shareholders from various regions in the world. The majority shareholders in the Citi group holdings originate from the Middle East and Singapore (Bejjani, 2009, p.155).
Before the recent global financial crisis, Citi was the world’s largest bank and company regarding total assets accrued. Citibank deals in all financial services as well as offering financial assistance regarding advice to its members. This research plan will include various areas of study including general knowledge about Citi group holdings, risk management measures, the success of the company, challenges and what they need to do as a company to return to the top(Bejjani, 2009, p.163).
Risks Management
There are some risks that banking industries go through, and Citi is no difference to other banking firms who trade on the New York stock exchange. This entails a file that managers in institutions formulates to project any risks that are like to occur in the process of striving to achieve the set target for a given firm. During working periods banks are invariably faced with different types of risk depending on the area of occurrence within the firm. It includes proper risk identification, measurement, and assessment to observe the outcome of the said risk. It is, therefore, advisable for banking institutions to formulate a certain section that would help in risk identification and analysis of the risk. Some of these risks include financial risks, strategic risks, operational, liquidity, and credit and compliance risks among others (Stone and Brewster, 2004, p.115).
Risk Types
Risks are unplanned for negative occurrences in business firms. There are numerous risk types that management ought to address before they damage the firms image in the public eye. They include the following among others.
Financial Risks
These are risks that come about majorly due to the changing economic conditions in the countries or regions of operations. In the year 2008 when there was a global economic meltdown, Citi suffered the most. It was only rescued by the United St ...
This document is the preface to the 7th edition of the textbook "Managerial Economics" by authors William F. Samuelson and Stephen G. Marks. The preface outlines the key objectives, features and innovations of the textbook. It emphasizes that the textbook focuses on real-world managerial decision making problems and uses economic analysis to help guide managers' decisions. It highlights the early introduction of optimal decision analysis, expanded coverage of game theory and decision making under uncertainty, integration of international topics and applications, and inclusion of end-of-chapter spreadsheet problems.
This document is the preface to the 7th edition of the textbook "Managerial Economics" by authors William F. Samuelson and Stephen G. Marks. The preface outlines the key objectives, features and innovations of the textbook. It emphasizes that the textbook focuses on real-world managerial decision making problems and uses economic analysis to help guide managers' decisions. It highlights the inclusion of new topics like game theory and decision making under uncertainty. It also notes the integration of international applications and the addition of spreadsheet problems.
This document is the title page and copyright information for the 7th edition of the textbook "Managerial Economics" by William F. Samuelson and Stephen G. Marks. It lists the publishing company, various production roles, and copyright details. The preface provides an overview of the objectives, features, organization, and coverage of the textbook, with an emphasis on managerial decision making and the integration of new topics like game theory, decision making under uncertainty, and international applications. It is intended for use in undergraduate, MBA, and executive education courses.
This document is the title page and copyright information for the 7th edition of the textbook "Managerial Economics" by William F. Samuelson and Stephen G. Marks. It lists the publishing company, various production roles, and copyright details. The preface provides an overview of the objectives, features, organization, and coverage of the textbook, with an emphasis on managerial decision making and the integration of new topics like game theory, decision making under uncertainty, and international applications. It is intended for use in undergraduate, MBA, and executive education courses.
This document is the title page and copyright information for the 7th edition of the textbook "Managerial Economics" by William F. Samuelson and Stephen G. Marks, published by John Wiley & Sons in 2012. It lists the publishing staff and details such as place of publication, copyright years, and library of congress cataloging information. The preface provides an overview of the objectives, features, organization, and coverage of the textbook, with an emphasis on managerial decision making. It highlights the incorporation of new topics such as game theory, decision making under uncertainty, and international applications.
Brian Glaze & Larry Ware, CRPC, CLTC – Proactive Advisor Magazine – Volume 5 ...Proactive Advisor Magazine
Brian Glaze & Larry Ware • LPL Financial
- Why hasn’t the Efficient Market Hypothesis disappeared? by Linda Ferentchak
- Climbing U.S. dollar makes exports less competitive
- The seasons of the stock market by Paul Desmond
- Selling proposition: "Plan-based investing" (Jerry Ganz, Packerland Brokerage Services)
The document discusses stock prices and percentage changes for four companies - Apple, Exxon Mobil, Grupo Aeroportuario del Sureste, and Daimler Ag. It provides the closing price, purchase price, and percentage change in stock price for Apple (-5.30%), Exxon Mobil (-3.12%), and Grupo Aeroportuario del Sureste (3.05%). It does not provide the full details for Daimler Ag.
Running Head ECONOMICS AND ADMINISTRATION1ECONOMICS AND ADMI.docxtodd271
Running Head: ECONOMICS AND ADMINISTRATION 1
ECONOMICS AND ADMINISTRATION 5
ECONOMICS AND ADMINISTRATION
Khalia Hart
Dr. Touhey
MGMT 640 – Financial Decision Making for Managers
March 31, 2019
EXECUTIVE SUMMARY
For the success of every business, there needs to be a strong supporting factor that enforces success. The success of a business indicates that the structure of decision making is tough, strict but at the same time lenient to staff and more importantly customers. Financial management is a very vital factor to consider while engaging in any business activity. Not only is it concerned about customers and staff, but also affects every aspect of the business from managing cash flow and maintaining performance index to developing plans to ensure maximum use of opportunities by business owners. Stakeholders and business owners need to realize the importance of financial management as a tool in business administration since it is the force that ensures continuous development of financial capabilities needed for a business to achieve its full potential.
The macro-economic environment addresses issues concerning behavior. Here are where aAdministrative issues lie. Administration can be categorized into two main categories, administration as a practice and as a science. Administration as a practice mainly addresses the normal routine of business owners and managers and their normal administrative roles in any business entity. Administration as a scientific field is bound to face challenges which are broken down into four main classes. They are discussed fully in this document.
Factors that affect administrative decisions include globalization, cost of control, the relationship between stakeholders and demand on ethical behavior and corporate responsibility. Administrations in different organizations should always be keen to ensure that the named issues are always put under the eye . These factors can greatly affect the performance of a business entity as shall be discussed in this document. Comment by debra touhey: Good start, Khalia. The Executive Summary should explain the problems at hand with potential solutions to those problems. Here is a good reference on writing Executive Summaries:
https://www.inc.com/guides/2010/09/how-to-write-an-executive-summary.html
INTRODUCTION
Since time immemorial, business has always been a very important factor in society. To date, business transactions take place daily through the various business entities that have been established. In the modern world, however, various guidelines, strategies, and tools have been established to ensure that business practices go on smoothly (Robert et al., 2004). Comment by debra touhey: A little too informal for graduate writing
One of the practices that have been developed to ensure maximum productivity in the various entities that have been established, is financial management. The financial management function allows for the planning, organizing, monitori.
This document introduces topics that will be covered in a course on financial markets and institutions. It provides an overview of why these topics are important to study, including how financial markets and interest rates impact individuals, businesses, and the economy. The three main financial markets discussed are the bond market, stock market, and foreign exchange market. The roles of the Federal Reserve, central banks, and other financial institutions are also introduced. The document outlines how the course will use analytical frameworks, case studies, problems, and web exercises to explore these concepts.
How to Write a Problem Solution Essay - Comprehensive Guide. Topics For Propose A Solution Essay. Proposing a solution essay f15. ⚡ Proposing a solution topics. Top 130 Problem Solution Essay Topics .... Topics To Write A Problem Solution Essay On. Proposing a Solution Essay - YouTube. Proposing a Solution Essay Example | Topics and Well Written Essays .... Reflection Essay: Proposing a solution essay ideas. Proposing a solution essay #4. 013 Proposal Essay Topics Ideas Research Paper Conclusion Sample For .... ⭐ Problem solution essay ideas. Problems And Solutions Examples: Unique .... Proposing solution essay - dissertationadviser.x.fc2.com. Proposing a solution Research Paper Example | Topics and Well Written .... 10 Beautiful Ideas For Problem Solution Essay 2023.
This presentation discusses the changing financial landscape after the 2008 crisis and lessons learned. It covers four main topics: 1) how the financial crisis occurred and the role of poor policy and incentives, 2) changes in regulation and the financial system, 3) key lessons on risk management and governance, and 4) focus areas including liquidity, capital, and compensation. The presentation emphasizes that while regulation is important, the underlying issues were related more to incentives and risk culture within firms.
07. the determinants of capital structurenguyenviet30
This document summarizes a research paper that investigates how firms in capital market-oriented economies (UK, US) and bank-oriented economies (France, Germany, Japan) determine their capital structures. Using panel data and regression analysis, the paper finds that firm size and tangibility of assets increase leverage, while profitability, growth opportunities, and share price performance decrease leverage in both types of economies. However, the impacts of some determinants vary between countries depending on differences in institutions and traditions. The paper also finds that firms have target leverage ratios but adjust to them at different speeds across countries.
Assignment 1 Discussion QuestionThe management of current asset.docxfredharris32
Assignment 1: Discussion Question
The management of current assets and current liabilities in the short run can lead to several challenges for the financial manager. What are some of the more common challenges or problems encountered by the firm in this regard, and what are the possible solutions? Explain your answers.
Assignment 2: Discussion Question
Financial mangers make decisions today that will affect the firm in the future. The dollars used for investment expenditures made today are different from the cash flows to be realized in the future. What are these differences? What are some of the techniques that can be used to adjust for these differences?
Assignment 3: Discussion Question
Valuation of a firm’s financial assets is said to be based on what is expected in the future, in terms of the future performance of the firm, the industry, and the economy. What types of value would you consider when assigning “value” to a firm’s stock or bond? What is the significance of each of the different types of value in the valuation process? Use examples to support your response.
Assignment 4: Discussion Question
The finance department of a large corporation has evaluated a possible capital project using the NPV method, the Payback Method, and the IRR method. The analysts are puzzled, since the NPV indicated rejection, but the IRR and Payback methods both indicated acceptance. Explain why this conflicting situation might occur and what conclusions the analyst should accept, indicating the shortcomings and the advantages of each method. Assuming the data is correct, which method will most likely provide the most accurate decisions and why?
Course Overview (1 of 3)
Defining Finance
Broadly defined, finance is the study of how people manage scarce resources in general, and money and other financial resources in particular. There are two important features that distinguish financial decisions from other types of decisions. The benefits and costs of financial decisions are spread out over time and usually shrouded in uncertainty.
These decisions are made in a financial environment that includes the financial system, institutions, markets, and participants such as individual households, businesses, and governments. It is important to note that a well developed and properly functioning financial system enables the economy to operate efficiently and contributes to the economic growth and development of the country.
Brief History of Finance
Finance emerged as a separate field of study in the U.S. in the early 1900s. At that time finance was taught primarily as a descriptive subject using anecdotes and rules of thumb. The focus at that time was on the formation of new firms, the various types of securities firms can issue to raise funds and the legal aspects of mergers and acquisitions. This continued to be the focus all through the 1920s.
However, during the 1930s the focus shifted to the study of bankruptcy and reorganization, corporate liqu ...
Sound or Editing Paper Your goal for this assignme.docxwilliame8
Sound or Editing Paper
Your goal for this assignment is to conduct a close reading of a film through an analysis of sound or editing in
one scene. Your paper should include a strong thesis statement, making an overall argument about the film.
What does your chosen moment tell us about the film? How do the filmmakers use the elements of sound or
editing to tell their story and build meaning? Does the editing fracture the narrative or build tension? Do songs
or score help define characters? Some questions you might consider: How does the narrative conceit of A Quiet
Place build tension? How do the jump cuts influence our understanding of time and space in Breathless? How
are the graphic matches in Psycho meaningful? In the landscape of fear and violence, how do we analyze the
sound of a baby crying in Children of Men? Why is Chiron’s quiet manner meaningful in Moonlight?
Your grade will be based on your understanding of the terms as well as your ability to provide a clear, thought
out claim about the film.
For this assignment, you may can use the following films.
You can not write about the same paper you used for the mise-en-scene paper.
Editing: Psycho, Breathless, Children of Men, or Moonlight.
Sound: Psycho, Moonlight, Children of Men, or A Quiet Place
3 pages, double spaced 1” margins, Times New Roman font.
Upload to d2l by start of class March 4th
THE CORPORATION’S PLACE IN SOCIETY
Gabriel Rauterberg*
Morality, Competition, and the Firm: The Market Failures
Approach to Business Ethics. By Joseph Heath. New York: Ox-
ford University Press. 2014. Pp. ix, 372. $65.
The social responsibility of business is to increase its profits.
—Milton Friedman1
Economic justice is concerned with the fairness with which benefits and bur-
dens . . . are distributed . . . among organizational stakeholders.
—Newman S. Peery, Jr.2
The vast majority of economic activity is now organized through corpo-
rations. The public corporation is usurping the state’s role as the most im-
portant institution of wealthy capitalist societies. Across the developed
world, there is increasing convergence on the shareholder-owned corpora-
tion as the primary vehicle for creating wealth.3 Yet nothing like this degree
of convergence has occurred in answering the fundamental questions of cor-
porate capitalism: What role do corporations serve? What is the goal of cor-
porate law? What should corporate managers do? Discussion of these
questions is as old as the institutions involved.
Contemporary reflection on these questions takes the form of two
starkly different and estranged orthodoxies.4 Both are now decades old, but
neither shows any sign of either subsiding or emerging victorious. In corpo-
rate finance, economics, and most of corporate law, the orthodoxy is that .
Here is a draft essay on the provision of dental care in correctional facilities:
The Provision of Dental Care in Correctional Facilities
Prisons and jails have a legal and ethical obligation to provide adequate healthcare to inmates,
including dental care. Dental health is important for overall physical and mental well-being. However,
correctional dental care presents unique challenges. Many inmates enter the system with untreated
dental issues due to a lack of access to care prior to incarceration. Additionally, the prison
environment and lifestyle can exacerbate oral health problems.
To meet their obligations, correctional facilities must provide dental exams, cleanings, fillings,
extractions, and dentures as
Royal Institution: Investing As If The Long Term MattersDr Raj Thamotheram
This document discusses issues related to long-term investing and sustainability. It notes growing inequality, extremism, climate change risks, and loss of confidence in politics and corporate governance failures. It argues the current system is overly intermediated and dysfunctional, with short-term incentives and irrational theories. Investors are seen as enabling these issues by primarily caring about short-term returns. The document calls for treating these issues by focusing companies and investors on long-term wealth creation, fiduciary capitalism, and taking urgent action on sustainability in line with limiting warming to 2 degrees Celsius.
The passage discusses two poems, "Blackberry Picking" by Seamus Heaney and "Blackberry Eating" by Galway Kinnell, that describe picking blackberries at different times of the season. Both poems reference the late summer/early fall timing of blackberry ripening. They compare the descriptions of blackberries as overripe in September versus ripe in late August. The poems also contrast portrayals of blackberries as wine-like versus as soft and easily crushed.
Michael Porter is a leading authority on competitive strategy and international competitiveness. He developed the influential Five Forces model for analyzing competition within an industry. The model examines five competitive forces - threat of new entry, power of suppliers, power of buyers, threat of substitutes, rivalry among existing competitors - that shape an industry's structure and determine the intensity of competition. Porter's work has provided frameworks for analyzing industries, developing competitive strategies, and understanding national and regional competitiveness. He continues to advise top companies and influence thinking in fields like healthcare through research at Harvard Business School.
READING HEAD Business International Expansion .docxsedgar5
Gentry Inc is a mid-sized tech company considering expanding its operations internationally to increase profits by 15-25%. It is deciding whether to expand to China, Japan, and Germany all at once or one country at a time. To finance the expansion, the company can pursue an IPO or issue bonds. Debt financing through bonds reduces profits due to interest payments but does not require giving up ownership, while equity financing through an IPO dilutes ownership but does not require debt repayments. The company must choose the optimal financing strategy to maximize the value of its expansion.
Similar to Analyzing Leadership Decisions: Stan O'Neal (20)
Best practices for project execution and deliveryCLIVE MINCHIN
A select set of project management best practices to keep your project on-track, on-cost and aligned to scope. Many firms have don't have the necessary skills, diligence, methods and oversight of their projects; this leads to slippage, higher costs and longer timeframes. Often firms have a history of projects that simply failed to move the needle. These best practices will help your firm avoid these pitfalls but they require fortitude to apply.
Unveiling the Dynamic Personalities, Key Dates, and Horoscope Insights: Gemin...my Pandit
Explore the fascinating world of the Gemini Zodiac Sign. Discover the unique personality traits, key dates, and horoscope insights of Gemini individuals. Learn how their sociable, communicative nature and boundless curiosity make them the dynamic explorers of the zodiac. Dive into the duality of the Gemini sign and understand their intellectual and adventurous spirit.
Discover innovative uses of Revit in urban planning and design, enhancing city landscapes with advanced architectural solutions. Understand how architectural firms are using Revit to transform how processes and outcomes within urban planning and design fields look. They are supplementing work and putting in value through speed and imagination that the architects and planners are placing into composing progressive urban areas that are not only colorful but also pragmatic.
[To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
This presentation is a curated compilation of PowerPoint diagrams and templates designed to illustrate 20 different digital transformation frameworks and models. These frameworks are based on recent industry trends and best practices, ensuring that the content remains relevant and up-to-date.
Key highlights include Microsoft's Digital Transformation Framework, which focuses on driving innovation and efficiency, and McKinsey's Ten Guiding Principles, which provide strategic insights for successful digital transformation. Additionally, Forrester's framework emphasizes enhancing customer experiences and modernizing IT infrastructure, while IDC's MaturityScape helps assess and develop organizational digital maturity. MIT's framework explores cutting-edge strategies for achieving digital success.
These materials are perfect for enhancing your business or classroom presentations, offering visual aids to supplement your insights. Please note that while comprehensive, these slides are intended as supplementary resources and may not be complete for standalone instructional purposes.
Frameworks/Models included:
Microsoft’s Digital Transformation Framework
McKinsey’s Ten Guiding Principles of Digital Transformation
Forrester’s Digital Transformation Framework
IDC’s Digital Transformation MaturityScape
MIT’s Digital Transformation Framework
Gartner’s Digital Transformation Framework
Accenture’s Digital Strategy & Enterprise Frameworks
Deloitte’s Digital Industrial Transformation Framework
Capgemini’s Digital Transformation Framework
PwC’s Digital Transformation Framework
Cisco’s Digital Transformation Framework
Cognizant’s Digital Transformation Framework
DXC Technology’s Digital Transformation Framework
The BCG Strategy Palette
McKinsey’s Digital Transformation Framework
Digital Transformation Compass
Four Levels of Digital Maturity
Design Thinking Framework
Business Model Canvas
Customer Journey Map
Presentation by Herman Kienhuis (Curiosity VC) on Investing in AI for ABS Alu...Herman Kienhuis
Presentation by Herman Kienhuis (Curiosity VC) on developments in AI, the venture capital investment landscape and Curiosity VC's approach to investing, at the alumni event of Amsterdam Business School (University of Amsterdam) on June 13, 2024 in Amsterdam.
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Starting a business is like embarking on an unpredictable adventure. It’s a journey filled with highs and lows, victories and defeats. But what if I told you that those setbacks and failures could be the very stepping stones that lead you to fortune? Let’s explore how resilience, adaptability, and strategic thinking can transform adversity into opportunity.
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[To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
This PowerPoint compilation offers a comprehensive overview of 20 leading innovation management frameworks and methodologies, selected for their broad applicability across various industries and organizational contexts. These frameworks are valuable resources for a wide range of users, including business professionals, educators, and consultants.
Each framework is presented with visually engaging diagrams and templates, ensuring the content is both informative and appealing. While this compilation is thorough, please note that the slides are intended as supplementary resources and may not be sufficient for standalone instructional purposes.
This compilation is ideal for anyone looking to enhance their understanding of innovation management and drive meaningful change within their organization. Whether you aim to improve product development processes, enhance customer experiences, or drive digital transformation, these frameworks offer valuable insights and tools to help you achieve your goals.
INCLUDED FRAMEWORKS/MODELS:
1. Stanford’s Design Thinking
2. IDEO’s Human-Centered Design
3. Strategyzer’s Business Model Innovation
4. Lean Startup Methodology
5. Agile Innovation Framework
6. Doblin’s Ten Types of Innovation
7. McKinsey’s Three Horizons of Growth
8. Customer Journey Map
9. Christensen’s Disruptive Innovation Theory
10. Blue Ocean Strategy
11. Strategyn’s Jobs-To-Be-Done (JTBD) Framework with Job Map
12. Design Sprint Framework
13. The Double Diamond
14. Lean Six Sigma DMAIC
15. TRIZ Problem-Solving Framework
16. Edward de Bono’s Six Thinking Hats
17. Stage-Gate Model
18. Toyota’s Six Steps of Kaizen
19. Microsoft’s Digital Transformation Framework
20. Design for Six Sigma (DFSS)
To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations
Industrial Tech SW: Category Renewal and CreationChristian Dahlen
Every industrial revolution has created a new set of categories and a new set of players.
Multiple new technologies have emerged, but Samsara and C3.ai are only two companies which have gone public so far.
Manufacturing startups constitute the largest pipeline share of unicorns and IPO candidates in the SF Bay Area, and software startups dominate in Germany.
NIMA2024 | De toegevoegde waarde van DEI en ESG in campagnes | Nathalie Lam |...BBPMedia1
Nathalie zal delen hoe DEI en ESG een fundamentele rol kunnen spelen in je merkstrategie en je de juiste aansluiting kan creëren met je doelgroep. Door middel van voorbeelden en simpele handvatten toont ze hoe dit in jouw organisatie toegepast kan worden.
Digital Marketing with a Focus on Sustainabilitysssourabhsharma
Digital Marketing best practices including influencer marketing, content creators, and omnichannel marketing for Sustainable Brands at the Sustainable Cosmetics Summit 2024 in New York
2. A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories.
International Research Journal of Marketing and Economics (IRJME) ISSN: (2349-0314)
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earning the reputation of being a hard worker (Thornton, 2001). After his time with General
Motors, O‘Neal joined Merrill Lynch in 1986. He continued his career in finance by joining
Merrill Lynch‘s high-yield department. After just three years of working in this department, he
began to run it beginning his executive ascent at Merrill Lynch (Grey, 2007).
O’Neal’s Rise in Merrill Lynch
As head of Merrill Lynch‘s high yield bond segment, O‘Neal led a group of young vice
presidents in a sales drive to attract new clients. Later when he became chief financial officer
(CFO) of Merrill Lynch, he led the company through a liquidity crisis and developed a program
that would prevent this particular problem from occurring again (Thornton, 2001). Shortly after
becoming CFO, O‘Neal received another promotion in 2000 to lead one of Merrill‘s more
prominent departments, the brokerage division. Stan O‘Neal‘s success in leading the company‘s
brokerage operations came by reducing payroll 13% and personal service for small accounts
while acquiring high-end banking accounts with $1 million or more in assets (Thornton, 2001).
Using this strategy, the company doubled the amount of revenue per dollar in assets and reduced
operating costs by $800 million (Thornton, 2001). O‘Neal was present at the World Trade Center
on September 11, 2001 and led 9,000 employees in a temporary office until the team was moved
back to headquarters. After the attack he also let go 20,000 employees and closed 266 offices
worldwide (Grey, 2007).
While seen as aggressive and sometimes ruthless, these events and the outcomes they
represented earned O‘Neal a great deal of respect among his peers. In 2001 Merrill Lynch
appointed Stan O‘Neal to be the company‘s the chief operating officer (COO) (―Table: Merrill‖,
2001). With his ascent to COO, O‘Neal became the first African Americans to run a major
investment bank (Thornton, 2001).
As America‘s largest brokerage and one of the nation‘s top three investment banks,
Merrill Lynch was known for extravagant spending and thin profit margins (Thornton, 2001).
When Stan O‘Neal was named Merrill Lynch‘s chief executive officer (CEO) in the beginning of
2002, the firm‘s stock price had declined by 31.7% (Thornton, 2001). And it was O‘Neal‘s
charge to improve the company‘s profit margin and maintain the 87 year old company‘s
independence (Thornton, 2001).
3. A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories.
International Research Journal of Marketing and Economics (IRJME) ISSN: (2349-0314)
29 | P a g e
Derivatives: A New Opportunity
Derivatives are security assets meant to manage risk. They consist of a financial contract
that derives its value from the risk involved with the underlying asset. A derivative can further be
defined as a risk transfer agreement, which derives its value from the underlying asset (―Product
Descriptions‖, n.d.). The underlying asset can include ―an interest rate, a physical commodity, a
company‘s equity shares, an equity index, a currency, or virtually any other tradable instrument
upon which parties can agree‖ (―Product Descriptions‖, n.d., para. 1). This financial
management tool falls into three major categories; traded over-the-counter, exchange traded, and
those routed through a central clearing housing.
Over-the-counter derivatives are customized bilateral agreements that transfer risk from
one party to another and are sometimes called swaps that are negotiated privately between two
parties (―Product Descriptions‖, n.d.). Swaps are also considered bilateral agreements but
exchange cash flows at specified intervals during the agreed life of the transaction. Loss on a
swap takes place when the counterparty defaults and the swap remains positive for the party that
did not default. The actual amount of risk in a swap is associated with its relative credit exposure,
which is generally equal to the market value if positive, and zero if negative (―Product
Descriptions‖, n.d.).
This instrument evolved into a tool known as synthetic collateralized debt obligations
(CDOs) which consist of pools of loans and credit default swaps. The more complex derivatives
that incorporated mortgage loans involved a cornucopia of exotic, jumbo-sized contracts linked
to real debt (Morgenson, 2008).
An elite team at J.P. Morgan developed the initial structure of the synthetic CDO in 1997,
with the goal of reducing risk when loans were made to top–tier corporate borrowers
(Morgenson, 2008). Synthetic collateralized debt obligations were especially attractive to Wall
Street because they generated bigger fees than typical derivatives and were faster to put together
(Morgenson, 2008).
Super Senior Risk Management
Blythe Masters, one of the team members and pioneers of the synthetic CDO and former
head of J.P. Morgan‘s commodities division stated:
In 1997 and 1998, when we invented super senior risk, we spent a lot of time examining
how much is too much to have on our books. We would warehouse risk for a period of
4. A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories.
International Research Journal of Marketing and Economics (IRJME) ISSN: (2349-0314)
30 | P a g e
time, but we were always focused on developing a market for whatever we did. The idea
was we were financial intermediaries. We weren‘t in the investment business (Morgenson,
2008, para. 23).
However, a new financial tool that initially seemed like a good idea and was meant to insulate
against risk, was quickly misused. These unregulated products allowed questionable assets to be
passed off as higher–quality goods, providing a false sense of security for banks and investors
(Morgenson, 2008).
Why Unregulated?
The idea that markets were self-correcting and that the presence of regulation was in fact
harmful to banks was an era that was ushered in and nurtured by Alan Greenspan in 1987, after
taking the reins of the Federal Reserve as chairman. His beliefs in Ayn Rand‘s philosophy on
free–market capitalism were reflected in a statement made in Greenspan‘s memoir. In the Age of
Turbulence: Adventures in a New World, he provides his perspective on market regulation
stating:
Markets have become too huge, complex and fast moving to be subject to twentieth-
century supervision and regulations…regulators can still pretend to provide oversight, but
their capabilities are much diminished and declining. Regulation, by its nature, inhibits
freedom of market action, and that freedom to act expeditiously is what rebalances
markets. Undermine this freedom and the whole market-balancing process is at risk.
(Greenspan, 2007, para. 6)
Ethics and Decision Making
A source of moral failure in groups stems from people deviating from moral requirements
to help their group attain its goals (Hoyt & Price, 2013). Another factor that influences moral
decision making is the extent of power which people possess in a group. Leaders have greater
power and therefore have a greater chance of making unethical decisions in an effort to produce
group goals. Since CEOs hold a disproportionate amount of responsibility in both setting goals
and inspiring collective action to attain organizational goals, they ultimately are perceived to be
accountable for business mishaps as well as successes. The obligation of goal achievement
associated with the leader role contributes to the overvaluing of group goals, and an increased
confidence in the moral permissibility of using less than ethical means to achieve these goals
5. A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories.
International Research Journal of Marketing and Economics (IRJME) ISSN: (2349-0314)
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(Hoyt & Price, 2013). In doing so, leaders feel more justified in making questionable decisions
for the organization.
Stan O’Neal’s Decision to Boost Profits
The decision to utilize risky financial instruments to supplement short term profits was
one of these questionable decisions. In 2002, when interest rates were low, investors were
pushed to seek higher returns and Merrill Lynch began utilizing a type of derivative called
synthetic collateralized debt obligations (CDOs) to achieve this. At a time when Merrill Lynch
was aggressively seeking new ways to profit from risk, Merrill Lynch looked outside the
company to AIG to insure the risk from these CDOs.
By 2005 both Merrill Lynch and Citigroup reaped fees from the CDO business of $100
million each (Cresci, 2005). This business consisted of the most popular cash CDOs that were
made up of commercial and residential mortgage backed securities, including home equity loans
and mortgage loans to individuals with questionable credit histories (Cresci, 2005). John Kansas,
the founder and former chief executive of North Fork Bankcorp who spent hours speaking with
top executives at Merrill Lynch, commented:
We spent a great deal of time with Stan (O‘Neal) and the entire management team at
Merrill trying to learn their business and trying to explain our business to them.
Unfortunately, in the end we were put off by the fact that we couldn‘t get comfortable
with their risk profile and we couldn‘t get past the fact that we thought there was a
distinct possibility that they didn‘t understand fully their own risk profile. (Morgenson,
2008, para. 29)
These meetings were in reference to generating in-house mortgages and for Merrill
Lynch to package them as CDOs to avoid outsourcing them. This move was largely due to
Merrill Lynch‘s reliance on AIG to insure its CDO stakes to limit potential damage from defaults
(Morgenson, 2008). For years, Merrill Lynch paid AIG to insure its CDO risk but once the CDO
business model became viral, AIG stopped insuring portions of the firms‘ portfolios. AIG
eventually refused to continue this practice, citing concerns of overly aggressive spending. This
left Merrill Lynch extremely vulnerable to risk. It is the failure of O‘Neal to understand the risk
of generating and holding CDOs that ultimately led to the downfall of Merrill Lynch itself.
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Meanwhile Back at the Ranch
Taking what he believed was a realistic perspective on the challenges that Merrill Lynch
faced, O‘Neal recognized the need to overhaul the investment firm‘s business operations saying,
―that means being properly positioned...it also means not expending resources on the things that
will not ultimately produce the growth and profits we want to achieve‖ (Thornton, 2001, para. 6).
His initial strategy included the layoff of 10,000 employees while redirecting Merrill Lynch‘s
investment bankers‘ focus on select industries where their relationships were strongest (Thornton,
2001). The approach to organizational cultural change was disruptive and meant to drastically
adjust Merrill Lynch‘s ―civil-service‖ mindset by changing the business model (Robertson &
Sullivan, 2009). Additionally, O‘Neal handpicked new executive team members, losing
experienced management in key senior leadership roles. O‘Neal‘s vow to increase profit margins
in two years included ordering his managers to reduce their expenses to previous levels.
O‘Neal made few allies and friends with layoffs, and drastic organizational culture and
management changes. His leadership style was autocratic and insular. In an interview conducted
in 2007 with National Public Radio, Derek Dingle, executive editor of Black Enterprise,
analyzed O‘Neal‘s style stating ―he listened to his own voice and he moved according to his own
strategy‖ (Moore, 2007, para. 18).
The need for O‘Neal to retrench stemmed from a prior strategy that failed. Merrill Lynch
estimated the numbers of the world‘s ultra-rich to grow by 8% annually and focused on
international account expansion that included an emphasis on Japan and Europe (Thornton,
2001). After the firm lost $180 million on retail operations in Japan and Europe under the old
regime, O‘Neal‘s strategy to expand banking services including CDOs was meant to close this
gap. When discussing a possible solution, he was quoted saying, ―spending more money on a
flawed business model will not fix the fundamental problem‖ (Thornton, 2011, para. 29).
O‘Neal‘s aggressive and competitive action plan for fixing Merrill Lynch included building
profits, narrowing the firm‘s focus, and cutting costs.
The Wrong Solution
Again, a significant part of executing O‘Neal‘s turnaround of Merrill Lynch was to be
accomplished through the use of CDOs. Pools of mortgages were purchased and bundled into
CDOs and sold to investors. The executives who created the securities were not permitted to buy
much of their own product so their pay was calculated by the short term revenues they generated
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for the company (Bernstein & Eisenger, 2010). These securities consisted of large bundles of
subprime mortgages (mortgages sold to those who could not afford them) that were created in-
house, eventually becoming the favored and wrong solution to fix Merrill Lynch.
In an effort to achieve O‘Neal‘s competitive action plan to build profits and fix Merrill
Lynch, a team of bankers were assembled in 2006 for the sole purpose of acquiring the widely
unpopular mortgage–backed securities Merrill Lynch was creating, largely as a result of
unwilling traders and AIG‘s refusal to buy the ―super–senior‖ assets (Bernstein & Eisernger,
2010). This new in-house group was paid to take on Merrill Lynch‘s losing mortgage securities,
which quickly earned them the label of ―million for a billion‖ club (Bernstein & Eisenger, 2010).
Simply put, the group was compensated for how much risk they took and not for how much
money they generated. According to internal risk reports, a month before the group was formed,
Merrill held $7.2 billion worth of these assets, which skyrocketed to $37 billion in 2007
(Bernstein & Eisenger, 2010). An individual who worked in the group was quoted as saying,
―We were managing and booking risk that was already in the firm and couldn‘t be sold‖
(Bernstein & Eisenger, 2010, para. 13). Again, the group was solely responsible for the
warehousing of the super–senior risk (Bernstein & Eisenger, 2010). In the end, tens of billions of
dollars in toxic assets in the form of subprime mortgages were accepted with disastrous results,
drastically decreasing the value of Merrill Lynch securities (Bernstein & Eisenger, 2010).
2007: The Year of the Bear
The first quarter of 2007 produced another earnings record allowing Merrill Lynch to
finally beat Lehman Brothers, Goldman Sachs, and Bear Stearns in profit growth (Morgenson,
2008). However, as the year progressed, investment banks experienced significant declines in
profit margins due to questionable subprime mortgages and the CDO business began to fall apart.
Rather than slowing down after AIG‘s refusal to insure the firm‘s CDO business, Merrill Lynch
became the world‘s biggest underwriter of these products (Morgenson, 2008). O‘Neal exhausted
all options to insure the company‘s risky CDO business both externally and internally. Between
2005 and 2007, the company went on a buying spree of 12 major purchases of residential and
commercial mortgage–related companies or assets with the intention of generating in-house
mortgages that could allow the internal team to package and sell the CDOs. Additionally, the
company bought commercial properties in South Korea, Germany, and Britain, a loan servicing
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operation in Italy, and a mortgage lender in Britain, but largest acquisition was First Franklin, a
domestic subprime lender (Morgenson, 2008).
As the U.S. housing market tanked, Merrill Lynch‘s share price dropped 21% in October
of 2007 (Moore, 2007). O‘Neal attempted to reassure the public by stating the financial crisis
was ―reasonably well contained,‖ however, a few months later Merrill Lynch reported a $2
billion loss--the largest loss in the firm‘s history--as result of its controversial mortgage practices
(Hightower, 2008, para. 2). Thus, the risks placed on these subprime mortage securities began to
take its now predictable toll on Merrill Lynch. The people with terrible credit who had purchased
these homes, predictably defaulted on their mortgage payments, and those whose profits
depended on these mortgages being payed, tanked as did the CDO business.
Yes Men
O‘Neal‘s reliance on employees and people he liked, instead of qualified and proven
candidates is what many who were involved with Merrill Lynch attribute to its downfall. Among
these men that O'Neal liked, but were not qualified to serve in their respective positons were
Ahmass Fakahany, Osman Semerci, and Dow Kim.
According to authors Bethany McLean and Joe Nocera,
[Fakahany] had spent his career on the administrative side of Merrill, overseeing such
functions as human resources and computer systems, he wielded outsize power because
he was indisputably the one executive who was close to O‘Neal. ―Fakahany was the one
guy who could go into Stan‘s office, close the door, and say, ‗Can you believe . . . ?‘ ‖
says a former executive. He had worked in the Merrill finance office when O‘Neal had
been C.F.O., and had essentially hitched his wagon to O‘Neal‘s pony. (McLean & Nocera,
2010, para. 27)
O'Neal appointed Fakahany as co-president which included overseeing the internal CDO
team, and credit and risk management. Thus, O'Neal appointed a man with no prior knowledge
of the securities industry to serve as co-president and head of the risk department. This reveals
O‘Neal‘s thought process in whom he chose to associate and why as O'Neal appointed Merrill
Lynch executives based on who listened to him and who he liked instead of those who were best
for Merrill Lynch's success. This favoritism is ironic because O'Neal's personal agenda as head
of Merrill Lynch was to root out the "Mother Merrill" culture that had consistently displayed
favoritism in the past (Robertson & Sullivan, 2009).
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Stan O'Neal also showed his favortism towards Dow Kim and Osman Semerci. Kim
headed all of Merrill Lynch‘s fixed-income businesses. O'Neal kept Kim close to him because
Kim carried out O'Neal's orders without question. One such example is manifested in who Kim
wanted to retain as top traders and who he wanted to bring in. O'Neal consistently hounded Kim
about not making as much fixed-income revenue as Lehman Brothers or Goldman Sachs,
pressuring him to have his team of traders create CDO packages as fast as possible, and to sell
them as fast as possible. Instead of listening to and promoting one of his most experienced and
effective traders, Jeff Kronthal, Kim fixed his eyes on the young and aggressive CDO trader,
Chris Ricciardi. As Ricciardi amped up the CDO business, Kronthal and other veteran traders
warned Kim of the negative impact Ricciardi and like-minded traders would have on Merrill
Lynch. However, since O'Neal would not stray from the CDO business and rid Merrill of anyone
that posed opposition, Kim fired Kronthal and kept on Ricciardi. "Kim thought Merrill needed
10 more salesmen just like [Ricciardi, because] he was the kind of trader O‘Neal wanted at
Merrill Lynch" (McLean & Nocera, 2010, para. 20).
After Ricciardi voluntarily left Merrill Lynch, O'Neal and his loyal followers, Kim and
Fakahany, searched for someone to replace Ricciardi who shared his aggressiveness in the CDO
business. They then found Osman Semerci.
O‘Neal was quickly persuaded to bring him to New York and give him a title—global
head of fixed-income, currencies, and commodities…. Semerci, a 39-year-old British
citizen of Turkish descent, had a reputation for being extremely driven and extremely
aggressive—the traits O‘Neal wanted on the trading desks. Semerci wouldn‘t be afraid to
take big risks to generate big profits. (McLean & Nocera, 2010, para. 25)
O'Neal, Fakahany, and Kim, who collectively knew very little about the trading and
financial business, brought on Semerci because he would listen to them and aggressively attack
the CDO market, despite the warnings of Kronthal and others not to rely so heavily upon CDOs.
Semerci, Fahanky, and Kim were used to replicate the model O‘Neal had seen made so
successful by Lehman Brothers and Goldman Sachs. This was O'Neal's tunnel vision and anyone
who questioned him would be aggressively ousted. Thus, O‘Neal surrounded himself with yes-
men executives who supported his thoughts and decisions without question.
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The End is Nigh
In 2007, O'Neal began to see the writing on the wall and knew he and Merrill Lynch
needed an out to save them from their increasing losses. O'Neal began to look to outside sources
to save his firm. O‘Neal preferred to make decisions autonomously with little input from others
sources. This approach had a significant effect on his decision making. But, he was slow to take
action to save the firm because of his disconnect with the board and the gravity of the situation
he faced (Hoel, Glaso, Hetland, Cooper, & Einarsen, 2010).
O'Neal, liking to make decisions autonomously, asked one of his employees with whom
he was not close, to consult Wachovia Bank and see if they would have an interest in a merger
with Merrill Lynch. Later, the Merrill Lynch‘s Board discovered O'Neal's dealings with
Wachovia Bank and argued that Merrill Lynch did not need saving and that by him reaching out
to Wachovia Bank in the interest of merging would tarnish Merrill Lynch's image. O'Neal
countered that he had been through a similar situation before and knew merging would be what
would save the company. Board members rebutted that Merrill Lynch was a great franchise and
one solid as Coca-Cola (Olster & Farrell, 2010).
Although seeking a merger partner may have been of sound reasoning, O'Neal's merger
propositions included a separation package of $250 million if O'Neal was not appointed to lead
the newly merged firm. After the board discovered these details, they forced O'Neal out and he
"retired" (Duke, 2007; NPR, 2007). As an eventual result, O‘Neal‘s inability to persuade his
board to take action in 2007 and merge with another company would cost shareholders $50
billion (Hoel et al. 2010).
‘Cuz’
Stan O‘Neal explained his decision making process after the fact, stating ―a larger
consumer base as part of the financing base, and beginning to change the character of not only
the balance sheet, but also the composition of business at Merrill was something I would have
liked to have done strategically‖ (Cohan, 2010, para. 3). Since a majority of O‘Neal‘s pay was
tied to Merrill Lynch‘s short term performance, he was encouraged to take short term risks. As a
result, his intentions to expand Merrill Lynch‘s presence into new and riskier ventures resulted in
more risk but higher compensation. When questioned about whether he thought he delegated too
much risk, he replied, ―I can't really say. Also, I never stopped looking at the risk reports. It turns
out they didn't properly capture the nature of the risk‖ (Cohan, 2010, para. 1).
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Analyses
Decision Making Tools
O‘Neal acknowledged he was unaware of the complexity of the challenges faced by
Merrill Lynch as result of uncomprehensive data tools. Using a strategic decision making process
while simultaneously incorporating tools, such as data warehousing capabilities, contribute to the
flow of information and better informed decisions. Data warehousing capabilities is a five stage
process that provides organizational decision support with reporting, analysis, prediction,
operations, and disintermediation (Saporito, 2001). Stage one refers to reporting from a single
source of truth within the organization into a single repository that drives decision making across
all functions creating a cohesive foundation (Saporito, 2001). The second stage involves asking
questions in an interactive environment beyond the numbers. The third stage requires
management to leverage this information to forecast what could happen. The fourth stage
analyzes what is happening and provides continuous updates for day-to-day activities. The last
stage involves operational aspects of decision support that encourage interactive customer
relationship management in real time. Data warehousing is meant to increase the speed and
accuracy of business decisions.
Inquiry and Advocacy
Western leaders are trained to present and argue strongly for their views, but as they rise
in an organization they are forced to address complex and interdependent issues where one of the
only viable options is for groups of informed and committed individuals to think together to
arrive at effective solutions (Senge, Roberts, Ross, Bryan, & Kleiner, 1994). Executive level
positions require a skillful balance of inquiry and advocacy using reasoning and thinking while
encouraging others to challenge those views. This process allows for leaders to change a
company from within when senior management opens up and is willing to share information. In
using this approach, O‘Neal would have promoted a team of shared authority and increased
intimacy. O'Neal was ultimately responsible to dissolve barriers and reinvent relationships
among his senior team. This work requires deep reflections into fundamental beliefs about self,
work and power, while changing carefully guarded structures of the organization that deal with
compensation and promotion (Senge et al. 1994). O‘Neal attempted to make these large scale
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changes in a short time frame without an adequate foundation of addressing the two levers of
shared authority and intimacy from the top of the company (Senge et al. 1994).
Status Anxiety
The former CEO‘s ascension of the corporate ladder from humble beginnings earned him
the respect of his colleagues but contributed to status anxiety displayed in his relationships with
senior leaders of the firm. When an individual begins to achieve success and recognition in his
work, he comes to a realization that a change has occurred within himself and in his relationships
with associates (Zaleznick, 1963). The individual is subsequently viewed as a contender and
peers become cautious, distant, and constrained in their approach (Zaleznick, 1963). Those that
were once mentors become competition, as was the case for O‘Neal. Another side to the
dilemma of status anxiety is the need of executive subordinates to be near the source of power
and to be accepted and understood (Zaleznick, 1963). Under these conditions, communication
breaks down. The sense of loneliness an executive experiences is derived from the feeling that he
is the target for the aggression of others (Zaleznick, 1963).
O‘Neal had a reputation for being aggressive, aloof, and autocratic. His style of
leadership was perceived as bullying behavior (Hoel et al. 2010). Bullying is associated with
ongoing negative relationships where targets strongly resent the received treatment, viewing it as
systematic, ongoing, and being unable to defend themselves against it (Hoel et al. 2010). Former
executive vice-president and chairman, Win Smith of Merrill Lynch, commented on O‘Neal‘s
approach saying, ―what he did that made many of us non-supportive was to publicly castigate
Mother Merrill without understanding what Mother Merrill stood for‖ (Bartiromo, 2007, para. 2).
Behaviors involved with bullying may be subtle or difficult to recognize. O‘Neal‘s conflict
management style was a reflection of these behaviors. His organizational changes were
accomplished by forcing others to comply. Although described as intense and reserved, his
disconnection with the underlying challenges being faced by the company were apparent.
Coupled with O‘Neal‘s autocratic leadership approach, the breakdown in senior management
was predictable.
Conflict Management
O‘Neal‘s aggressive approach indicates an interactionist view of conflict (Zaleznick,
1963). His behaviors encouraged conflict within the company that was intended to lead to
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change and innovation. However, promotion of conflict without strong conflict management
skills and organizational norms that promote fair fights led to organizational dysfunction. Poor
conflict management let to O‘Neal‘s alienation, loss of ability to communicate with subordinates
and the board, and his eventual resignation.
It is challenging to maintain allies while in a position of power. The loss of allies can take
place in power conflicts that stem from personal integrity, friendship, loyalty, jealousy, egotism,
and hopes of prestige and recognition (Zaleznick, 1963). A source of dilemmas that leaders face
can be found within themselves. Executives must be able to resolve their inner conflicts so that
their actions are strongly grounded in reality, and that the leader does not find himself constantly
making or not making decisions to the disservice and confusion of subordinates (Zaleznick,
1963). When an executive finds himself immobilized by conflict, he will seek outsiders for an
explanation. He may hesitate to try and resolve the conflict within the firm because he feels
subordinates are holding out by providing too little information, stating confused positions, and
giving mixed signals (Zaleznick, 1963). In order to effectively resolve such a situation, an
executive must retain trusted board allies through garnering mutual trust.
Such trust was not established between Stan O‘Neal, his board, and subordinates. In 2007,
O‘Neal knew he had run out of options and needed to sell Merrill Lynch to save the company.
To go through with the selling Merrill Lynch, the idea needed to be presented to, and then
approved by the board. However, due to unresolved conflict with board members, he was unable
to strategically communicate with the executive team the reasons why they needed to sell.
Life after O’Neal: Déjà vu All Over Again
Despite Merrill Lynch‘s reports of the largest–ever quarterly loss--$8.4 billion for the
third quarter of 2007, O‘Neal still left the company with $161.5 million in stock, options, and
retirement benefits, and an office and executive assistant for up to three years (Associated Press,
2007). Merrill Lynch‘s record loss and O‘Neal‘s resignation were signs that the misuse of CDOs
had reached its climax and that someone in senior leadership was going to pay for it. Lehman
Brothers analyst Roger Freeman commented on the meaning of the resignation and transition
stating, ―Just because there's a change in the CEO doesn't change the challenges Merrill Lynch
faces. This could be a slow death spiral for these securities‖ (Ellis, 2007, para. 6). O‘Neal‘s
successor, John Thain came from Goldman Sachs and promised that as the new CEO of Merrill
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Lynch he would live up to his reputation as ―Mr. Fix It‖ (Robertson, 2009). Merrill Lynch was so
committed to securing Thain that the company paid him $15 million as a signing bonus.
However, after attempting to balance major problems within the company in 2008, and
the fates of hundreds of Merrill Lynch employees, the company reported a $10 billion loss
(Robertson, 2009). Additionally, in an executive hiring move similar to O‘Neal, Thain hired a
new Chief Financial Officer with no experience in a securities firm. Thain eventually pushed
through executive bonuses totaling $3.6 billion causing investors to lose complete confidence in
the firm (Robertson, 2009). In September of 2008 and one month after the extravagant bonus
payouts, Merrill Lynch was sold to Bank of America. The John Thain experiment had failed.
However, Thain was somewhat successful in fixing the broken Merrill Lynch, and
managed to sell over $30 billion of repackaged debt securities, but this was not enough to undo
what had been done in creating even more billions worth of dollars of mortgage backed
securities. Thain was unable to face the reality that his reputation of ―Mr. Fix It" would be
inapplicable to this situation, and Thain was he was forced out in January 2009 after the Bank of
America acquisition (Gasparino, 2008). The acquisition was completed and officially approved
by Bank of America shareholders only after the U.S. government provided $138 million in
assistance (Robertson, 2009).
Merrill Lynch is still suffering from the aftermath of the failed CDO business. Charges
were brought in 2013 by the Securities and Exchange Commission that Merrill Lynch misled
investors about CDOs and concluded that Merrill Lynch kept ―inaccurate books‖ while
outsourcing the risk prior to the financial crisis. In a statement made by George S. Canellos, co-
director of the SEC's Division of Enforcement:
Merrill Lynch marketed complex CDO investments using misleading materials that
portrayed an independent process for collateral selection that was in the best interests of
long-term debt investors. Investors did not have the benefit of knowing that a prominent
hedge fund firm with its own interests was heavily involved behind the scenes in
selecting the underlying portfolios. (Yu, 2013, para. 3)
The company was forced to pay $131.8 million in penalties without admitting or denying the
SEC‘s findings. Merrill Lynch also agreed to a censure and must cease and desist from future
violations of specific sections of the Securities Act and Securities Exchange Act pertaining to
CDOs (―SEC Charges‖, 2013).
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The 2008 Financial Crisis
The shock of the global financial crisis of 2008 was epic. In 2005, $178 billion was
issued in mortgage and other asset–backed CDOs and this number rose to $316 billion in 2006
(Morgenson, 2008). In addition to Merrill Lynch, the list of giant financial institutions that were
most involved in the CBO game included Lehman Brothers, AIG, Freddie Mac, Fannie Mae,
HBOS, Bradford & Bingly, Royal Bank of Scotland, Fortes, Alliance & Leicister, and Hypo
(Mathiason, 2008).
Commentators note that the market instability of the 2008 financial crisis was caused by
many factors, but one of the most prominent and impactful was the decision making process
behind the use of CDOs (Guina, n.d.). As a result of the mismanagement of these instruments,
financial institutions were saddled with mortgaged backed assets that decreased in value and
dried up their cash reserves, further restricting their ability to make new loans (Guina, n.d.). The
impact on the financial industry was catastrophic and echoed throughout the global economy.
This created a banking crisis and a domino effect endangering the entire economic system as
credit dried up (Guina, n.d.).
Simon Johnson, former chief economist for the International Monetary Fund offers his
perspective on the future of large financial institutions (superbanks) said:
The superbanks were sort of exercises in empire building and aggrandizement of the
CEOs. There are people who say the main job of the CEO is actually lobbyist, because
the CEOs can't control these banks anymore. Nobody understands the risks that they've
taken on in these kinds of global businesses and their very complicated derivative
businesses, for example. I think actually it's self-evident that nobody understood those
businesses, because they couldn't have messed up in this way if they had. So the
superbanks I think are finished, should be finished. They're not very efficient, they're
politically way too powerful, and they should be broken up and go into decline. Whether
they will or not depends on the success of their CEOs in terms of their political lobbying.
So that, I think, is where the struggle is right now. (―The Future‖, 2009, para. 11)
Concluding Remarks
The intentions of weeding out the Mother Merrill culture, cutting costs, and preserving
Merrill Lynch as an independent company were noble. But, O‘Neal‘s approach to leadership,
conflict management, and decision making had a widespread negative impact on both Merrill
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Lynch and the entire economy. His focus on CDOs and the reward systems at Merrill Lynch
encouraging aggressive short term gains without understand the instruments‘ inherent risks.
Moreover, his blatant favoritism led to less collaboration and engagement in the company‘s
executive ranks.
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