Ag Case Study Aig Case

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AIG’s corporate culture played a big role in its downfall. They seemed to be more concerned about their own personal gains in the short run than what the effects were going to be in the long run. The company did very poorly and accumulated billions of dollars in the red, and still many top executives were getting paid in cash bonuses after the bailout. These bonuses amounted to almost 2-3 times their salaries they earned before the bailout. AIG’s focus was on the reward system this placed little responsibility on executives who made poor decisions. This resulted in many believing AIG had neither concern nor acknowledgement to changing their ways. Also, shortly after the bailout AIG spent over $300,000 on a conference held in phoenix at a lavish resort. This did not sit very well with stakeholders. AIG executives and upper management time and time again were showing little change in business practices even after the bailout.
AIG’s corporate culture also played a role in its downfall by allowing higher-risk transactions to continue time after time. Even though the risk was...

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