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Importance of social responsibility of business
Importance of social responsibility in business
Importance of social responsibility in business
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Were business schools to blame for the financial crisis? What should business schools do to help prevent similar crises in the future? In the august, striking news from the Bloomberg News with the title “Shanghai Plot of Land Sells for Record Price Amid Credit Binge” has appealed a nationwide discussion of how soon will the potential and predictable national financial crisis caused by the property bubbles sweep the China. Some people started to blame the CEOs of the real estate companies with their greed. However, more people are blaming on the business schools where generates those CEOs. This is not the first time that the publics direct their spearhead against the business schools. In spite of the fact that the people holding MBA degrees occupy many important positions in the business companies and banking systems, the business schools, however, should not be blamed for the financial crisis. Their correlation is not evidence that can prove their causation. Business schools are not only teaching students analyzing the date from the profit margin and making strategies to solve problems and to improve company performances, they also put efforts on developing more courses of business ethic, social responsibility and environmental …show more content…
The CSR courses included in the curriculum showing that they are not only teaching people on making profit, but they are also contributing to the society. In conclusion, business schools should not be blamed for the financial crisis based on the above reasons. At the same time, there are more stages need them to step on one by one in order to avoid the public query and
Many people today would consider the 2008, United States financial crisis a simple “malfunction” or “mistake”, but it was nothing close to that. Contrary to what many believe, renowned economists and financial advisors regarded the financial crisis of 2007 and 2008 to be the most devastating crisis since the Great Depression of the 1930’s. To make matters worse, the decline in the economy expanded nationwide, resulting in the recession of 2007 to 2009 (Brue). David Einhorn, CEO of GreenHorn Capital, even goes as far as to say "What strikes me the most about the recent credit market crisis is how fast the world is trying to go back to business as usual. In my view, the crisis wasn't an accident. We didn't get unlucky. The crisis came because there have been a lot of bad practices and a lot of bad ideas". The 2007 financial crisis was composed of the fall of many major financial institutions, an unknown increase in mortgage loan defaults, and the derived freezing up of credit availability (Brue). It was the result from risky mortgage loans and falling estate values (Brue) . Additionally, the financial crisis of 2007 was the result of underestimation of risk by faulty insurance securities made to protect holders of mortgage-back securities from risk of default and holders of mortgage-backed securities (Brue). Even to present day, America stills suffers from the aftermaths of the financial crisis.
To achieve this, “banking firms provide [them] with a way to maintain [their] elite status in society by providing avenues to wealth and power that other professions do not” (179). They leave them unconsciously with an ultimatum, to either continue living their prestigious lifestyle and be the in the top with the elites, or settle for lower than what they’ve worked for, which is any other career path. Students who attend Princeton and Harvard who aspire to become teachers or writers are told they are settling for less than what they deserve and will be “more happy” with an investment banking career. There is a subtle form of manipulation being acted upon prospective students from investment bankers which is hidden by all of the positive, glamorous stigmas of Wall Street. To fully understand Wall Street as a whole, someone must know the small components that make it come together as a whole. This is shown through Karen Ho’s observations such as learning that students at Princeton and Harvard do not need to hold a finance degree to obtain a job on Wall Street. Whereas, Yale and Brown students must have a finance degree and are forced to show their abilities at a higher level than Princeton and Harvard students. Underneath all the dashing appearances and smart conversations on Wall Street, there is a hidden bias and a constant manipulation system in order for them to get what they want. The small components of Wall Street consist of their “small” priorities,
The years 2008 shined a light on a group of people who were considered high society. When the stock market crashed in September 2008, the world shines a spotlight on the financial corporation. Words such as hedge fund manager and financial instrument such as credit default swaps are not words not known to everyday citizens. The economic downturn forced society to ask question not normally asked.
At the end of September and the beginning of October, stock prices began to decrease. The crash was caused by the nervous investors, which sold 16.9 million stocks on the New York Stock Exchange in one day. Many businesses invest most of their money in the stock market to make more money, but when the stock market crashes, so do businesses that have to shut down because they have no money. Most of the nation’s banks also failed because they had to put the depositors money in the stock market to increase, but when it crashed people lost most of their money. Many people started to lose faith in the stock market and “you can’t have a healthy economy without confidence in the market.”
Many Americans are seeking an ideal presidential candidate for our next election; furthermore, many college students seek a candidate that has their best interest in mind, leading many to focus on Bernie Sanders and his ideas for an affordable education system. In the article, The Myth of the Student Loan Crisis, Nicole Allan and Derek Thomas focus the article on the risky investments of college and questioning the rising debt levels as a national crisis. While Allan and Davis claim the risk of college and mention rising debt levels as a national crisis; however, Allan and Davis use charts to support their stance while avoiding the issues Americans need to focus on, such as the rising cost of college, “justifiable debt”, and the cost of those not contributing to society.
What caused the Great Recession that lasted from December 2007 to June 2009 in the United States? The United States a country with abundance of resources from jobs, education, money and power went from one day of economic balance to the next suffering major dimensions crisis. According to the Economic Policy Institute, it all began in 2007 from the credit crisis, which resulted in an 8 trillion dollar housing bubble (n.d.). This said by Economist analysts to attributed to the collapse in the United States. Even today, strong debates continue over major issues caused by the Great Recession in part over the accommodative federal monetary and fiscal policy (Economic Policy Institute, 2013). The Great Recession of 2007 – 2009 enlarges the longest financial crisis since the Great Depression of 1929 – 1932 that damaged the economy.
This essay will examine the causes of the 2008 Global Financial Crisis (GFC) from a Marxist perspective. This paper will specifically examine and critique how Marx’s Theory of Crisis can be applied to understand and interpret the underlying structural causes of the 2008 Global Financial Crisis.
Cabral, R. (2013). A perspective on the symptoms and causes of the financial crisis. Journal of Banking & Finance, 37, 103-117
The "subprime crises" was one of the most significant financial events since the Great Depression and definitely left a mark upon the country as we remain upon a steady path towards recovering fully. The financial crisis of 2008, became a defining moment within the infrastructure of the US financial system and its need for restructuring. One of the main moments that alerted the global economy of our declining state was the bankruptcy of Lehman Brothers on Sunday, September 14, 2008 and after this the economy began spreading as companies and individuals were struggling to find a way around this crisis. (Murphy, 2008) The US banking sector was first hit with a crisis amongst liquidity and declining world stock markets as well. The subprime mortgage crisis was characterized by a decrease within the housing market due to excessive individuals and corporate debt along with risky lending and borrowing practices. Over time, the market apparently began displaying more weaknesses as the global financial system was being affected. With this being said, this brings into question about who is actually to assume blame for this financial fiasco. It is extremely hard to just assign blame to one individual party as there were many different factors at work here. This paper will analyze how the stakeholders created a financial disaster and did nothing to prevent it as the credit rating agencies created an amount of turmoil due to their unethical decisions and costly mistakes.
Many of the “Elite” financial figures could not give a definite answer about why this crisis occurred as well as stated by many of the people interviewed, “We don’t know how it happened.” Many young brokers working for JP Morgan back in the middle of the 90’s believed they could come up with a way to cut risk, credit derivatives. Credit Derivatives are just a way of using other methods to separate and transfer risk to someone else other than the vender and free up capital. They tested their experiment with Exxon Mobile who were facing millions of dollars in damage for the Valdez Oil Spill back in 1989 by extending their line of credit. This also gave birth to credit default swaps (CDS) which a company wants to borrow money from someone who will buy their bond and pay the buyer back with interest over time. Once the JP Morgan and Exxon Mobile credit default swap happened, others followed in their path and the CDS began booming throughout the 90’s. The issue was that many banks in...
The recent Global Financial Crisis (GFC) initially began with the collapse of credits and financial markets, which caused by the sub-prime mortgage crisis in the US in 2007. The sub-prime mortgages were given to high-risk lenders (with bad credit history) who were in danger of defaulting, which eventually caused a global credit crunch, where the banks were unwilling to lend to each other. In October 2008, the collapse of the major financial institutions and the crash of stock markets marked the peak of this global economic slowdown (Euromonitor International, 2008).
The classical view of CSR is a prominent ideology which business organizations are seen merely as profit-driven organizations. Simply put, businesses work for the sole purpose of making a profit. Thus, this profit motive is the sufficient and unique social identifier that separates a business organization from other institutions in society. These business organizations have a limited, yet essential role in society. Social concerns are considered important, but businesses, in the classical view, are focused solely on the economic activities and are judged accordingly. By having a limited role in society (i.e.,...
Several financial statements have been prepared to describe the causes of this current financial failure. There are a variety of factors that has resulted in the explosion of this financial crisis. Downfall of the US housing market; highly benefited financial dealings and a low interest-rate promoting borrowings, have all contributed to the recession monetary market. Let us now consider these various reasons in a little detail.
It had been very difficult to start out in the world of Business Administration as a student during this rough economic time. Many students have had a difficult time getting involved in the business world due to the low demand in jobs and internships. This is a big issue because it does not allow students to understand the real conflicts and agreements that have to be made day by day in the business world. Another thing is that it also limits their views to understand this same world.
Global debt crisis is essentially widespread globally. There are different issues that can cause debt crises. Currently, different countries around the world are facing debt crises, and definitely that is because of an error in the banking system. We’ll see below what are the main causes briefly and what are really the objectives that lead to a collapse in the banking system or so financial crisis.