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What are the key points for chapter 1.1?
- The five things that every manager should have are Fealty, charity, prudence, accountability, and Equity.
- How the global economy effects on executives’ ethical standards.
- Some of the big companies violate the right of employees.
- Lack of trust because of the negative ethical standards rate, threat the capitalism.
- Five advices for an MBA student “assuming”.
What did I learn?
I learned that, managers should embrace the responsibilities of stewardship by the following:
Viewing the talents and treasure anyone’s command as a trust rather than as the means for personal aim.
- Be able to put the concerns of teamwork before my own.
- Being responsible to secure the organization’s future.
- Sense of responsibility towards any problems in the organization.
- Always be sure that all the financial and moral rewards are taken by however deserves it.
- As citizens and consumers, we must do whatever we can to ensure that when governors or the members of the board of any company have a meeting; our issues and concerns exist in their list of dissection.
If I want to improve my stewardship in my business life, the next approach shall help me with that:
My company as my widowed mother, my boss as if he was my older sibling, my employees as if they were my childhood chums, my company’s primary customers as if they are my children, and imagine that my walking to work is because I want to, and not because I have to.
How will I apply the knowledge?
No matter what is my possession, I have to be a responsible steward. I will treat my employees based on how they will benefit the organization, not because of how they will benefit me. Also as I expect from my employees to put the organization’s goals before their own goals, as a leader my responsibility is to give first priority to the organizational goals than my employee’s goals, after that I can proceed to my goals.
As the leader of my company, I will seek to secure my company’s future, as well as the employees’ future career with the company. I will be able to do that by reassessing my company’s SWOT analysis and figure out how to raise the company profits, and improve both employee satisfaction and customer service, so that I get where my company wants to be. That will not be enough without making an at least five-year plan, alternative plans and rescue plans.
In today’s Business world, problems at work are commonly seen, whether it’s because of the company’s performance or about the employees. If it is about the company’s performance, there are many steps to solve it as I mentioned above. However, if it is because of the employee’s performance, then my first step would be to talk to the individuals concerned. Then I will try to figure out if there are any circumstances that led to the problem, or if there are tribulations that I can deal with, instead of directly starting to blame the particular employee.
Justice in life is very important; thus even in business justice is needed. One of my aims is to ensure that there is no one under my management will be deprived of his/her rights. This includes rewarding them according to their works, and not according to what I want. Rewarding how one deserves will enhance the spirit of competition among the employees, plus enhances the feeling of equality at the workplace.
I will be sure that my feelings as a citizen towards some ministers in my country, who discuss their interests rather than our interests, will not exist for my employees. Therefore, I believe that solving my employees’ issues would improve their work, which will benefit the company’s performance in the end.
By applying the approach of Mr. Gary Hamel, I will sacrifice my time and effort for my company. I will also respect my boss because he is the leader of the ship, and he/she has both the experience and knowledge. Build a great relationship with my employees, by respect them, treat them nicely and, what is more, important is to listen to them, which will let them feel as if they are a significant partner in the organization. Moving to the primary customers, one of my plans is to provide exceptional customer service, also analyze my customer feedback and figure out my business’s weaknesses, to sum up this point I would say “putting myself in my customer’s shoes”. Finally, everyone’s potential related to his motivation, thus always I will motivate myself at the workplace as I enjoy working instead of working because I have to.
What are the key points for chapter 1.2?
- Analyze the global economic crisis from a moral point of view.
- The housing boom caused by the following factors: Easy Money, Securitization, Insurance, Complexity, Leverage, and Illiquidity.
- Alchemy never would work in business.
- Things that can't go on forever usually don't.
- Risks and returns are always correlated.
- Stupidity is contagious.
- Five elements causing the banking crisis: Deceit, hubris, myopia, greed, and denial.
- What we expect from the government when such a crisis happened.
- Blind indifference to the human costs of ideological zeal.
- Public responsibilities abandoned for political gain.
- Milquetoast regulators more inclined to protect their backsides than raise an alarm.
- Capitalism and morality.
- Some negative actions have been done by companies and executives.
What did I learn?
There are many things that I have learnt from this chapter. I have learned that the economic crisis happened when people neglected the human and moral dimensions of economic life, not because of the banking crisis, the credit crisis, or the mortgage crisis. A good example for that is when banking leaders stole the US economy for personal goals. I learned the exact causes behind this crisis, which are Easy money, securitization, insurance, complicity, leverage, and illiquidity.
Firstly, the dirt-cheap money, which encouraged U.S consumers to go with debts raising the risk of widespread mortgage, defaults. Secondly, by selling the collateralized debt obligations, to third parties, the bankers were able to move loans off their books. As a result, between 2005 and 2007, more than 85% of all U.S mortgages were securitized. Thirdly, the credit default swaps made it possible for CDO investors to protect themselves from a house collapse. Fourthly, banks make the financial rules intricately, and of course they did not make it by accident. Fifth, much of leverage at that time came from loans, which are made by commercial banks. And when investments began to default their debts, banks started to call in their loans, which force investment banks and hedge funds to deleverage in down market. Then they had to sell other assets, which sent the stock market into a great abyss. Finally, in the absence of reliable pricing data, bankers had no choice but to take punishing write-downs of their mortgage-backed securities. As a result the reliable pricing data it’s too importance to avoid such crisis.
I also learned that no matter how clever I am, I will not be able to predict when my loans would help me in my investment or not. Also, things don’t last forever whether it’s useful to me or not. Moreover, I had learned that risks are always linked to investments. Also the stupidity and the delinquency are contagious, a good example of this, despite the fact that bankers do know the situation, Wall Street’s scientists did not heed bankers and they go further than that to abound their responsibilities as the guardians of capitalism’s most important citadels.
Moreover, I learned that there are five moral qualities that led to such crisis. The first one is Deceit; a good lesson for that: any financial instrument that is built on top of lies and misrepresentation will be flimsy at its core. The second one is Hubris; I learned what the Wall Street scientists had learned that distributing risk is not the same thing as eliminating it. The third one is Myopia; I learned from this that as I must look ahead, it’s more important to learn from the past. The fourth one is Greed; an example for this, when the mortgage originators approved all those loans without requiring a minimum income, job, or assets, show how the Wall Street bankers were greedy. The last one is Denial, which is the aspect of always bringing negative result; Indeed stupefaction is the product of denial.
I learned that if I can’t find within myself a little righteous anger about the way my company fulfills its responsibilities, and then I will not be very effective in helping repair the moral fabric of capitalism.
How will I apply the knowledge?
Appling this knowledge in my work requires me to be more responsible for the human and moral dimensions. Also, I will always consider the risk of any debt that I was planning to get. As things don’t last forever, so I have to secure my investment by taking action when the market values continued to increase. I will never build my financial instrument on lies. Looking ahead is too important as well as looking behind to learn from the past. I should not be Greedy, and to follow the rules whatever the chance is of violating it.