Saturday, August 31, 2019

The Ethics of Enron

Reading Enron's code of ethics, on first impression, you would expect nothing but excellence from a respectable company. Their code of ethics relied heavily on effective communication, a high level of integrity, and nothing but excellence. Through this code they portrayed a business that was capable of exceeding greatness to the highest standard. This soon to be eluded fact jaded by the deception with Enron's unethical actions, which would ultimately lead to its untimely demise. Enron, at one point, was the seventh largest company within the Fortune 500. Careful accounting strategies allowed it to be listed as the seventh largest company in America, and it was expected to dominate the trading it had virtually invented in communications, power and weather securities. Instead it became the biggest corporate failure in history. Enron was formed in 1985, by Kenneth Lay, CEO. Lay graduated from the University of Missouri with a degree in economics. He then went on to get his Ph.D. from the University of Houston. With his extensive background in economics, Lay began to work for Exxon Mobil, and thus began his life in the energy business. He soon began to get involved in the natural gas market, which led him to propose the idea of the deregulating energy. Lay merged his company, Houston Natural Gas, with Omaha, Nebraska's InterNorth to form Enron (Briefing 2012). In addition to traditional sales and transportation of natural gas, Enron, under Lay's direction, invested into, what at the time was, future markets. From around 1983-1987, oil prices fell drastically. Buyers of natural gas switched to newly cheap alternatives such as fuel oil. Gas producers, led by Enron, lobbied vigorously for deregulation (Briefing 2012). Once-stable gas prices began to fluctuate, spooking buyers. That's when Enron started marketing futures contracts guaranteeing a price for delivery of gas sometime in the future (Briefing 2012). The government, again lobbied by Enron and others, deregulated electricity markets over the next several years, creating a similar opportunity for Enron to trade futures in electric power. With this, Enron began to grow at a rapid pace, having their assets grow by $50 billion in the matter of a short fifteen years. Being seen as a powerful company was undermining motive that lead to Enron's one main goal that they continuously strove to achieve. Who would not enjoy having a superior image for as long as this company did. Enron, before its collapse, was one of the worlds leading electrical, natural gas, and communication companies (NPR 2012). The company, with profit of $101 billion in 2000, markets electricity and natural gas, delivers physical commodities and financial and risk management services around the world, and has developed an intelligent network platform online business (NPR 2012). However, all so called good things for Enron came to an end. Despite Enron's perceptual display of ethical standards in its transactions, social conduct, environmental and financial reports, evidence of unethical behaviors such as engaging in massive corporate fraud, misleading its investors and employees about its financial status bloated out when it collapsed in 2001. By excluding its partnerships with Chewco and Joint Energy Development Investments (JEDI) from its financial statements, Enron was able to hide its $600 million debt from the balance sheet. For about eight years, Enron used complex and unethical accounting schemes to reduce its tax payments, overstate income and profits, inflate stock price and credit rating, hide losses, transfer the company's money to themselves, and fraudulently misrepresent its financial condition in public reports. Enron Senior Management did perform a job well done until it fell apart when Enron's share price started to drop in 2000. Before Enron filed for bankruptcy protection, the Securities & Exchange Commission (SEC) already found out these accounting irregularities where Enron clearly misled its shareholders, analysts and creditors. By the end of 2001, it left thousands of employees who have invested their savings and pensions in the company and small shareholders maintaining their investments; while members of Enron management sold their shares knowing the falling performance of the company. Enron was not protecting the interest of its stakeholders at all. Thousands of employees lost their jobs and significant amount of retirement savings, while investors were left with worthless stocks. These further affected their families and their community as a whole. Enron's scandal damaged public trust on corporate leaders. The behavior of Enron's leaders were far from the good leadership behavior we know of, where leaders should demonstrate integrity. What's worse was that, the Auditors of Enron who should have been the one to report their accounting malpractices long time before, accepted the accounting practices and remained silent. This was most probably because of the conflict of interest because these auditors earned high revenues from audit and non-audit works with Enron. In the most basic sense, lack of management integrity and the resulting impact on corporate culture was the root cause of Enron's downfall and the fundamental ethical issue. Enron's management chose ego gratification, power maximization, stakeholder deception and short-term financial gains for themselves, while destroying their personal and business reputations and hurting literally tens of thousands of stakeholders. Enron's scandal called for the need of significant change in accounting and corporate governance in the U.S. This is why the Sarbanes-Oxley Act (SOX) of 2002 was introduced. It was officially signed into law july 30th, 2002 to protect investors by imporoving the reliability and accuracy of disclosures made pursuant to securities laws. Sarbanes-Oxley developed the Public Company Accounting Oversight Board, a private, nonprofit corporation, to ensure that financial statements are audited according to independent standards. The legislation also mandates that companies listed on stock exchanges have completely independent audit committees to oversee the relationship between the companies and their auditors. Sarbanes-Oxley further banned most personal loans to any executive officer or director, accelerated reporting of trades by insiders, and stiffened penalties for violations of securities laws. SOX is generally applicable to all companies, regardless of size, who require to file reports with the SEC. SOX established the creation of the Public Company Accounting Oversight Board to oversee the audit of public companies that are subject to the securities laws. The PCAOB establishes auditing, quality control, ethics, independence and other standards relating to the preparation of audit reports. They are also responsible for conducting inspections of registered public accounting firms, as well as conducting investigations and disciplinary proceedings, where, justified, concerning registered public accounting firms. The Enron case will forever stand as the ultimate reflection of an era of near madness in finance, a time in the late 1990's when self-certitude and spin became a substitute for financial analysis and coherent business models. Controls broke down and management deteriorated as arrogance overrode careful judgment, allowing senior executives to blithely push aside their critics. Indeed, it could be argued that the most significant lesson from the trial had nothing to do with whether the defendants, both former Enron chief executives, committed the crimes charged in their indictments. Instead, the testimony and the documents admitted during the case painted a broad and disturbing portrait of a corporate culture poisoned by hubris, leading ultimately to a recklessness that placed the business's survival at risk. The ethical lesson that can be learned front the Enron scandal is that, no success is important enough to be achieved at the price of dishonesty and illegal activities. Not only did the scandal tarnish the reputation of Enron but it ruined the lives of the people who belonged to the name, People who have invested time and money into the company. It goes without saying, corporate values is far more important than unethically scheming in order to make profits.

Friday, August 30, 2019

The Neanderthal Man In Retrospect

We have always been fascinated by Darwin and his theories of evolution. With so many â€Å"schools of thought† of how the earth came into existence, it seemed impossible to narrow down our choices, analyze each theory, and prove everything that it postulates. It was a clear indication that the search for our ancestors, and the â€Å"missing link† will continue until an answer is sought. But, will we ever find out? For now, that remains to be seen. The Neanderthal man is believed to be one of the â€Å"missing links† in our ancestry. Like the Cro-Magnon man, Peking man, and Java man, this â€Å"species† became extinct 32,000 years ago. The purpose of this paper is to familiarize the reader with the Neanderthal man and the possible theories that might have led to his extinction. The remains of the Neanderthal man, also known as Homo (sapiens) neanderthalensis, was discovered in 1856 by workers quarrying for limestone in Neander Valley, Dusseldorf, Germany. These fossils were also found in other parts of Europe and Asia. They were considered a subspecies of humans because upon examination, they had features that are almost similar with humans, except for heavy brow ridges, a long low skull, and a robust skeleton (Foley, 2002). Neanderthals were shorter than the modern man, and as previously stated, had prominent brow ridges. Aside from that, they had low, sloping foreheads, a chinless and heavy, forward-jutting jaw, extremely large front teeth, wider shoulders and pelvis, more conical rib cage, and shorter forearms and lower legs (Columbia Encyclopedia, 2005). Some scientists, majority of which are paleoanthropoloists, claim that these were not a subspecies of humans because of their more â€Å"primitive† appearance. According to Stringer and Gamble (1993), the Neanderthals are a late form of Homo erectus or a descendant of that species. It was believed that the Neanderthals have been living in Europe 200,000 years before the Homo sapiens arrived (BBC News, 2007).In van der Dennen’s Book Review Essay on Neanderthal Man (2005), he stated that: This was the first evidence of a distinct (and now extinct) species or subspecies of human, Homo (sapiens) neanderthalensis, that lived during the later part of the Pleistocene epoch, more familiarly known as the Ice Age, some 200,000 to 30,000 years ago. During 1917, Emil Bachler, in one of his excavations in the mountains of Switzerland, found no fossils of the Neanderthals (Van der Dennen, 2005). However, Mousterian tools and the remains of many cave bears were in abundance. Mousterian tools were most closely associated with Neanderthals. Bachler also felt that the bones and the tools were part of a ritual, and believed that the Neanderthals practice some sort of   â€Å"bear cult† (Van der Dennen, 2005). This led to the notion that the Neanderthals, like humans, had some form of communication and â€Å"culture†. When the fossil of this subspecies was studied by world-renowned pathologist and anatomist, Rudolf Virchow, he found out that the remains had evidence of rickets and osteoporosis, and he attributed this to the ape-like appearance of Neanderthals. Rickets and Osteoporosis is a manifestation of Vitamin D deficiency. Francis Ivanhoe (1970) in his paper supported Virchow’s   statement and postulated that the disease causes skeletal deformities and enlargement of the liver and spleen (Thompson, 2002). This maybe true because in the Pleistocene epoch, more commonly referred to as the â€Å"IceAge†, sunlight was a rarity. Vitamin D, in itself is stored in an inactive form and in order for it to be utilized by the body, it needs to be converted to its active form by UV rays (good source, sunlight). Therefore, it is not surprising that a number of fossils recovered during this era had evidence of bone deformities. However, Trinkaus and Shipman (1992), claimed that Neanderthal features are not caused by these bone diseases and argued that the bones of the 1st Neanderthal, were about 50% thicker than the average modern man. Klein (1989), supported this idea by comparing the long bones of Neanderthals and those of rickets’ victims. He claimed that both of their long bones are more curved than normal but rickets causes a sideways curvature of the femur, while Neanderthal femurs curve backwards. If Neanderthals are more human than ape, then it should follow that these subspecies should have survived today. Surprisingly, this is not the case. One of the earliest theories of the extinction believe that the â€Å"Ice Age† era, with its harsh climate, could have killed the Neanderthals. It points out that during this period, it was not only the climate that affected them, but the scarcity of resources were a factor as well. However, Professor Katerina Harvati, a palaeoanthroplogist from the Max Planck Institute for Evolutionary Biology, Germany, said: â€Å"The more controversial date of circa 24,000 years ago, places the last Neanderthals just before a major climate shift that would have been characterised by a large expansion of ice sheets and the onset of cold conditions in northern Europe† (Morrelle, 2007). Another theory is is the â€Å"candelabra model† or â€Å"multiregional evolution† theory. According to Trinkaus and Shipman (1992): â€Å"Though the evidence in different regions of the Old World records genuinely different events, nowhere is there evidence for violent confrontations between Neandertals and modern humans (myths notwithstanding). The mosaic of local evolution, migration, admixture, absorption, or local extinction of Neandertals was a complex process that occurred over the last 10,000 years† (p.416). But, Tattersall (2005), in his book, had another theory. He is convinced that the extinction of Homo neanderthalensis was brought about by the arrival of the more intelligent and   more adaptable Homo sapiens, and that the latter killed the race of the former. On his book he wrote: â€Å"It is vanishingly unlikely, however, that peaceful assimilation was an overall option, with groups of the two kinds of humans [the resident Homo neanderthalensis and the invading Homo sapiens or Cro-Magnons] exchanging members when they met and going their separate ways, or joining forces. More likely, perhaps, if intermixing is to be considered at all, is a scenario of well-equipped and cunning Homo sapiens descending on Neanderthal groups, killing the males – through strategy and guile, certainly not through strength – and abducting the females†(p. 202). However, there was no evidence of large scale killings (Richards, 1987), and the theory of â€Å"Biological displacement† was proposed. It states that the Neanderthals and modern man (Cro-Magnons), coexisted and lived side by side. But, due to the fact that humans are much more intelligent than these subspecies, they might have indirectly led to the extinction of Neanderthals by driving them away from their territories. These led to occasional violence between the groups, but, as expected the humans won, driving them to places with insufficient resources for sustenance. Ironicallly, the very species that are studying these Neanderthals are the cause of their extinction. Works Cited â€Å"Neanderthal Man.† Columbia Encyclopedia 6th edition. 2005. Foley, Jim. â€Å"Creationist Arguments: Neandertals† 31 October 2002. Talkorigins. 14 September 2007 http://www.talkorigins.org/faqs/homs/a_neands.html Ivanhoe, Francis. â€Å"Was Virchow Right About Neanderthal?† 1970. Nature, 227:577-579 Klein, Richard. The Human Career: Human Biological and Cultural Origins. 1989. Morrelle, Rebecca. â€Å"Neanderthal Climate Link Debated†. 13 September 2007 BBC News. 15 September 2007 http://news.bbc.co.uk/2/hi/science/nature/6992721.stm Richards, G. Human Evolution: An Introduction for the Behavioural Sciences. 1987. Stringer, Andrew and Clive Gamble. In Search of Neanderthals. 1993. Tattersall, Ian. The Last Neanderthal: The Rise, Success, and Mysterious Extinction of Our Closest Human Relatives. 2005. Thompson, Bert. â€Å"Neanderthal Man – Another Look.† May 2002. Apologetics Press. 15 September 2007 http://www.apologeticspress.org/articles/491 Trinkaus, E., and P. Shipman. The Neanderthals: Changing the Images of   Mankind. 1992. Van der Dennen, Johan. â€Å"The Continuing Essay of Neanderthal Man: Book Essay.† 2005. Rechten University of Goningen. 15 September 2007 http://rechten.eldoc.ub.rug.nl/FILES/departments/Algemeen/overigepublicaties/2005enouder/NEANDER/NEANDER.pdf â€Å"The Day We Learned To Think – Programme Summary.† 20 February 2007. BBC News. 14 September 2007 http://www.bbc.co.uk/science/horizon/2003/learnthink.shtml   

Thursday, August 29, 2019

As Fashion Merchandiser

How to Draw Strategy from a Comparison Shopping Report Milliard's Mini-Case As an FM student you have already done lots of shopping reports. This exercise is intended to show you how to use this information as an analytical tool. Comparative shopping Is done In the Industry constantly. But the point of the task Is to Identify strengths and weaknesses of your stores merchandise mix In comparison to the competitors'. Are you offering the customer something unique in one segment of your business, but not in others? Are you Just a poor second in comparison too throng competitor?Are you under- or over-developed in certain classifications? Are your prices in line with the rest of your store? In relation to your competition? Are there business opportunities that no one has addressed yet (market voids)? In this exercise, you are the buyer for Milliard's Department Stores Men's Sport Shirt Department. Your boss has asked you to do a comparison shopping analysis in order to determine ways to a djust your assortments to improve sales and profits. Milliard's Is a mostly moderate department store with some business done at better price points as well.Women's, Men's, and Kids' are all carried, along with all the usual Home Store categories. Within Women's, both Misses and ‘Women's† (Plus size) are carried. The store is predominantly branded, but there is some private label merchandise carried within the departments. For 201 3 Private label has not been as profitable as Branded merchandise and the buyer of Men's sport shirts is seeing a trend toward â€Å"labels† Note: This Is a self-contained case study. â€Å"Mallards† Is a fictitious store. Therefore, you must Limit yourself to Information In this write-up only. Work on the skill of writing with specificity.Don't answer competitor-by- competitor; give one assessment that takes all competitors into consideration) b. Why are these segments at a competitive advantage? C. Which components are not at a competitive advantage? D. Why not? Third Step After finishing your study, you read in the paper that Thomas & Blake is going out of business! Even though they continued to have decent revenues, their debt load finally did them in. They could no longer afford to keep the stores open. 3. A. Does this change provide an â€Å"environmental opportunity' for you? . Does the issue of branded vs.. Private label enter into this consideration? Why or why not? C. How might you adjust the assortments in your department to â€Å"pounce† on the misfortunes at Thomas & Blake? Be very specific. A. Yes, When Thomas & Blake goes out of business, that gives you an opportunity to take over Thomas & Flake's market share with the right merchandising strategy. B. Maybe , because Thomas & Blake is a typical department store that doesn't have over Thomas & Flake's customer. They might want to consider private label. C.Compare to Thomas & Flake's shopping analysis. Milliard's needs make the price ran ge of the better regular classification a bit higher from $80 to $120. Also, the price range of the better big/Tall classification need to be adjusted higher from $50 to $90 in order to meet the need of the customers who used to shop at Thomas & Blake. D. Fourth Step Of course, nothing stands still in the world of retailing. Just as you start to celebrate the loss of a key competitor, another news item hits the local paper: Wall-Mart is coming to town!! Ouch!

Strategic decion making for a company in crisis Assignment

Strategic decion making for a company in crisis - Assignment Example However, American car makers also felt the sharp punch of economic slowdown. Another reason for weakening of the automobile industry was the rising fuel prices round the world. This was linked to the energy crisis of 2003-2008. This discouraged the customers to buy Sport Utility Vehicles (SUVs), as these vehicles were not fuel efficient. The big three automakers in America, General Motors, Chrysler and Ford had to shift their focus to manufacturing trucks or fuel efficient cars due to shifting focus of the customers. As in 2008 situations were turning critical, so the prices of the raw materials were also increasing (Jansen â€Å"Why the UK’s Auto Industry Remains Crisis Free†). The impact of the global financial crisis was more on the automobile sector than on the housing and financing sector. The first reason was the big three automakers of America were running with life-support or financial aid from the US government. The credit market had frozen, so the orders were being cancelled, the plants were being shut temporarily and the suppliers were not paid their invoices. The debt loads were increasing and the high labor cost was an additional pressure for the companies, surviving in this environment. The second reason was the high internal cost and increasing longevity of the two wheelers led the customers to delay their car purchase (Sturgeon and Biesebroeck â€Å"Strategic Decision-Making† 3-4). Thus the demands for four wheelers were neither getting created nor were the ordered cars sold. Moreover, in US the people were not receiving car loans to buy cars because of the sub-prime crisis, so the customers were reluctant to buy cars solely with thei r savings. This was the reason why the sales figure plunged too (Zeese â€Å"The Causes of the Auto Crisis†). The major effect of the automobile crisis was felt in United States and in Canada. The weakening of the sector was due to the increasing prices of spare parts and