Case Study: The Collapse of Lehman Brothers

Lehman Brothers Inc operated at a wholesale level, dealing with governments, companies and other financial institutions. Its core business included buying and selling shares and fixed income assets, trading and research, investment banking, investment management and private equity. In September 2008, Lehman Brothers filed for chapter 11 bankruptcy protection. The company became insolvent with finances totalling $639 billion in assets and debt worth $619 billion; it became the largest bankruptcy in history. The company employed 25,000 employees worldwide including 5,000 and was the fourth largest US financial bank at the time of the bankruptcy. It also became the biggest victim of the subprime mortgage disaster that had put the global financial sector into meltdown. History In 1844 23 year old Henry Lehman the son of a cattle merchant immigrated to the United States from Rimpar, Bavaria. He set up home in Montgomery, Alabama where he opened a dry-goods shop. In Continue reading

Case Study of FedEx: Pioneer of Internet Business in the Global Transportation and Logistics Industry

Transportation is one of the largest industries in the world, and its sector range is very wide which include taxis, truck, train, ships, barges, airplanes, pipelines, warehouse and logistics service. For the industry, the three main trends were globalization of business, information technology development and new technology to support process efficient, and the market demand for more value-added. Hence, the companies in transportation and logistics industry depend on the global network of distribution centres to gain quick payment cycle and cheaper resources. In FedEx Corporation, as a leader firm in the industry, its centralized structures have always required, and facilitated billion dollar investments in IT and established the website from 1994. It provided a successful technology for the FedEx Corporation as a pioneer in the whole industry for e-business. This strategy became an advantage that they used to undermine their competitors’ strengths and localized customer service. With a globally connected Continue reading

Profit Management And Control

Profit is the reward which goes to organization as a factor of production for its participation in the process of production.  Profit in its pure accounting sense is the surplus of revenue over the cost. Thus,  P = TR – TC We have also studied that every business enterprise desires to  maximize  its profit. The condition for profit  maximization  is the level of output where Marginal Revenue = Marginal Cost. We also differentiate between normal profit and super normal profit i.e. normal profit is included in average cost whereas any profit above the average cost is super normal profit. We have also considered   the concepts of gross profit and net profit besides profit in accounting sense, which considers only explicit cost whereas in economic sense to consider profit we take note of both explicit   and implicit costs. The firm has also to reveal to its shareholders the profit Continue reading

Difference Between Morality and Ethics

Greek word ethos – stands for Ethics, ethos means custom or moral character. Morality originates from the Latin word moralis – manner or customs. Both these words deal with the manner or customs of the people in which they do things. The modern dictionary defines these words as the way people act – that can be either good or bad. A set of agreed rules and the code of conduct within an environment that openly states what is acceptable and what is not acceptable within a society is referred to as Morality. The concept of morality changes with time and situation, this can explain as killing (murder) is an immoral act but in the state of war or in a battlefield killing, murder is allowed, so it be said that morality is synced with ethics. Morality addresses the queries related to ethics on the moral conclusion that can be derived Continue reading

Bankruptcy Recovery Strategies

A firm is said to be bankrupt or in financial distress if it is unable to meet its current obligations to the creditors. Bankruptcy may occur because of a number of external and internal factors. The primary cause of a firm encountering financial distress starts when it finds it difficult to meet the scheduled payments or when the cash flow projections of the firm are indicative of the fact that it will soon be unable to do so. Some important business bankruptcy recovery strategies are: 1. Settlements without going through Formal Bankruptcy When a firm goes through the period of financial distress, it is very important for its management and creditors to decide whether the problem is a temporary one and it is possible for the firm to continue its operations or whether the problem is more serious and permanent in nature that has the possibility of endangering the life Continue reading

The Importance of Going Green

A definition of green management according to is the process within an organization of applying innovation in order to achieve sustainability, waste reduction, social responsibility and a competitive advantage by the aids of continuous learning and development. Organizations shall be doing such developments, by implementing environmental goals and strategies which match the goals and strategies of the organization. This will therefore help the organization to stay focused to its mission and vision. Nowadays, it is found that companies advertise their products by promoting their environmentally – friendly behavior. It does not matter whether it is on TV or on banner; the message of “go green” is almost always used. But why green? Green is not simply a color. Going green is a way of making changes in the lifestyle of some organizations as well as the society also. This implies bringing in some changes which are friendlier towards the environment. Continue reading