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  • Wolf of Wall Street Trailer Named the Best of the Year

    Wolf of Wall Street Official Trailer Wolf of Wall Street Official Trailer #2 The Wolf of Wall Street won 2013's Grand Key Art Award for audio/visual as the best trailer of the year. This is the highest honor in the Hollywood Reporter's Key Art Awards. The film by Martin Scorsese's is based on the book by Jordan Belfort . The book is a memoir. His web site says the following about him. "In the 1990s, Jordan Belfort built one of the most dynamic and successful sales organizations in Wall Street history. During that time, he soared to the highest financial heights, earning over $50 million a year, a feat that coined him the name “The Wolf of Wall Street.” As the owner of Stratton Oakmont, Belfort employed over 1,000 stockbrokers and raised over $1.5 billion and started more than 30 million-dollar-companies from scratch. . . . Along the way, he succumbed to some of the traps of the high-flying Wall Street lifestyle, going through a spectacular—and well-publicized—fall from grace. Taking invaluable lessons from the mistakes he made and the prices he paid, he has re-emerged as a globally recognized potent force behind extraordinary business success." As a manager, what would you say if your company wanted to hire Jordan Belfort to train your employees or consult with your company on business strategies, sales training, ethics in business, or how to raise venture capital?
  • Jamie Dimon Is No Longer Chairman Of JPMorgan Chase Banking Unit

    Jamie Dimon CEO, JPMorgan Chase (Source: Wikipedia ) Jamie Dimon just lost his job as Chairman Of JPMorgan Chase Banking Unit, the nation’s largest bank. According to Mark T.Williams , a former Federal Reserve Bank examiner who teaches risk-management at Boston University School of Management, and author of Uncontrolled Risk about the rise and fall of Lehman Brothers, since Dimon became Chairman and CEO in 2005, JPMorgan Chase has had the following problems. Questionable mortgage practices $6 billion “London Whale” trading scandal Bribery of Chinese officials Shoddy debt collection practices Libor-fixing probe Violations of the federal mortgage insurance program Charging credit-card customers for services never received Manipulation of western electricity markets Compliance weaknesses in money laundering controls Settlement relating to client money taken by MF Global Potential damaging link to financial criminal Bernie Madoff Ben Heineman,a senior fellow at Harvard's Law and Kennedy Schools, in his blog post states , "at the end of the day, it is bank leaders and employees who must take the right business, legal and ethical actions under existing law." He then goes on to ask, "Are these huge major financial institutions not just too big to fail, their leaders “too big to jail” (as some critics charge), but also “too big to manage”? Why haven't the bank managers made the right ethical decisions? Are big banks, like JPMorgan Chase, unmanageable? What might happen to the economy the next time a big bank crashes?
  • Financial Services and Banks Least Trusted

    Financial services and banks are one of the least trusted industries according the 2013 Edelman Trust Barometer . It measures "the state of trust around the world by exploring trust in institutions, industries, leaders, and the impact of recent crises in the banking and financial service sectors." Do you trust your bank? Explain. How can managers at banks (and other businesses) rebuild trust?
  • Management by Riding a Bus

    Picture from San Antonio Express News , "Chase boss stops in S.A. on Texas tou r." Most of us have heard of " management by walking around ." But, JPMorgan Chase chairman and CEO Jamie Dimon has been visiting employees in Washington, California, Florida, Michigan, Ohio, Indiana, Illinois, Wisconsin, and Texas by bus. Mr. Dimon is CEO of the largest bank (by assets) in America. T he Dallas Morning News reports that Mr. Dimon asks employees "what works and what doesn't work." Also, he wants to know what competitors are doing and how the bank could make the job easier for employees. "The most important thing we get to say is thank you and tell them how proud we are of JPMorgan," he said. Some managers meet with employees via email and formal meetings. It takes extra time and effort to visit face-to-face with employees. Will management by riding a bus be welcomed by employees or will employees find it distracting? Will employees answer the questions truthfully? Explain.
  • Consumer Financial Protection Bureau Launches Complaint Database

    The Consumer Financial Protection Bureau (CFPB) is the first federal agency solely focused on consumer financial protection. The CFPB began consumer response operations on July 21, 2011 and the Consumer Response team has been hearing directly from consumers about the challenges they face in the marketplace, bringing their concerns to the attention of financial institutions, and assisting in addressing their complaints. This taking in, resolving, and analyzing consumer complaints is an integral part of the CFPB's work. The CFPB maintains a database on banks and credit card complaints at http://www.consumerfinance.gov/complaintdatabase . It tracks which banks have received the most complaints about their credit cards. So, consumers can visit the website and determine which issuer received the most complaints and how it responded. See the attached file snapshot of complaints received (June 19, 2012). The CFPB plans to remove the "beta" tag by then end of the year and add complaints on additional financial products. If you were the manager of a financial institution, how would you view the database? Would you welcome the CFPB's reports since they'd show you what your customers don't like about you, giving you the opportunity to fix problems before your customers go to the competition? Or, would you fear that the database may open the door to frivolous and unsubstantiated complaints? Do financial institutions want to have a good reputation? If so, how can managers ensure that customers are treated fairly and that their complaints are answered in a timely manner?
  • Customer Service Most Discussed Social Media Topic

    Customer service and topics related to customer service issues account for the majority of conversations shared on social media in 2011. The research was conducted by Attensity , a text analytics service and customer experience solutions provider, and published by eMarketer . Graphics about topics of messages in the banking industry and hotels can be seen below. Managers know that customers will share good, as well as bad, customer service information. How should managers respond to customer service-oriented discussions? What do you think will be the most discussed topic on social media during 2012?
  • Who should be fired?

    Visit msnbc.com for breaking news , world news , and news about the economy JPMorgan Chase, the largest bank in the United States, just lost $2 billion in something called its "synthetic credit portfolio" by making complex trades on European bonds (corporate debt). The loss came from the Chief Investment Office in London. Ina Drew was the chief investment officer who oversaw the trade. The trader involved, Bruno Iksil, was known as "the London Whale" for his big trades. Both have resigned as a result of the scandal. JPMorgan Chase chief executive Jamie Dimon delegated authority to Drew, and she delegated authority to Iksil. In an organization, authority flows downward and can be seen in the organization chart . The chain of command is an unbroken line of reporting relationships that extends through the entire organization and defines the formal decision-making structure. This way employees know who their boss is, to whom they are accountable, and where to go with a problem. Authority is the legitimate power of a manager to direct subordinates to take action within the scope of the manager's position. Formal authority in the organization can be traced all the way back to the U.S. constitutional right to own property. The owner of the organization has the authority to make decisions. Owners (stockholders) hire managers and hold them accountable for the results of the corporation. Dimon told "Meet the Press" host David Gregory that "there's almost no excuse" for the bank's $2 billion trading loss. In essence, the chief of the unit and the trader have been fired. But, Dimon was convinced by them (Drew and her team) that the risk was manageable. Who do you think should be fired?
  • BofA Improvements in 2012

    Bank of American (BofA) plans to improve risk-management practices in 2012. Bloomberg News obtained a copy of a BofA year-end letter to employees from chief executive Brian Moynihan posted to an internal employee Web site. In it, he said, "We greatly strengthened our risk culture in 2011, and that work has laid the foundation that will carry us through whatever turbulent times may lie ahead." The bank is "simplifying our business model and organization, continuing to shed non-core assets and businesses, and reducing risk-weighted assets." Shedding assets could improve BofA's capital levels ahead of the stricter Basel III international standards. Basel III is in response to the global financial crisis. Many banks were undercapitalized when the crisis hit, thus massive bailouts and recapitalizations by governments were necessary to save the banking system. The international community came together in Basel, Switzerland to determine bank capital requirements or how much of their capital structure should consist of common equity, retained earnings and other high quality assets. It is an effort to set minimum capital requirements, internationally, for banks. The implication is that many banks will have to raise equity and sell low quality assets in order to meet the new capital requirements. The Federal Reserve has indicated that the United States will adopt most of the recommendations. Moynihan wrote, "We can focus all our energy and $3 billion in technology investments -- the 'peace dividend' that derives from no acquisitions/integrations -- on increasing the pace of innovations and improving service." What does he mean by the ' peace dividend' ? How does this relate to BofA improving service?
  • Countrywide - Not a Good Deal

    Bank of America's acquisition in 2008 of Countrywide Financial, the largest mortgage lender, has turned out to be one of the worst business deals in history. It has resulted in tens of billions of dollars in losses for Bank of America. In addition, Countrywide has become a symbol of the housing boom and collapse. "Countrywide's actions contributed to the housing crisis, hurt entire communities, and denied families access to the American dream," said Thomas E. Perez , Assistant Attorney General for the Civil Rights Division. The Justice Department announced the largest residential fair-lending settlement in history on December 21, 2011. Bank of America will pay $335 million in compensation for victims to settle allegations that its Countrywide Financial unit discriminated against black and Hispanic borrowers in their mortgage lending from 2004 through 2008. This was before Bank of America purchased Countrywide. The Justice Department determined that from 2004 to 2008, Countrywide did not have a system to comply with fair-lending rules. Countrywide's policy gave loan officers and brokers the discretion to alter the terms for which a particular applicant qualified. Lending data showed that Countrywide charged Hispanics and African-Americans more, on average, than white applicants with similar credit histories. Furthermore, brokers and employees "steered" applicants who qualified for regular mortgages into riskier, more expensive subprime loans. Bundling and reselling subprime loans as securities was one cause of the 2007 financial crisis. Attorney General Eric Holder said, "The department's action against Countrywide makes clear that we will not hesitate to hold financial institutions accountable, including one of the nation's largest, for lending discrimination. These institutions should make judgments based on applicants' creditworthiness, not on the color of their skin. With today's settlement, the federal government will ensure that the more than 200,000 African-American and Hispanic borrowers who were discriminated against by Countrywide will be entitled to compensation." Federal civil rights laws, including the Fair Housing Act and Equal Credit Opportunity Act , make a lending practice illegal if it has a disparate impact on minority borrowers. What is disparate impact ? What can a manager do to discourage disparate impact in lending practices?
  • Example CEOs

    Matt Harrington, president of Edelman, attended an ethics and trust conference at Southern Methodist University (SMU) in November 2011. His company is the largest independent public relations firm in the world and publishes the Trust Barometer . He sees distrust deepening. When asked about CEO trust improving in this year's Trust Barometer, he said, "They were more upfront about the economic conditions and the storm they were trying to navigate and the tough actions they had to take. That earned them some level of credibility. Every CEO hasn't taken that route, but many have." Harrington specifically mentioned CEOs with credibility problems. "We're in a cycle of Reed Hastings (at Netflix ), Brian Moynihan (at Bank of America ) and a variety of CEOs who've gotten high visibility of a nonconstructive basis. That's been coupled with a spate of CEOs losing their jobs and getting extraordinary payout packages , none of which engenders trust." He gave Howard Schultz, CEO of Starbucks, as "a perfect example of someone who - whether its internally or externally - you know what the business is about, what his values are, what he's driving for, and who you're dealing with." Source: Cheryl Hall, "Edelman Chief Sees U.S. Distrust Deepening," The Dallas Morning News , November 9, 2011, D 1, 5. Give some more examples of trusted CEOs, as well as those with credibility problems.
  • Distrust of Business

    Edelman is the world's largest independent public relations firm and publishes the Trust Barometer from an annual survey it conducts in 20 countries. Respondents are described as "opinion elites" (affluent, college-educated, and well-read). The 2011 Trust Barometer indicates that American consumers distrust business. Six in 10 Americans respondents doubt business will do the right thing. Trust in U.S. business was just five points ahead of last-place Russia. In addition to business, Americans distrust government, nonprofits, and the media, with media distrusted the most. In the U.S., trust in banks dropped from the No. 3 spot in 2008 (71 percent) to second from the bottom in 2011 (25 percent), tied with financial services. The most important corporate reputation factors are quality products, trust, transparency, and employee welfare. Richard Edelman, president and CEO , said, "Trust has transformed the license to operate for business. Company actions must deliver on the expectation for a collaborative approach that benefits society - not just shareholders, transparency about how it makes money, and communication in surround-sound through all forms of media - from mainstream to new to social to owned." What do you think managers can do to increase business trust?
  • Occupy Wall Street and Management

    Should managers be concerned with the Occupy Wall Street (OWS) protests? Resentment is building on income inequality. Protesters describe themselves as " the 99% that will no longer tolerate the greed and corruption of the 1% ". Protests began in New York and have moved to other cities including Oakland, Los Angeles, Dallas, Chicago and Philadelphia. Jeremy Loren reports that 72% of the country has an unfavorable view of Wall Street and " big banks ". "Trends in the distribution of Household Income Between 1979 and 2007," released October 18, 2011 by the nonpartisan Congressional Budget Offic e shows that income inequality has grown in the last three decades. CBO finds that, between 1979 and 2007, income grew by: 275 percent for the top 1 percent of households, 65 percent for the next 19 percent, Just under 40 percent for the next 60 percent, and 18 percent for the bottom 20 percent. The share of income going to higher-income households rose, while the share going to lower-income households fell. The top fifth of the population saw a 10-percentage-point increase in their share of after-tax income. Most of that growth went to the top 1 percent of the population. All other groups saw their shares decline by 2 to 3 percentage points. What can managers learn from resentment and criticism? What can they do about it?
  • Bank of America Changes Plans

    Bank of America Corporation changed its plan to charge customers a $5 a month debit card fee . The customer fee was to replace merchant fees lost from tightening regulations. Charging customers for debit-card transactions proved to be very unpopular. Customers felt that the banks benefited from government stimulus and should not charge customers in this soft economy. The fee was to start in January 2012. Many customers were very upset over the new fees, left the bank and took their money to credit unions. Furthermore, competitors JPMorgan Chase & Company and Wells Fargo & Company decided not to implement a debit-card transaction fee. Sun Trust Banks, Inc. and Regions Financial Corporation decided to drop the debit card fee. In a press release David Darnell, co-chief operating officer, said, "We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee. Our customers' voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so." Environmental scanning is the process of collecting information about the external environment to identify and analyze trends. The external environment includes economic, technological, legal/political, and sociocultural forces. Could Bank of America have used environmental scanning to identify customer feelings on the plan and the moves by rivals?
  • Debit Card Fees

    Banks want to make customers pay debit card fees. How will this affect businesses? Will customers continue to use their debit cards? Will they begin using more cash? Will they begin using credit cards more? Will they buy less? Younger people are heavy users of debit cards. I spoke to Esther Campbell, the Assistant Manager of the Barnes & Noble College Bookstore at Stephen F. Austin State University and asked her opinion about debit card fees. The college bookstore sells textbooks, school apparel, and accessories. "It will affect customer spending. Most of our customers are young and use debit cards to make every purchase. They don't use cash often, and they don't use credit cards. A lot of Americans are carrying debt on their credit cards. Younger people see that and have a bad image of using credit cards. If they use their debit cards, the money is directly taken out of their accounts and they don't have to worry about spending too much, going into debt, or paying any fees. However, once the debit card fees are enforced, the customers will have to pay fees. If customers learn how to properly use credit cards, they can still make the same amount of purchases and not pay any fees as long as their credit card is paid in full each month. If our younger customers stop using their debit cards, or only use their debit cards for emergencies, and don't use credit cards, and don't carry cash, our sales will definitely decrease." How will the new debit card fees change your debit card use?
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