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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?
  • Managers Use GDP

    Managers are interested in the economy. So, they look at the gross domestic product (GDP), which is the broadest gauge of economic output. The United States Bureau of Economic Analysis (BEA) reports on GDP. The bureau defines real gross domestic product as the output of goods and services produced by labor and property located in the United States. BEA released its first-quarter 2012 advance estimate of GDP August 27, 2012. The New York Times prepared a chart based on that report and previous reports, as seen below. Recession and recovery or growth can be seen in the chart. According to the U.S. National Bureau of Economic Research , the worst recession since the Great Depression of the 1930s began in December 2007 and ended in June 2009. A recession is a period of declining real GDP and rising unemployment. During the recession real GDP dropped by ~3 % and unemployment rose from 4.7 % to 10 %. The recession (2007-2009) included a housing bubble, financial system losses, and a commodity boom. From 1995 to 2007, the U.S. housing market was booming, which encouraged many households to borrow money to buy real estate. Some of these new homeowners' loans were subprime. In other words, given their down payments, incomes and credit histories, they were at a high risk of loan default. Since 2007, many of the new homeowners found themselves underwater , owing more on their mortgages than their houses were worth. As a result, mortgage defaults and home foreclosures increased. In 2008, the financial institutions that held these subprime mortgages faced large losses. Bear Stearns was purchased by JP Morgan Chase Fannie Mae and Freddie mac were taken over by the U.S. government Lehman Brothers declared bankruptcy Bank of America purchased Merrill Lynch American International Group (AIG) received $85 billion from the federal government JP Morgan Chase purchased Washington Mutual, the biggest bank failure in history In July 2008, oil peaked at $147.30 a barrel and a gallon of gasoline was more than $4.00 across most of the U.S., driven in part by increased demand from China and other rapidly growing emerging economies. Economic contraction in the fourth quarter caused a dramatic drop in demand. Prices fell below $35 a barrel by the end of the year. Since the second half of 2009, the economy has been growing, coming close to 4 % growth in early 2010. Then growth slowed, but accelerated the rest of the year. The most recent report says that growth has slowed to 2.2 %. How might this affect decisions by managers? Will they increase or decrease production? Will they hire or lay off employees? What other decisions might be affected?
  • 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?