Individual, Companies,Leadership and Internal control
Mr. Lesson was accused of losing 1.3 billon dollars as a result of a risky derivative investment with the potential of a 27-billon gain. The collapse of Barings Bank in 1995 has been one of the most spectacular events in the banking world in recent years. Banks solvency and liquidity can be significantly threatened if speculative trading in financial derivatives is guided by a lack of adequate internal and external controls. There is evidence that such reasons are responsible for the failure of Barings in February 1995.
Recently, many multi-national companies, such as Cisco and Yahoo, stimulate the employees’ morale by offering stock options to their employees. Stock option provides a chance for employees to become the shareholders of the company. As the result, the interest and profit of the company is tightly connected with the employees’ interest and income.
Many firms adopt “Profit-Related-Pay” contracts (PRP contracts) and pay wages at levels that vary with firms’ profits. Many studies suggest that firms adopting PRP contracts show productivity per worker higher than that of their competitors who used more traditional contracts. The reason behind is that PRP contracts greatly change individual workers’ relationships to the firm, connecting their interest with firms’ interest.
The greater the division of labor in an economy, the greater the need for communication and coordination. This is because increased division of labor entails a larger number of specialized producers, which results in a greater number of disruptions of supply and production.
An employer looking for long-term employees may be better served by hiring applicants with broad background. By way of their more general education, these applicants have acquired a variety of general and transferable skills. They may be more suitable than their business-background colleagues to solve general management problems, deal with business associates from different cultures and view issues at a variety of aspects. In general, the employees with broad background can accustom to changes more quickly than their business-majored colleagues.
Daimler Chrysler, one of the most successful automobile companies in the world, contributes significantly to the local employment of Stuttgart, Germany.
Philip Morris, the largest tobacco company in the world, has been sued by government and many other groups for producing products that are harmful to health. The fines and legal fees that have resulted from the legal attacks against the company have costed the company substantial amounts of money.
Bayer, one of the largest pharmaceutic companies in the world, announced that the company would cease production of one of its major products, because of the hazardous ingredients it contained. By doing so, the company suffers great loss on profitability, but gains strong public support and understanding, which can contribute to the long-term success of the company.