Rewarding Good Performance at a Bank

QUESTION 6

Read exercise task 14.1 (Rewarding Good Performance at a Bank), and explain your answer in detail.

            I find it strange and criminal that the bank does not reward their employees, particularly, their bank managers, in this case study.  Of course, it would be important first if the whole bank industry practices the same thing, because, if all banks do it, then it is the industry standard.  However, if through investigation, Jim finds out that the other banks do give commissions to their bank managers for business they bring in, then this raises a red flag to Jim, that he may be working for the wrong company, because no matter how much business he brings in to the company, he will never be amply rewarded for it, except with an increase to his current salary.  I feel that this reward does not amply give back to Jim the effort that he has put in to ensure that the bank branch that was instituted meets its yearly targets.  We all know that meeting the quota is never easy and that quota increases every year, so does the pressure to meet that quota.  I know, as time goes by, Jim will not be satisfied with what he is receiving and may either be demoralized, or decide to work for the competitor bank, especially if the competitor bank sees the great job he has done for First Trust Bank.

            I personally feel that First Trust Bank does not adequately offer sales incentives to its branch managers.  Considering the business Jim has brought to the bank, considering that their competitors were their ahead of them, and they were the ones who came later to the area, it just shows how much hard work Jim put in to ensure everyone in the area that they are the bank of choice.  Now, that the bank knows that they may have a problem with regard to their compensation rules, what they can do now is review it properly, to ensure that they meet industry standards, maybe even exceed it, and make sure that their branch managers are amply rewarded for their excellent performances.  They will not lose this way because the bank manager will only receive a commission if and when the bank manager meets the designated quota which the bank sets in the beginning of the year.  By offering a generous commission benefit for their branch managers, it will be a good way to motivate them to work hard to meet these quotas.

Literature Critique on Mining the Discourse: Strategizing During BHP Billiton’s Attempted Acquisition of Rio Tinto

 Introduction

Through the utilization of discourse based analytic approach, the authors of the article did examine the strategizing that happened throughout an endeavored acquirement in the year 2007 and 2008 of Rio Tinto by means of BHP Billiton. In undertaking so, the authors of the article donate to conversational studies of mergers as well as acquisitions in twofold substantial respects. Principally, the authors display the significance of learning in what way performers outside to, as well as individuals inside to BHP, exercised power over the gaining development and result. Their impact can be credited, in fragment, to their practice of linguistic approaches in the course of the compromise of the connotations of some concepts that were essential to the acquirement discourse. Subsequently, the authors study displays in what way the rhetorical approaches were positioned into influence expending not simply language, but likewise non-linguistic methods of discourse such as descriptions, pointers, and position. The authors of the article concluded that by means of obtaining a widespread understanding of the part of dialogue in relation to a tactical movement in the article’s situation, an endeavored gaining which practically necessitates consideration of multi-modal linguistic approaches carried to tolerate by mutually outside and inside players.

Theoretical Framework and research questions

On the unsuccessful combined endeavor, Freeman and Company evaluates the six groups counseling on the transaction would have pooled 172m dollars if the transaction had vanished in advance, divided justly correspondingly amongst them. That means anyplace amongst 120m dollars and 155m dollars was not waged out to Goldman Sachs, to Lazard as well as Gresham Associates as advice-givers to BHP Billiton, as well as to Morgan Stanley, to Credit Suisse in addition to Macquarie as advice-givers to Rio Tinto. The breakdown approached two ages subsequently after BHP Billiton’s aggressive endeavor to obtain Rio Tinto for 149bn dollars was terminated, which occasioned in an additional 120m dollars in misplaced charges for BHP Billiton’s eight advice-givers, conferring to Freeman and Company approximations.

Just above a year subsequently after BHP prepared its move, that transaction distorted in the face of the approaching economic catastrophe and increasing antagonism from the EU Commission as well as controllers in Korea, in Peoples Republic of China and in Japan. Conferring to the year 2009 yearly report, Rio Tinto waged around 42m dollars to its consultants for effectively guarding contrary to BHP Billiton’s aggressive technique, which was mutual amongst eight banks as well as three law businesses. In addition, BHP Billiton rewarded 450m dollars in charges, conferring to its 2010 yearly report, encompassing 294m dollars to security banks, legal representative and auditors for guidance, as well as 156m dollars concerning to an 18 months 55bn dollars debt competence engaged out to fund the transaction. Nevertheless, an additional 120m dollar was left on the counter in unpaid realization charges, conferring to Freeman and Company approximations.

In February in the past years, to defend itself from upcoming aggressive proposals and help challenge its increasing debt load, Rio Tinto approved to trade an 18 per cent stake to Chinese state possessed metals multinational Chinalco for 19.5bn dollars. The connection not ever becomes visible and Rio Tinto was required to pay break-fees of 195m dollars. Chinalco’s advice-giver Blackstone is expected to have established a portion of the break-fee and was then one of the insufficient financial consultants to advantage. Freeman and Company evaluates Rio Tinto’s advice-givers were paid 6.8m dollars, matched with 50m dollars up to £80m if the transaction had moved through. Instead of working with Chinese, Rio Tinto approved to 58bn dollars iron minerals combined undertaking in Australia with BHP Billiton. This period the agreement was welcoming, and had been intentionally organized to satiate the oppositions outstretched by EU Commission throughout the aggressive proposal.

Methodological Basis of the Paper

Unique co-head of unions and attainments at a European venture bank, thought, this is the throbbing truth of the business industry. Charges in mergers and acquisitions are overpoweringly success grounded. Business owners can devote a lot of months even years functioning on a business deal and it derives to nonentity. Business enthusiasts just need to dust themselves off then develop on within the succeeding one. The story instigated on November 8 of the year 2007, as soon as BHP Billiton main executive Marius Kloppers publicized his goal to obtain competitor Rio Tinto in money and stocks transaction worth 149bn dollars. Rio Tinto declined to take part and BHP Billiton lawfully propelled an aggressive offer the following year in February. Conferring to statistics source Dealogic, BHP Billiton’s unsuccessful proposal for Rio Tinto is the biggest botched transaction on record globally. The combined endeavor, which unraveled has been the ninth biggest at 58bn dollars. Grounded on the segment fees of Rio as well as BHP three ages in the past, the overthrow for Rio was the third prevalent broadcasted on top score, surpassed basically by Vodafone’s attainment of Mannesman for 183bn dollars during the year 2000 as well as AOL’s 165bn dollars unification with Time Warner within the similar time.

Nevertheless, BHP Billiton and Rio Tinto had been unsuccessful to persuade global controllers that a connection would not obligate a destructive consequence on the fees of iron minerals, petroleum, uranium as well as aluminum. Whereas the investors misplaced the success component of their charges on mutual transactions, the law businesses were still satisfied for the reason that they are waged by means of the hour notwithstanding of result. This is sarcastic, for it was their failure to acquire anti-trust sanction that disrupted mutually the planned merger as well as the combined venture. Rio Tinto presenter said: “The controlling consequence imitates in what way the marketplace and political setting have transformed ever since people decided to the contract in June of the year 2009. The supply and demand stability has instigated fees to upsurge further than 100 per cent subsequently since June of 2009, values have been unstable for the year 2010, and periodical valuing has been presented that generated a further politicized situation, creating it challenging to get permission for combined ventures. BHP Billiton has at the present completed a 40bn dollars aggressive offer for Canadian compost cluster Potash Business. Subsequently after guiding BHP Billiton on unsuccessful transactions with Rio Tinto, Goldman Sachs has substituted edges and is currently guiding Potash Company. For several further banks, the occasion has delivered.

BHP Billiton in numbers

1,078 being the days ever since BHP Billiton projected relationship with Rio Tinto

3 as the number of unsuccessful deals

227bn dollars as combined assessment of the unsuccessful transactions

18 as number of banks on transactions (17 law businesses had a part)

450m dollars as fees waged by BHP Billiton to advice-givers

Significance and Limitations

The extraordinary percentage of CRM disappointments is a substance of apprehension for corporate executives. Even though the welfares of CRM have been well recognized, the technique in which CRM’s welfares can be leveraged is still not well assumed. The article pursues to deal a method that can be utilized to manage for CRM in command to influence the welfares. This has been grounded on the judgments of several authors in addition to reviewing the CRM approach embraced by retail industry to progress a theoretical background that can be utilized for planning for CRM. The involvement of the authors is a theoretical background that can be utilized to manage for CRM. Thus, some phases of the context or background are involving segment and initial track of which merely one situation study has been mentioned in the background can be utilized by executives who wish to practice CRM and influence its welfares. Ever since the failure proportions of CRM are extraordinary, it appears that the remaining contexts and methods are not proficient of safeguarding realization with CRM. It is expected that this ground breaking theoretical method that essentially concentrates on vital steps such as engage, track, segment as well as personalize in order to distribute on the possibilities of CRM.

Conclusion

The downfall of the combined endeavor among mining collections Rio Tinto as well as BHP Billiton had characterized the concluding nail in the container of a story that instigated practically some years previously, directed to three unsuccessful transactions, involved 18 security banks as well as 17 law businesses, and lost investors further than 350m dollars in success payments. Engaged mutually, it results the biggest unsuccessful business courtship in the past. For a defense force of implementation investors, metals as well as mining business experts, business and rivalry attorneys and auditors, it was the height of 35 months of effort that approached to nonentity. The investors are the major losses. They have misplaced prospective success payments of 355m dollars, conferring to investigation by the Financial News, approximate from adviser Freeman and Company and circulated company official papers. Thorough preparations differ from transaction to transaction and consultant to advice-giver, however a straw census of merger and acquisition investors places the realization component of the charge bundle at anyplace amongst 70 per cent and 90 per cent of the overall. The stability is accounted for by means of a scheduled fee and further payments waged out at breakthrough occasions for case in point on publication of the official agreement document.

Reference

Floris et al (2013). Mining the Discourse: Strategizing during BHP Billiton’s Attempted Acquisition of Rio Tinto, Journal of Management Studies. Journal of Management Studies. Volume 50, Issue 7; November, pp. 1185 – 1214

Critique on "How Corporate Social Responsibility Engagement Strategy Moderates the CSR Financial Performance Relationship"

Introduction

Corporate Social Responsibility (CSR) has been becoming popular nowadays among executives, business academics, and public bureaucrats. This paper incorporates and expands the  gathered  related literature on Corporate Social  Responsibility  (CSR)  which also  includes the theoretical framework and propositions on how do companies can  gain  social  and economic   benefits from  engaging in CSR activities. This paper proposes to relate company’s CSR initiative such as CSR related strategies integration of CSR activities into the company, innovate CSR related strategies, enhance CSR related advertizing and risk management, relationships with CSR-related government and non-governmental organizations.

Research Objectives

·         The objectives of this research is to  find out the    financial advantages  and disadvantages  that a company  can get from  taking part a sustainable  Corporate Social Responsibility  (CSR)  both in the  company and its  outside environment.

·         Secondly, to determine which is more prominent in    taking part in the CSR strategy financial loss or gain of the business.

·         Thirdly, to discuss the long-term financial benefits that the company can get in doing a related-manner and sustainable CSR strategy.

·         Fourthly, to discuss how unrelated manner and unsustainable CSR do strategy can hurt the business in the long run.

Theoretical Framework

Servaes & Tamayo (2012)   emphasized that CSR activities can enhance the company’s value through increasing the level of the public awareness about the products or services.  This is even more intensified by advertising campaign. However, those companies with low public awareness, has a low impact of its CSR activities on the firm value aspect. And, even the advertising has also a negative impact to the public.  So, if there is a consistency between the advertising intensity and CSR activities, there is a positive impact on the company performance and financial gain.

Research Problem

What are the advantages and disadvantages that a company can get in taking part in a consistent, related-manner and well-sustainable CSR strategy?

Review of Related Literature

Tang, Hull & Rothenberg (2012)  have claimed that  the firms’ success and  profitability   hugely depends on  how the firms engage in corporate social responsibility strategy and how its  corporate financial performance  associate with the context of  creating a  more responsible and committed  business operations in the community where it operates. Furthermore, “How Corporate Social Responsibility Engagement… “ (2012) has explained that  if the company engages  slowly and consistently  in Corporate Social Responsibility (CSR),  the CSR-related  dimensions are being focused on  enhancing  its   mass efficiencies by  enhancing the financial benefits of the Customer Social Responsibility engagement strategy.

NBS (2013) found that there is a strong connection of corporate social and financial performance that is met through a U-shaped. Experimenting in CSR leads to the second-rate performance of the company. According to Milton Friedman’s theory, CSR incurs costs and lose competitive performance in the firm.  Meaning, if the company is committed to engage in CSR, naturally, the firm will incur costs in different community projects which may lower the profitability of the organization.

On the contrary, many scholars disagree with the above concept, instead they explained that the relationship between the social performance and firm’s profitability   underlies on fostering the trust in their stakeholders through being active in civic activities and other social performances. The more the company engages and sustains in different socio-civic programs, the more the chances will its products and services to be recognized by the potential clients from different locations.   Taking part in socio-civic activities is a great opportunity for the firm to market its products and services to many potential customers. And, this strategy may increase the profitability of the company.  It is also added that the   it is inevitable that the firms experience high and low profitable rate when they commit in social performance.   Yes, at the beginning of the initiative, there are high costs of expenditures for various socio-civic programs. However, in the long run, many business scholars say that   a company tends to have a high financial performance and ROA after displaying a continuous commitment and sustainability of supporting the various socio-civic programs. In the U-shaped model, of course, the middle position is the lowest level. However, it is just temporary,   as you can see both left and right sides of the U-shaped rise higher than the middle position. So, it only shows, that after the  initiative  of the company for  highest commitment to  environmental  and social sustainability, the direction that the  business will lead to is going up, and it means  more clients  and more profits. (NBS, 2013).

Kittilaksanawong (2011) cited the work of (Hull and Rothenberg, 2008; Waddock and Graves, 1997) which is asserting that a company has to integrate CSR to the fullest activities in the business operations in order to make most of the extra costs of products or processes associated with CSR innovative steps. Besides the company will only provide a little portion of the contribution of this kind of   undertakings as to compare to the additional benefits that a company can get in sustaining and continuously translating the CSR strategy into regular organizational performance and commitment. Many business analysts considered   the sustainability of CSR strategy as one of the great marketing opportunities of the company to market their products through civic groups or programs.

Therefore, firms should take Corporate Social Responsibility as an enormous opportunity rather than a loss or threats of a business.  (Sharma, 2000; Sharma et al., 1999, cited by

Kittilaksanawong, 2011). 

Research Methodology

This research uses a comparative study with the   works and articles of the reputable scholars and researchers in the field in order to validate the reliability and the consistency of the   present research.

Research Design

The researcher chose to apply a descriptive research design in order to describe clearly and comprehensively the major points of the study. The research design is also supported by personal interview and   distribution of questionnaire in order to gather data and information in order to come up with the findings and results.

Limitation of the Study

This study only focuses on the CSR related-issues that attributes to the success of CSR activities as well as to the success and financial gains   of the company.

Significance of the Study

The significance of this  study is  to  come up with a blueprint evidence  to be a noteworthy  for the  next   generation of researchers  who will conduct another research about the  same topic “Corporate Social Responsibility”  (CSR), and what  the companies can  gain from engaging  in  CSR activities within the organization as well as in  a more upscale  environment.

Findings of the Study

·         This research found that when a company engages in Corporate Social Responsibility (CSR) in a related manner, the return of assets (ROA) of the company is higher than the company that engages in CSR in an unrelated manner.

·         The company increases more its operational performance and financial benefits when the company engages in a sustainable and consistent CSR engagement strategy. On the other hand, the company   encounters more financial sufferings when it is inconsistent and unsustainable with its CSR engagement strategy.

·         If and when a company engages first in internal Corporate Social Responsibility (CSR),   for sure, the company will benefit through its sustainable and consistent performance. The Return of Assets will definitely suffer if the company will act differently from the CSR principles.

·         Finally, the Corporate Social Responsibility (CSR) and the Return of Assets (ROA) is not affected by the way at which Corporate Social Responsibility is being adopted and implemented within the organization and outside the organization.

Conclusion

 This research has found that a company should differentiate its products and services based on the organization’s innovative CSR attributions.  It should be taken into great account if the product is lesser innovative and lesser competitive than its rival products. The  public’s   familiarity of the firm’s  products  will be enhanced  through  CSR initiatives  with  different  NGOs and other  private   and public   companies  joining in the  non-profit  undertakings. More efforts and  longer sustainable  performance-based CSR strategy of the company will  determine  the  direct  and clear connection  of  firm’s long term   financial benefits  from  the  CSR financial performance.  Engaging in CSR   undertakings will enable the company to improve further its competitive advantages and even create win-win relationships with all its stakeholders. More than gaining from cost and risk reduction process as well as the outstanding image and reputation that a company is promoting in CSR strategy.

 

References:

How corporate social responsibility engagement strategy moderates the CSR-financial performance relationship 2012. Accessed 21 September 2013 from, ew15.vigiepme.org/index.php?option=com_content&view=article&id=837:how-corporate-social-responsibility-engagement-strategy-moderates-the-csr-financial-perfo.

Kittilaksanawong, W 2011, 'Doing well by doing well? Implementing new effective integrated CSR strategy. ' African Journal of Business Management.  Vol. 5, No. 4, pp. 1211-1224.DOI: 10.5897/AJBM10.576. Accessed 21 September 2013 from, http://www.academicjournals.org/ajbm/pdf/pdf2011/18Feb/Kittilaksanawong%202.pdf

NBS 2013, CSR pays when you bake it in or ignore it completely. Network for business sustainability. Accessed 21 September 2013 from, http://nbs.net/knowledge/csr-pays-when-you-bake-it-in-or-ignore-it-completely/

Research brief: Corporate citizenship strategy must be chosen carefully to maximize benefit. Center for corporate citizenship.  Boston College Carroll of Management. Accessed 21 September 2013 from, http://www.bcccc.net/index.cfm?pageId=2484

Servaes, H & Tamayo, A 2012, 'The impact of corporate social responsibility on firm value: The role of customer awareness. forthcoming,' Management Science. Accessed 21 September 2013 from, http://faculty.london.edu/hservaes/ms2013.pdf

Tang, Z, Hull^*, CE & Rothenberg, S 2012, 'How corporate social responsibility engagement strategy moderates the CSR–Financial performance relationship.' Journal of Management Studies. Vol. 49, No. 7, pp. 1274-1303. [doi: 10.1111/j.1467-6486.2012.01068.x]

Walking The Talk

Bravo to this girl for walking the talk!! I did not even volunteer before to teach in a public school opting instead to teach in UPIS, because of the horror stories I heard (teaching under the trees kasi walang classroom na available, 60 students in one class, walang chalk, walang blackboard, walang electric fan, etc etc). So for her, to really get down in the trenches is admirable! Ika-nga ni Robert Frost, I chose the easier path, she chose the road less traveled by.

Poverty and privilege

Bangon Pilipinas!

I decided to put a picture of a slightly tattered Filipino flag in the couverture of my FB page today as a message of hope and solidarity with my fellow Filipinos who have suffered too much.  I also tweeted it.  First was the earthquake and then typhoon Haiyan followed.  Our Filipino resiliency and determination will prevail!