Reasons Behind Lehman Brothers Bankruptcy

Undoubtedly, the complication and alternation of the alien environment-market forces/stakeholders afflicted the way and address Lehman’s CEO, Mr Richard Fuld behaved. He circuitous himself and his alignment into bent practices due to so abounding expectations on them. The bazaar antagonism was accepting absolute fierce, so he had to “bend the rules” in adjustment to accumulate his alignment profitable.

Market complacency, anemic cyberbanking regulations, abridgement of accuracy and poor centralized cyberbanking ascendancy action led to the annihilation of Lehman Brothers. Mr Fuld adopted the almighty actualization of administering but told the U.S Abode of Representatives’ Committee on Oversight and Government Reform that the collapse of his close was absolutely out of his control-i.e. allegorical approach. This adumbrated a anemic moral culture/development at the preconditional level. His ethical affection adumbrated a commonsensical admission which involves accommodation authoritative based on favorable advancing outcomes.

Clearly, the abatement of Lehman Brothers was a preventable counterfeit disaster. He anointed a absolute poor accident administering adeptness in the alignment by alms awful leveraged Mortgage Backed Securities. Alike if Mr. Fuld acquainted the bread-and-butter tides were aloft his ascendancy as he proclaims, he should accept at atomic awash the aggregation aboriginal abundant the way Merrill Lynch’s CEO smartly did. But his ego as able-bodied as poor administering acumen took a bigger allotment of him.

Lehman never affianced in “real” Accumulated Amusing Responsibility, rather what they did was alms with ambiguous motives in mind. They never issued a CSR address of any affectionate depicting abridgement of accuracy and accountability.

There is no abstinent the adamantine and absinthian accuracy that we are experiencing a all-around cyberbanking recession with abounding a nation counting their losses. We are in actuality activity through possibly the affliction all-around acclaim crisis aback the Great Depression. Given that the apple is adulate and with advancing technology, all-around cyberbanking markets are now chip appropriately authoritative an contrarily civic cyberbanking bazaar a all-around phenomenon. By a simple bang of a button, billions of dollars can seamlessly bisect civic boundaries at the acceleration of light.

Sadly, this all-around cyberbanking accident originated in USA due to the boundless subprime mortgage defaults, bread-and-butter recession is affecting all the aloft players of apple economy.

By September 2008, the acclaim crunch, which started about 2006, had alarmingly ballooned into Wall Street’s better crisis aback the Great Depression as hundreds of billions in mortgage-related investments went sour; boss advance banks that already disqualified aerial accounts empyrean crashed.

In the bosom of this conundrum, accusing fingers are been acicular at altered quarters; some accusation the authoritative authorities over abundance and “blind-faith”, while some accusation the clandestine and advance banks over greed, poor accumulated governance/practises and advance decisions. The affliction hit anon were the allowance companies, advance banks, Hedge Fund operators, Ample Mortgage Lenders such as Lehman Brothers, Merrill Lynch, Bear Stearns, Fannie Mae, and Freddie Mac etc.

The United States government has been advancing to abjure off what has absolutely snowballed into a all-around bread-and-butter recession by accepting civic mortgage giants: Fannie Mae, Freddie Mac, AIG as able-bodied as midwiving Bear Stearns Cos Inc’s auction to JPMorgan Chase. Coffer of America took over Merrill Lynch. While these bailouts were going-on, a dark eye was angry on the disturbing fourth better advance giant- Lehman Brothers.

Consequently, the Lehman brothers filed for defalcation on September 15, 2008 as a aftereffect of the Fed abnegation to bailout them out or at atomic backstop their baneful assets.

1.1 CASE ISSUES

The case issues discussed are:

The Centralized and Alien Environment

We shall appraise how these environments interacted with Lehman Brothers.

Managerial Ethics

Reactions are apprenticed to be elicited as organizations abide to collaborate with their environments. Hence we shall attack to appraise how Lehman Brothers behaved and reacted in accordance with ethical theories and standards.

Corporate Amusing Responsibility

Lehman Brother’s Amusing Responsibilities as able-bodied as their accessory after-effects shall be evaluated.

PART A

2.0 THE INTERNAL AND EXTERNAL ENVIRONMENT OF LEHMAN BROTHERS

2.1 The Alien Environment:

Organizations do not accomplish in a exhaustion because they acquire their ultimate actuality from the environment. Ecology factors whether specific or broad-based, influences an organization’s action for adaptation and profitability. Lehman’s alien ambiance consists of its stakeholders such as Mortgage financiers, Hedge Funds, Pension Funds, Government Regulators, Bartering Banks, Investors, Acclaim Appraisement Agencies, employees, Home Owners, Small and Ample companies, etc. See aggregate beneath for a schematic diagram of Lehman’s all-embracing environment. Aggregate 1

GLOBAL ECONOMICS

DEMOGRAPHICS POLITICAL/

LEGAL

TECHNOLOGICAL SOCIOCULTURAL

Suppliers

Pressure Groups

LEHMAN BROTHERS

Customers

Competitors

How ambiguous and circuitous is Lehman Brothers’ environment?

Below is the Uncertainty cast acclimated to appraise how the alien ambiance afflicted Lehman Brothers. Aggregate 2

ENVIRONMENTAL UNCERTAINTY MATRIX

Source: Robbins, Bergman, Coulter, Administering 4e, 2006, Pearson Education, Australia

Due to the blazon and attributes of business, Lehman Brothers avalanche aural the corpuscle block 4: which connotes a activating and capricious ambiance characterised with abounding apparatus and a aerial charge for knowledge. Hence, Lehman stands the adventitious of been afflicted by the alien ambiance which may abate the admission of its authoritative decisions and interventions.

Lehman Brothers’ broader ambiance as it afflicted their activities, behaviour and outcomes are discussed beneath the afterward sub-headings application the Political/Legal, Economical, Socio-cultural and Technological changes, PEST analysis:

Political/Legal:

Lehman Brothers which was formed some 158 years ago was initially circuitous in acceptable ample accumulated firms such as Sears, Roebuck and F.W. Woolworth, etc accession basic to aggrandize their businesses. During the 1930s, the Lehman Brothers adapted into carefully Antithesis business aback the U. S government afflicted all cyberbanking institutions to accept amid bartering cyberbanking and Securities.

Lehman’s portfolio deepened afterward the abolition of the Glass-Steagall Act in 1999, during the Clinton administration. The act banned banks from advance on Wall Street, appropriately careful consumers from riskier transactions. Already that aegis was abolished, Lehman was able to gamble; and it became amid the better issuers of Mortgage-Backed Antithesis authoritative its allotment aggregate to ascend from its 1994 aggregate of $5 to $86 in 2007.

As a aftereffect of Lehman’s atrocious attempts to attack angrily with its aggregate rival, Morgan Stanley for bazaar share, it active several under-arm access that credible it to several absinthian brushes with the law amounting to assorted litigations (See addendum 1). This added aching its accumulated angel by brewing fear, panic, disbelief amidst its stakeholders consistent in it been deserted during its time of need.

Lehman would accept been adored aloof as Fannie Mae, Freddie Mac, Bear Stearns and AIG beneath the accustomed political climate, but there were outstanding issues circuitous e.g. the Federal Reserve best out big holes created by the baneful assets in Lehman’s antithesis area accompanying with their abnegation to appear out apple-pie to the public. Instead, Treasury and Federal Reserve bosses, Messrs Henry Paulson and Ben Bernanke respectively, adopted to save others because they acquainted that acceptance these (Fannie Mae, Freddie Mac, Bear Stearns and AIG) to abort would accept resulted in a adverse avalanche of contest that will absorb not abandoned in the U. S abridgement but the World’s. Moreover, Mr Paulson never believed it was appropriate to use taxpayers’ money to save Lehman. Whether this was a appropriate accommodation charcoal to be credible as the Lehman’s defalcation has accordingly bedridden all-around cyberbanking markets worldwide.

Economic:

The Macro and Micro-economic ambiance which Lehman Brothers operated played a basic role in its demise. Indeed, what basically happened to Lehman was about a simple bread-and-butter case of accumulation outstripping demand.

After the agitator attacks of September 11, 2001, the Fed abundantly bargain absorption ante in alternative to activate bread-and-butter advance and anticipate abysmal recession. Expectedly, the better Wall Street firms began reacting to this Federal Reserve action of acutely low ante at which money was adopted by purchasing billions of dollars of subprime mortgage loans. These were best acceptable bought from nonbank mortgage companies, which adopted money from companies like Lehman in adjustment to accomplish loans and bound resell them to Wall Street.

Bear Stearns and Lehman Brothers about monopolised this bazaar as alternative players like Merrill Lynch were backward arrivals to the awful leveraged/risky subprime lending and securitizing business. Lehman offered aggregate loans to nonbank lenders, additionally purchasing mortgage articles and again axis them into Asset Backed Antithesis (ABS), and again affairs these bonds to end investors basically fabricated up of the allowance companies, Hedge Funds, Pension Funds, Bounded Governments and adopted banks.

The Antithesis and Barter Commission escalated the already deepening bread-and-butter bearings in 2004 by auspicious these advance banks through the alleviation of the above-mentioned banned on leverage. Expectedly, the advantage ratios of the bristles better absolute investments banks hit the rooftop (Labaton, 2008). Lehman’s acquisitive centralized cyberbanking action did not advice affairs at all, as it offered potentially alarming advantage ratios as abundant as 30:1, asset-to-equity arrangement (Table 6, see addendum 2). Given this scenario, any 3% bead in aggregate of assets absolutely assault out the absolute aggregate of disinterestedness appropriately apprehension the aggregation bankrupt. Nevertheless, Lehman grew rapidly, arena a ascendant role in the securitisation bazaar and the leveraged lending businesses announcement division afterwards division of almanac antithesis from 2004 to 2007.

Even afterwards the abridgement had recovered, the U.S Fed awfully kept absorption ante low which fabricated mortgage payments alike cheaper and affordable appropriately abundantly abbreviation the likelihood of defaults to barest minimum. Therefore, appeal for homes began to escalate, sending prices up. In addition, millions of homeowners bedeviled the befalling of aggregate drops to refinance their absolute mortgages. As the industry became saturated (as about everybody now endemic a home), accompanying with the amaranthine advancing animosity amid lenders, the affection of the mortgages went bottomward consistent in the abrasion of underwriting standards.

For the abhorrence of aggrandizement due to antithesis clamminess in the markets, Fed started accretion absorption ante which eventually fabricated mortgages already owned, account beneath than the aggregate for which they were initially purchased due to college payments. This beatific boundless agitation above all stakeholders which to accident of aplomb and assurance in cyberbanking markets arch to mortgage defaults and consecutive foreclosures. With this animal book arena out, accompanying with the Lehman’s accretion disability of affair its debt obligations, investors absent aplomb in its stocks consistent to defalcation with about $613 billion in debt.

Socio-cultural:

These are factors such as behaviours, beliefs, values, demographic trends as they affect organization. A majority of Lehman’s workforce accord to the bearing Y. Bearing Y are about affairs oriented, tech-savvy, ambitious, impatient, etc. Because they about army to “where the money is”, Lehman’s top administering connected to do aggregate in its adeptness to absorb its best brains. With the connected availability of low absorption funds, change in customer aftertaste became the norm. An abandoned who contrarily wouldn’t accept been able to allow a abode now had admission to owning added than one house. This fabricated the accessible accept the adeptness disposed appear advance rather than consumerism which afflicted alternative absolute sectors of the economy. This change in customer aftertaste favoured Lehman initially because of admission in mortgage demands. Soon Lehman had no borrowers for its mortgage articles because everybody now had a house; and with the admission in absorption rates, foreclosures became credible because the absolute anemic cyberbanking cachet of its borrowers became obvious.

Technological:

Advancement in technology played a absolute “double-edged sword” role at Lehman Brothers. It brought about desperate abridgement in the amount of creating mortgages. The advance of the internet accompanying with easier availability of advice about abeyant borrowers by the simple bang of the abrasion button, encouraged it to await added heavily on acceptable sources of information, such as acclaim array and ratings, rather than on the added labour accelerated time activated methods. It additionally fabricated analytic for a new set of borrowers easier and beneath costly, mortgage offerings application aggregate email sending tools.

On the alternative hand, these innovations created what economists alarm an “agency problem”. Aback the mortgage artist was no best activity to authority the mortgage to maturity, but rather was activity to anon advertise it to a antithesis close and aggregate its fees upfront, it did not accept a able affection to conduct a absolute appraisement of the loan.

2.2 The Centralized Environment

The centralized ambiance of any alignment basically symbolizes its culture, personality, frequently aggregate belief and behavior (Robbins S., et al, 2006). Companies will acknowledge to aforementioned affairs abnormally due to the differing cultures that analyze them. Furthermore, an organization’s centralized strengths and weaknesses as able-bodied as opportunities and threat, SWOT can comedy a basic role in its success or failure.

2.2.1 Lehman’s Culture

Lehman’s CEO, Mr Richard Fuld in my assessment is beheld as an almighty baton because he “single-handedly” angry the fortunes of the aggregation about aback he afflicted appointment in 1994. He ran the alignment like a warfront area he anointed a absolute able adeptness amidst his subjects.

His colleagues alike nicknamed him “Gorilla” because of his arty adeptness on the close as cipher not alike “outsiders” dared claiming his ideas, behavior and decisions. This behaviour was not abrupt because Lehman has had a continued history of hostilities, in-fighting and “coup de tat” aural its ranks which had amount it its adeptness in 1984.

Since we already apperceive that the centralized ambiance of an organisation is all about its culture, behaviour and acknowledgment as to how it sees the alien environment. For the abuttals of this report, we may not abide so abundant on the absolute adeptness of Lehman rather we shall booty a analytical attending at how its adeptness ability accept played a role anon or alongside in its annihilation application the seven abuttals of culture.

Usually, absorption to capacity is absolute abundant of appropriate accomplishment cyberbanking institutions charge possess. But due to the advancing mural and acquisitiveness on the allotment of chief management, ethical capacity were abandoned apropos the blazon of mortgage loans that were issued. Background checks weren’t performed to actuate the acclaim adeptness of its mortgage borrowers

Innovation and Accident tolerance

X

High innovation/High accident altruism adeptness as credible in their awful leveraged mortgage antithesis alms which came through several circuitous cyberbanking avant-garde packages

Outcome orientation

X

-Outcomes/result-oriented adeptness that focuses added on after-effects rather than “how” they were achieved. This attitude fabricated it lose afterimage on the illiquidity of the bazaar during the approaching crisis because of dark greed

– Abbreviate appellation accomplishment accolade adeptness throughout the close not absorbed if these loans would survive in the continued appellation or not

Stability

X

Very strong/stable adeptness of “let’s advance the cachet quo” which resulted in their disability to acclimate to the accustomed cyberbanking situations.

People orientation

X

-Poor and abortive advice adeptness from top administering to the bottom. Chief advisers never took feedbacks from advisers in the “field” seriously

– While chief administering compensated themselves with banknote bonuses, alternative advisers were issued bonuses mainly in banal options and bonds.

– Abridgement of acceptance for outstanding accomplishment abnormally if it came from a “lower” employee

– A adeptness of abridgement of accuracy amid the chief executives. They never announced the accurate attributes of their clamminess to their advisers and alternative stakeholders

Aggressiveness

X

Overly advancing adeptness in which they approved to bully, dispense and outsmart the bazaar but got their fingers burnt.

Team orientation

X

Non collaborative competitions which abject agent morale. The atmosphere was like that of a collegiate, bodies formed cliques and cartels. There was teamwork, but antagonism was basically on a claimed akin because of rewards that may accumulate from abandoned performance

The aloft listed cultural adoptions by Lehman went a continued way in tarnishing their angel afore its all-around stakeholders which fabricated it difficult for it to be trusted and rescued aback its accompaniment of defalcation became apparent. Table 2.0

2.2.2 SWOT Assay of Lehman Brothers

SWOT

DESCRIPTION

Strengths

-Lehman has a able-bodied cyberbanking abject with clamminess in antithesis of $42 billion as at Aug., 2008 which is able of arresting astringent cyberbanking stresses (Scott S., Tanya A., 2008). It additionally has a able authorization above its aggregate advance banking, trading, and advance administering businesses.

– Cutting-edge IT basement is one of Lehman’s strengths which it exploited maximally in the accretion of barter added calmly (see PEST analysis).

– Able abreast and accomplished workforce

– Able adeptness which is one of team-work, accord and adeptness administration as credible by the circling of workers about departments at atomic every two years

Weaknesses

-Poor authoritative decisions which led to the disability or contrarily absolute abnegation to see the cyberbanking dangers coming. -Poor accident administering and centralized controls which led to its affairs actuality credible to accident of been wiped out aural days. – Able adeptness which resulted in apathetic adeptness to the alteration cyberbanking situations aural and afterwards the organization.

Opportunities

-The U.S Federal Treasury kept absorption ante low for abiding periods which fabricated mortgage acquisition/repayments alike cheaper and affordable which added the advocacy that accrued to advance banks, Lehman Brothers inclusive. – Antithesis and Barter Commission airy banned of cyberbanking advantage which able Lehman with the befalling to action added awful leveraged mortgage backed antithesis to its investors. But these appearing “good” opportunities angry out to be a “curse” in disguise.

Threats

– Stiff antagonism advancing from Morgan Stanley, Goldman Sachs, and Merrill Lynch in the “hunt” for new mortgage audience arch to the desperate abridgement in the affection of mortgage instruments issued. Added and added advantage was issued in alternative to abide advancing and abide “profitable”. The affliction blackmail came from the Federal government backed Fannie Mae and Freddie Mac which had absolute admission to government subsidy (very low absorption aggregate loans) authoritative them affair the everyman aggregate mortgages thereby assertive the mortgage market. This again afflicted alternative players to affair alike lower ante in adjustment to break in business. -Short affairs of its stocks by brokers on the attic of the barter which fabricated the aggregate abatement advisedly thereby ascent broker all-overs consistent in accident of confidence. Negative bazaar sentiments apropos its acceptable collapse due the beforehand collapse of Bear Stearns, bailouts of Freddie Mac and Fannie Mae.

Summary of the SWOT Analysis

No doubt, Lehman is an absolutely absolute ample bank. With its able-bodied cyberbanking war chest, experienced/diverse workforce and cutting-edge IT/IS at its disposal, it still went under. Lehman bootless to advance its strengths/opportunities to cardinal advantage. Stiff competition, cyberbanking adjustment abandon as able-bodied as poor administering fabricated it affair awful leveraged chancy Mortgage Backed Securities, MBS which eventually wiped out its clamminess due to massive defaults in mortgage repayments which came as a aftereffect of added absorption ante to arrest ascent inflation.

PART B

3.0 MANAGERIAL ETHICS

These are laid bottomward standards of conducts or moral judgements acclimated in the acquittal of business. Added importantly, it refers to the rules and attack that ascertain appropriate and amiss conduct. It is the ultimate assignment of the administrator to finer acquaint and apparatus ethical issues aural an organization.

Lehman Brothers adopted the commonsensical actualization of ethics, in which decisions were fabricated based on outcomes and/or consequences. They anxious themselves with authoritative abundant profits to amuse the acquisitive yearnings of the top few at the top bureaucracy of administering not absorbed if their activities were adverse to the abundance of others. This was acutely credible in the way apperception extraordinary bonuses was dished out to the CEO, Mr. Fuld and alternative top administering executives. According to Mr. Fuld’s address to the Federal Committee on Oversight and Government Reform, over $30 actor was paid to him as bonuses. He additionally claimed that during the abounding years, 2004-2007, an amazing $16 billion was disbursed as bonuses out of which he abandoned grossed over $260 million.

Below is a table assuming a account of variables as they affect Lehman’s adeptness to behave the way it did.

Table 3.0

3.1 Factors affecting Lehman’s ethical behaviour

Factors affecting Authoritative Ethics

Comments

State of moral development (manager’s)

Since the ethical behaviour of managers is the distinct best basic agency that influences agent decisions (Robbins S., et al, 2006), we shall focus on the accompaniment of moral development of Lehman’s CEO, Mr Fuld R. He operated at the preconventional akin aback his accomplishments (selling awful leveraged Mortgage Backed Antithesis at all cost) were badly absorbed to the rewards and bonuses he and his assembly would get.

Personality/Values (ego strength/locus of control)

Values which represent claimed aesthetics of what is appropriate and amiss (Robbins S., et al, 2006) go a continued way in influencing ethical behaviour. Mr Fuld has a absolute able personality (ego strength) consistently assertive that whatever he does is the appropriate thing. Alike at the collapse of Lehman, he never accustomed albatross for his accomplishments and/or inactions. Aback he was alerted about what cyberbanking crisis they were in, by an insider, he coiled it off. He additionally believes he has the ultimate adeptness to ascendancy both his afterlife as able-bodied as that of others (internal locus of control)

Organizational Culture/Design

-For the actuality that Mr. Fuld took Lehman from “rag to riches”, he was credible as a demigod who was aloft the law. Hence, he was not accountable to the organization’s cipher of belief and conduct.

– The authoritative design/structure adopted a Top-Bottom administering actualization of leadership. It anointed a able master-subordinate accord which aside advice and adeptness administration as no agent cartel active top administering on their abominably adopted strategies

– Lehman’s adeptness is such that encouraged accident demography and connected addition which afterwards accepted to be its undoing.

– The accent on abandoned accomplishment aloft group/team accomplishment encouraged advisers as able-bodied as administering to go added lengths alike if it’s bent to “perform” e.g. the added mortgage audience you get, the added your benefit and acceptance which was added additional by its adeptness of concise accomplishment appraisals.

Issue Intensity

– Greatness of harm: Lehman brothers never believed their accomplishments (highly leveraged MBS) would accept deleterious furnishings on its all-embracing stakeholders afterwards all, it believed its investors had actuality belted adjoin dangers through the Acclaim Default Swaps, CDS actuality issued by American Allowance Group, AIG

-Consensus of wrong: Cipher dared altercate Mr. Fuld’s decisions, the absolute few that did were arbitrarily sacked. So there was no abject for accord of amiss here.

-Probability of harm: Lehman believed the anticipation of foreclosures was basal because of the acutely abiding low interests ante which created a lot of clamminess in the economy

Immediacy of consequences: Mr. Fuld in his assessment believed that alike if there’s an aftereffect of foreclosures, bread-and-butter abatement and/or address downs, it would be ” for a abbreviate while” because ” historically” crises does action every few years and the markets would consistently ” alleviate itself”

-Proximity to victims: Lehman “pushed” its mortgage barter far off application its “distanced” subsidiary, Aurora Accommodation Services as the issuer of its mortgages. This, it acclimated to abuttals itself from its customers. By so doing, best bodies never knew the subprime mortgages were actuality offered by Lehman in adjustment to advance a apple-pie accessible angel and abstain albatross for any adverse adverse furnishings of its bent actions

-Concentration of effect: Lehman abandoned how concentrated the aftereffect of foreclosures that would appear from its subprime mortgage sales would accept on the civic as able-bodied as all-around economy. They bootless to see the broader account of a acceptable all-around bread-and-butter downturn. That apprenticed their connected unethical/risky cyberbanking actions.

Conclusion

Mr. Fuld of Lehman Brothers acted unethically in best of his decisions

From the circuitous coaction of several factors that afflicted Lehman’s bent behaviour in the table above, we shall booty a afterpiece attending at some of the ethical issues faced at Lehman Brothers beneath with a actualization to comparing opposing angle on their conducts.

Table 4.0 Opposing arguments apropos Lehman’s authoritative ethical decisions.

Ethical issues

Arguments for

Arguments against

Sale of risky/highly leveraged Mortgage Backed Securities

Small allotment acknowledgment in aggregate can construe to atomic profits for its antithesis area and investors alike

Little abatement in aggregate potentially wipes out the absolute acclaim of the aggregation apprehension it insolvent. It is bent to use investors’ adamantine becoming monies to adventure into acquisitive and chancy ventures beneath whatsoever guise.

Constant cyberbanking articles reengineering and “innovation”

This creates abeyant allure for new barter as able-bodied as application the absolute ones

Causes abashing as to the compassionate of the abeyant risks these products- offers portends.

Unscrupulous “bulking or bundling” of mortgages

This contrarily acute action helps to adulterate the “toxic” aftereffect of under-performing mortgage antithesis by lumping them with the acceptable ones thereby creating a absolute actualization arch to AAA ratings by appraisement agencies

This action bamboozled abounding investors by underplaying the absolute aggregate and assurance of their banal backing arch them to be demography by abruptness aback their stocks became worthless

Generating mortgage demands; packaging them, and again reselling them aback to Wall Street and the advance accessible for ample profits aback in reality, there weren’t “real” buyers for them

This was a way to actualize profits out of nothing

This is an bent attack to dispense the accustomed armament of appeal and supply. Hiding abaft their affected subsidiary, Aurora Accommodation Services to bear canard contributed to the apartment bazaar balloon access aback it became axiomatic there was no added appeal for these mortgages

Underwriting loans to ambiguous lenders e.g. FAMCO, Delta Funding Corp., etc and acceptable them in cheating borrowers thereby actionable customer aegis laws (Graham R., 2008, see bibliography)

NA

This led to boundless abrasion of all-around broker and accessible aplomb in the aggregation which added contributed in its bankruptcy.

Mr Fuld’s non-equity incentives were ample above the 85th percentile. Furthermore, his bonuses grossly exceeded the accustomed industry boilerplate of bonus= abject bacon x Two. Mr. Fuld’s bonuses were bristles times his abject bacon (Nell M., 2008, see bibliography)

NA

This advantage convenance doesn’t adjust in favour of actor interests

PART C

4.0 CORPORATE SOCIAL RESPONSIBILTY

This is a ample appellation which is acclimated to call an organization’s business activities as it affects the abundance of its stakeholders- customers, investors, employees, communities and the ambiance aural which it operates. It is the acceptable ethical accepted for which all of an organization’s operational activities are abstinent (Davidson, P. & Griffin, R, 2005). Achieving cyberbanking success in a address that honours ethical belief and account people, communities, and the bounded ambiance is what defines CSR.

An able CSR affairs is one that is not mainly based on alms or “goodwill” but rather on creating advantageous relationships with stakeholders who represent assorted social, cyberbanking and ecology concerns.

Lehman Brothers adopted the duke of administering admission to CSR in which it acerb believes in the advance of its accumulated bread-and-butter interests as able-bodied as the aegis and accessory of the affection of activity of its stakeholders. The censor and practise of an organization’s administering is generally a accountable of common agitation globally. Is it compulsatory that an organisation charge assure and advance the abundance of its specific and alien stakeholders? Well, the abuttals of this address is not to altercate in favour of or adjoin this motion but to analyse area Lehman got it amiss as commendations to CSR.

Lehman affianced in several altruistic (socially responsive) activities all over the apple area they had their businesses. Lehman’s CSR spanned through the bread-and-butter and acknowledged levels absolute at the ethical level. Lehman acclimated its alms to abstain acknowledged accomplishments both from the government and its stakeholders while authoritative abiding its activities backward aural the abuttals of the law. It affianced in alms (in a socially acknowledging way) in my assessment because it did what it did aloof to actualize added all-around acquaintance (Public Relations for cyberbanking gains) (economic CSR) as able-bodied as to fulfil the accepted expectations association associates abode on corporations (ethical CSR). See Bibliography (URL link) for absolute capacity of their alms works.

Corporate Amusing Albatross goes aloft aloof philanthropy. CSR agency accountability appear a firm’s assorted stakeholders e.g.: shareholders, employees, customers, bounded and all-embracing communities, etc. Unfortunately, Lehman and Bear Stearns produced no CSR address of any s

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