Ethics In Business: The Bernard Madoff Investment Scandal

Ethics In Business: The Bernard Madoff Investment Scandal The organizational leadership of Bernard Madoff Investments Securities LLC was held by Bernard Madoff himself. Madoffs charismatic leadership style included seducing friends, those in secluded groups, and even his own employees. He seduced his clients by making them to believe they were investing in something special. He would often turn people away, which helped Bernard in courting people and charities with more assets to offer. Bernard Madoff created a system which was promising high returns in short terms and was nothing else but the Ponzi scheme. The systems idea relied on funds from the new investors to pay misrepresented and extremely high returns to the existing investors. He was doing this for years; tempting billions of dollars from wealthy individuals, charities by getting them to invest in his hedge fund. And they did so because of the extremely high returns, which were promised by Madoffs firm. But if anyone would look deeply into the structure of his firm, it would defin itely show that something is wrong. This is because nobody can make such big money, especially if no one else could at the time. How could one person, Madoff, who held all his clients assets, priced, and managed them. It is clearly a conflict of interest. His company was showing profits year after year, despite most of the companies having looses. In fact, Bernard Madoffs case is absolutely amazing, both in its range and in its list of investors who got caught up in it. Bernard Madoff Case Summary Bernard Madoff opened his firm in 1960. His business began to grow when his father-in-law Saul Alpern, who was an accountant, came to the firm. Because there were a lot of competitive firms at that time, Madoff decided to use innovative computer information technology to spread its quotes, which later on became the NASDAQ. This technology provided his firm with a really good income and at this point his securities become the largest buying and selling market maker at the NASDAQ. Eventually, his scheme reached a staggering 50 billion dollars under his management. It came to an end after market conditions let to a considerable amount of redemptions when investors started to take their money back. After Bernard Madoff, former NASDAQ chairman, was arrested on December 11, 2008, he acknowledged that his performance was nothing but the Ponzi scheme. He pled guilty to the biggest investor fraud ever committed by anyone on March 12, 2009. On June 29, 2009 Bernard Madoff was put in jail, and will spending there long 150 years. Stakeholders Madoff was able to align himself with government, rich individuals, and businessmen. This empowered him to have an unlimited access to different groups of investors. Among Madoffs Ponzi scheme victims, it is easy to find wealthy individuals, charitable organizations, and its stakeholders, such as employees, communities, vendors, and government. Investors that took the biggest losses, which was billions, because of this scheme are marked in the Wall Street Journal; among them are Fairfield Greenwich Group, Tremont Capital Management, Banco Santander, Fortis, and others. Investors lost their money because of their lack of conscious and unwillingness to understand or realize that it is impossible to have such high returns in a legally managed investment operation. They also failed to understand that one day they could lose everything. They would rather believe in a fairy tales about high returns in short terms, without any consequences. 7 Steps 1. What are the facts of the case? Madoffs business had obvious facts that showed he was doing a scheme. First of all, because he was being a pioneer in electronic trading, he refused to provide his clients with the on-line access to their accounts and sent out statements by mail. Though, most hedge funds in that time were e-mailing statements to their investors, in order to provide its customers with convenience and the ability to analyze their account. It should have been an important signal to investors, but it was ignored. Secondly, Madoffs firm processed all of its trades and appeared as its own broker-dealer. This made impossible for the outside investors to verify their actual holdings. In fact, one of Madoffs unusual tactics was to get rid of his holdings by selling them at the end of the period. It helped him to avoid filing disclosures of his holdings with the SEC. As well, he was always refusing to talk to any outside audit for the reason of secrecy of his firm. This should raise questions and concerns amongst its investors, but again it did not. The fact that Madoffs fund only had five down months since 1996 could have shown investors that Madoffs business was at least suspicious and warned them to avoid investing in his hedge fund. It is, for sure, impossible in investment or any business to have only a couple down months in more than 10 years of a companys performance. Besides, there are some known factors that helped Madoff to commit his fraud for years, including the following: Madoff had a good reputation in the investment field over the years. Madoff knew how to create the aura of trust. Madoff constantly promised high and stable returns to his investors. 2. What are the ethical issues? In 1980s Bernard Madoff was providing payments to his brokers to perform the customers orders through his brokerage. Later this system received a name, a legal kickback, and because of this he became the biggest dealer in the U.S. stock market. When academics questioned the ethics of these payments, Madoff replied that those payments did not change the price that the customer received, and were a legal business transaction. The SEC investigated Madoffs fraudulent practices and they had concerns that his firm did not show its customers orders to other traders, but they could not find anything illegal in the period from 1999 till 2000. As well, Madoff was too secretive about his investment performance and kept all financial statements closely protected. He usually refused to meet directly with his investors. After some time, he decided to invent a new investment method that was promising constant returns to selected investors, rather than supplying all new investors with high returns. This new innovation was too complicated for outsiders to understand. That should, for sure, raise some questions in his investors, but they did not demand any information and explanation. Of course, there were some investors in the Madoff case that used caution and could see that something is not really clear in his business, and as well because they did not want to lose their money, they removed it. And it was their best decision in regards to this fraud. 3. What are the norms, principles, values related to the case? The culture of a company is heavily influenced by the actions of upper-level management. Their actions are seen by workers throughout the organization and help develop a cultural norm within the company. When lower level employees witness those above them acting unethically, they will think that those actions are acceptable and the norm. This can lead to all types of unethical actions like, fact concealing, budget twisting, and many other unethical actions that were prevalent in the Madoff case. Ethical boundaries arent always clearly defined. The ethical action is not always perfectly obvious, placing investors money into risky investment while trying to gain in the short term is illegal. However, if not done carefully, it could be viewed as unethical. Because of this, it is necessary to train employees in ethical decision making processes. Then they will be able to make the right decision when the ethical thing to do is not completely obvious. In addition, an ethical environment must be set by management, in order to promote good ethical decision making processes. Making the correct decision in an ethical dilemma requires good judgment. Having a good example to follow definitely helps. However, a persons values and beliefs are important in making an ethical decision. If a decision does not seem morally right, then it is most likely not an ethical business decision. Promoting strong values and internal judgment helps employees at all levels of a company behave ethically. 4. What are the alternative courses of action? a) It is very important to provide education to board members about financial and operational matters, as well as analyze and modify all procedures in governance policy and investment policy areas, and always to remember to avoid conflicts of interest in business practice. b) It is also important to provide investors with companys records, for the purpose of due diligence. Inform and explain to the investors about each companys performance, even though it is a time consuming process. This effort will demonstrate a companys commitment to its investors. 5. What is the best course of action? The best course of the action is definitely to be open and clear with investors and committed to the best practices in governance and operations. This will help the company to succeed in the competitive investment environment. 6. What are the consequences of each possible course of action? These actions will open new horizons to interest new investors and will lead the company to profit and success. 7. What is the decision? The shocking Madoff scandal and an unfavorable economy created challenging times for stakeholders. In order foster a competitive environment that will interest new investors, a company needs to legally make profits and always provide clients with all the information. Laws are the minimum code of conduct to which the company has to abide by. The company can always take further actions, beyond what the law requires, in order to ensure investors confidence. What recommendations would you make to your client about the existing 35% investment with Bernard Madoff? I would explain to the client that keeping 35% investment in one investing company can be very risky, especially if the company is Bernie Madoffs which is not regulated or publicly traded. I would further advise my clients the following: Sell off 30% investment with Bernard Madoff. Invest 20% in equity mutual funds. Invest 5% in equity exchange-traded funds. Invest 5% in individual stocks. What recommendation would you make regarding the $100,000 they currently have in cash? I would advise that the $100,000 in cash cleverly would be to invest in different areas, such as in hedge fund the $15,000, Treasuries $25,000, mutual fund $10,000, Madoffs fund $10,000, and the rest $40,000 to spend on buying fixed asset. How would your recommendation be affected if your client tells you that they would like to give the additional $100,000 to Madoff to invest? My recommendation would not change if my client tells me that they would be interested in investing additional money in Madoffs fund. This is because my recommendation is based on the fundamentals of investments. However, I would spend more time explaining to my client the excessive risk they are taking by putting a significant portion of their eggs in one basket. With the information you have at this point in the case, is there anything else that you should do? Definitely, I have to inform the client of a possible risk of investing in Madoffs fund. I will present one some arguments, such as: Bernard Madoff denied outsiders access to records. The company hedge fund was not registered until 2006. Madoffs fund rarely lost its value, even in times of economic downturn. Should you mention to your client that the $5 million in sales may draw the attention of the IRS, because of the relative size of that number compared to the rest of the return? Based on the AICPAs Statements on Standards for Tax Services (SSTS) and Treasury Department Circular 230, which provides authority to the Treasury allowing disbarment or suspension from practice before the IRS, it is not considered unethical to mention to my client that the $5.0 million investment sales can interest and raise questions of the IRS. Though, I should make the client aware that $5 million in sales will be a red flag for the IRS because of its relative size to the rest of the return. At the same time I would need to let the client know that any sales number must be supported by proper documentation that would unquestionably prove its validity. As a professional tax practitioner, I would refrain from making those kinds of comments without any valid evidence. It can even be misleading to the client to give this kind of unsubstantiated advice. Should you discuss with your client the possibility that their account is being churned? I would not discuss with my client the possibility of the account being churned because it is beyond the scope of regular tax preparation. Additionally, churning, if proven can lead to prosecution of the broker since it is considered a fraudulent practice. Churning has been labeled as a falsified practice in 1934. Churning is when stock-brokers execute a large volume of sales on their customers accounts. Since those brokers are earning a commission on each transaction, they get paid more if they execute more transactions. So, those fraudulent brokers would carry out excessive amounts of small transactions, in order to earn their commissions, which would slowly drain the customers account. After awhile, the investors account would be reduced because of the constant charges. Eventually, the customers account would be drained and they would not know how it occurred, or that they had been defrauded. In fact, if I would have suspicion that the clients account is being churned, I should disclose that to the client. Churning is illegal and unethical, and suspected churning should be addressed. I should share with the client that sometimes brokers and traders maliciously trade securities very actively in a brokerage account in order to increase brokerage commissions rather than customer profits. And in this particular case Madoff may be tempted to churn the clients account because Madoffs income is not transparent and could be directly related to the volume of trading of the clients account. Based on the information you have thus far in the case, what further information do you believe you need in order to prepare the tax return with regard to the Madoff investment? I would need following information: The investment sale prices in order to estimate and accurately report capital gain/losses, and include the result in the gain/loss report. The investment purchase prices in order to correctly calculate and report capital gains/losses, and include the result in the gain/loss report. The date of the investment purchase and sale is also important in order to determine if the capital gain is short-term or long-term. As well, I would need the following data to complete the return: Investment sales price. Investment purchase price. Description of the securities purchased and sold during the year. Gain/Loss from the options. Market value of the open options at year-end. For sure, in order to prepare tax return to the Madoffs investment I should obtain all necessary tax forms from Madoffs accounting firm, including a 1099B for sales, 1099DIV or 1099 INT. I cannot just rely on his accountants explanation on how to calculate dividend and interest. Moreover, since options trading is a very complex subject I must do additional research on how to report income on options trading, and be sure that all the necessary tax forms are provided by Madoffs firm. We now know the Madoff investments for some period of time have been fraudulent. Were there indicators that might have caused you to react differently with regard to your clients investment? There were the following indicators: There was no online access to accounts. There was no issuance of forms a) 1099B (for investment sales transactions), b) 1099 DIV, and c) 1099 INT. David G. Friehling, a sole CPA practitioner, audited the hedge fund. Madoff did not file any disclosures of his holdings to the SEC, because he was easily selling his holdings. The business cannot have only couple down months when operating for years, it is impossible. In other words, the Madoff case was filled with signs of fraud that could have led one to think that something was going on and changed the way the average investor feels about investing. Fraud comes in many forms, it can be as simple as taking money from a companys account, or it can become as complex as the Madoff case. In order to catch fraud in companies as complex as Mr. Madoffs, one must pay attention to more subtle signs that could point to fraud. The transparency of Mr. Madoffs company was minimal and should have alerted someone that something was wrong. Mr. Madoff repeatedly denied outsiders access to records, which should have been available. The companys hedge fund was not registered with the SEC until late in 2006, which should have been another sign that something was amiss. This shows that Mr. Madoff had something to hide, because he did not want the SEC evaluating his hedge funds. In addition, the companys auditor was Mr. Madoffs brother-in-law, which opens the door for fraudulent activity. Auditors are supposed to be independent and definitely not family members of the company that they are auditing. This situation becomes more alarming when you consider that Mr. Madoff was frequently opposed to outside audits of any type. A family member as an auditor and a strong resistance to all other audits should have been the first sign that something fraudulent was occurring. Funds managed by Mr. Madoffs company performed so well, that it could have been another clue to the fraud that was taking place. Forecasts were matching outcomes, in areas like earnings per share, to the point that it became unrealistic to be able to forecast that accurately. Earnings per share figures have so many variables that it is nearly impossible to predict them accurately time and time again. In 2008, one of Mr. Madoffs hedge funds, which invested in the SP 500, gained almost 6% in value, while the SP 500 itself was down over 35%. This was yet another clue that something in this company wasnt right. Mr. Madoffs funds rarely lost value, even in times of economic downturn. So, while most investors were losing money in the market, Madoffs funds continued to profit. With the advantage of hindsight, what additional due diligence could you have performed? In regards to Financial Planning: A quick search on Google could have shown that Madoffs practice starting 1990s was exposed to accusations that he was front-running his investors, and the idea of this practice was to buy or sell shares before filling investors orders. All of the articles and complaints about Madoff in the early 2000s would have been revealed as well. Independently investors have to check the stock prices and trades on a daily basis. Dig into the small accounting Firm that audited Madoffs Fund. To check any Web sites in order to gain more information about his practice, such as the Financial Industry Regulatory Authority, or FINRA. I would quickly come to the conclusion that my client should divest 100% of their investments in Madoffs fund. In regards to tax preparation: Dig further into the multi-page printout of listing of hundreds of transactions. Request for a formal 1099B (for investment sales transactions), 1099 DIV, and 1099 INT. Recalculate the gain/losses reported on the summary sheet. If you run across a similar situation in the future, do you feel any more comfortable about how to handle it? Yes. Would you report such situation to SES, IRS, or other regulatory body? Yes. Madoff stopped trading and has been fabricating investment return of his clients during middle 1990 till 2008. He and his accomplices have committed fraud. The crime was committed based on the value of greed and a get rich quickly scheme. From the investors position, greed is also what fueled billions of dollars to be invested in Madoffs Hedge Fund. Investors should have avoided the following: Invest into an unregulated hedge fund. Too little due diligence. Higher than average returns usually cannot always be realistic. Absence of the audit of financial statements. Now that we know how Madoff performed his Ponzi scheme, we will able to figure out and try to avoid scheme in future, and do not forget to: Broadly analyze the company performance. Watch closely for warning signs. Verify filing with the SEC. Check for the company reputation. 6 Pillars Applied: Responsibility: Though Madoff was performing the investment operations as a Ponzi scheme, but when his investors wanted to have their money back, they got it without any delays. Of course, this does not show his responsibility to all the investors, but a little percentage to those who were smart enough to withdraw their investment from his fund. Those investors definitely were aware that Madoffs firm does not conduct its business transactions according to law and ethics. In fact, Madoff has violated mostly all 6 pillars, such as trustworthiness, respect, responsibility, fairness, caring, and citizenship. His only goal was to benefit himself and his family, while completely ignoring the well-being of others. Madoff cared little about those he harmed and only worked to better himself at the expense of others. Therefore, from an ethical perspective, Madoffs scam was a white color crime. White color crime creates victims by establishing trust and respectability. As in this case, victims of white-color crime trusting clients, who believed there were many checks and balances certified the Madoff investment operation as legitimate. Madoff appears to be the classic white-collar criminal. He was an educated and experienced individual in a position of power, trust, respectability, and responsibility, who abused his trust of personal gains. From the inception of his investment business, he knew he was operating a Ponzi scheme and defrauding his clients. As a result, he is serving jail time and will be paying restitution for the rest of his life. In the end, he knew this day would come.

Reproduction Businesses of Thomas Kinkade?s painting :: essays research papers

Reproduction Businesses of Thomas Kinkade’s painting When I read the article by Susan Orlean, I am very aware of the big business Thomas Kinkade is trying to create by reproducing his original paintings mechanically using digital technique, but I have also carefully examined whether this article which discusses about the reproduction of his art works has a correlation with Walter Benjamin’s essay â€Å"The Work of Art in the Age of Mechanical Reproduction†. A certain emotion or an â€Å"aura† is said to be present when an artist creates an art work. However, some of the reproduction pieces inside Kinkade’s signature gallery are highlighted by his specially trained assistant; I believe these paintings are no longer evoking this so-called â€Å"aura† of the original work. Aura is something that cannot be duplicated. Reproductions of art pieces are simply tangible and concrete object. They are digital imitations that â€Å"could be soaked in water, peeled off the paper, and affixed to a stretched canvas, so that it showed the texture of the canvas the way a real painting would.† As Benjamin stated, â€Å"†¦ the most perfect reproduction of a work of art is lacking in one element: its presence in time and space, its unique existence at the place where it happens to be.† The original paintings have their own unique characters and history, and these are not the things that art reproductions can generate . "The presence of the original is the prerequisite to the concept of authenticity." To recreate an original masterpiece such as Kinkade’s â€Å"Julianne’s Cottage†, and to print it onto the canvas takes away its original beauty and changes it into an everyday, insignificant object. Although highlights of the paintings are done to entails stippling paint dots to give an image â€Å"more texture and luminescence†, but Glenda, one of the highlighter mentioned in the article would even allow customers to perform the highlights themselves, these reproductions are no longer authentic, it is the unique involvement that is counted significant by the public to make the painting â€Å"truly one-of-a-kind†. Kinkade’s business world is marketing businesses with the recreations of his art paintings that can provide continuing supplies â€Å"in the pursuit of gain† discussed by Benjamin. In my opinion, the digital reproductions of Kinkade’s art works are not intended for political or even social action, but for economic acti on. The sensation of â€Å"absent-minded† is also apparent when the customers at Kinkade’s signature gallery are trying to engage themselves in the art world of Kinkade’s paintings.

Music And Stress Essay -- essays research papers

Music and Stress   Ã‚  Ã‚  Ã‚  Ã‚  During the first week of my self change project I monitored my stress levels and the way music effected the mental and physical aspects of stress. From monitoring this properly, I found that listening to music pleasing to me at the specifically different times I experienced stress did help reduce my internal feelings and physical changes. In carefully studying the various types of stress experienced I concluded that certain types of music more effectively reduced my stress and anxiety levels. The following paragraphs explain further the types of stress felt and the music that assisted in subsiding the symptoms of stress. Stress can be felt in several different forms, included here are the following ways I experienced stress. This step was found to be particularly important in past studies to learn specific Å’stress styles' and most importantly, what music reduced what symptoms of stress. There are six separate forms of stress that can be experienced. These are symptomatic in physical, behavioral, emotional, cognitive, spiritual, and relational aspects.   Ã‚  Ã‚  Ã‚  Ã‚  Physical symptoms I personally experienced were: headaches (specifically tension headaches), nausea, dizziness, sleep difficulties, tight neck and shoulders, racing heart, trembling hands, and restlessness. Behavioral symptoms I felt were: a definite excess in smoking, bossiness towards others, compulsive gum chewing, I became critical of others, grinding of my teeth so hard that I am forced to wear a mouthpiece at night, and an inability to finish what I start. Some of the emotional symptoms included: crying, anxiety,nervousness, boredom, edginess, overwhelming sense of pressure, overwhelming anger, being unhappy for no reason, and very testy. Cognitive symptoms that I felt were: trouble thinking clearly, forgetfulness, writers block, long-term memory loss, inability to make decisions, and constant excessive worry. Spiritual aspects of stress that I felt: doubt, unforgiving, apathy, and a strong feeling for the need to prove myself. Examples of relational symptoms included: isolation, intolerance, resentment, clamming up, nagging/whining, distrust,and less contact with friends.   Ã‚  Ã‚  Ã‚  Ã‚  The importance of identifying interpersonal feelings helps with deciding what music would be most effective in reducing stres... ...nderstand that if she/he decided to change, she/he could. Future use of behavior change will most definitely come in handy. I already have a list of things I would like to change on my own time and knowing how and what to do will be more than enough motivation to get me going.   Ã‚  Ã‚  Ã‚  Ã‚  My major goals in this specific self-change project would be the reduction of anxiety and stress through music therapy. Hopefully this will follow me into the rest of my life, including stress in family life and in my chosen career. Secondary goals that I have acquired through study on the topic are actually using music therapy in my future career. To be specific, I would like to turn and use music along with psychodynamic therapy to help heal pediatric oncology patients. At this time in my college career, I feel that I am fulfilling my goals, but certainly not to their best. Hopefully, through this and other self-change projects, I can prepare myself for today and the future. Self-change is, I found, something that can only continue in your life if you use it . If you do follow through, eventually, the change will become a part of you and not a simple Å’behavior you don't like'.

Organizational Citizenship Behavior Essay

Human Resource Management (HRM) is defined as the organizational function that focuses on recruiting, management, and the directing of the employees that work in the organization. It also deals with compensation, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training. Even though the HR functions evolved, some things never change. Since most companies will always need the traditional HR functions such as hiring and firing employees, providing pay and benefits packages, training and developing the workforce, and dealing with employer – employee conflicts. Organizational citizenship behavior (OCB) is a concept defined as the set of additional activities that are beneficial to an organization and its employees. These activities are not required in a formal way; that is, they are not stated in a contract nor required by the company. OCB is commonly a behavior of employees towards their company and vice versa. It is clear that the organization’s HRM plays a vital role in implementing OCB through creating a well-established relationship between the organization and the employees. Rousseau and Geller argued that this relationship’s status is critical in the amount of OCB produced by employees where the company must deliver first a few requirements. (cited in Morrison, 1996). Schuller states that each company’s HRM has a set of principles and values that are integrated in its overall philosophy, which includes a respectful treatment of its employees (cited in Morrison, 1996). According to Eisenberger, Huntington, Hutchison, and Sowa, how effective is an organization in applying that philosophy is related towards how much the employees feel appreciated in their work place and therefore related to the amount of OCB displayed (cited in Morrison, 1996). OCB is present in all companies and can be considered a cycle. In fact, the HR department encourages OCB through several actions, which pave the way to creating a healthy organizational culture where the company protects its employees who are devoted to their company. This report will discuss OCB in Middle East Airlines (MEA) by taking a closer look at the employee – company relationship and the company – employee relationship. Literature Review on Organization Citizenship Behavior How Companies Encourage OCB In order for employees to work on achieving OCB, the human resource management has to work on some issues to help encourage each individual to participate in developing the company. The management must ensure that several things should be well done: Social Exchange, ldentification with Organizational Objectives, Empowerment, Selection and Socialization, Evaluation and Rewards, Rules and Job Descriptions. In an organization, Blau identified two types of relationships that tie the management and the employees together: the economic relationship and the social relationship (cited in Morrison, 1996). Konovsky and Pugh’ analysis states that it is more likely for employees to perform OCB under good social conditions than economic (cited in Morrison, 1996). Organ claims that this fact is due to several reasons: First, social relationships allow employees to have feelings of mutual trust with the organization and they will build long-term relationships with the management. This will encourage employees to help enhance the image of their company by practicing OCB. Second, the social relationship is one that is ambiguously defined, that is it does not have clear boundaries; therefore employees will more likely include certain citizenship acts in their job tasks (cited in Morrison, 1996). The identification of the employees with the organizational objectives is crucial for achieving OCB. That is because each individual will adopt and familiarize with the values and principles of the company, and hence become a part of its system, which will give a feeling of belonging and an encouragement for being part of the progress of the company. For employees to achieve OCB, Conger and Kanungo believe that they must be first willing to do so, and that is by being encouraged and empowered (cited in Morrison, 1996). Bowen and Lawler claim that many benefits are generated as a result of empowerment. First, it will shorten the time of response of employees to serve their customers. Second, the relationship between the employees and the customers will be more enthusiastic and kind. Third, it will allow the employees to be more innovative and generate ideas for the benefit of the company (cited in Morrison, 1996). Selection is the first phase of the entrance of an employee into a company. During this stage, Shore and Tetrick claim that each individual becomes aware of the job responsibilities in his field. Also, it is through this stage that the company indicates to the employee the responsibilities that the company has towards him as well, such as security, progress and training; hence it identifies a two-way relationship. This will lead to a feeling of respect and interest from the other party, which will lead to employees achieving OCB (cited in Morrison, 1996). Selection is also important in what is referred to by Chatman as person-organization fit: by learning about the organization’s objectives, the employee becomes aware that he or she will be chosen not solely for their job qualification, but for their compatibility with the work environment as well (cited in Morrison, 1996). Socialization as defined by Van Maanen and Schein is when the company prepares the new employees with the set of knowledge, approaches, and behaviors that they should apply in order to fit into their roles (cited in Morrison, 1996). Similar to selection, socialization is about showing the new employee that the relationship with the organization is based on social exchange. This can be clarified through such processes as orientation that holds within it more value than it shows. Chatman claims that socialization also familiarizes the employees with the company’s objectives and values not to mention that it plays a vital part in the empowerment process. (cited in Morrison, 1996). There are two extremes stated by Jones in applying socialization. The first is a highly institutionalized one where the new employees are separated and offered a common learning program. The second end is highly individualized, where employees are left on their own to engage in informal relationships with their fellow employees and to have self-learning experiences. There is however one disadvantage to socialization: when the objectives are clearly defined for employees, they tend to perform solely what they were expected to (cited in Morrison, 1996). Therefore, a company that seeks employee OCB will tend to have a more individualized socialization. OCB by definition includes the set of actions performed by employees that are not asked by management, therefore it is not directly rewarded. Thus, to encourage employees into applying this behavior, O’Reilly and Chatman believe that the company should employ indirect means that will encourage them to do so. That can be done by giving a reward to the organization’s performance as a whole. This will be helpful in two ways: first, it will further familiarize the employees with the company’s objectives and this way they will tend to act more upon achieving those goals through citizenship behavior. Second, by giving an award for the entire company’s performance, the organization will indirectly inform the employees that their job goes beyond what is clearly specified and limited into a certain role or department (cited in Morrison, 1996). According to Bowen, Siehl, and Schneider, when the company imposes a high number of rules and regulation, it is limiting and discouraging the employees’ ability to perform tasks outside their field of work, therefore limiting the OCB that can be achieved in that organization. A high number of rules will clearly define the limits of the economic exchange relationship between the employees and their company which will diminish their will to achieve OCB by determining exactly what the employees are asked to do and not to do and preventing them from engaging in any other action that is indirectly rewarded even if it benefits the company as a whole. Hence, in order for employees to want to perform citizenship behavior, the company must reduce its rules and thus create a social exchange relationship (cited in Morrison, 1996). Like rules and regulations, if a company describes the employees’ job in a very precise and narrow matter, it will reduce according to Bowen and Lawler the citizenship behavior applied by its subordinates. Employees will then have extremely well defined tasks to perform with no regard to any other company-wide actions. That way the exchange relationship between employee and company will more likely to be economic, not to mention that it reduces empowerment by limiting the resources needed by employees such as knowledge and skills to taking action towards OCB (cited in Morrison, 1996). How Employees Exercise OCB: To achieve organizational citizenship behavior, employees must practice different means. First, as Organ defines it, helping behavior is critical and evident in creating inter-employee relationships. Such behavior can be noted in the simplest acts such as when an employee assists his co-worker when the latter is overstrained with his paperwork or any other task being done. Second, according to Organ as well, sportsmanship, another dimension of OCB, is the ability to accept criticism and unfortunate events in the company without complaints, verbal or written. Consider a meeting for a marketing idea where employees are brainstorming. When the group rejects someone’s idea and the latter accepts that without being offended, he/she is considered to have a sense of sportsmanship. Third, organizational loyalty is a major concept when it comes to having a constructive organizational culture. This is evident whereby when employees are loyal to their company, they would feel safer and more content about the workplace and the organization’s culture. Podsakoff, MacKenzie, Paine, & Bachrach, 2000) Individual initiative, a fourth aspect of OCB, is represented in taking on additional responsibilities and engaging in task-improving actions without being asked to do so. This also includes encouraging others to do so, which helps the company as a whole improve. (Podsakoff, MacKenzie, Paine, & Bachrach, 2000) An example is when an employee suggests to adopt a new method of performing a task, which he/she knows will improve the way things s done. Related to this is self-development, which is yet another dimension of OCB. According to George and Brief, self-development pertains to voluntarily engaging in development courses that are not required from the company in the attempt of improving one’s skills and broadening one’s knowledge. (Cited in Podsakoff, MacKenzie, Paine, & Bachrach, 2000) For instance, an employee could learn about upcoming seminars and training sessions and inform his colleagues of their dates. A different aspect of OCB is civic virtue, which can be defined as a commitment to the organization as a whole. This takes place through engaging in governing the organization indirectly, looking out for its best interest, and protecting it from threats. (Podsakoff, MacKenzie, Paine, & Bachrach, 2000) A simple example of this is turning off the lights after having used the restroom. Similar to this is organizational compliance, the last dimension of OCB, which is when an employee complies with the company rules and regulations whether or not the latter is being monitored. Podsakoff, MacKenzie, Paine, & Bachrach, 2000) Returning to work right after having finished the permitted lunch break is an example of organizational compliance. It is crucial to note that all these behavioral aspects of organizational citizenship behavior are not part of the work contract or job description. Factors that diminish OCB: Several factors antecede and affect organizational citizenship behavior. Such factors can be set into four basic categories: employee characteristics, organizational characteristics, task characteristics, and leadership behaviors. The influence of these categories on OCB can be either positive or negative. It is evident that OCB is present in all companies, whether on a noticeable scale or an imperceptible one. This report will be depicting the negative relations between OCB and its antecedents, whereby, according to studies done in a meta-analysis by Podsakoff, MacKenzie, Paine, and Bachrach, it has been found that organizational and task characteristics have little impact on OCB relative to individual and leadership behaviors which have greater impact on OCB. Employee or individual characteristics affect the presence of OCB and how much the latter contributes to building a constructive organizational culture. Taking two extremes, one can consider an employee who is indifferent of his/her company’s interest. The latter would surely not engage in activities pertaining to civic virtue, thus not exercising good citizenship behavior. The other extreme is an employee who is very concerned about the company’s interest and always seeks to attain goals that hold the company’s benefit. Such employee is more likely to be engaged in the different dimensions of citizenship behavior. To go back to the bigger image, an employee’s characteristics help in determining how well OCB is exercised in an organization. Indeed, it is found that the existence of OCB increases with the increase of employee loyalty and concern to the organization, and decreases with indifference to the greater benefit of the company and the rewards granted for good citizenship behavior. Podsakoff, MacKenzie, Paine, & Bachrach, 2000) Leadership behaviors are quite correlated to the presence of citizenship behavior in an organization. According to another meta-analysis reported by Podsakoff, MacKenzie, and Bommer in 1996, leadership behaviors are mostly positively related to OCB, whereby most leaders reward citizenship behavior within performance in general, which increases such behavior in the company as employees are aware of such rewards. The only negative leadership behaviors are contingent and non-contingent punishment behavior as well as leader specification of procedures. This is due to the fact that employees feel confused as to why leaders perform contingent punishment, thereby decreasing their citizenship behavior. Non-contingent punishment is a discouraging factor by itself, which makes it obvious why it negatively affects OCB in an organization.

Family Issues as the Main Cause of Violence Essay

What is the main cause of violence in Master Harold†¦ and the Boys? â€Å"Master Harold†¦ And the Boys† written by Refaat Rayhan uses South Africa during the Apartheid era as the main setting that illustrates institutionalized racism and how it unconsciously affects the characters. Hally’s warm relationship with two black African servants reflects humanity’s potential to dispel racial boundaries. Since Hally has spent a great part of his youth with these two Black African waiters, they created a unique sense of human attachment that may seem peculiar to most people that. Simultaneously however, the political climate due to apartheid system becomes apparent as the story progresses. The play centrally gives the full impact of Hally, Sam and Willie’s simple conversation of the daily events and problems in their lives and how the conversation reflects the hidden effects of Apartheid system with these characters especially on Hally’s part. It is apparent that the dominant manifestation of violence here is how the characters unconsciously respond and conform to racial differences. However, it can be concluded in this story that family issues also triggers the theme of violence in their midst of conservation. Hally who has lacked an optimistic fatherly presence in his life has unconsciously looked to Sam to fill some of that fatherly role. The unsatisfactory image of Hally’s father who is drunken cripple of a man and self centered pervades throughout the play. Hally’s self esteem and self worth has been damaged over the years because of his father’s shortcomings and imperfections. His father trials and tribulations have been shouldered by Hally as his own. Hally’s hostility and ambiguity of character in the play particularly in the conversation is being manifested every time he is being confronted by his mother on the phone call. The conversation of Hally, Sam and Willie started humorously. They initially chatted about ball room competition and later, Hally and Sam teases each other about Wilies’s dancing and his dancing partner. Hally in the beginning of the play displays his fondness and friendly interest in the lives of the boys with his optimistic affirmation and approval of their ballroom dancing. Hally’s ambiguity of character is of course initially discernable on how he unconsciously and subtly respond to the social construction reality of white’s and black’s differences during the whole course of conversation. But let’s focus on family issues as a triggering point that revealed the real nature of Hally and his tendencies to subtly demonstrate racism. The abrupt and short lived call of his mother once in a while disturbs Hally’s moments of optimism and reminisces with his fond memories with two blacks. The violence here is manifested with the mood alteration of Hally every time his mother calls. In the first call, the news that his mother is bringing his father home from the hospital that day makes Hally uneasy. Since he believes that his father has not fully recovered yet makes him disappointed with the news. As a result he becomes agitated with both Sam and Willie, reminding them that they should go back to work. On the second call when her mother confirmed that she is bringing her father home from the hospital, Hally argues with her but loses the argument. He eventually turns his anger loose on Sam and Willie. On the third call of his mother, Hally is forced to speak to his father and pretended to be happy about the homecoming. Sam, aware of what’s happening opposes Hally from disrespecting his father. Hally whose pride is hurt, blows out against Sam as he never has before. Hally out of anger reminded Sam of his status as a servant not a friend or a father or any special relationship. Note that Hally, Sam and Willie speak familiarly and affectionately to each other especially as they reminisce the old days when Hally’s family is out of picture, but the course of the conversation altered as Hally is faced with the pressures of his family issues. Hally’s hidden and unknown familiarity in racial differences taught by his parents is revealed. What is the main cause of violence in American X? The visual approach of the movie especially in the series of flashbacks to the years leading up to Derek’s crime and punishment obviously illustrates violence. One might say that the main theme or reasons of violence here is the disastrous implications of racism and hate since Danny and Derek, who are the main protagonists, are both white supremacist that advocate the conviction that white people are superior than any other race. However, the explanations of Danny and Derek’s radical changes in behavior should not be perceived as relentlessly one dimensional alone but rather should look closer to the Derek and Danny’s family background since the subtle voice- overs in the film also guide the viewers about the events of their family’s life. Derek, on the peaked of his teenage years was initially influenced by his firefighter father who was an assumed racism. When Derek’s father is murdered in a drive by shooting, shortly afterward Derek was transformed from a white ordinary teenager to a vengeance seeking white supremacist. The death of Derek’s father unconsciously influence his future endeavors in different forms of violence. Derek eventually involved himself from minority gangs in their area that commits acts of violence and intimidation. Derek with his skills and abilities became a leader that all these wannabes skinheads look up to including his younger brother Danny. Danny idolizes his bother that inspire his future involvement in crime and punishments. But when Derek was been in prison once and emerge with a desire to change attitudes and fates, Danny got disappointed that reflects change of heart as something brutal. The brutalities manifested in the movie started from Derek’s father up to how Derek greatly influences his brother. Work Cited Page: American History X. Prod. Morrissey, John. McKenna, David. Hess, Jon. Carraro, Bill. Witten, Brian. Peak, Kearie. Turman, Lawrence. De Luca, Michael. Tisch, Steve. Dir. Kaye, Tony. Perf. Edward Norton, Edward Furlong, Beverly D’Angelo, Fairuza Balk, Avery Brooks. New Line Cinema, 1998. Fugard, Athol. â€Å"Master Harold†Ã¢â‚¬â€œ and the Boys. Penguin Books, 1984

Synthesis of Guernica

During the Spanish Civil War, a small Basque village was bombed by German troops. In April of 1937, Pablo Picasso paid tribute to the bombing by creating the painting, Guernica, which showed a horrible scene of corpses and disaster stricken community. In 1985, a replication of Guernica was donated to the United Nations headquarters in New York and was â€Å"hung outside in the Security Council chamber. † In February of 2003, councilmen gathered at the UN in order to hear US Secretary of State Colin Powell build the American case for war against Iraq.Before the procedure could begin, however, the replication was covered with â€Å"a blue curtain and flags of the council’s member countries,† under the notion that it â€Å"was simply a matter of creating a more effective backdrop for the television cameras. † Off the record, some UN officials believe that â€Å"the United States leaned on UN officials to cover the tapestry, rather than have it in the backgro und while Powell or other US diplomats argued for war on Iraq. † This situation relates directly to George Orwell’s 1984.The covering of Guernica is similar to the censorship Orwell condemns in 1984. (Source 4:Walsh) In 1984, everything was censored and citizens were not allowed to think for themselves. Their government, the Party, regulated every aspect of life, from working to sleeping. Everyone was under their control. Even children were taught to censor the things their parents did or said. The government also dictated what was seen in the media, which is how Guernica connects to 1984. The theme of the painting, Guernica, is war.To have this graphic tribute to the loss of innocent lives as the background for one’s speech justifying war is questionable. Just as the Party censored the media in 1984, UN officials were censoring what the public was seeing here. Why would they allow a painting that shows death, heartache, and loss to be the first thing the public saw? This would make the public question the motives of those speaking and make them wonder what there ulterior motives were for waging war against Iraq.If the Guernica would have remained the backdrop for the Secretary of State Colin Powell, the US would have been questioned by not only its citizens, but those of other countries also. When questioned, the US would have lost supporters and cooperation from its sister countries. This would have eventually led to bad relations between countries, which would have affected everyone greatly. In the end, politics is nothing more than a popularity contest.

Business Torts Wk 2

Business Torts Pearl leos University of Phoenix Buisness Law/ 531 Kelly Dickson June 10, 2010 Proposed actions a company  may take to avoid tort liability and litigation are vital to organizations. Proposed actions a company  may take to avoid product liability risk may be a way out of liability issues. Assessing methods for managing legal risk arising from domestic and international regulatory matters is the best way to beat business torts. an integral aspect of a business liability practice is to take ongoing proactive measures through direct collaboration to avoid lawsuits before they are filed.Seeking advice from government authorities, specialists and risk-management consultants is a technique buinsess should use. It is in every company’s business interest to allocate resources to identify risks and avoid descrepancies within the buisness (Parchomovsky, 2008). Business Torts In order to develop methods to reduce or eliminate torts, risks need to be identified and step s need to be taken. Proposing actions for a company  to avoid tort liability and litigation is a way to keep ahead of the game.A company  may take actions to avoid product liability risk such as; identifying risk, risk management, analysis and risk control to avoid torts. Assessing methods for managing legal risk arising from domestic and international regulatory matters is vital. Employing risk and management principles will not always prevent a businesses from being sued or from suffering loss but financial burdens can be significantly reduced. Identifying Risk An integral aspect of a business liability practice is to take ongoing proactive measures through direct collaboration to avoid lawsuits before they are ever filed.Not all companies understand how to completely guard themselves of outside entities that have ill will and malice intent therefore it is important to completely understand how to handle these circumstances. Such risks have an impact on a company’s exis ting assets, earnings, and often, reputation. In the context of tort liability arising out of noncompliance of government regulations, it is in every company’s business interest to allocate resources to identify those risks, and to implement action plans to avoid such risks.Assessing methods for managing legal risk arising from of domestic and international regulatory matters (Wilson, 2009). Regulatory risks and tort liability are nothing new to companies within the business world of todays’ society. Business members should be aware of specific goals, business needs, economics and the impact of potential liability as well as managing risk and risks associated with the failure to comply with a whole host of governmental regulations. In the event those risks do develop, the company needs to have system in place to properly manage and contain monetary and repetitional loss to the company.Additionally, companies will also benefit by anticipating what regulatory changes are upcoming instead to adjust the business practices accordingly, thereby minimizing the exposure to tort liability arising out of noncompliance of regulations (Wilson, 2009). Risk Management This may be as simple as continuing to operate as usual or as complicated as restructuring or abolishing an entire department. Risk IdentificationThe first step in the risk management process is to identify all potential losses facing a municipality. Risk identification is an on going process that changes with each new situation.Risk identification, or exposure identification, requires the development of an inventory of all municipal operations, knowledge of the potential liabilities that may be imposed by either statute or common law, and knowledge of the worth of all municipal assets and sources of revenue. This step must include an evaluation of all potential events that might adversely affect the finances of a municipality. Contracts should be reviewed thoroughly, before being signed, to ensu re that the municipality is obtaining the best deal possible.In some cases, risks can be transferred to the contracting party. Potential losses of income and extra expenses that a municipality might incur are two areas often overlooked in risk identification. (Parchomovsky, 2008). Other areas where risk management principles should be applied include vehicle usage, maintenance of property and facilities, public use of facilities, use of independent contractors and consultants, personnel questions and personal injury and property injury exposure. All municipal activities should be evaluated and facilities inspected.Court decisions and legislation that affect municipalities must be reviewed. Insurance and risk management publications should be studied for the latest information on loss avoidance. Attending courses on risk management may prove beneficial. The importance of the human element cannot be overemphasized when identifying risks. Asking employees and supervisors for their inpu t because they are in the best position to identify risks. It is important to communicate with people in other municipalities who are involved in risk management that might have faced and solved a similar problem in the past.Obviously, a great amount of guesswork is involved in risk identification, and some potential losses may be overlooked. However, by making a conscientious effort, the most common losses can be reduced or perhaps totally avoided (Marcus, 1986). Analysis The next step is to calculate the potential severity and frequency of losses facing the municipality in each of the identified risk areas. A review of the past experience of the municipality, as well as statistical information and probability analysis, is necessary. The impact of a particular risk on a municipality is difficult to determine.The use of statistics and probability analysis involves guesswork. To determine where a municipality should concentrate its risk management efforts, the risk analysis should be performed carefully. Some risks may involve such a small amount or probability of loss that the municipality will decide to simply absorb any losses which occur. The potential loss may be so large and difficult to avoid that insurance might be the only recourse (Marcus, 1986). Risk Control Once the risk areas are identified and analyzed, the next step is to eliminate, reduce or transfer the risk.Steps toward risk control are taken prior to suffering a loss, with the primary goal being loss prevention. However, when a loss cannot be prevented, risk control principles may help reduce the financial liability suffered by a municipality. Elimination of a risk is the most desirable goal. If a municipality discovers a way to eliminate a risk, there is no need to worry about its future effect or to insure against it but risks cannot always be eliminated. For instance, abolishing the police force will eliminate all loss exposure in that area, but in most cases, that action is not desirable. After an analysis, a municipality may decide to stop performing some activities or to transfer the risk to a private operator. If a risk cannot be eliminated, the next choice is to attempt to reduce the risk. Risk reduction primarily involves safety. Some common techniques for reducing risks include adoption of policies for, and proper training of, personnel, particularly for the police and fire protection services, and proper inspection and maintenance of equipment and facilities. Segregation of equipment may also help avoid the loss of all equipment at one time during a disaster such as a fire at a storage site (Gray, 2003).Steps Reducing Risk If the risk cannot be eliminated or reduced, two last options are available. First, if the risk is not large, a municipality may decide that the best option is to retain the risk and fund it itself. The municipality must be aware of its financial condition, its cash flow and the availability of additional funds before deciding to assume a ri sk. Retaining the risk is the appropriate action in many cases. Studies have shown that municipalities retain far fewer risks than they are financially able to. By deciding to retain a risk rather than purchasing insurance, a municipality may save money in the long run.Again, this decision can only be made after the financial condition of the municipality has been analyzed in detail (1964). Second, a municipality may be able to transfer the risk to another party. This does not always mean obtaining insurance. The most common form of risk transference is probably the †hold-harmless agreement,† in which a supplier or contractor agrees in the contract to assume risks for which the municipality would normally be responsible. Of course, the added cost to the supplier or contractor of obtaining insurance or otherwise guarding against loss may be passed on to the municipality.In such case, a municipality must calculate costs to determine if transferring the risk in this manner is the best option. In some instances, insurance remains the ultimate solution to a risk management problem. A municipality may want to retain some of the risk of an activity and transfer (1997). Identifying Risk Program Developing a Risk Management Program on a practical level, is the first step in developing a municipal risk management plan to define the scope of the program. This definition should be in writing and should set out the objectives or reasons for establishing the program.Second, it is important to delineate the responsibilities of all persons involved in the risk management function. All persons engaged in identifying and analyzing the risk and implementing the risk management program should be included. Cooperation is one of the keys to successful risk management. Third, a municipality must develop a formal risk retention policy. Once the retention limits are established after a thorough survey of the financial strength of the community, the working policy should be drawn up as a formal policy (Del,n. d).A municipality or board may want to form a safety committee which will be responsible for the conduct of a mandatory safety program for employees. This committee should recommend safety policies to be carried out by administrative personnel and should review all accidents and claims against the municipality. Most of fee accidents and claims are usually found to result from the performance of a relatively few activities. Concentrated efforts can be devoted to the correction of procedures in these areas, thereby minimizing possible losses.The second principal duty of the committee should be that of inspection of municipal procedures and installations, concentrating the search on possible defects which might cause injury and liability. Finally, the committee should confer with insurance carriers and their representatives for the cost of insurance coverage in areas where liability dangers are greatest (Del, n. d). Professional input and guidance b ecome necessary and a professional consultant is best suited to help a municipality determine what steps should be taken to protect against torts. ConclusionRegulatory risks and tort liability are nothing new to companies within the business world of todays’ society. monitoring the risk environment in a structured way is vital. Looking at legal activity elsewhere and seeing how that might impact the business is a technique to use to avoid torts. There is a lack of awareness among employees about why their companies get sued. It's not just the board's responsibility but must be spread throughout the corporation. Other priorities compete for a worker's time, so there needs to be mechanisms put in place to identify, monitor and address risks.Put in place a strong in house legal team with clear lines of responsibility and accountability. There are a number of cases that have escalated into litigation because of the failure of companies dealing with customers when they register a complaint. Capturing issues at the outset and dealing with them, thereby avoids an escalation of problems and is the best way in tackling situations that pertain to protecting businesses agains torts.