Theoretical Aspects Of Financial Crisis Finance Essay - Free Essay Example

Sample details Pages: 10 Words: 2993 Downloads: 9 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Sapir 2008 analysed that there were a combination of three things that were related to the financial crisis; a crisis of capitalism, a financial crisis and a liquidity crisis. This unusual combination explains how serious the impacts of the crisis were. Each element had different repercussions and at the same time was tightly linked. Don’t waste time! Our writers will create an original "Theoretical Aspects Of Financial Crisis Finance Essay" essay for you Create order Allais 2002 blamed excessive development of payment promises and their financing. He argued that the same causes generate the same effect, which explains some of the crises that had occurred in history and also explains the events of the last crisis that became a global issue. A journal article written by Kern Alexander 2008 Principles v Rules in financial recommended efficient regulation to prevent misconduct and misdemeanour of excessive lending to people that are unable to pay back loans, which has become a burden on the economy. Regulators do have the resources and expertise to cope with this issue. However efficient regulation is difficult because of the incentives financial institutions have to develop means to avoid the impact of regulations by loophole missing (Eaglesham 2012). Therefore it will always be a case where changes in regulations would not generally respond promptly to the pace of change in markets and economy (Kern 2009). Sapir 2008 concluded the emergenc e of new development models and that the crises imply a global re-evaluation of international integration strategies. Many would assume that Sapir is questioning as to what should be done about this issue. Boccara 2009 indirectly expressed his desire for Islamic finance and suggested that Islamic banking could be a new economic system base. Boccara 2009 complimented Islamic finance as a potential alternative. On the other hand Khan and Bhatti 2008 argued that Islamic banking will face challenges that could be difficult to overcome. A similar study to this research Bellalah et al. 2004 mentioned that there is a strong relationship between interest and instability, which are to do with financial and liquidity crisis mentioned by Sapir 2008. Akerlof and Shiller 2009 believe that financial crisis exist mainly because of changes in confidence, envy, illusions, temptations and stories about the nature of the economy. To understand Akerlof and Shiller 2009 theory Catts 2013 explai ned the theory in reference to reality and argued that those who could not afford a house or could not make payments were astonished by the fact that house prices would never fall. Therefore a lot of people were starting to take out subprime (high risk) mortgages and these were usually supplied by loan/mortgage brokers. Keynes 1937 believes how economic fluctuations are explained by spontaneous changes in the moods of people (optimism and pessimism). Minsky 1986 explained how a financial crisis would occur when a bubble in asset prices collapse. Greenspan 2003 said: The notion of a bubble bursting and the whole price level coming down seems to me as far as a national nationwide phenomenon, is really unlikely (CRAIG, Page 10). Keynes 1937 made the following argument: Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic. Nobody was aware of the consequences. Both Akerlof and Shillers (2009) point agrees with Keyness (1937) statement to an extent. However they point out that non economic motivations play a role in this, as they believe that the classical and new classical model ignores non economic factors. Barny 2005 argues that there was a substantial excessive inflation of house prices and on top of that interest rates were historically low. This created a mania for home ownership and lead to people optimistically buying homes, as explained by Minsky 1986 and Keynes 1937. Kindleberger 1987 and Friedman Schwartz 1963 argued that many banks would be forced to close. Economists Hayek 1935 and Wicksell 1935 (both subscribed to the Austrian school of economics) have in further depth elaborated the relationship between interest and instability. However Hayek 1935 examined Wickells 1935 study with the assumption of employm ent levels fluctuating, where as Wicksells 1935 assumed full employment. This would mean that both conclusions would slightly differ. Nevertheless the theories of the two economists in the end supported that interest leads to economic instabilities. The first part of the literature review managed to identify some of the causes that lead to a global financial crisis. It was important to have taken economic theories into consideration, as this dissertation will focus on how Islamic finance can assist the conventional system into becoming more resilient to the crisis. Therefore the second part of the literature review will look at the principles of Islamic finance. Islamic Finance History Islamic banking is one of the major economic developments in the early 1970s. However, the concept is not new. (Choudhury and Hussain 2005) discussed that Islamic banks have emerged since the 20th century and that they offer banking services through their resourced based view. Both Khan and Bhatti 2008 argued that Islamic finance made tremendous breakthroughs that have made the system viable and a competitive alternative to conventional banking. Currently Islamic banking is growing at 15-20% per year. Mawlana Maudidi proposed the idea of Islamic finance in the 1940s and was further developed by Anwar when Maududi died in 1979. According to Visser 2009 the main motivation of the development of specific Islamic views on the economy was due to the conviction that Islam was seen as backward by the European civilisation, which had little time for the tenents of Islam in the economic sphere (Visser, 2008 p4 8). Siddiqi 2002 has credited Maudidi for the development of Islamic finance, but argued that strong political ideas of Maudidi should be ignored as they might have arisen from a reaction of what the European civilisation thought of Islam and that no anti-western feelings need to be involved. Siddiqi 2002 has also stated that the world needs to participate in Islamic finance. Karbhari et al. 2004 explained that conventional banks have acknowledged the potential of Islamic finance. As result a number of conventional banks such as ANZ bank, Barclays, Citybank, HBSC and Lloyds TSB offer Islamic finance products, which not only illustrates there has been much recognised growth, but also how valuable the idea proposed by Maudidi has been. On the other hand, it must be mentioned that some scholars raised concerns about the legitimacy of Islamic products offered by conventional windows (Abdurahman, 2006, Yaquby, 2005 and Malik et al. 2011). Not one person can guarantee that funds provided to establish these windows did not involve interest, which means that t hat capital could be unacceptable according to the Shariah principles. These are potential challenges that many that many conventional banks that wish to open Islamic windows will face as mentioned by Khan and Bhatti 2008. These challenges could also explain as to why HSBC has decided to withdraw some of its Islamic windows. Different people have different ideology on why interest might be prohibited. However there are debates going on amongst scholars as to whether it is allowed for a transformed conventional institution to Islamic institution, could be classed Islamic if it commits to make charitable donations to purify their money. Tlemsani 2010 argued whether both Islamic and conventional banking can work together in a mutually productive manner. Lewis 2008 believes that Islamic finance varies little from conventional banking, which indicates a possibility that the two financial systems could co-evolve. Both might be correct in their suggestions, but Berger and Huntingdon 200 2 believe that the two systems are irreconcilable and conflict between each other, as conventional banking is merely profit motivated whereas Islamic banking focuses on the economic wellbeing and also profit. In addition Islamic banking completely avoids interest. Ahmad 1992 acknowledged that Islam completely prohibits interest. But if Islamic economics completely prohibits interest, then why do Muslim countries run their financial institution with the involvement of interest? This raised many questions and not one single person has managed to answer this (John Foster, 2009)., which also lead to people enquiring about whether Islamic finance is really Islamic (Foster, 2009). Shariah Board The activities and behaviours that caused the financial crisis are completely unacceptable in Islam. Every Islamic bank institution has its own Shariah board, and their responsibilities are to ensure operations adhere to Shariah law and give approval to management team regarding any operations and activities (Wilson, 2004 p9). After any approval the board monitors the ongoing activities and ensures that they are performed in the practice of the Shariah law. Both Hasan 2008 and Malik et al. 2011argue that there is no single organisation that governs the Islamic banking industry. It would be more beneficial to Islamic banking as a whole if there was a universal set of Islamic banking rules. Indonesia is a very good example, as the rulings are mandatory for all Shariah boards within the nation. Dr Hassan in a recent report that looked at the toughest issues facing Islamic finance admitted that the reason for this was that scholars with both Islam and finance knowledge are extremely scarce (which Malik et al. 2011 mentioned too) (Isra, 2012). In the same report Dr Laldin disagreed with Dr Hasans point as he claimed that there is no shortage of Shariah advisors in the market. As mentioned in the previous paragraph scholars in the Shariah board identify whether Islamic banking products are Shariah compliant. According to Wilson 2004 merely stating whether a product is Shariah compliant or not is insufficient. He recommends Shariah scholars should be more involved in the marketing as well as regulation. This shows that scholars are more proactive. Wilson 2004 also argued that Islamic banks need to consider ways to convince new and existing customers about the benefits of their innovative products and also demonstrate their products to new business circumstances and at the same time ensure customers that they are Shariah compliant. Van Gaal claimed that Islamic banks do engage with their customers. Therefore it can be assumed that Wilson 2004 might have been tr ying to explain that Islamic banking need to improve on their marketing (Van Gaal, 2012, p27). This assumption has been also made by a number of individuals who have analysed the challenges faced by Islamic finance (Mustafa 2011, Askari et al. 2010, Ramal Hussain 2010). Principles of Islamic finance Interest For many centuries Muslim nations have been developing ways of co-operating their religious beliefs and values within their business and banking. The fundamentals of Islamic banking are concepts in compliance with Islamic Sharia law principles. The Islamic bank is a banking establishment that solicits funds and employs them in accordance with the Islamic Shariah, for the purpose of building Islamic solidarity and ensuring justice of distribution and employment of funds in accordance with the Islamic principles. Abdelgadir B, Graham H.R, Cyril R.T ( 1994, p.6). In Islam there are two sources of principles that determine the Islamic structure, which primarily is the Quran itself and the Sunnah. The structure and basics of Islamic finance is different to the Western Commercial banking and financing system in many aspects. One way in which it distinguishes itself from conventional finance, is through the complete prohibition of interest (riba), whereas with conventional banking interest is the main driver (El-Gamal, 2006). Shariah law (Islamic law) strictly forbids interest. However it does not prohibit gains on capital. The Shariah law requires that performance of capital is taken into consideration when rewarding capital. In financial terms, use of capital must add value and not be devoid of risk (Arberry, 1964, p. 4). It is stated in the Holy Quran in the following verses: Those who devour usury will not stand except as stands one whom the Evil One by his touch hath driven to madness. That is because they say: Trade is like usury, But Allah hath permitted trade and forbidden usury. Those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for Allah (to judge); but those who repeat (the offence) are companions of the fire; they will abide therein (forever). Holy Quran, Surah al Baqarah, 2:275 (23 Source: The Meaning of the Holy Quran. (Translated by Abdullah Yusuf Ali. Ninth Edition 1997. Amana Publications, Beltsville, Maryland, USA). The former president Obasanjo speaking in 2000 about Nigerias mounting debt to international creditors stated: All that we have borrowed up to 1985 was around US$ 5 billion, and we have paid about US$ 16 billion. Yet we are still being told-that we owe about US$ 28 billion. That US$28 billion came about because of the injustice in the foreign creditors interest rates. If you ask me what the worst thing in the world is, I will say it is compound interest (Shakespeare, 2011)(PRESSTV) The repercussions of interest are so severe to not only cause unable mortgage payers to lose their property, but enough to put a whole country into debt. Many more countries in the world, especially third world countries have very large debts to be clearing. According to Shakespeare 2011, the region of Sub-Sharan Africa pays $10billion every year in debt services which is four times the amount countries within that specific region spend on health care an d education (NewsInt 1998). Shah 20005 pointed out that there is $523 billion debt burden after $550 billion has been paid in both principal and interest. Although this might be irrelevant to the topic it still is a very good example to consider and understand why Islamic finance prohibits interest. A general agreement among Islamic scholars is that the charging of interest and any positive, fixed, predetermined rate of return which are promised regardless of how well a project performs is prohibited and also usury. (Iqbal and Tsubota 2006). The financial crisis started with the subprime mortgage where mortgage originators collateralized the debt by mixing prime and subprime debt. This means that they had less incentive to undertake careful underwriting Ghafour 2008. Zarqa 1983; Siddiqi 1983 have described Islamic banking as one that is value based and aims to ensure moral and material well being of individuals and society as a whole, whereas conventional banking can act inconsid erate about the economic well being. Gambling and Speculation Kunhibiva 2010 stated that any activity that involved a form of gambling is strictly forbidden in Islam, as well as speculations that lead to zero sum outcome. It is stated in the Holy Quran: They ask thee concerning wine and gambling. Say: in them is great sin, and some profit, for men; but the sin is greater than the profit (Holy Quran, Surah al Baqarah 2:219). The main reason why gambling is forbidden, is due to the fact that one gains through no effort (Damansari 2007, p.219). Campbell 2008 in an interview unveiled that conventional banks were aware of the risks involved in the activities of excessive lending, leading to a zero-sum outcome. Although gambling in conventional thought is widely accepted as McGowan and Brown 1994 believe that one should have the economic freedom to do as they desire. However there are some that argue against it Borna and Lowry 1987 believe that such activity does not take the economic well being into account. Tickell 1999 on the other hand argues that it should be totally avoided in the conventional banking system. It is to be said that Islamic finance principles can assist conventional banking on how to be more resilient to a future crisis. Islamic banking has shown more resilience during the time of the crisis compared to conventional banking, where a number of big players had to be bailed out by the government. A published document by Nankin and Schmidth 2009 showed some of the institutions in the conventional system that had to be bailed out, because of the way the crisis had affected them: Fannie Mae / Freddie Mac: $400 Billion American International Group (A.I.G.): $180 Billion Bank of America: $142.2 Billion These were companies with huge reputations. They had to be bailed out, for the reasons that they were all involved with the subprime mortgage crisis. Islamic banking principles and why Khan 1985 noted that the abolition of interest based transactions is not a subject that is new to conventional economic thought. A number of economists have agreed that the conventional system is instable compared to Islamic finance and Islamic scholars blamed interest rates. People who supported the conventional system such as Metzler 1950 and many more were familiar with the fact that the conventional system was not stable in the long term. For that reason Metzler proposed an interest free model where contracts should only be based on equity. This illustrated a more economic stability, because as explained by Keynes 1937 and Akerlof Shiller 2009 economic fluctuations are caused by changing moods of individuals and the existence of illusions which are both influenced by interest rates. This explains that interest is an act of exploitation and injustice (Lewis 2008). However scholars such as Chapra (1985), Khan (1985) and Siddiqi (1980 and 1982) are not fully against interest. They argued that interest should be rewarded only if savings are used to create additional capital and wealth. In the real world however, this is not the case, because interest rates have nothing to do with capital productivity. Instead, interest is paid on money and has to be paid regardless of whether an investment is a success or not. A lot of research has been carried out in this field with many similar opinions. Choudrys and Hussain s 2005 have also stressed their point of view which closely relates to Zarqa 1983 and Siddiqi 1983 way of thinking. There are many more researchers such as Dusuki and Abdullah 2007 who have critically reviewed and explained how Islamic banking aims to create a much fairer and balanced society as prescribed by Islamic economics. Chapra 2009 discussed this issue and added on how it has the potential to minimise the chances for a future crisis. All these compliments to Islamic finance are thanks to the Shariah principles which ensure proper Islam ic banking to act in an appropriate manner John LIU , ; Iqbal and Mirakhor, 2006 and Islamic prohibits interest because: Alternative products and alternative options (musharakah, ijarah sukuk etc) Whether Islamic finance principles can be adopted (scholarly reviewed articles To organise valuable ideas and findings To identify other research that may be in progress To generate research issues To develop a critical perspective To organise valuable ideas and findings To identify other research that may be in progress To generate research issues To develop a critical perspective

Dehumanization In Brave New World And 1984 Essay - 1192 Words

Imagine a world where mothers, fathers, brothers and sisters are no longer a part of society. Imagine a world of lifeless shells of humans. Both Brave New World, by Aldous Huxley, and 1984, by George Orwell, portray such societies that have been degraded by the idea of ‘utopia. In such a distraught society its no surprise that people will loss their humanity. For those characters that still had sanity, the impact of this world would twist their minds to the limit. To be human is to be able think and learn without any restraints. To have an opinion all to ones self even if it my clash with someone elses. To be human is to have emotion. One must be able to smile, cry, laugh or shout without living in fear of the consequence. One must†¦show more content†¦All of the advantages of Christianity and alcohol; none of their defects. Huxley(54), according to Mustapha Mond. The lack of a religion helps to ensure that the citizens, both upper and lower class, have no reason to rebel Bernard Marx is an upper class Alpha who constantly struggles being different from the rest of the Alphas, and, in the beginning, tries to find a way to become more popular. By the end of the novel, Marx has come to terms with the society which he had first seemed to dislike. Marx meets a woman called Lenina Crowne, and they both travel to a savage reservation. There, Marx and Lenina meet John the savage and his mother Linda. Linda is originally from the civilized world and became pregnant which, in that society, is illegal and was sent to Reservation herself. Once brought back to the New World, John soon found the differences between the two worlds to great. All his values and morals clashed with those of the new society. It turns out, John was the only sane person left. He didnt understand how the citizens lived the way they did, with no morals or values. There, he struggled for his right to think freely. To be happy, to be sad, to be mad, to have any feeling at all. In fact, said Mustapha Mond, youre claiming the right to be unhappy. All right then, said the Savage defiantly, Im claiming the right to be unhappy.Show MoreRelatedHuxley V. Orwell1015 Words   |  5 PagesBrave New World v. 1984 June 8, 2011 It is no question that both Huxley and Orwell were displeased with our societal norms by their predictions in Brave New World and 1984. However, the two famous novels could not have differed more in their visions of tomorrow. Huxley portrays a nation of pleasure addicted, mindless beings merely existing. Orwell illustrated such a strict regime that the pursuit of knowledge would be banned and our voices would be silenced. Imagine living in a world withoutRead MoreSimilar To Power Struggles, Even When Conversations Occur1568 Words   |  7 Pagespredictable. Fortunati describes a particular conversation in 1984 where even though the exchange does occur, the dialogue is didactic. The conversation appears forced and stimulated. Winston essentially repeats O’Brien as Winston has been conditioned to have the same mindset (Fortunati 143). In Brave New World, Bernard and Helmholtz try to have a conversation with the World Controller when he threatens to banish them from the island, but the World Controller fails to change his mind (Huxley 220). ThisRead MoreWhat An Ideal Posthuman Model Of Moral Enhancement1742 Words   |  7 Pagescoming from the bioconservative ideology, which fears what a posthuman world could look like under a society where human enhancement is considered to be the norm. Prominent bioconservative writers like Francis Fukuyama and Richard Kass believe that a posthuman wo rld with moral enhancement would be very much identical to the society that Aldous Huxley feared in his novel Brave New World. Kass describes the utter dehumanization moral enhancement would portray: â€Å"Homogenization, mediocrity, pacificationRead MoreBehavior Regulations Such As Parenting Socialization, And Education1405 Words   |  6 Pagesthat include increased attention span and cognition. There has also been the use of drugs like OxyContin to help with empathy and to make people feel happier. It may be thought that a drug like soma was only possible in Aldous Huxley’s novel Brave New World. However, utilitarian’s have been pushing for human enhancement that uses drugs, genetic engineering and nanotechnology to ensure the maximum amount of happiness possible while attempting to eliminate any pain. It has been said that doing thisRead MoreEssay about Utopian Literature1833 Words   |  8 Pagescondone, or refute utopian ideals, several have been fairly recent and very relevant to our lives. For example, Aldous Huxley wrote his Brave New World in 1932, a book which depicts the dehumanizing factor associated with utopian culture. George Orwell, the infamous lexicographer of satire, published many works in the same era as Huxley, including Animal Farmand 1984. The former is a satire aimed at defaming communism.2 The latter is a warning against superpowers and abuses of scientific technologyRead MoreAnalysis Of Aldous Huxley s Brave New World 1820 Words   |  8 Pagesorder to manipulate its citizens’ minds thus creating this Brave New World. The World State lives by the motto, â€Å"Community. Identity. Stability.†, this stability being defined as a time in which there is no visible violence, there is a healthy economic stance and the people are†¦ happy. Its aim is â€Å"universal happiness† because if people are happy there’s more likely to be social stability and less likely there be conflict. Brave New World satirizes a society that puts all its focus and efforts onRead MoreAldous Huxleys Brave New World1958 Words   |  8 Pagesabilities, which include increased attention span and cognition span. Drugs like OxyContin have also been used to help with empathy, and to make people feel happier. It may be believed that a drug like soma was only possible in Aldous Huxley’s novel Brave New World, but perhaps not. Utilitarian’s have been pushing for human enhancement that uses drugs, genetic engineering and nanotechnology to ensure the maximum amount of happiness possible while attempting to eliminate any pain. Proponents believe thatRead MoreAnalysis Of Ray Bradbury s Fahrenheit 451 Essay2089 Words   |  9 PagesThe analysis of Ray Bradbury s dystopian novel, Fahrenheit 451, shows that literature as books, education and alike is abused and criminalized in the hero’s reality, who is Guy Montag. The novel’s setting is when new things seem to have totally replaced literature, fire fighters set flames instead of putting them out, the ownership of books is deserving of the law and to restrict the standard is to court demise. The oppression of literature through innovation and technology can be analyzed throughRead MoreThe Impact Of Science And Technology On Our Society1822 Words   |  8 Pageseffect of technology on our humanity. Some estimate we are changing for the better with our gadgets and gizmos that help in connect with others around us, while others believe we are changing for the worse and that we are on our way to potential dehumanization. Several advances from different arenas of technology have made a positive impact. Medical breakthroughs have contributed significantly to the longevity and health, of life itself. The idea of technology through media has also made great stridesRead More A Dystopian Future in Brave New World Essay examples4100 Words   |  17 PagesBrave New World is a remarkable journey into the future wherein mankind is dehumanized by the progress and misuse of technology to the point where society is a laboratory produced race of beings who are clones devoid of identity only able to worship the thr ee things they have been preconditioned to love:   Henry Ford, their idol; Soma, a wonder drug; and sex (Dusterhoof, Guynn, Patterson, Shaw, Wroten and Yuhasz   1).   The misuse of perfected technologies, especially those allowing the manipulation

Work Sheet Free Essays

* * Scavenger Hunt Worksheet Assignment Background: The point of this assignment is to get you to search and become familiar with the GCU Learning Management System (LMS) LoudCloud and the GCU web site. These two sites have many resources to help you be a successful student. Assignment Instructions: Answer the following questions that require you to search the LoudCloud classroom and GCU web site. We will write a custom essay sample on Work Sheet or any similar topic only for you Order Now Feel free to search around the sites until you find the things you are looking for. LoudCloud Questions 1. After logging into the LoudCloud classroom, list the tabs and other items on the screen when you first enter a course in LoudCloud. 2. From the course home page in LoudCloud, click on the â€Å"Tasks† tab and then click on â€Å"Forums†. Make notes on the various forums and their purposes. * * 3. Find the Student Success Center under the Resources Tab. Click on this link. List some of the services provided to students at this link. * * 4. Inside the Student Success Center, click on the Writing Center link. Click on LoudCloud Courses. What writing style is required for 100- and 200-level courses at GCU? 5. Inside the Student Success Center, click on the Support Services link. List the services available at this link. 6. Inside the Student Success Center, click on the Succeed at GCU link. Click on the GCU Tutorials link at the bottom of the page. What tutorials are available for students at this link? 7. Click on the Resources Tab in the LoudCloud classroom. List each section. Review each section and list what you find in it. 8. Click on the Course Home link the left-hand corner of the screen. List some of the components found on this page. 9. Go to http://library. gcu. edu. Click on the Frequently Asked Questions (on the left) link. List how a GCU student finds a Book, DVD, streaming video, or other multimedia at the GCU library: * GCU Web site Questions (http://www. gcu. edu) 1. Locate and click the Spiritual Life link on the right side of the screen. You will notice a navigation pane on the left side of the screen. Click the â€Å"+† sign next to Chapel and the Gathering. What information is listed under Chapel and the Gathering? 2. On the Home page, locate and click the Current Students button on the right side of the screen. Scroll down the page. What links are listed under the Student Resources section? 3. On the Home page, locate and click on the Resources tab at the top of the screen. Click the Technical Support link listed under the Support Services section. What information can be found under Technical Support? 4. On the Home page, click on the Contact Us tab which is located just above the home page footer. This is where you can locate phone numbers and addresses of the colleges, the main GCU switchboard, and the Student Services offices. List the phone numbers of the following departments located in the Student Contact Information section: * Career Services- * Center for Learning Advancement- * Academic Advising- * Finance Counselors- * Office of Academic Records- * Technical Support 5. On the Home page, notice the icons on the top right header area. What are the other icons listed next to theâ€Å"† for the GCU Facebook page? 6. On the Home page, click the About Us tab located at the top. What is the vision and mission statement for Grand Canyon University? 7. Also under the About Us tab, locate the four pillars of Grand Canyon University. 8. Navigate from the About Us tab to the Academics tab. Read about Accreditation near the bottom of the page. What did you learn? 9. Navigate from the Academics tab to the Student Life tab. Scroll down the page to locate and click on Bookstore. Click the Online Bookstores link and then through to the Grand Canyon Online Students section. What sort of materials can a student purchase from this site? How to cite Work Sheet, Essay examples

Strategic Supply Chain Partnership Environmental †Free Samples

Question: Discuss about the Strategic Supply Chain Partnership Environmental. Answer: Introduction Information system helping in gaining all types of organizational goals with excellent strategies is known as strategic information system (Haux et al. 2013). The most significant advantage of this strategic information system is that it provides competitive advantage to that typical organization. These information systems often deliver any product or service that does not incur much cost and is absolutely differentiated for focusing on the segment of market that is important (Galliers and Leidner 2014). It is considered as one of the most important characteristic in the field of IT or information technology. Moreover, this type of information system is responsible for helping all the organizations in storing, categorizing, transferring and processing of any type of information or data. The operational efficiency of the organization is solely developed with this strategic information system (Willcocks 2013). Accounting software can be defined a specific type of application software, which helps in recording and processing the financial transactions in the functional modules like trial balance or general ledger. The functionality of this software is just like an accounting information system (Dandago and Rufai 2014). Accounting software can be accessed from anywhere with any device that has Internet connectivity and does not incur much cost. This literature review will be providing a short as well as precise discussion on the most popular ad significant banking sectors in Australia, Commonwealth Bank of Australia. This literature review will outline the several organizational problems and the organizational structure of CBA. The system efficiency method, system flowchart and the various control problems of the organization will be given here. The relevant accounting software package for CBA will be highlighted here. Commonwealth Bank of Australia is the most popular and important multinational banking sectors having businesses in the various countries across the world including Asia, Europe and entire Australia (Commbank.com.au. 2018). This particular bank is responsible for providing several financial services that include funds management, investment, loans, investment, insurance and many more. In the year of 2015, CBA was listed as the largest bank in Australia in the Australian Securities Exchange with other brands like Bankwest, ASB Bank and Commonwealth Securities. Commonwealth Bank of Australia is one of the four banks with Westpac, ANZ and NAB (Commbank.com.au. 2018). This organization comprises of an extraordinary organizational structure and various organizational strategies that has made the organization extremely popular and well accepted by all. Organizational Structure of Commonwealth Bank of Australia The organizational structure of the Commonwealth Bank of Australia is explicitly popular and important for the organization. This organizational structure comprises of all the managing bodies and important employees of the bank (Palvia and Palvia 2013). The board of directors or the board of commissioners of this organization includes the owners, directors, stockholders and many more. The three levels of management, i.e. top management, middle management and lower management are properly given here. Although, Commonwealth Bank of Australia is one of the best banks in Australia, there are some of the major operational problems within the organization (Ogiela 2015). These problems are therefore the most significant as well as dangerous as they are effecting the market shares of the organization. The shares of this organization are going down explicitly and thus the popularity of the company is falling (Laudon and Laudon 2016). Over the last five years, due to the degradation in shares, various operational problems have occurred. This is mainly due to the wrong strategies that the organization has undertaken. Commonwealth Bank of Australia has taken various approaches for solving their operation problems. The main reason that their approaches or strategies did not work was constant alterations in the market trends (Arvidsson, Holmstrm and Lyytinen 2014). CBA was always involved in the competition of going on top. This type of competition often can be harmful to the organization and this was exactly what happened with CBA. This bank was failing to satisfy their clients and was not being able to meet the expectations (Konsynski and Karimi 2013). The situation even has gone down to such limit that they were unable to give loans to their clients. Another important problem that occurred within CBA was that they were not making enough money. A multinational bank, CBA found it really hard to make money and thus the competition was increased from all types of financial technology companies (Hill, Jones and Schilling 2014). The popularity of all types of financial technology organizations worldwide has somewhat affected the banking sectors and CBA is one of the major victims. This is mainly because CBA is a traditional bank and they are being able to cope up or adjust with the modern changes or alterations. The operations of the bank are much traditional in comparison to other financial technology organizations (Bryson 2017). Moreover, the regulatory requirements have continued to increase and the banks require spending maximum on the discretionary budget and thus escalating the requirements. The above figure has properly demonstrated about the downfall of the share price of the Commonwealth Bank of Australia (Alexander 2013). In the above figure, during the period of June and July 2013, the share price has gone up to 70%, however, recently, it has gone down to below 20%. Organizational Strategies There are some of the most significant strategies of the Commonwealth Bank of Australia. There are four major strategies of CBA. They are as follows: i) Customer: This is the first and the foremost strategy of the Commonwealth Bank of Australia. They always focus on their customers. According to them, the customers are the most important part of their organization. The culture of this particular bank is completely vibrant and customer focused (Amrollahi, Ghapanchi and Talaei-Khoei 2013). The diversification and safety of the money of their customers are properly maintained by the bank. The major reason for this type of ideology is that they think that this would help to maintain their popularity. ii) Technology: The second important strategy of the Commonwealth Bank of Australia is their technology. They try to maintain their technology. Although, they are facing problems in coping up with the financial technology companies, they are still trying to increase their technological skills (Yoo 2013). The real time capabilities are maintained with several developed applications. Productivity: The third strategy of the bank is the productivity. The productivity of this particular bank is much more than the rest of the banks in Australia. They are continuously simplifying their method so that they can achieve and obtain for better results or outcomes for their customers (Gholami et al. 2013). Productivity is something that they always focus on and according to the Commonwealth Bank of Australia, it is extremely critical for their long term success. The process by process look is undertaken by them and thus the errors are reduced and the unit costs are reduced. Strengths: The final strategy of the Commonwealth Bank of Australia is their strength. The financial crisis of the bank is overcome with the extraordinary strategies and thus they try to focus on their strengths for making the organization strong and popular (Youn et al. 2013). An extremely popular, strong as well as flexible balance sheet is being maintained and is very important for ensuring that they can continue in supporting their clients and thus capitalize on opportunities. System Acquisition Method Enterprise Resource Planning or ERP is undertaken by the Commonwealth Bank of Australia for the system acquisition (Al-Hiyari, AL-Mashre and Mat 2013). ERP can be defined as the procedure through which any specific organization controls as well as integrates various areas like purchasing, planning, finance, marketing and many others. The organizational goals as well as objectives are well achieved with this particular technique. CBA utilizes SAP model for their business (Dandago and Rufai 2014). However, the involvement of SAP is not easy and it needs proper professional training. Flexibility and scalability are the two most significant advantages of SAP. This particular ERP model has provided the Commonwealth Bank of Australia with excess effectiveness and popularity (Simkin, Norman and Rose 2014). Moreover, SAP also help in gaining utmost proficiency within the software. Cost effectiveness is another important benefit of the model. The specific SAP model of the organization is abso lutely updated and thus it helps to solve the problems related to any type of operation. It is even utilized by the bank for making the bank shares absolutely steady and working (Amrollahi, Ghapanchi and Talaei-Khoei 2013). If the interest rates of the bank would be reduced, then the customers would again take loans from CBA. Various problems are faced by the Commonwealth Bank of Australia. Several modifications have occurred in the bank shares and this growth of the organization completely depends on various stakeholders and marketing team (Bryson 2017). The brand name of this particular bank is solely affected as well as influenced in the sector. The control problems of this organization even are responsible for reducing the growth in the entire market. There are various types of frauds possible in the system of Commonwealth Bank of Australia. The first and the foremost fraud of this organization mainly include the hoax emails or the hoax SMS messages (Arvidsson, Holmstrm and Lyytinen 2014). The other fraud of the bank includes phishing and spoofing. Smishing is the most popular form of phishing and SMS. Accounting Software Packages Accounting software packages are utilized for recording and processing the accounting transactions within the functional modules like the payroll, general ledger, trial balance and many more (Simkin, Norman and Rose 2014). This type of accounting software packages are purchased from any specific third party or is developed by any organization. There is a great variety in cost and complexity. There are various types of accounting software packages available in the market. The most popular examples include Myob and Xero. The accounting software package that CBA has utilized in the accounting software package is Xero (Xero Accounting Software. 2018). It is a cloud based accounting software for all types of businesses. However, it is popular for the smaller and the medium sized organizations. Approximately all products of this software are on the basis of the SaaS model or software as a service. There are various advantages that the Commonwealth Bank of Australia enjoy from the accounting software package of Xero. They are as follows: Supporting Maximum Clients in Lesser Time: It helps to support maximum time in extremely less time and Xero is utilized by the Commonwealth Bank of Australia (Al-Hiyari, AL-Mashre and Mat 2013). Reporting of Real Time Finances: This is another important advantage of Xero. The real time finances are reported with this. Easy Collaboration: The owners of the business and all the clients could be easy collaborated with this particular accounting software. High Improvement: Xero software is always improving and thus allow easy updates of the software (Yoo 2013). Identification of Market Leaders and Competitors The Commonwealth Bank of Australia is not only the market leader in banking sector. There are few more, who is leading the market of Australian banks (Hill, Jones and Schilling 2014). These banks are the core competitors of the CBA. The most popular and significant competitors of the Commonwealth Bank of Australia are given below: i) National Australian Bank or NAB ii) Australia and New Zealand Banking Group or ANZ Bank Auckland Savings Bank or ASB iv) Bank West v) Westpac New Zealand vi) Kiwi Bank St. George Bank, Australia (Konsynski and Karimi 2013). The most significant competitors of the Commonwealth Bank of Australia are being shown in the above figure (Willcocks 2013). According to this, Commonwealth Bank of Australia is still getting the highest shares. Around 20% is taken by them. 16% is taken by National Australian Bank and 13% is taken by the Australia and New Zealand Banking Group. The remaining 51% of shares are taken by all the remaining banks available. The above figure has clearly shown that Commonwealth Bank of Australia is within a better position than the rest and thus is obtaining competitive advantages (Laudon and Laudon 2016). Hence, it is depicted that Commonwealth Bank of Australia is leading the market of banking and banking services. Relevant Suggestions or Recommendations Commonwealth Bank of Australia has faced various operational and organizational problems within their system. The most significant issue or problem in the Commonwealth Bank of Australia is that the interest rates of this bank are much higher than the rest of the banks in Australia. Therefore, it is highly recommended to the bank to reduce their interest rates as soon as possible so that people are able to take up the loan once again from this bank. The second significant problem in the Commonwealth Bank of Australia is that people are not willing to invest in the bank as they are worried about their security. This is solely because of the downfall in shares. It is highly recommended that they should advertise about their bank more often. Another important problem is their CRM. The customer relationship management should be kept on first priority for this bank. Conclusion Therefore, conclusion can be drawn that the SIS is utilized by various companies for successfully gaining their organizational goals and objectives. The major advantage of the SIS or strategic information system is that it gives competitive advantage to all the organizations. Accounting software is any particular kind of application software that is utilized for the purposes of recording as well as processing of the finance related transactions. The major function of accounting software is similar to an accounting information system. The above literature review has outlined a brief discussion on the strategic information system of the one of the most popular banks in Australia, known as the CBA or Commonwealth Bank of Australia. This literature review has also provided the several organizational problems and the organizational structure of CBA. The system efficiency method, system flowchart and the various control problems of the organization is provided here. The relevant accounting software package for CBA is also provided here. Moreover, the market leaders and the competitors of the Commonwealth Bank of Australia are provided in this literature review. The final part of the literature review consists of relevant suggestions and recommendations for the bank. References Alexander, K. ed., 2013. Facilities management: theory and practice. Routledge. Al-Hiyari, A., AL-Mashre, M.H.H. and Mat, N.K.N., 2013. Factors that affect accounting information system implementation and accounting information quality: A survey in University Utara Malaysia.American Journal of Economics,3(1), pp.27-31. Amrollahi, A., Ghapanchi, A.H. and Talaei-Khoei, A., 2013. A systematic literature review on strategic information systems planning: Insights from the past decade.Verified OK. Arvidsson, V., Holmstrm, J. and Lyytinen, K., 2014. Information systems use as strategy practice: A multi-dimensional view of strategic information system implementation and use.The Journal of Strategic Information Systems,23(1), pp.45-61. Bryson, J., 2017.Effective library and information centre management. Routledge. Commbank.com.au. 2018.Personal banking including accounts, credit cards and home loans - CommBank. [online] Available at: https://www.commbank.com.au/ [Accessed 13 Apr. 2018]. Dandago, K.I. and Rufai, A.S., 2014. Information technology and accounting information system in the Nigerian banking industry.Asian Economic and Financial Review,4(5), pp.655-670. Galliers, R.D. and Leidner, D.E. eds., 2014.Strategic information management: challenges and strategies in managing information systems. Routledge. Gholami, R., Sulaiman, A.B., Ramayah, T. and Molla, A., 2013. Senior managers perception on green information systems (IS) adoption and environmental performance: Results from a field survey.Information Management,50(7), pp.431-438. Haux, R., Winter, A., Ammenwerth, E. and Brigl, B., 2013.Strategic information management in hospitals: an introduction to hospital information systems. Springer Science Business Media. Hill, C.W., Jones, G.R. and Schilling, M.A., 2014.Strategic management: theory: an integrated approach. Cengage Learning. Konsynski, B.R. and Karimi, J., 2013. The Information Technology and Management Infrastructure Strategy Globalization and information management strategies. InStrategic Information Management(pp. 103-126). Routledge. Laudon, K.C. and Laudon, J.P., 2016.Management information system. Pearson Education India. Ogiela, L., 2015. Advanced techniques for knowledge management and access to strategic information.International Journal of Information Management,35(2), pp.154-159. Palvia, P.C. and Palvia, S.C., 2013. Understanding the global information technology environment: representative world issues.Strategic Information Management, p.151. Simkin, M.G., Norman, C.S. and Rose, J.M., 2014.Core concepts of accounting information systems. John Wiley Sons. Willcocks, L., 2013.Information management: the evaluation of information systems investments. Springer. Xero Accounting Software. 2018.Online Accounting Software Free Trial, Free Support | Xero. [online] Available at: https://www.xero.com/ [Accessed 13 Apr. 2018]. Yoo, Y., 2013. The tables have turned: How can the information systems field contribute to technology and innovation management research?.Journal of the Association for Information Systems,14(5), p.227. Youn, S., Yang, M.G.M., Hong, P. and Park, K., 2013. Strategic supply chain partnership, environmental supply chain management practices, and performance outcomes: an empirical study of Korean firms.Journal of Cleaner Production,56, pp.121-130.