Description of the Key Arguments and Findings of the Total Eight Articles

2021-08-12 01:18:17
7 pages
1763 words
Middlebury College
Type of paper: 
Critical thinking
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The article Allianz Global Wealth Report 2016 by Allianz SE Munich unveils the global world report that places assets and debt situation for households in over 50 countries under analysis. The report indicated that the best years have passed given that global financial assets rose by 4.8 percent in 2015 a value roughly equal to the growth rate of economic activity. The report shows that financial assets grew with an average of 9 percent between 2013-2015. The author argues that it would be expected that the slow growth hit Europe, US, and Japan with the highest impact. Asia - except Japan- experienced an expansion of 14.8 percent. The region recorded the highest growth in the world even when compared to Latin America and Eastern Europe that recorded half the growth in Asia. The region records an 18.5 percent financial asset share which then implies that the region has had a three-times growth and hence outdone the eurozone whose record is 14.2 percent.

The author highlights that 4.5 percent of the liabilities of households had grown in 2014. Overall, the household debt adjusted to EUR 38.6 trillion a value quarter higher than the value recorded in before the major financial crisis. Regions experienced different developments. In Asia, debt growth increased and household liabilities measure in as a percentage in the form of nominal economic output was equivalent to the level present in US, or Spain during the housing boom. Debt growth decreased significantly given the crises dogging major economies of the region. The reports summarize that in all household and specifically those in advanced countries people were very cautious about borrowing and that liabilities were in reduction process in 2015.

The Impact of Financialization on Management and Employment Outcomes is written by Bat and Appelbaum, E. (2013). It examines three concerns beginning with the reasons and the causes of financial models applied in doing business and how such model has emerged in the last three decades. The other concern focuses on the new forms of financial capitalism that have been developed in the current period. The third aspect of the analysis is new financial intermediaries. For instance, how, private equity and financial strategies that nonfinancial corporations adopt and how such strategies affect the management of companies and employment outcomes. The articles describe the deregulation and institutional changes. The author argues that the deregulation and institutional changes created conditions for a new and more powerful role for finance capital within the governance of the U.S. companies. The author also provides a synthesis of empirical evidence regained the process and outcomes witnessed in the financialization in large and publicly traded corporations and also those that are dominated by private equity. Further, the author points out the need for future research to focus on examining how financialization affects management or employment dynamics in the post-crisis operations.

Another article named Four ways to bring galactic executive pay back to down to earth written by (Hill, 2016). The article highlights that having excessive pay in the football industry is by far, the obstacle for restoring trust in the football industry. The author insists that it is crucial for companies to reflect on the values they impact through their pay policies. Further, the author highlights four proposed solutions that might work to restore trust including the reduction of complexity. The purpose is simply the complicated mechanics of pay deal and reduces the ambiguity of plans to make the incentive effects clearer. The next step should involve making transparency work that favors restraint. It is important for companies to benchmark pay and targets against. Peers although it could trigger the Woebegone effect where all people in offer their labor at prices above average. The third proposition is to link CEO pay closer to actual performances on a scale of good or bad. The focus should shift from the CEOs levels of pay and target sensitivity to the events that happen in the company. Lastly, reinforcing remuneration committee that can stand firm against chairs and chief executives.

The article Regulating Bankers Pay the author makes three contributions on understanding how the salaries of bank executives have resulted into excessive risk-taking and how much pay need reformation. The authors logic that there is increasing recognition that focuses on pay packages on very short terms is valid. The author analyzes a separate yet critical distortion that has been somehow ignored. The author places a critical argument that equity-based awards and capital structure that banks use gives their executives compensation high enough to the value of banks assets. Given that bank executive share in gains that common shareholders receive, and yet they are given security from any possible losses, they, therefore, offer inadequate commitment to curb risky strategies. The article also contributes to corporate governance reforms. Such reforms are aimed at alighting the design of executive pay arrangements to match with the interest of common shareholders interests. The focus would be on advisory shareholder votes regarding compensation arrangements, increasing direct oversight and independent as well as using restricted stock awards. It would indeed be insightful to have the interests of common shareholders served by more risk-taking personnel as compared to socially desirable persons. Lastly, the article argues the author develops a case based on using regulation of banks executive pay. Executive pay is considered an important element in financial regulation. The article provides a normative foundation under which pay can be regulated and regulate bankers pay to compliment traditional forms that have been applied in financial regulation.

The article Dreaming with BRICS by (Wansleben, 2013) examines the integration of economic and economic knowledge and the interests that sociologists and cultural anthropologists over the years. Th author examines BRIC as a particular case of intertwinement which was formed in 2001 as a group of the largest and emerging economies- Brazil, Russia, India, and China. According to economists, it was established that 50 years the group would become the new core of the world economy. The author explains that BRICs concept is the innovation in the classification regimes of finance. The BRIC conceptualization recognizes cultural constructs. The author highlights the role that BRIC will play in changing the traditional domain of international finance classifications and organization. The author argues that the BRICs concept will alter classificatory regimes and re-describe a selective group in the emerging markets as solid and long-term investments. The author draws a calculative frame, narrative strategies, and metaphorical language. The article also outlines a descriptive portfolio flow with a preliminary analysis of investment discourses and some of the changes that are emerging in the market funds industry. The author's argument is convincing that emergency BRIC has a new and significant contribution to the cultural circuit of capital in the post-emerging markets investments in developing countries.

The article Story Stocks Tell Tall Tales, was published on the Financial Times website in 2014. It is written by James Mackintosh and expands on the knowledge of sell stocks. The author uses the sale of stocks as a case scenario to highlight the role and harm that online businesses cause. There is a frantic desire for finding growth in post-crisis environments when economies stumble, and this might be playing a significant role in triggering online feuds for businesses. Online platforms like social media appear to be presenting models that resemble the ideological business model. The challenge presented by such model lies within the valuations as there is no room for error. Most individual stocks are exposed to plot twists, but in a group, they form a stronger economy. The economy allows locating easier growth at relatively low prices although it is uncertain to determine the outcomes beforehand.

'Reconceptualizing financial innovation: frame, conjuncture and bricolage (Engele., 2010) argues that for a reconceptualization of financial innovation. The ideology is disregarded and cursed by those who appreciated it in the beginning. Further, the author conceptualizes financial innovation as the improvement of markets and expansion of rational calculability. The article proposes a new concept to fanatical innovation consisting of three main elements, bricolage, frame and conjecture. The author validates the shift in problem focus by highlighting the inherent fragility of the intermediary-led innovations in finance. The author advocates for a more radical rethinking about policy responses in the financial crisis in 2007.

The book After the Great Complacence: Financial Innovation and Politics of Financial Reforms is written by (Engelen, et al., 2011) and addresses the two critical questions. The first question is majors on the reasons that made financial innovation lead to the crisis in the banking sector between 2007-8. The second question examines the reason why political reforms in the finance sector and why it has proved very challenging across political jurisdictions. The author's analyses how the crisis occurred and later develop a response to the questions convincing the reader that innovation surrounding financial markets take the form of bricolage and does not consider the risks presented by the uncertainty and unseen consequences especially on the business models and complex circuits. Direct implications derived from logic explains the need to simplify finances instead of applying regulations since they complicate the issue further. Regarding the reasons why demographic, political control is difficult before and after the crisis, authors present the answers arguing that self-serving financial elites are not easy to control using technocratic elites especially because of knowledge failure and having unconcerned governing classes. The book ends with a discussion of the implications of the analysis and why the reform of banking regulation and democracy is necessary.

Part two

Business ethics are important in the contemporary business

Contemporary business value and appreciate the importance of business ethics in their operations. Ethics is conceptualized in business as a set of honest standards that a company is required to meet since they apply to the society. Business ethics reflect the norms, values, and standards that are established within the society in which the business exists. The basic importance of doing business ethically is to preserve the companys and brands reputation and hence secure the market performance of the product. However, the importance of ethics surpasses the need for market preservation given the globalization of the worlds economy. Global economy yields a consistent growth of competition internationally and hence the need to maintain ethicality. Also, companies spend a considerable amount of resources to form and establish a brand and attract potential customers or maintain loyal ones, and this is largely determined by their ethical conduct. Ethics in business is an important aspect as it directly affects the business performance at a local and international level. The paper will analyze three articles to explain the importance of ethics in business.

In the article, The Democratization of Finance? Promises, Outcomes and Conditions,

(Erturk et al., 2018) Presents logi...

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