FIN 513 UIU Organizational Structure and Control Systems Discussion

DQ1

This week’s discussion deals with organizational structure and control systems. Examination of the structure of a current global organization.

Discussion Question:

Choose and evaluate one example of a current global corporation and how they managed their global organizational structure.

Discussion Guidelines

Readings:

Bravo, R., De Chernatony, L., Matute, J., & Pina, J. M. (2013). Projecting banks’ identities through corporate websites: A comparative analysis of spain and the united kingdom. Journal of Brand Management, 20(7), 533-557. doi:http://dx.doi.org.ezproxy2.apus.edu/10.1057/bm.2012.59  URL:  http://search.proquest.com.ezproxy2.apus.edu/docview/1391538201?pq-origsite=summon

Patel, T. (2015). Crossing disciplinary, epistemological and conceptual boundaries in search of better cultural sense-making tools. Journal of Organizational Change Management, 28(5), 728-748. Retrieved from http://search.proquest.com.ezproxy2.apus.edu/docview/1710608641?accountid=8289

Spangenberg, H., & Theron, C. (2013). A critical review of the burke-litwin model of leadership, change and performance. Management Dynamics, 22(2), 29-48. Retrieved from http://search.proquest.com.ezproxy2.apus.edu/docview/1439534543?accountid=8289

Victoria, M., & Dipak, B. (2014). Evolving relationship between the parent and subsidiaries in multinational companies. Advances in Management, 7(2), 1-15. Retrieved from http://search.proquest.com.ezproxy2.apus.edu/docview/1502695827?accountid=8289

Zhang, M., Sarker, S., & Sarker, S. (2013). Drivers and export performance impacts of IT capability in ‘born-global’ firms: a cross-national study. Information Systems Journal, 23(5), 419-443. doi:10.1111/j.1365-2575.2012.00404.x  URL:  http://search.ebscohost.com.ezproxy2.apus.edu/login.aspx?direct=true&db=bth&AN=88904384&site=ehost-live&scope=site

Book:

Edger, C. (2013). International Multi-Unit Leadership : Developing Local Leaders in International Multi-Site Operations. Farnham, GB: Routledge. Retrieved from http://www.ebrary.com  URL: http://site.ebrary.com/lib/apus/detail.action?docID=10768058

DQ2

This week we will be discussing Chapters 20, External Growth, and 21, International Finance.  Organizational controls are extremely important issues as is a level playing field, it has been tilted by the LIBOR scandal, please see the link below on The Fix-Why is LIBOR important to Financial Management? The latest information on the LIBOR transition is also posted in the second link–Keep Exploring!

Talk to you soon–Dennis

https://www.theguardian.com/business/2017/jan/18/libor-scandal-the-bankers-who-fixed-the-worlds-most-important-number

https://www.shearman.com/perspectives/2019/05/latest-developments-in-the-transition-from-the-libor-lending-benchmark?utm_source=Mondaq&utm_medium=syndication&utm_campaign=View-Original 

R1

Debt-service payments are the sum of the following:

A) Dividend payments + Equity buybacks.

B) Preferred dividend payments + common-equity dividend payments.

C) Principal payments on debt + Interest payments on the same debt.

D) Interest payments on convertible debt + Preferred dividend payments.

The risk-free rate is the rate of interest on a government security having no _________.

A) Default risk

B) Inflation risk

C) Interest rate risk

D) Exposure to any type of risk

R2Amazon is one of the most renowned global organizational businesses out there today. Being that Amazon is one of the largest retailers in the world and employs over 1.3 million people worldwide, Amazon operates using a hierarchical corporate structure (research-methodology). Amazon integrates hybrid project groups comprised of different individuals with different areas of specialties. These employees can be attracted part-time reporting to both, the head of their departments and project leaders, or they can engage in the project full-time reporting to project manager only for the duration of the project (research-methodology). Even though Amazon achieved being such a large business, it remains flexible and able to adapt to frequent changes in the external marketplace.  Successful organization of hybrid project groups plays an instrumental role in maintaining flexibility of the business. Amazon founder and former CEO Jeff Bezos is credited with the introduction of ‘two pizza rule”. According to this rule, meetings should be held in teams small enough that could be all fed with only two pizzas. “Two pizza rule” continues to this day under the new CEO Andy Jassy (research-methodology). Stability is also a notable feature of the Amazon organizational structure, particularly in senior management. Many members have been in the same position for years or in some cases, decades. The long-term success of the hierarchical model has resulted in a highly experienced senior management team. Amazon is similar to a large firm that invests in multiple ideas. The focus is on finding successful ideas, and not on avoiding failure of any idea (Outlook, 2017). What is believed to be the strongest part of Amazon’s global organizational structure is its function based global groups. Each major business function has its own dedicated group that is structured in a way to manage e-commerce operations efficiently and successfully throughout a global organization (Organimi). These groups are also incorporated into geographic divisions. Geographic divisions are assigned to specific geographic locations and focused primarily on business goals, challenges, and logistics, for that specific area. For being such a large organization, Amazon has paved new ways in global organization structuring which has proven to be successful.Respectfully,KevinReferences:Amazon organizational structure: A brief overview – research-methodology. Research. (2022, March 22). Retrieved July 4, 2022, from https://research-methodology.net/amazon-organizational-structure-2-2/Amazon’s organizational structure [Interactive Chart]. Organimi. (n.d.). Retrieved July 4, 2022, from https://www.organimi.com/organizational-structures…Outlook, O. (2017, September 5). Amazon works because of its org structure. Medium. Retrieved July 4, 2022, from The LIBOR scandal was a significant issue because of its central role in the global finance world and was used to determine everything. For instance, from the interest rates that giant corporations will pay for these loans to the rates individual consumers will pay for their home or student loans. It was also used in derivative pricing. Thus, by distortion of the LIBOR, the traders or investors that were part of it were indirectly causing a stream of mispriced financial assets throughout the global financial system (Vaughan &  Finch, 2017). This led to a substantial public backlash because parties involved worldwide wondered whether they might have been effective financially.ReferencesFernando, J. (2022, June 12). The libor scandal. Investopedia. https://www.investopedia.com/terms/l/libor-scandal…Vaughan, L. &  Finch, G. (2017, January 18). Libor scandal: The bankers who fixed the world’s most important number | Liam Vaughan and Gavin Finch. The Guardian. https://www.theguardian.com/business/2017/jan/18/l… R4I will be honest; I don’t really understand Libor fully. I don’t understand all of the minutia involved in the numbers, calculations, and other stock market language. What I do understand is that whatever it is/was, it was used to manipulate trading. This Hayes guy was using his relationships and other tactics to manipulate brokers and the rules to trade in favor of his bank and his bank account (Vaughn & Finch, 2017). It was years of moving things around and tricking the system. There seemed to be no regulation or oversight into the practices because it was a small club of banks that set the rates (Vaughn & Finch, 2017). I do not see (or understand) where Libor was useful in any way – maybe I am just not understanding correctly, but it would seem that the only thing it was used for was to cheat the system to make more money. And Hayes was exceptionally skillful in risk-taking and finding ways to circumvent process or rules. I am glad that McGonagle read that Wall Street Journal article that day, because if he had not, he would not have known about what was going on. The investigation ensued and as a result, Hayes was prosecuted, and thus begun the process of creating legislation and regulation around Libor (Vaughn & Finch, 2017). As one who was heavily impacted by the Great Recession, this saddens me that so many people had to suffer while these rich guys got richer from playing the system. But the good part is without the investigation, new laws to prevent this would not have been put into place. Vaughn, L. & Finch, G. (2017). Libor scandal: The bankers who fixed the world’s most important number. The Guardian. https://www.theguardian.com/business/2017/jan/18/libor-scandal-the-bankers-who-fixed-the-worlds-most-important-number

R5

LIBOR (London Interbank Offered Rate) is the standard international interest rate for unsecured short-term borrowing in the interbank market. It is used for the valuing of interest rate swaps, currency rate swaps as well as mortgages (Kagan, 2022). The LIBOR gauges the strength of the financial system and estimates the trajectory of approaching rates of central banks. The LIBOR is set by a self-selected, self-policing committee of the world’s largest banks. The rate measured how much it cost them to borrow from each other (Vaughn & Finch, 2017). The LIBOR connects an estimated $350 trillion of international financial products and loans, with a large portion of these attached to the dollar-based benchmark.LIBOR is important because it is used to measure market anticipation for interest rates confirmed by central banks. It takes into account the liquidity premiums for numerous securities traded in the money markets. Derivative products are created, launched and traded in reference to the LIBOR.The LIBOR Scandal was a vastly exposed scheme in which bankers at multiple major financial institutions conspired with each other to manipulate the LIBOR. The scandal sowed distrust in the financial industry and led to a wave of fines, lawsuits, and regulatory actions. Although the scandal came to light in 2012, there is evidence suggesting that the collusion in question had been ongoing since as early as 2003. As a result of the scandal, the LIBOR has been discontinued due to questioning of the LIBOR’s legitimacy as a reliable benchmark rate.In 2012, extensive investigations into the way the LIBOR were set uncovered a widespread, long-lasting scheme among multiple banks—including Barclays, Deutsche Bank, Rabobank, UBS and the Royal Bank of Scotland—to manipulate Libor rates for profit (Marquit & Curry, 2021).ReferencesBlock, S. B., Hirt, G. A., & Danielsen, B. R. (2019). Foundations of Financial Management.New York: McGraw-Hill Education.Kagan, J. (2022, March 12). London Interbank Offered Rate (LIBOR). Retrieved from Investopedia.com: https://www.investopedia.com/terms/l/libor.aspMarquit, M., & Curry, B. (2021, December 21). What Is Libor And Why Is It Being Abandoned?Retrieved from Forbes.com: https://www.forbes.com/advisor/investing/what-is-l…Vaughn, L., & Finch, G. (2017, January 18). Libor scandal: the bankers who fixed the world’s most important number. Retrieved from TheGuardian.com: https://www.theguardian.com/business/2017/jan/18/l…R6Walmart is one of the most successful companies in the world. It owes its success to its organizational structure which endeavors to integrate the values of its founder Sam Walton. Walmart has a hierarchical functional organizational structure. This structure has two features: hierarchy and function-based definition. The hierarchy feature pertains to the vertical lines of command and authority throughout the organizational structure.  For example, except for the CEO, every employee has a direct superior. To manage this vast retail chain, the corporation has divided the areas into districts/regions, each district has a Regional/ District manager who supervises the store in the area. The stores in each district are headed by a Store Manager. The main effect of Walmart’s hierarchical functional organizational structure is the ability of corporate managers to easily influence the entire organization. The downside to Walmart’s organization structure is that the lower levels of the organizational structure cannot easily adjust business practices because of the lengthy communications and approval process involving the middle managers and corporate managers at Walmart’s headquarters.Walmart’s organizational culture has four main components, service to customers, respect for the induvial, strive for excellence, and action with integrity.  These components guide employees’ behaviors, which determine organizational capacities to add value in the provision of retail service and related services to consumers. The cultural components are also identified as Walmart’s beliefs. This makes Walmart’s organizational structure is ideal for the company’s type of business and global scope of operations. Managerial control and influence are maximized through this corporate structure, despite the vastness of the company’s retail and related operations.V/rSageReference: Lombardo, J. (2019, February 15). Walmart: Organizational Structure & Organizational culture. Panmore Institute. Retrieved July 5, 2022, from http://panmore.com/walmart-organizational-structur…