How to decrease the possibility of having financial crisis

How to decrease the possibility of having financial crisis Essay example
Masters
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Finance & Accounting
Pages 5 (1255 words)
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Financial Crisis Table of Contents Table of Contents 2 Background 3 Aim and Objectives 4 Methodology 6 Result 7 Analysis and Conclusion 8 References 9 Background Financial crisis takes place in the business industries because of some unfavourable decisions taken by the managers…

Introduction

The financial crisis in a company is an unplanned burden which may affect its resources, capabilities, the values and the goodwill of the company. Lack of corporate governance and business ethics is one of the reasons responsible for the financial crisis in an organization. Acemoglu and Johnson (2003) have said that managers should change their way of thinking by disregarding that mismanagement of the macroeconomic policies is responsible for the lack of corporate governance. They should plan for strategies to overcome crisis in an organisation. The business leaders should focus on the policies like the legal framework of the organisation and protection of the interest of the stakeholders and investors. A good relationship between the shareholders and the managers help to achieve corporate governance within an organisation. Lack of business ethics in an organisation is responsible for weak corporate governance. Business ethics help an organization to frame a corporate governance strategy consisting of values, principles, a good work culture and proper decision making ability of the organizations. Wood (2002) and Lagan (2006) have said that organizations need to set the business ethics with strategic objective which can provide scope for achievement of corporate governance. ...
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