Strategic Initiatives: Requirements against Public Corporations - Dissertation Example

TABLE ON CONTENTS I. Introduction 2 II. Strategic Initiatives: Requirements against Public Corporations 2 III. FASB and Investment Community 3 IV. Investment Avenues 5 V. Initiatives Undertaken by FASB 6 VI. Conclusion 7 VII. References 8 Introduction The FASB has strived for the sustainable success since its inception, and has been successful in development of corporate and business relationship with its valued customer. The banking institute has tried to evolve a healthy relationship with its partners which is based on mutual trust and understanding, the banking institute understand the responsibility on their part, and has tried to accomplish objectives and aims through recognition of its role and responsibility as a financial intermediary brings with it a duty of responsible conduct and engagement. The banking institute has introduced certain amendments and reforms in its policies, and has tried to broaden the scope of its services. Before the beginning of the century, the banking institute focused heavily on wealthy class that was because during that era the economic wealth was extremely concentrated, therefore the wealthy class was supported and encouraged to involve in different financial schemes, aimed at creation of wealthy opportunities. The economic activities have accelerated in the current century, the economic opportunities have been explored, and wealth proportion has expanded instead of getting more concentrated. The FASB therefore adopted a policy of variance, aimed at adaptability towards economic progression. The economic expansion and rapid circulation of wealth intensified the activities of the banking sector, and for the procurement of its share, the FASB broadened the horizon of its banking facilities. Strategic Initiatives: Requirements against Public Corporations The requirements and the expectations of the consumers revolutionized, and for this purpose the banking sector was compelled to adopt and introduce set of revised and modified scheme which primarily focused on lending services, the deposition activities although gained a massive momentum, but the contribution in this regard was mainly from the wealthy people, the lending services were sought by the industries, corporate world and the major portion of society. Initially the banking institute was reluctant to adopt the concept of accountability and transparency, but once the population of the consumers rose, and the banking institute developed linkages with different clients, the bank was forced to ensure that accountability and transparency is practiced in all its form. The economic expansion did not only broaden the horizon for the FASB, rather the other banking institutes also strengthen and received an equal opportunity for procurement of contracts and opportunities. The FASB therefore had to intensify the implementation of its plan in the wake of economic expansion, and rising competition. The FASB developed an strategy, previously when the economic activities were sluggish, the bank focused on the areas where the community sought financial assistance and safeguard for the deposition of their money and other valuables, lately when the technological revolution improved the qualitative and the quantitative standards of living, the bank adopted an entirely different strategy to overcome the needs of the customers, not by offering to them what they require, but by offering to the customers all which they should inherit in this period of technological development, so that the improved quality standards can be availed by the customers. The bank focused from routine operation to an arena of innovation, where the need was never felt but generated to apprise the customers about the qualitative enhancement of life, through different financial schemes. The organization usually assigns the managerial responsibilities to the employees of various divisions, keeping in view the difference of area of specialization of the employees. According to Welch (2001), the organization offers employment positions i.e. 'accountants, position classification and labor relations specialists, fiscal analysts, training and development specialists, criminal investigators, taxpayer assistors', in all such respective departments the managerial skills are required to ensure the performance improvement and management development. The Internal Revenue Service has performed required exercises and reviews which has led to the identification of 'twenty one generic skills that managers need, these twenty one skills are divided into four categories: interpersonal skills, analysis and decision making skills, managing systems and organizations, and understanding operations'. The Myers-Briggs Type Indicator and Adjective Check List incorporate the self-assessment relevant to the interpersonal skills category which encompasses, therefore according to Welch(2001), 'self-awareness, understanding individuals and groups, and communications'. The scheme has converged the interpersonal skills and managerial skills, and the influence of the respective aspects has been monitored. The Myers-Briggs Type Indicator and The Adjective Check List has been a source of insight for the FASB which have helped these FASB to resolve their respective concerns having relevance to the career development process. The techniques have relevance towards the leadership and career development processes. The Myers-Briggs Type Indicator was designed as per conclusion of the Carl Jung's Psychological Type. The Myers-Briggs Type Indicator has revised by Jacques (1989) which enabled the FASB to concentrate and focus upon managerial skills and leadership qualities, and 'the assessment of their preferences with regard to judging and perceiving'. FASB and Investment Community The FASB has acknowledged their responsibility in the allocation of the capital to the businesses and individuals, the FASB performed with the similar objective previously. Presently, the FASB has deviated from its past practices, and has played a responsible and crucial role for the promotion of the 'best corporate practice' (Jan, 2002). The element of responsibility has been materialized through 'integrated environmental, social and ethical considerations into its risk engagement process' (Dejan, 2003), the strategy has been responsible for the satisfaction of the clients, who previously faced 'the same challenges and opportunities related to sustainability', unfortunately the banking institute was not capable and motivated to work towards the resolution of the issue, and the area remained neglected and unexplored. In the present century, and under the current economic setup, the FASB has played its responsibility in the allocation of the capital towards meritorious and capable performers, and those who have reflected potential within their limited capacity, at personal and administrative level. As per Dejan(2003) the banking institute has adopted the crucial role to assist 'in the reduction of the fundamental risks underlying the selected client portfolios and transactions and creating more sustainable long-term business relationships'. The observation concludes that the priorities of the FASB have emerged with the passage of time, and in this regard the FASB has tried to evolve business relationship which is strong, cordial and consistent. The idea of long term association was never practiced and implemented in the previous century, the reason because the potential of the client with whom the company enjoyed lengthy affiliation failed to yield rampant profit, but the current setup of the FASB has encouraged the concept of the long term relationship which is based upon the existence of sincere and cordial affiliation, irrespective of the yield. The prospects of the life term affiliation are brighter, because the FASB on its part is consistent in allowing continuous and uninterrupted support, whereas the client is more concern towards optimum return from the investment. The nature of the relationship basically draft the frame of the activity and prospects associated with the activity, therefore Christine(2003) concluded that the FASB has realized and reaffirmed its commitment to strengthen the relationship, and broaden the scope of the relationship, and in this regard more opportunities are being explored and reviewed. As per Christine(2003), the FASB 'has taken a prudent, holistic and professional approach to managing risks, including credit risk; environmental, social and ethical risk; country risk; market risk; operational risk; and risk to the reputation of the FASB', the approach incorporate the separation of the risk management from the 'commercial lines of business to ensure balanced and independent decision-making'. In the previous century, the risk policies were avoided, and the FASB was reluctant to invest in the projects expecting certain level of risk, however in the current setup the 'policy development has provided an opportunity to the FASB for resolution of the environmental, social and ethical risks in their engagements, protect the interests of their stakeholders, understand best practices for particular sectors, and promote sustainable development generally'. In the present century, the FASB took the initiative of launching forestry policy, the objective of which was to govern the business correspondence with the customers and projects, including 'palm oil plantations that may harm tropical rainforests and the people who live there'. The FASB has given primary importance to the environment related projects, which was never practiced in the last century, lastly Jan(2002) confirmed that the FASB has developed an understanding with the consortium, and has 'developed an animal testing position statement and a Business and Energy Risk Paper'. The public perception with reference to the FASB has changed gradually. The current perception popular among the public is with reference to the 'clear and constructive role in society. With the global network, through which the company affect thousands of communities around the world', the policy is complementary to the previously adopted public perception as per which the company is 'committed towards sustainability, and has made a choice to actively contribute to the communities in which the FASB operate and where the employees of the company are settled'. The public perception related to FASB focused on profit making, but now it has been realized by the public that the company is involved in wide range of projects aimed at higher levels of sustainability, in this regard the company played crucial and lead role in the achievement of the objectives associated with the United Nations Millennium Development Goals and Global Compact. Harald(2000) discussed that the FASB has evolved better coordination with the governments through supporting local communities, the objective of which has been materialized through community investment programs. The corporate social responsibility is an area that has transformed the image of the company. The public previously condemned the FASB for its ignorance towards the conditions prevailing in the surrounding regions of its operation, for this purpose the FASB evolved a 'structure and framework for community investment efforts'. The common public perception with reference to the activities of the FASB was based on the full contact between the FASB and the rich people, whereas the needs of the middle and low class population were ignored, therefore all the hopes pertaining to the assistance of the low-class area by the residents faded. Surprisingly, in this century the FASB has given due attention towards 'sustainable livelihoods', which is aimed at proving the people with possible opportunities so that they can 'sustain their lives and build their futures'. The current area where the FASB has given sue consideration is related to the eradication of the poverty, which has been achieved by 'strengthening a community's ability to develop economically'. In this regard, the FASB has focused on three major constituents including education, income generation and environmental protection. Previously, the activities and the scope of those activities varied from place to place, but presently the FASB has adopted uniformed policy aimed at alignment of all the international banking activities. The FASB has adopted a different techniques as per which the world wide community will complement each other, and irrespective of the level, the 'community investment required thorough and transparent assessment and decision-making processes which ensured fairness and apply the highest selection standards'. As per Christine(2003), the FASB is considered to be 'a dynamic and growing business, and there is a constant inflow and outflow of people caused by people joining or leaving joiners, leavers, as well as acquisitions, divestures and restructuring programs', such pluralistic and diversified environment was not encouraged prior to this century, the current century has involved series of reforms which have tried to minimize the splits within the different units of the organization. Investment Avenues The bond market risk are associated with the occurrences when the agents allocate the funds towards the bond market without any evaluation and analysis of the purchasing and selling price of the bond afterwards. Such concerns are imminent because asset markets are considered to be incomplete and segmented. FASB has estimated the risk within the bond market based on the supply of the bonds is experienced when the agents and dealers are willing to invest their resources in the trade market. The buyers are the expected beneficiaries when the bond-supply shock is positive, the positive effect is based on the lower prices of the bond as compare to the expected prices, and when the expected rate of return has been crossed. Therefore within the bond market business, the dealers are expected to make good fortune, and 'any real consequences are distributional because the shock has favored some agents at the expense of others'. The expansion and growth of the bond market is expected to determine the time period associated with the downgrade within the bond market the time is considered to be major dimension, and the expansion of the bond market is based on the 'relationship between the indicators and the downgrade'. This all has been possible through proactive role undertaken by FASB. In the case of banks, the relation between the market indicators which include rating changes, abnormal stock returns, and the proportion of equity owned by institutional investors and bank insiders and supervisory information have failed to explain the supervisory assessments and bond ratings, and for this purpose the equity indicators have been ignored. It was reported that the 'bond spreads with particularly poor supervisory assessments reducing spreads and vice versa', therefore market is based on the market discipline i.e. supervisory assessments. It was investigated by John (2004) that market prices incorporate additional information as compare with the accounting variables, and therefore influence the ratings of the respective bonds, however there is no variance in the future prospects and worth of the bond, it is the debt market indicators which have predictive power to influence the performance and operations of the bond market. In normal practices are dealer who offer successful bid 'in the course of their direct interactions with the New York Fed', as per the terms and conditions of the Treasury department is entitled to be announced as successful bidder, and the bonds are issued within the period of three days. It is expected that in bond market, some depository institutions, brokers and agents are expected to pay towards their successful bid on the date of issuance of the bonds, however there is an allowance, and some of the dealers and agents can pay at the time of 'submission and are either refunded excess balances or called upon to remit additional funds based upon the final auction price and security allocations'. Boyan (2001) identified that, the supply risk associated with the bond market is associated with residual supply risk. In cases where there is heavy demand of the Treasury Bills in the bond market, the demand in many of the cases is expected to surge due to the interests of the 'foreign financial institutions and international monetary authorities regarding whether to roll over their substantial and various holdings of bonds, such decisions are expected to influence the residual supply which is provided to the 'remaining traders because they count against the issue quantity stated in the auction announcement'. Initiatives Undertaken by FASB FASB has seriously undertaken the concept of ERP. The Enterprise Resource Planning system refers to the system formulated for the enterprise-wide resources. The Enterprise Resource Planning has wide scope; previously it was confine to the manufacturing environment. The domain of the Enterprise Resource Planning is based upon the fundamental operations of the organization; the relevance is irrespective of the nature of activity practiced by the organization. Thomas (2002) confirmed that the Enterprise Resource Planning is practiced and conducted by 'business, non-profit organizations, nongovernmental organizations, governments, and other large entities'. The software package is required for the timely execution of the Enterprise Resource Planning system, which is able to provide functionality in a single package, from technical perspective the software package shall incorporate feature relevant to the payroll and accounting functions. The usage of the external interface is not relevant for the implementation of the Enterprise Resource Planning system, which has provided improved characteristics based upon standardization and lower maintenance. The implementation of the Enterprise Resource Planning system is expected to result in the best practices, for this purpose the organization has to select between 'customizing the software or modifying their business processes' as per the standards of the best practices. The extent of the implementation of the Enterprise Resource Planning system, and the subsequent exercise of the best practices is applicable on the large organizations, in particular those organizations where the IFRS, Sarbanes-Oxley or Basel II have been adopted. The adoption is for the reason being that features of the Enterprise Resource Planning system are coherent with the legislative or commodity content. The Enterprise Resource Planning system is however considered to be complex, and is responsible for the imposition of the major changes on the work practices of thee employees. According to Doug (2006) The Enterprise Resource Planning system has been successful in the achievement of the cost-effective project. Conclusion The accounting board has incorporated the required objectives and plans which has prevented the company from any major financial debacle, the success of the company is therefore entirely based upon the efficient strategy, thorough analysis and exemplary implementation which has brought laurels to the accounting board, not only on domestic front, but the accounting board has emerged as major success in the international market. The adherence by the corporate social responsibility can be attributed towards the success of the company, which received enthusiastic response in different parts of the world, the strategy of the company has been surely modified, and the amendments are responsible for the successive achievements of the auditing institute. References 1. Christine Brentani. (2003). Portfolio Management in Practice. Elsevier Publication. pp. 195. 2. Jan Aart Scholte, Albrecht Schnabel. (2002). Civil Society and Global Finance. Routledge. pp. 47. 3. Harald A. Benink. (2000). Coping With Financial Fragility and Systemic Risk. Springer. pp. 86. 4. Krishnamurthy Sriramesh, Dejan Vercic. (2003). The Global Public Relations Handbook Theory, Research, and Practice. Lawrence Erlbaum Associates. pp. 187. 5. David E. Altig, Ed Nosal. (2006). Why Haven't Long Term Interest Rates Fallen Federal Reserve Bank of Cleveland. 6. Gibb AA. (2003). Corporate Restructuring and Entrepreneurship: What can Large Organizations learn from Small Enterprise and Innovation Management Studies; 1(1): 19-35. 7. Leonard J. Brooks. (2000). Business and Professional Ethics for Accountants. South-Western College Publishing. pp. 154. 8. Edward Ketz J. (2006). Accounting Ethics: Critical Perspectives on Business and Management. Cornell University Press. pp. 87. 9. Ronald F. Duska, Brenda Shay Duska. (2003). Accounting Ethics. Blackwell Publishing. pp. 76. 10. Hamel, G. (2000). Leading the Revolution. Boston, MA: Harvard Business School Press. Pp. 123-124. Read More