Business

According to Emirates Islamic Bank, Islamic banking is the type of banking or banking activity that has its mode of operation in consistence with the shariah laws. This type of banking is also guided by Islamic economics (para, 2). Shariah law bars the collection of and payment of interest also referred to as usury or commonly known as Riba. Islamic laws regard trading in financial risk as a form of gambling and therefore prohibit it. Investing in businesses that are considered as unlawful is also prohibited. The last few years have seen an increase in the emergence of Islamic banks. One of the facts that may be attributed to the emergence of Islamic banks is the observance of their faith.  Nowadays Islamic banking is preferred by both the Muslims and non-Muslims due to the benefits associated with it. Islamic banking and finance has shown in the last almost three decades, development into a full fledged scheme and discipline that has been reported growing at a rate of about 15 per year (Zaharuddin, para 3). Islamic financial institutions have spread to almost every part of the world. Today, over 75 countries are known to have embraced these institutions. Many countries are also developing strategies to implement Islamic banking on a national wide base rather than on individual basis (Gafoor para7).

Commercial banking on the other hand is the type of banking whereby a wide range of banking products and services are offered by a particular bank. These deposits include cheques, credit cards, savings, time deposits and also loans to businesses and also individuals.  Full brokerage and financial development services are offered by good number of commercial banks. Commercial banks also sell some investments.  Banks obtain revenue by issuing primary loans from its collection of deposits. By holding a collection of security deposits, commercial banks are able to generate proprietary income (Emirates Islamic Bank Commercial, para 14).

Comparison between the Islamic and commercial banking systems

Monetary intermediation
There are some major differences that are noticed between these two types f banking systems. For example, the nature of monetary intermediation for Islamic banks is very different from that of the commercial banks. This is the primary aspect in the understanding of the characteristic of the risks in commercial and Islamic banks. The base of monetary intermediation and banking in Islamic banking is the mudarabah contract (Emirates Islamic Bank Commercial, para 13). The primary concept is that both the mobilization and the use of money are based on the sharing of profit among the depositors, the bank and the capitalists. With the only difference being that there are several selections on the asset side, the monetary intermediation is simply a pass through arrangement which is the same as fund management. While the commercial banks can charge extra cash to defaulters, the Islamic banks do not have the authority to carry out such an act on its defaulters (Zaharuddin, para 17).

Balance sheet risk outline
According to Institute of Islamic Banking and Insurance, the balance sheet risk outline of Islamic banking system is very different from that of the commercial banking system. The balance sheet has the pass through nature as the principle feature. This pass through feature eliminates the characteristic asset liability mismatch exposure of commercial banks, because the returns of the Islamic bank depositors returns is connected to the returns on the banks assets. All the practices of the commercial banks are aimed at eliminating the risks while Islamic institutions bear them (para, 6).

Nature of assets
Commercial banks prefer staying with very low credit risk debts fixed income securities while Islamic banks assets are concentrated on the asset based savings which has credit risk but also backed by real assets due to the fact that the lending capacity of Islamic financial institutions is bound by the availability of actual assets in the financial system. According to Gafoor, the possessions of Islamic financial institutions contain financing possessions where real goods are bought and sold to the clients (p, 16). In the case of commercial banking institutions, the assets are financed by a loan from the bank to the client whereas in Islamic financial institutions, the possessions and the financing are joined together. As a financier, the Islamic financial institutions are not limited to exposure but additional exposures can be developed resulting from dealing with physical possessions. The risk of an Islamic bank is very different from that of a commercial bank because it lacks liquid security on the side of possessions (Zaharuddin, para 14).

Financing of assets
    Emirates Islamic Bank claims that Islamic financial institutions do not have the capability to finance the possessions due to its inclination on shariah law which prohibits generation of interest as this discourages creation of leverage (para, 1). During the times of economic crisis, the Islamic financial institutions can be considered less risky due to lack of leverage. Aggarwal claims that financial intermediary is closely linked to the assets and therefore the Islamic banks are able to carry out an enhanced watch over the possessions as well as the obligor (p, 14). These characteristics greatly improve the stability of the Islamic financial systems. Due to the principal of Islamic banking which is profit and loss sharing, these institutions pay greater consideration to developing projects assessment and evaluation.

Liability
    Zaharuddin claims that commercial banks do not take any liability when they involve in any kind of transaction with clients. Therefore, they benefit from the transaction yet they do not take any liability. This is regarded as unlawful by shariah (para, 10). All commercial banks generate profits by charging interest to its clients whereas the Islamic institutions prohibit charging of interests. While the commercial banks are aimed at maximizing profits with minimal restrictions, the Islamic banks aims at maximizing profits based on shariah. Commercial banks carry out transactions that result in its interest becoming outstanding yet it makes no efforts aimed at ensuring growth with equity. Islamic banking system on the other hand aims at ensuring growth with equity (Zaharuddin, para 12).

Accessibility
    Commercial banks are the most spread type of banks in the world as compared to the Islamic banks. These commercial banks sail smoothly as regards to complying with the central   banks rules of their various countries (Gafoor, para 12). These rules are a very big hurdle to the Islamic banks. Islamic banks do not guarantee a fixed rate of return on deposits like the commercial banks as it bases its working on the principle of profit and loss sharing.  Capital is also not guaranteed by Islamic banks because if a loss occurs, it will have to be deducted from the capital.

While commercial banking sector is seen to be currently struggling with its own critical burden and increased in loss of jobs, Islamic banking has been expanding day and night.  The Islamic financial institutions have been venturing into areas that are underserved. As a way of saving themselves and spreading the risk, the commercial banks are expanding into emerging markets. Some commercial banks are even adopting the Islamic principles of banking and incorporating them into their systems.
Islamic banking is an upcoming idea. This idea has found acceptance in many of the Muslim countries and also in some non-Muslim countries. Were the Islamic banks to implement some changes in their banking system, they would eliminate problems and doubts associated with the issuance interest free loans. This would put them at the fore front in the race for market competition with the commercial markets. Another exceptional characteristic of the Islamic banks is the participatory financing. This can greatly offer accountable financing to cultural and economically significant development schemes. This service has been shown to put Islamic banking system ahead of the customary commercial banking system.

Kudler Fine Foods stores are situated in San Diego metropolitan area and were founded by Kathy Kudler. The stores are divided into different departments, which include fresh meat and seafood, fresh produce, dairy products etc. Kathy Kudler opened the enterprise as she was tired of moving long distances to search for ingredients to prepare meals (Kudler Fine Foods, 2009). Further in this paper I emphasized upon my own values and how they align with those of Kudler Fine Foods as well as how they can help me to improve my performance as a manager.

Good Interpersonal Skills
     I have good interpersonal skills that help me to freely interact with other people in the work place. This is in line with the value of open communication in the Kudler Fine Foods which advocates for the free movement of information for all people in the organization. This value will be of great use to me in maintaining a good working relationship with my junior and senior colleagues, because this will help in enhancing the culture of openness in the organization.

Good interpersonal relationship will help in customer retention in Kudler Fine Foods, which will enable the organization to increase its customer base, hence the scale of sales. Good international skills will also help me in solving conflicts that may arise between the employees in the organization, because through sharing information and opinions will help solve the problems easily.

Good organizational skills
     I possess good organizational skills for activities and events. This is a value that goes very well in line with the value of Kudler Fine Foods, which encourages an organized structure. This is a value that will help me to maximize the satisfaction of customers with the products of the organization. This is achieved through good logistical organization of activities in the organization, where all the planned activities run smoothly without any hitch. This value will help me in making all my duties a success in the organization, hence, increasing the productivity of the organization.
Through the organizational skills I will be able to provide the customers of Kudler Fine Foods with exemplary services by means of provision of the right commodity at the right time in the best manner possible. This will increase the customer satisfaction which will result in customer retention.

Leadership
       I have good leadership skills which enable me to inspire and motivate the employees. This is in line with the values of Kudler Fine Foods concerning good management.

The skill of leadership can be of great use in providing motivation to employees at Kudler Fine Foods by means of building up trust with their leaders and having confidence in the decision made by their leaders. This skill will enable me to inspire employees so that they can work hard towards achieving the organization objectives. When employees are motivated they increase their productivity and this will translate into good profits in the organization.

My leadership skills will help in providing direction to the employees of Kudler Fine Foods. When employees have confidence in their leader, he or she is able to guide them in the fulfillment of their duties. Through these skills I will be able to provide guidance to employees in their undertaking which will enable them to realize their full potential.

Through leadership skills I will be able to form teams and provide good leadership. Team leadership will enable me to synergize members of different teams to perform quality work in Kudler Fine Foods. This value will help me in ensuring good interaction and working relationship between members of the group. The value will also help me to form well balanced groups composed of members that can achieve excellent results.

    Honesty
I believe to be honest in all my undertakings, be honest to all the people I deal with in business. Honesty is a value that is entrenched in all the activities of Kudler Fine Foods, in leadership as well as when dealing with customers. The value of honesty will help me to be trusted by other members of the organization which will help me be an effective leader in my areas of operation.

    Ability to work hard
     I am a hardworking and well motivated person. This is a value that is in line with Kudler Fine Foods employees values. This value will enable me to achieve good performance in my workplace. The value will enable me finish the duties which are set by the management in time which will be a good contribution to the organization growth and development. Being hard working will also make me a role model to my junior which will act as a motivating factor.

      My working hard in the organization will help me provide timely services to the customers. Timely service to the customer will improve the customer service in the stores which will result in customer attraction and retention. When employees in an organization are hardworking it results to cost saving for the organization in terms of wages and this results to increased profit to the organization.

    Objectivity
     I am always objective in my decision making and handling matters. This is in line with the values of Kudler Fine Foods. This value will help me in making quality decisions in my duties. I will be open-minded when analyzing different issues affecting the business. Being objective will help me not to ignore any important aspect that can affect the functioning of the enterprise. It will help me to weigh all the options critically before making critical decisions.

      Objectivity will also help me to solve conflict situations within the organization, because I will be able to respect other peoples opinions and accommodate other peoples views. This will help me to carry out my duties properly and be accepted by the employees of the organization. This value will also make others trust my judgment on issues which can make me a good leader in the organization.

      Taking into consideration all my values and the values of Kudler Fine Foods, I believe they have many things in common. My values can help in attaining good performance in Kudler Fine Foods and be a very reproductive manager in the organization. I can be an important resource to the growth and development of the organization.

Busyness has become a virtue for Americans. Even when there is not any activity, the busyness is still there. People love to live with this habit. They want to present them as virtuous and display the facade of busyness to others whether they are engaged in any productive work or not. This is so critical in businesses and organizations that employees feel that they would lose their job if they do not pretend to be busy. Likewise, managers in organizations create their own crisis even when their company is going well. It has become a dilemma.

Having passion in ones on-going work or any activity brings great benefits for the worker. But one should identify his passion, particularly about his work, by inquiring himself. There is much importance of dedicating some time on regular basis to analyze, so that he can ensure that he is truly pursuing his passion. If he doesnt adopt this strategy of self evaluation, he will get lost in his work and loose personal meaning despite being respectful and dedicated in his organization. It has been indicated that investments made to delight the employee act as an encouraging factor for them. Employees retain with the company they maintain their loyalty and company doesnt lack the talent.

Employees who do their jobs in an enjoyable environment care about their organization and contribute in selling more products. They work with passion and play a significant role in achieving organizations goals. Leaders can never succeed in building meaning for their organization as long as they dont evaluate their own passion and meaning in work. If both employers and employees adopt a habit of self-assessment, they will gain intellect and more centered approach in their jobs. This development will results in more production and creativity. Organization should know that if their employees are not getting financial incentives, they can be attracted by the incentives offered by their rivals. Workers want to work with meaning and purpose. They prefer working where they get regard and become the part of the group.

In todays modern educational systems, the value o f encouraging individual development has been understood. Though, students play with others in groups and teams, but soon they acknowledge that in practical life achievements and successes can be attained through individual character and effort.

Last century was the century of industrial revolution that gave birth to the industrial age, and also contributed in the development of modern strategic planning process.  Several companies are successful today by implementing this strategic planning process like Zachry Corporation. The company is a good model for other companies who want to implement a top-down strategy for the strategic planning process in their organizations that can help them surviving many years in future. The companys establishment created their long-range plan through the scenario-based model. They examined and explored a number of potentialities in their future business. They identified the most probable model for their future business that facilitated them in devising the long-range strategic objectives. Scenario planning helps in understanding and addressing the uncertainties around their organization. Scenario planning doesnt claim to make predictions about future environments and situations but it is helpful in conceiving what can be the situation.

Organizations should develop open environment for their employees, so that they can be encouraged to make healthy participation in the scenario process. Strategic planning should be made to comply with all future developments and changes, so that it cannot lose its effectiveness with on-going changes in the environment. Decisions about the strategic alignment should be made each day. If the problems are properly diagnosed, it not only eliminates the chances of unintended consequences but also provides a solution to them during strategic planning.

Buy-in to change deals with the responsibility of individuals and organizations to make change. The competition can be decreased through creating buy-in to change. It lessens the threat of uncertainties and encourages the passion to grow and learn. The first step in creating buy-in to change is identification of the reasons that create resistance to change. Buy-in to change prevents, decreases, and minimizes resistance to change. Organizations and managers should employ all possible means to develop the correct process of change.

The organization equipped with effective managerial tools can better deal with the resistance to change moreover, its ability also depends upon the complexity of the situation. It is the managers job to implement change in his organization through creating buy-in to change.

An organization should develop a culture that support implementation of innovations. Every member should realize and play his role in implementing new ideas. Their attitude should be encouraging in creating new ideas. Proper knowledge, training and support are also dispensable.

People often have very limited concept about the leader. They think responsibility of a leader in any organization is just being a manager, but they have much greater responsibility than anybody thinks today. A true leader should know the significance of certain factors afflicting their employees. A true leader values their employees. He is always willing to understand each employees importance that working in his organization.

There has always been discussion over the value of employees and shareholders of the company. Shareholders contribute in monetary form through investing their money whereas strive day and night turn their business into profiting. Workers actually invest their lives. We can get the answer to this question by looking at the example of Southwest Airlines. This company regards every individual associated with them. Holding dear the employees is the culture of the company, which they developed gradually. Now, one can easily understand why Southwest Airlines delivers best services than its competitors. Employees are delighted with the hefty salaries they get from their company and return to company with minimal turnover rate. Organizations are obliged to ensure a secure working environment for their employees. Without having a feel of security, the workers can never devote full attention towards increasing production. It is the style of the leadership that is a source of an inspiration to employees in creating and producing products. This builds corporate image and performance and contributes additively towards growth. When we look at the two successful establishments of Google and Southwest Airlines, we understand how leadership inspired the performance of all those associated with these companies.


This book is a cumulative research into Leadership and Sustainability in an organization. Different chapters cover several different important factors for organizational sustainability.
Leadership for Organization has always been curious topic for me and I use to study the values of this one of the most enlightening group of our society. This was the recent literature I enjoyed reading where I learnt new definitions, styles and strategies associated with the leadership. My personal vision about leadership styles and qualities always evolve from what I read. Style-wise, I have an image of participative, Opportunism, Situational, Transformational. Approach-wise, I conceive it to be a psycho-dynamic. Ethically, I view it as Utilitarian. It is very interesting for me to read about leadership styles and approaches and then see them practically in my own organization of Georgia Pacific (Paper Manufacturing Company).

I never ever assessed my own concept of leadership perspective and style as a part of my academic needs. As I read through the books on this topic during my academic years, I started more deeply examining the perspectives and styles. All of my perceptions are influenced by my own experiences and readings. I learnt many new ideas about leadership in organization and come to some conclusions that I will discuss now.

Day by day we are losing the qualities of self-assessment in our business lives. We feel delight in picturing ourselves by our busyness. I refer the habit of appearing oneself as a busy person as a frenetic short-sightedness. Due to this, managers adopt new behavioral strategies. This leads them to make serious mistakes that cost the organizations heavily.

In our organizations, there is a lack of individuals talent to refine his own sense of purpose and direction in his work. Owners are dominant over working procedures and employees are following the managers who determine their tasks.

When I look to major successful organizations they never struck me with their busyness. They work in group like a family. They start up any project with only aim to get it done. They all are equally involved. They progress, learn and enjoy their work.

Busyness has become a very common trait in the recent times. This can be attributed to the rapid progress and development of the information technology sector. This look busy, do nothing attitude has become a fashion, and people of all ages are now adopting this approach, which is now considered to be dangerous by eminent scientists.

Busyness is a virtue considered very important for business people and organizations aims and purpose. People like to look busy in all instances that will create value and respect for them as a productive individual of a society and organization. People pay so much value of being called a very busy person or looking very busy that even if someone is not busy and thinking about useless things  not important for his business or life, he would pretend to be busy by keeping fingers crossed or gazing at a newspaper or book or computer so that other people would think that hes busy doing an important. This is a common practice now, even at upper level of management to look busy at all times. In business environment, work more and for longer hours becomes an honor for a person that hes very hard-working and productive. Some people even if not doing any useful thing, still wants to, look busy so that they should be considered very important and vital for the business. Some employees would like to be show-off that they are very busy to put good impression on the employer and managers that they are hard working, in order to avoid loosing their job.

It is rather preferred that a more constructive attitude should be adopted, and this busyness should be transformed into doing things that are more practical and benefits the economy of the nation. It has been postulated that the internet age is harmful and facebook, myspace and like websites which have become the in things nowadays, makes one to become addicted and deeply involved in these sites. Youth tend to make virtual friends, ignoring the practical realities which are prevalent. Likewise, the introduction of cell phones and Blackberries, and similar devices are now making a person look busy, so much so, that the work of people is being severely affected. It is depicted that with the positive qualities technologies have, they also come with their drawbacks, and the youth of nowadays tend to be inclined to become deeply involved in virtual messages and feelings.

This has become a psychological disorder in most people, especially those in the upper age group, as they want to develop a sense of feeling important and being wanted, and thus adopt this look busy attitude. It has also been depicted by a many schools of thoughts, that this look busy attitude is adopted because people have been isolated, ignored and severely lack a feeling of being unwanted. Thus, in order to eliminate these negated feelings, and to develop a high self esteem, one tends to wander off into the internet world, or into activities, that passes his or her time, making absolute sure, they do that in front of others so that they could exhibit their busy attitudes explicitly, and thus themselves develop a sense of ecstasy and pleasure and feel good about themselves. Once again, it has been proposed that such people should be groomed and self trained, so that they could generate resources to support themselves, and in turn, contribute constructively for the progressive development of the society, and furthermore, develop a higher self esteem.

Georgia pacific should dig deeper in terms of developing its manpower and introduce vocational programs pertaining to developing its personal towards a proactive approach, focusing the aims and objectives of the company. This could serve a beneficial purpose, as manpower wants to become busy, and wants to become involved in constructive activities. If Georgia Pacific exploits this, and directs personnel in performing activities directly for the profit generation capacities of the industry, it will for sure become a leading paper manufacturing industry and compete with leading global producers.

Primary attention should be paid to SWOT Strength, weaknesses, opportunities and threats by which manpower should be groomed. Georgia pacific should adopt a bottom up approach, and train its lower staff and laborers, as they exist in a larger population, and they are the ones who tend to be idle and need to educate themselves and groom themselves, so that they can become aware of the potentials they have within, and how they could use their energy towards the right proactive direction. However the administrative staff and higher ups should also be provided counseling and recreational activities should be introduced in the company. In this way, a more social approach will be adopted, and by intermingling with others, a healthier environment will be prevalent, and with a positive and targeted approach, they could serve the industry in an improved manner. Strategic planning is the essence of the industrys success and it should be organized in a manner so as to make the staff have high morals and want to work long hours with passion and zest.

Manpower should be accommodating to changes and introduction of new routines in their lives. As much as this sounds difficult, it will definitely serve to be a plus point for Georgia Pacific, as introduction of new schedules, improved ideas, new machines and newer methods will tend to generate increased incomes for the industry, and will groom the staff for the better, so that they are at par with new and improved technologies.

People are often submerged into an unconscious world, and tend to worry about things that are useless and do not serve any purpose, often leading towards a destructive attitude. Georgia Pacific could in turn inculcate a sense of security amongst its manpower, by offering retirement plans, and other incentives, so that they feel secure and confident that they will be rewarded and catered for upon super-nation.  In this way, they will not worry about what is not needed, and their energy is not diluted, and a more focused approach will definitely prove to be beneficial for the industry.
Thus, as the title depicts, common sense is very essential in these economic tough times, where uncommon approaches like being buried in a virtual world, have to be faced. Management has to be vigilant and psychological counseling should be provided at all strata of the company, so that the overall environment is conducive for manpower to serve constructively and effectively. Good leadership implementing good plans and ideas is important for the industry, and proper strategies should be developed for the proactive and positive approach of manpower across the entire organization of the industry.

Strengths of Utilizing IPOs
The use of an IPO by Riordan Company is indeed a prudent consideration in the modern days considering the extent to which the internet has revolutionized modalities of performing businesses. If the company has fulfilled all legal requirements necessary for public listing, like those contained in Sarbanes-Oxley Act, there are several strengths it would have by using an IPO. First, IPOs have a massive potential for generating capital considering that investors are required to buy shares which require minimal financial investment.  Once, the company goes public, the shares traded increases the liquidity of the company since they have a market value and can be exchanged instantly for liquid money (Benton, 2009). This is an advantage to both the investors and the company who may need to dispose their shares to attend to immediate needs. In addition, an IPO would increase the prestige of the virtual company. The process of going public attracts a lot of attention which is good in marketing the name of the company. Also, IPOs improves the companys worth through valuation. The share values are determined by market demands and as such, the virtual company would overcome the limitations associated with private valuation. Also, going public would help the company owners to acquire more wealth since the shares generate revenue for both the company and the shareholders. As long as the shareholders have not disposed the shares, it remains a liquid capital for the company.
Strengths of Acquiring Another Company in the same Industry

One of the most fundamental considerations in business expansion is the need to devise strategies that can effectively tackle competition. By acquiring other companies in the same industry, the virtual company would be able to eliminate competition and instead focus on increasing sales volume to the consolidated market. Also, the companies would pull together their operational capital and resources which can be utilized in implementing growth strategies such as looking for new markets (BNET, 2009). In addition, the pooling together of human resources from the two companies increases the innovation base which may help the companies to diversify to new products which may effectively address the tastes and preferences of customers. Also, acquiring another company in the same industry would increase the pricing power for the supply chain. For instance, a company that acquires one of its suppliers is able to benefit directly from the profit margins that the supplier was adding to the costs. This way, the company can be able to reduce its production costs and transfer the better prices to customers which would help give the business a competitive advantage over its competitors.

Strengths of Mergers
The virtual company can adopt a merger strategy with a company which offers a complementary service to itself.  One of the fundamental strength associated with mergers is the increase of synergy in the business. Mergers are able to pool different resources, both physical and human, towards achieving a similar objective. This helps in increasing performance through a pooled workmanship and also reduces costs by taking advantage of diversified profit margins (BNET, 2009). In addition, merging may help the company to distribute its risks from one industry to the other. For instance, if an electronic company merges with a telecommunications company, the company would be able to tap the advantages of both low and high seasons in both industries. Also, mergers would help the companies in product diversification. For instance, merging two brands of a product and selling them under the same company would ensure that customers find different and diversified products in the same companies.  This would ensure that the company effectively caters for the requirement of new products by customers which is essential for their retention. In addition, mergers promote growth through the consolidation of capital as well as overshadowing their competitors efforts which helps in reducing competition.

Simmons embarks upon democratic leadership that is signified by participative decision making, confidence and trust in sub-ordinates and believing in Theory Y.

His open-door policy makes him accessible to his employees anytime. This musters continual interaction and exchange of ideas and information amongst Simmons and his employees which promotes participative decision making. His trust and confidence in his sub-ordinates is reflected by the responsibility given to them in handling his business operations. Connecting with everyone adds up to the traits that qualify him as a Theory Y manager where employees seek responsibility and are committed to achieve organizational objectives.
Identify several of Simmonss leadership characteristics.
The few leadership characteristics demonstrated by Simmons are
Dynamic and Energetic Simmons conducts his operations very fast paced signified from him talking on the phone most of the time while constantly replying to his messages on Motorola. His interest in small business activities such as the number of buttons to be placed on Phat farm suit, communicating with each of his employees makes him an active and a dynamic leader. 

Skilled communicator and marketer His promotional techniques in marketing his products during his television and radio interviews, amongst school going children, fund raiser programs and protest rallies qualifies him as an excellent social marketer and skilled communicator.

Flexibility and openness His flexibility in opening, selling and closing his ventures according to its success and the openness to new business ideas incorporates the visionary approach that Simmons possesses.

Do the right thing Building a US 300 million empire provides evidence to Simmons intuition and risk taking ability in doing the right thing which is one of significant traits of a successful leader.

Many of the general characteristics that are exemplified by innovative leaders are their creative style, visionary spirit, risk-taking capabilities, ability to create problems into opportunities and their motivation in seeking new possibilities. Russell Simmons possesses all of these traits resulting in him becoming the fourth richest figure in the hip-hop industry (Panache).

His has built his career by turning a possibility into a huge marketable product.  He identified the impact of hip-hop culture in youth and created successful businesses that include Def Jam, a hip-hop label and Phat Farm, a clothing line. His risk-taking ability and intuition in identifying this huge market made him the pioneer in this business. Moreover, Russell Simmons is continuously learning and striving for new opportunities which can be personified by having various product lines such as prepaid debit cards Rush Visa Card, energy drink DefCon3, and limited-edition Motorola cell phones with his design and name. All these characteristics add up to make Russell Simmons an innovational leader.

When Marks and Spencer encountered a succession crossroad as outgoing chairman Lord Burns apparently did not have any clear successor, the company would face a critical corporate governance issue.  A set of explanations as to why Marks and Spencer allowed Sir Rose in this position was officially released through a letter to the shareholders by Lord Burns dated 3 April 2008  Burns mentioned the changes that took place in Marks and Spencer, particularly in the structure and leadership.  He also admitted that the retail environment in 2007 had been a challenge, and that Sir Roses leadership was still needed.  Sir Roses appointment as both CEO and Executive Chairman was just an exemption to how things are normally run until Sir Rose leaves the company in 2011 for retirement.

    An assumption is that Sir Rose pressured the Board for the appointment this is to say that since there was no clear Executive Chairman, Rose saw himself fit for the role.  And in a sense, the Board agreed.  Sir Rose played a significant role in keeping the company afloat during the hardships of the industry, especially his engineering the dramatic improvement in the retailers performance from 2004 (Jacovitz, 2008).  What could also lead to this decision was to keep Sir Rose happy, and it was a way for the company to keep him after the expiration of his contract in 2009.  The Board decided to keep him and cited the Combined Code as a means to maintain its agenda.

Sir Stuart Rose had been the Chief Executive Officer of Marks and Spencer, and with the companys challenges, it seemed that Sir Rose would prove to be indispensable to the firm.  His appointment as Executive Chairman, in addition to his being CEO, was met with criticisms from Marks and Spencers shareholders.  Leading the opposition was Legal and General (LG)  which held 4.35 of MS shares L  G expressed that the assignment of Sir Rose for this dual role does not comply with the corporate governance approach in the UK which clearly stated that the function of the Chief Executive Officer and Chairman would be separate (Financial Reporting Council, 2006).  Consequences have evidently led to shareholders and the industry questioning the real intention of the appointment, thus, putting Marks and Spencer in the ethical spotlight.  This decision would therefore create a controversy that will hang above the companys heads until Sir Rose steps down.  Recently, a sense of relief took place when Sir Rose and the company had announced the recent appointment of a new Chief Executive starting 2010, Marc Bolland (Steiner, 2009).

Task 2
    Based on Lord Burns explanation, Sir Roses appointment was due to the Boards belief that he would be the best person to lead the company for a defined period of time.  Sir Roses performance in the company was seen in Marks and Spencer as a sign of commendable leadership, especially as he was responsible for the companys turnaround (Steiner, 2009).

    The main problem with this arrangement is that the appointment challenges the main idea of checks and balances in the corporate setting.  Evidently, the main actors in the decision to put Rose in the position would have considered this matter it is at least expected for Marks and Spencer to owe its shareholders and the public an explanation.  Corporate governance prevails in any corporate entity as a means to ensure that the company applies the best practices in operation, function and management.  According to Colley, et al. (2005), due to the past lessons from corporations, corporate governance has become a public expectation thus stepping beyond the legal framework of corporate function and compliance.  This therefore shows that corporate governance has become an ethical measure (Colley, et al., 2003). 

    There is also the case of differentiating between ownership and control. Corporations, in essence, are legal entities although it enables trade, transaction and commerce, it functions according to a set of legal frameworks.  This is especially important as corporations are also defined in terms of ownership and control, thus, highlighting the aspect of resources (as provided by shareholders) and accountability as to the best utilisation of these resources (as provided by management) (Blair, 1995).  Sir Roses appointment as Executive Chairman, in addition to his role as CEO which is stated in his contract, combines both ownership and control.  What makes this culpable is the concentration of power under one individual, thus, defeating the purpose of establishing sound corporate governance.  The question is whether this convergence of power and position is functional or was just merely a formality to retain Sir Rose.

    Another culpable decision was Sir Roses investment in a venture by a non-executive MS director, Martha Lane-Fox.  Sir Rose, which represents both the interests of the management and the shareholders through his position, can further the conflict of interest with this decision.  Because of this relationship, itll be hard to establish Ms. Lane-Foxs independent voice in the boardroom.  This can be therefore detrimental to Marks and Spencer, especially in the interests of the shareholders.




Task 3
    The explosion of BPs operations in Texas City caused 15 deaths and numerous injuries for its workers.  In an investigation called the Baker Report, it was found that the explosion has been due to technical shortcomings that would lead to the culmination of the incident.  In fact, it was noted that the Texas City operations was an explosion waiting to happen operating a 50 year-old kit would prove to be hazardous, in addition to the fact that the workers lacked the training and equipment to prevent such incident.  Based on this, the following are the governance standards of BP that would lead to these kinds of accidents

The executive managers role in determining appropriate budget allocations - although it is important for firms to become efficient and mind its expenses, there are certain areas that are not acceptable when it comes to these cost-cutting measures.  It was found that BPs chief executive, Lord Browne of Madingly, ordered a 25 cut on fixed spending.  Safety measures are part of capital spending, and fixed costs have to be consistent in order to ensure that the companys operations are maintained and consistent.  With the capital spending decreasing to 54 between 1992 and 2000, and fixed costs falling by about 50, the tendency is that maintenance spending was reduced as well.  Because of this, the company had jeopardised its operations.

The lesser power and influence of audit reports - Clearly, the executive managers hold the reins when it comes to determining the budget of the operations.   Audit reports are written up in order for the executive managers to determine budget allocations, but since audit reports are not given as much consideration when it comes to the pressing concerns in the company, critical decisions do not take these reports as prime references.  The audit reports should therefore serve as a significant source when it comes to operational and budget decisions, especially as this can be cross-referenced to occupational safety reports and recommendations, and the budget.

Decentralised operations - although there are the merits of this operational approach, the challenge is that in BPs case, the safety measures are not implemented according to a centralised set of standards.  This is to say that operational efficiency had compromised the safety measures of the company because it seems that the operations function independently, thus, their needs do not gain as much attention in headquarters.

Task 4
    The justification of the decisions in BP to cut costs and to generally let its Texas operations go in decline can be primarily pointed at the fact that Texas was formerly owned by Amoco.  As BP took over Amoco, the company also inherited the conditions of the Texas operations.  In a sense, this gave BP a means to save because Amoco itself also operated Texas under a tight financial leash.  Therefore, BP also continued Amocos operational and financial strategy in Texas which would lead to oversights such as investing in essentials such as safety maintenance.

    BPs side on the matter was more technical this is to say that the company blamed operator error which would lead to the firing of six employees (Schorn, 2006).  Basically, based on the investigation, it can be said that it was an error committed that particular day when the Texas City operation was about to restart a unit that suspended operations because of repairs.  What happened was the tower overflowed, and those who operated the unit were not aware of this incident, thus leading to the explosion. 

    BPs blame on the operators and those cited to be responsible for the explosion demonstrates how the company has failed to see the real problem in the incident.  Evidently, there was a domino effect in place the reason behind the technical error was that the employees lacked the training to effectively operate the unit, especially a unit that had been down for repairs.  The unit also was not armed with the proper equipment that would help in its operations and function.  In addition, BP had been warned of the conditions of the Texas plant as Amoco left it with little maintenance and care, it was BPs responsibility to make sure that its new, old plant would be at par with its safety standards.  Evidently, as the Telos Report would reveal, BPs own occupational health and safety standards were not modified enough after another prior BP blast in

Grangemouth, another BP refinery in Scotland.
    What is interesting is that the Telos Report showed that even though BP had sufficient data in its possession as to the conditions of its refineries, its employees were not shocked at all.  This is to say that there was the acceptable culture as to the hazards of being a player in the oil and gas industry, in addition to the companys lack of regard to the pressing safety measures it should implement.  This shows how BPs lack of consideration towards the welfare of its employees is that BPs own safety culture is almost non-existent, and that the occupational health and safety practices in the firm were just mere compliance.  The company focused more on market capitalisation instead of capitalising in its own efficient and safe operations.

Task 5
    Based on the Marks and Spencer and BP cases, it can be observed that these two firms demonstrated priorities that do not necessarily align with the interests of its shareholders and the public its own corporate and profitability interests.  Both companies went through challenges in which they had to make critical decisions that would either serve profit or employees well.  As can be seen in the case, the priority has been to maintain profit and politics to the detriment of the shareholders and the people.

    Marks and Spencers case can be regarded to be more political the company could not let go of Sir Stuart Rose because of his performance in the company.  By contract, his position would leave Marks and Spencer lacking another veteran leader about a year after its Executive Chairman, Lord Burns, left in 2008.  The reasoning behind Sir Roses appointment has been mostly based on what the Board felt right for the company, which was justified by means of structural and leadership changes in the company.  Apparently, the problem here is not so much on Sir Roses capability to lead as Executive Chairman, but rather, the appointment would lead to the concentration of power which conflicts with the best practices in corporate governance.  There is the important purpose of separating control and ownership in the corporate setting, and this is to ensure the checks and balances between the two. 

    In this case, what would make this particular case a lesson for MS  Apparently, criticism would weigh significantly for the company.  Influential shareholders like LG are not going to let this issue pass easily.  For a time, MS would be subject to scrutiny in terms of its public standing the public has been made aware of the perks that came with Sir Roses appointment, and shareholders also played into controlling what Sir Rose would get. 

    The public also played significantly into the BP case.  Evidently, sympathy went to the victims, and despite BPs defence, they were already at the losing end as expositions would lead to the company having a lesser grasp on its justifications.  The law played into BPs case in addition to public outcry.  Regulations did not have to change but rather the implementation became stronger.

    As can be seen in these two cases, there are the main factors that can strongly influence ethical compliance and practice in corporations the public and the watchdogs which can come in the form of consumer protection agencies, the law, and other players in the industry.  In order for companies to keep watch of its own behaviour, it is important for them to understand that transparency is a requirement, and that their every move is being watched.  Virtue is a personal matter, but in the corporate setting, an individual does not usually prevail.  The chosen leadership is considered as the one who puts the companys interests first, and that primary interest is usually for profit.  Virtue can come in the form of an internal auditor, and a redefined and strongly implemented corporate ethics practice and process however, in the end, the influence comes more strongly from the outside, by legislation, regulation, industry standards and the public.