In a nut shell, according to the discussion that have been discussed before about the risk management of takaful industry and how to faced it in order to avoid the loss in the industry, the takaful operators should know the current challenges similarly with the future. According to Waheed Akhter (2010), there is a few challenges in managing the risk toward takaful industry. A part of that is the challenge in facing the internal control. Based on Basel Committee and IAIS internal controls are very crucial in identifying risk toward financial institution. While, the insufficiency of an effective corporate governance framework restrained the independence of board of directors (BOD) also give the impact in risk management and poses a challenge to it.
Corporate governance arise whenever a company’s ownership separates from management, because managers, as Adam Smith mentioned in his “ The Wealth of Nations”, can not well expected to watch over shareholders interests as serious as over their own. As such, the board is introduced to make sure the management works on the best interests of the company in the long run by monitoring and regulating managers’ performance on behalf of shareholders. If the board does not response or only wants to be pacifist in case the management does wrong, the shareholders’ interests will be inevitably damaged as what happened in Loewen’s case. There are some examples we can take from Loewen’s to demonstrate how the management fails to fulfill its commitment to the shareholders: • Used improper accounting practice Loewen used an improper accounting practice to book its pre-need sales. After the customers made a down payment, Loewen started to recognize the customers’ purch... ... middle of paper ... ...hairman and CEO, who may have his own interests other than other shareholders.
Issues in Rapid Packaging Services Many people in the marketing realm disagree on the purpose of business ethics with some arguing that the main purpose of any business is profit maximization to the owner/shareholders. Others suggest that own interest would require business to observe law and basic moral responsibility because the implication of failing to do that would be expensive to the company in terms of fines and loss of company reputation. In addition, any business should have moral responsibilities both to those that are affected by the business directly such as stakeholders and indirectly such as state government (Amstrong &Evert, 1991). In business field, oft... ... middle of paper ... ... C. and Charlotte B. B.
There are several detriments to each method used today, one severe downside the Comply-or-Explain approach is that disciplinary action is not taken when a firm does not comply and fails because of that non-compliance. This was witnessed in the economic downturn in 2002, firms that were not in compliance experienced harsh economic conditions than those that did not. The composition of the Board of Directors is a vital component of every corporate governance system, but yet it is only recommended in the principles method that the majo... ... middle of paper ... ...es. With the principles- approach there is a need for a more watchdog like governmental body, one that can impose penalties if a corporation does not comply or explain. While only a little over half of Germany based firms follow this approach where in the United Kingdom there is even less, it is important that these firms that do not follow explain why, they might even have a better approach to the principles they are not following.
Basic Justification Since an accounting system is already in place in Rendell, change may not be easily accepted by the concerned divisions. Such changes may cause a dysfunction in the organizational structure since making division controllers report directly to corporate controller might cause destabilization in the structure of authority in the divisions. Loyalty issues may also arise because division managers may feel by-passed or spied-upon which may cause more problems in the long run. Thus, more importance should be given in preserving the power structure in each division. It is better that the company face the problem of having fats in the expense budget rather than give up order in each division and jeopardize the established line of authority.
What if you disagree with how they manage businesses? Multinational corporations could be tricky, and at times difficult to understand, but as a manager of international trade people are constantly faced by these types of questions. They need to have the skills to be able to put their own feelings aside to better help the other countries needs and be able to address these situations in any
Business Ethics The statement has been made that "ethics has no place in business" and the implications of this statement and its inferring characteristics provide a complex issue in the operation of national and multinational corporations. Because ethical decision making is often not as profitable as choices that do not embrace ethical elements, the perspective has emerged that the nature of an effective business mindset inherently brings about unethical behavior. In order to consider this statement and its implications, it is necessary to recognize the ethical decision-making processes of a number of companies, and reflect upon the fiscal, organizational and operational implications of ethical choices and then relate this process to the perceived outcomes if the opposite choices were made. As an element of this evaluation, it is also necessary to consider the nature of morality and the progression of moral underpinnings for business operations and the implications as companies expand into multinational arenas. Ethics can be described as: "the activity of examining one's moral standards or the moral standards of a society, and asking how these standards apply to our lives" (11).
Nevertheless, international companies face specific difficulties and requirements and above those operating only in local market. The first situation we were given to c... ... middle of paper ... ...ies to accord with the bounds of justice" (Megan 2006). More and more corporations carry out international operations as a routine of their everyday functioning. However, the situation is complicated by the differences in cultural values and behavior. To hold its goodwill and reputation a company must follow business ethics principles.
First of all, different audit engagement teams use different methods to evaluate the company’s business and financial situations. New auditors could have new viewpoints and identify potential problems about the company’s financial statements. Second, if the auditor understand his or her work will be reviewed by following auditors, he or she may be more critical to do their work. Audit firm rotation is also a method to help auditors refuse the pressure from the company’s management. However, we think mandatory audit firm rotation is not an effective method to improve audit quality.
The cause of this is because of their differing cultures. In order for their business to work efficiently both Chinese and American workers must find the right balance between the two cultures. For instance, Chinese cultures suggest harmony in everything including business. Sudden change is seen as dangerous to them whereas Americans are use to the hustle and bustle of everyday business techniques. Another differences in business ethics between China and the U.S. include: relationships, touch, subtleness and many more differences.