Inside the Bank that ran out of money

For this weeks blog I had to watch a documentary about the 2008 crisis when the royal bank of Scotland nearly came to a collapse. RBS managed to loose a record corporate loss of 24.1 billion pounds, this damaged the reputation of the well respected bank and the trustworthy financial industry Scotland had as a whole.

It started when the very stubborn Fred Goodwin didn't comply with  'risk management' and bought into a lot of companies that failed loosing billions of pounds. I believe he was too over confident and the power of CEO went to his head, just because he was very successful in the past for many years it shows the swings and round about the financial market can have.
His biggest mistake was not investigating into ABM AMRO's (This was, at the time, the largest rights issue in British corporate history) financial state, this amazed me as Fred Goodwin was recognised for being thorough, good credit record and reducing as much risk as he could with any investment, did he just not care as much anymore and rely on his experience in the market? RBS invested 10 billion pounds into a company they knew little about, for me this is madness with extremely high risk which isn't what shareholders like to hear, some argue 'prefers size over shareholder value'. Once they secured this deal they paid in cash leaving them very vulnerable to any problems that may occur, which of course they did.

Its hard to say how this may affect me? I feel as if I'm a sympathetic person and I really feel for those hard working people who put away their money into these banks as small investment or just an icer to keep them secure. When someone like Fred Goodwin and his egotistic investments puts peoples money on the line with very high risk which of course backfired and made a loss of £24.1 billion it makes me think how he can sleep at night?

This documentary shows two sides of the spectrum, RBS splashing the cash and owning the title as one of the worlds biggest banks. It shows the success RBS made over many years and how much there profits grew. But it also shows how one big mistake can cause the crash of profits and rise in debt. When dealing with such large investments of billions of pounds, you must be 100% sure that there's least risk as possible and it should return profits, RBS did not do this and unfortanely lost billions of ounds. Hopefully they learn from mistakes and nothing like this happens again in the future.

Blog 8 - Olympus 1.7 Billion Dollar Fraud

In this weeks blog I watched a documentary recommended by my university called the 'Olympus 1.7 Billion Dollar Fraud' about a mystifying corporate scandal in Japan that made news worldwide. As a brief summary, Olympus was a huge multi million dollar technology company in Japan and were exposed for fraud for 1.7 billion dollars. There was two heads of the company - Michael Woodford the president and Kikukawa the CEO who had very different loyalties and views.

Apparently irregular payments for acquisitions had resulted in very significant amounts of money in the company's accounts, which was then exposed in an article in the Japanese financial magazine FACTA and had come to Woodford's attention.

Kikukawa would lay very subtle hints to Woodford that he was boss and in charge. For example at a board meeting all executives received a full meal of sushi and Woodford received a tuna sandwich. What this implies to me is that even though woodford was high up in the chain of command within the company he was not respected and treat as equally as others, maybe because he was the only British person in this Japanese organisation  or he just had different views on how a company should be ran. It shows he is down the pecking order when it comes to the food chain and respect of other colleagues. Woodford felt out of place and as if something weird was going on. I believe equality in the workplace is vey important as it creates a nice working environment and no bad relationships with colleagues allowing them to work to there full potential.
The suspicions in fraud started when there was 3 payments of $700 million and Woodford did not understand the reason why these companies were bought. Fellow colleagues were sheepish to explain to Michael the reasons why, it became apparent to him there was something not right. I feel disappointed that in todays workplace people use there power to over rule unfairly and I feel like they have ganged up on Woodford even though he has a prestigious position in the company to not tell him what's going on maybe on his race or the fact he has loyalties and not corrupt as they know he would show them for what they are.
Woodford came to the decision to resign and go public to expose Olympus for there corruptness. He was worried for his safety as people have been killed for a lot less as he held the documents that showed evidence off this fraud. He met with a journalist he knew so he could reveal the documents and make this story to go public. I personally feel this is the correct way to approach this situation as his safety will be secured and he can now tackle this situation in a legal and professional manner to help bring Kakukawa and everyone involved down and to be prosecuted.
This story went worldwide and was the hot topic of every media institution around the world, this portrayed the Japanese business market to be corrupt and raised a lot of alarm bells. There was one country with very little media coverage - which was Japan itself. My thoughts on this are that a Japan didn't want to put there business market in a bad light and brushed it under the carpet, this makes me feel uneasy as it shows the power the media has in portrayal and how they want the public to perceive things, brainwashing comes to mind...
In the end the company were exposed, it stated they were concealing for losses in previous years due to the Wall Street crash and the change in inflation rates. This fraud landed Kakukawa with a 3 year sentence. From my point of view it's clear Olympus ruled out any ethical and legal implications and to reduce the risk of this happening in the future I believe the education of finance and laws should be drilled into people so they understand the legal implications behind money and finance and how much of an effect it can have on peoples lives.
A future ambition of mine is to be involved in finance and business investing and this proves to me how important it is to be legal, ethical and professional as it is such a serious matter in the world of today.

General Leadership and Management Movies : Sir Alex Ferguson Secrets to Sucess

Sir Alex Ferguson is regarded by many players, managers and analysts to be one of the greatest and most successful managers of all time. So it's very clear he has excellent leadership and management skills. At the start of this documentary Ryan Giggs mentions Fergusons 'relentless need for success and his desire to do better', this is an aspect of a great leader as he is always trying to do better than he has before and feels he hasn't accomplished anything until he is successful and will always do his best.

The question asked at the London school of business is 'What does it take to be a great leader?' where Sir Alex Ferguson answered and explained his reasons to being a great leader. His first answer was 'Assert control and expose discipline': In my opinion discipline is essential to achieve any objective otherwise anarchy would break out and become impossible to manage. He explains that little things such as uniform and behaving yourself off the pitch were just as important as anything else as everything contributes. He ensures equality is important which i think is key within any organisation whether it be a business or a football team because everyone should be treat as fair as each other but some people treat differently based on there personality as he knew he could get the potential out of everyone in the long term.
Making tough decisions is very important for being a good leader. in Sir Alex Fergusons case it was buying and selling players, for example he sold Roy Keane one of Man United's best as he disrespected the club. This showed nobody was bigger than the club and I believe this made everyone feel scared and threatened and kept on their toes.

Morrett one of the worlds most successful business men who invested in Apple, PayPal and Google backed sir Alex as he knew he was different and had an eye for business not just football. He saw Sir Alex's leadership skills were universal. It's clear to me he must be one of the best leaderships if he is in the same categories as these.
Sir Alex says he loves lecturing young entrepreneurs on leadership skills. I find this very aspiring, once I finish my degree I want to be a young entrepreneur and the thought of have someone as successful as Sir Alex telling me experiences and the best advice on how to be a leader really gives me the drive and ambition to follow my dreams.
Sir Alex believes giving job recognition and being sociable with everybody throughout Manchester United from the pitch to the dinner lady's was very important as it helped build a strong club and a family orientated feeling about it. I believe this helped him gain trust and could impact on everyone if he wanted as it shows he takes an interest and cares about everyone at the club. Last year when I worked at Morrisons and my manager used to say well done or nice work it made me feel appreciated and motivate me to maintain this standard.
Sir Alex's states to be a successful leader you must be able to challenge the existing culture and change it to adapt to the new way that it should operate for it to be successful. I believe this must be quite difficult to do as people may disagree with you and cause conflict but you must grind through it and prove the positive results in the end to show why you made these changes. This is very important for me to keep in mind if I ever come across a similar situation in the future I must follow what I believe in and not be influenced by anyone else.

Personally, I believe the most important assets of a leader are-
Passion - An effective leader is a person with a passion for a cause that is larger than they are
Control, Motivation and team work were also crucial to Fergusons success. I believe Motivation is important because it provides the drive for people to accomplish their goals, maintain their responsibilities or solve problems. Also a team that works well together understands the strengths and weaknesses of each team member and in terms of football this is very important.

Blog 6 : How business can put women in the boardroom

In todays day and age we are seeing more and more powerful women in the business and mainly political industry, for example 'Theresa May as UK prime minister, Hillary Clinton running for the US presidency, Angela Merkel as German chancellor: more and more'. It's clear political positions are being taken but unfortunately executive roles in business rent quite the same. Female representation in business is a very big thing for me because I agree with equality in the work place and that everyone should have the same chance based on their skills and assets, not their gender.

One thing that tarnishes the representation of women in the work place is the media as in recent years they have been portrayed as housewives and reliant on their man when this simply isn't the case. "There has been progress: in the past five years, the number of women on the boards of the FTSE 100 top UK quoted companies has more than doubled to nearly 27 per cent. But this is not good enough; for women to truly be represented in business they need to be in the most senior executive positions." so it's clear that the number of women are rising to the more executive positions. I believe this is excellent as for one it creates a gender equality but it brings a more diverse working environment working within company's. Men and also myself are categorized as egotistic, alpha male and not always thoroughly thinking about decisions made. In comparison with women who are known to be more organized, level headed and take a slightly more cautious approach when completing tasks set for them, proving that they are suitable for the workplace.


Unfortunately women receive fewer opportunity at shots at senior roles; often facing discrimination if they want children; and, even when they are happy in work, in many cases earning less than men doing the same work. I find this an absolute disgrace and it really upsets for someone is has been brought up in a modern where discrimination is at it's all time low, so to read that a human being is paid for doing the same job based on there gender shocks me and I cant help but feel as if we are going back in time...

In conclusion to this article its very clear to me that having women on boards is not just good for women; it is good for business and shows these sexist bigots who believe only men can be executives to come to the reality that it's 2016 and everyone has different skills that work effectively. Even though women in the world of business is rising it's not quite where I would like it to be, woman need support and given as many opportunity as they can to help progress  in there career, if I ever became a manager of a business I would not discriminate against women I would encourage them to be powerful leaders and work they're way up the business.