Although the objective of the firm is to maximize the wealth and values of its shareholders, including the owners, employees, suppliers, and communities, at the same time, its managers must apply moral management, and practice business ethics or the standards of conduct and ethical judgment.  Gitman (2009) argues “violations of these standards in finance involve a variety of actions: [creative accounting,] earnings management, misleading financial forecasts, insider trading, fraud, excessive executive compensation, options backdating, bribery, and kickbacks” (p.18). In the cases of Tyco, Fannie Mae, and Enron, or AIG and the major banks in the Wall Street, or in London in recent financial crisis, their common issues were largely because of poor or immoral management that many of their goals were to “hit the numbers.”  

     The executives liable for the near crash of Royal Bank of Scotland Group PLC (RBS) and HBOS PLC last Tuesday apologized for their deficient and inferior management in this financial disaster that needed taxpayers and government bailout in history (Deen and Hutton, 2009). When questioned why they were considering paying bonuses to employee for 2008 with public money, Tom McKillop, RBS’s former chairman argues, “the U.K. banking industry had [a lot of angst] about the pay culture, which he said was imported from the Wall Street in the U.S.” (Deen & Hutton, p.1).  For RBS’s $93 billion purchase of ABN Amro Holding NV, a Dutch bank, in 2007 of the subprime crisis, it was a totally bad decision and too much “hitting the numbers.” The most brilliant people and banking specialist with the highest pay in the financial industry seem little help or less bearing in this crisis that at the end needs the general public to rescue. Instead of “hitting the numbers,” managers should consider keeping the quality, improving the cost effective and efficient, or advancing customer service and management excellence as their main objectives and goals of the organizations.

References

Cornett, B. (2007). Subprime mortgage crisis explained. Retrieved

       February 13, 2009, from http://www.homebuying institute.com/homebuyingtips

       /2007/12

Deen, M. & Hutton, R. (2009). U.K. bank executives apologize for credit crisis.


       RetrievedFebruary 13, 2009, from http://www.bloomberg.com/apps/news

Gitman, L. (2009). Principles of managerial finance (12th edition). Boston, MA:
       Prentice-Hall.  

     In my study of Japanese domestic company, the organizational structure of Japanese business has its own set of belief and value system that has a different approach compared with Western structure. Under the Confucianism (that follow the idea and inspiration of Confucius, the Chinese philosopher and teacher from 551- 479 BC), the top leader, owner, or manager of an organization has a duty, or owes a certain degree of protection to the workers (OSB, 2008). In tradition, the management (or the master) has an obligation or responsibility to take care the welfare of his employees --like a team and not based on the notion of individualism. They may question or doubt their leadership skills or initial business planning, and believe the value of each individual and networking. In response, the employees are very loyal to the firm, in some cases; they would like to help out and work longer hours, or accept transfer to other undesirable branches or cities. "Hitting the numbers" may not always benefit the objectives of an organization.

Reference

Organization structure of business (OSB). (2009). Retrieved February 14, 2009

 From http://iml.jou.ufl.edu/project/Spring01/Newsome/structure.html