Global Economic Meltdown Of 2008

Ethics can be addressed within financial performance in stating how companies remain consistent by implementing corporate social performance and how recent trends can impact the result. In the book ‘A Study of the Link Between a Corporation’s Financial Performance and its Commitment to Ethics’ presents the latest trends companies implement in an ethical approach. “26.8% of US 500 largest corporations commit to ethical behaviour towards their stakeholders or emphasise compliance with their code of conduct.”(Verschoor 1997 p.1509) Although, a small proportion of major companies in US apply ethics, demonstrates that this is considered to be a significant factor through financial

2008 Global Financial Crisis was followed by the crash of the U.S. subprime mortgage security market. To illustrate the subprime mortgage security market with an example, considered the bank have only 100 dollars, and the bank lend this money to person A on an insets rate of 8% for him to buy a house without having his pledge. However, the bank want to lower the risk and have another 100 dollars to spend. So the bank sell person B a 100 dollars security bond that has a 5% interest rate. In other words, person B would has a security because even if the bank don’t have any money in the future, the bank still can pay back person B with the debt of person A. Therefore, the bank have another 100 dollars to lend to another person to repeat the cycle.

(Panza & Potthast, n.d.) Ethics is very important to a company’s success. Ethical behavior can bring benefits to a business. They can attract customers, which can lead to a boost in sales and profits. It can attract the right employees and increase productivity. It can also attract investors and keep the company’s share price high. Unethical behavior on the other hand can damage a company’s reputation and make it less appealing to stakeholders. It could also result in lower profits.

The financial crisis of 2008 has affected all of us. For most of us, it was a decrease in our assets and wealth which over the period of time can be rebuilt. There were some of us who lost their jobs and have to start anew looking for work, or finding second jobs. For those of us who have reached the age of forty and above, this can be difficult and moreover, taxing and tiring. First and foremost, our bodies are not as young and vibrant as they used to be twenty years ago. Nature has a way of telling our Human Growth Hormones to take it slow and so HGH does.

Although due to 2007-2008 market meltdown leads to the stock market devastating and housing crisis, Obama still took some reforms to rescue American economy. Obama ended the 2008 American market meltdown and took some effective measures such as cut taxes, extended unemployment benefits, and funded public works projects. The recession ended in July when GDP growth turned positive. In just seven months, the American Recovery and Reinvestment Act pumped $241.9 billion into the economy. That increased the growth to a robust 3.9 percentage rate by early 2010. Despite faced to many challenges, Obama accomplished many great things.

This article supports all the training and courses that I have taken reaffirming that ethics and making ethical decisions is extremely important. At any given time, a company’s productivity and profitability are greatly influenced by ethical decisions its managers and employees make on a daily basis. To most companies its reputation is its greatest asset and once stained, it is hard to bounce back. A prime example is Enron. Enron is still in business today but is haunted by the unethical decisions it made over 10 years ago.

So, the economic crisis in 2008 became the global economic crisis and influenced international businesses. Economic activities were weakened, people lost their jobs, wages and benefits were reduced and unemployment was rising. As far as the US government wanted to keep US economy going they reduced already low interest-rates and slowed down economic growth. US bank losses were forecast to hit $1 trillion and European bank losses will reach $1.6 trillion. The International Monetary Fund (IMF) estimated that US banks were about 60% through their losses, but British and eurozone banks only 40%. (Lost Spaces, 2009).

Ethics involve an individual's moral judgments concerning what is right and/or wrong. Individuals or groups of people are responsible for making decisions in an organization (shaw, 2008). Decisions within the organization are always emanate from the company's culture. However, the decision to act ethically and morally requires an individual judgment. Thus, members of staff are obligated to make decisions that reflect their right course of action (shaw, 2008). This involves rejecting the option that could lead to the greatest short-term gain. The leadership of most organizations stresses the need to adopt ethical behaviors and corporate social responsibility. Ethical dealings can earn the organization various benefits. For instance, it may attract more clients to the business thus boosting sales; employees could be motivated to stay longer in the organization thereby reducing recruitment expenditures. Ethical behaviors could also earn the business a favorable reputation that could attract investors. Categorically, a lack of social responsibility or unethical behavior may hurt the firm's reputation and scare away investors. Sales and profits could fall in the process.

The economic crisis of 2008 was one for the ages, it changed the world of investing forever. That year, the stock market crashed, bank failures and the infamous wall street bailout that can all be traced back to the subprime mortgage crisis.. The 2008 economic crisis rocked the global economy for the worst, and to this day the United States is trying to recover from the impact that the crisis had.

The global financial crisis of 2008-09 that spread contagiously across the globe has particularly hit the European economies hard, accentuating turmoil in the world financial markets and precipitating the European sovereign debt crisis almost instantaneously. This has consequently wiped away all of the EU’s accomplishments in economic growth and job creation (European Commission, 2010a:3). Statistics published subsequently exposed the magnitude of the crisis: real GDP contracted by 4%, unemployment soared at an unprecedented level, public finances deteriorated, and social cohesion in the EU has fragmented (Eurostat, 2010). The crisis has also exposed the fundamental weakness of the Union, especially in the face of new challenges from emerging market competition, an ageing population, and depletion of resources. Therefore, the Europe 2020 strategy adopted by the European Commission in 2010 introduces a new growth model for the EU to respond to the various challenges mentioned above, particularly the global financial crisis. (European Commission, 2010a:5).

The recent economic crisis of 2008-2009 that started in United States of America rapidly spread around the world due to the integration of the financial markets and the simplicity for investors to move throughout such markets. Therefore, countries had to deal with the economic effects of said crisis from a macroeconomic and regulatory perspective .

The world economic crisis of 2008 was the worst global crisis after the great recession of 1929-30. The most affected economies from the crisis are western European countries. The economic crisis sub sequentially lowers the growth rate of the economies. A large number of American companies incurred heavy losses and it declines in the gross domestic product widely known as GDP of the country. China plays a significant role during the economic crises (Lardy & Subramanian, 2012). China was full of financial funds and reserves when the other economies were down falling due to the economic crisis. The world economic downturn of 2008-09 emerged as an opportunity for china to gain sustainable growth and

Economic growth is mostly stagnated and has been since the global financial collapse of 2008. This collapse led people into different avenues of providing financially for their families and themselves, mostly due to the loss of jobs. In addition to that, people had surrendered to the idea that their financial futures would be threatened and that there is not secure job as that is a paradigm of the past. It appeared that the only viable option would be to start a business of their own. In an effort to minimize expenses most of the businesses that these people, who are known as entrepreneurs, are starting businesses in their own homes.

In today’s world of business the role of leadership team has been to integrate sustainable business practices into the organisations and ethics are key agenda items (Smart et al., 2010).Businesses can be tempted to make short-term gains by turning a blind eye to ethics that will lead to the loss of reputation (Barman et al.,2010). Thierry Pilenko said that “It is in the power of the leaders, stakeholders and employees to make sure that the ethics are the core values in order to maintain good reputation”. The ethics and the social responsibility are cooperative and a company that acknowledges the importance of sustaining the environment and the people involved makes good profit (Drotskie,2014,chap.5,p.92).The businesses that turned blind eye to ethics have faced the consequences of losing their reputation and remuneration, for example American gas Organisation took unethical decisions that left them being bankrupt (Drotskie,2014,chap.5,p.92).Makgoba stated that South Africa has ethical dilemmas that results to the level of distrust for the government.

The 2007 collapse of the U.S. housing market and the worldwide economic damage that followed in 2008 and 2009 made people know the term "economic meltdown" (ehow.com, 2011). And the year 2011 proved to be a epic one in world history and brought dramatic change to many parts of the world - change that require cautious and serious analysis. International developments since World War II have drawn the nations of the world closer together in a global economy in which labour and capital move across borders. When an economic crisis in one area spreads around the world, a global meltdown may result.