Managerial Decision Making In Banking Institutions Finance Essay - Free Essay Example

Decision making is a very important process in any kind of setup. It is through decision making that the organization forges forth with its plans. However the more broad the decision to be made the need to have as much information to do this so that the decision being made is an informed decision. Decision makers therefore have to contend with a number of issues such as personal motivation and emotions while making these decisions. In so doing different there could occur different outcomes from the same situation in which case two different people were the decision makers at varying times. Sub optimal thinkers will normally compromise unnecessarily and always settle for the second best. While this is the case we can be able to understand if they are charged with decision making then they may settle for what is not necessarily the best option. The banking industry is slowly picking up from the after shocks of the global economic crunch. The decision makers at the helm at some of these banks are under pressure to make decisions that could help revive the industry once again. Arriving at an option like diversifying services, and which services to choose from is one of the major decisions to be made. Asset management or stock broking for example would be other diverse services apa rt from the traditional banking services. Some banks have settled for sub optimal decisions as regards these two products. A bank with a strong and vibrant housing mortgage policy settling for stock broking to diversify is sub optimal, in this case asset management would have been a better option because the bank has a strong housing mortgage policy hence many of its customers can as well benefit from the asset management services it engages in. when critically evaluating a decision like this one we can understand that possibly personal interest on the part of the decision makers resulted in the choice of this option over the other which would have been the better option. We also notice a likely compromise of the companyacirc;s strategy, resources, opportunities and growth which is typical of a sub optimal thinking organization. Unit IV Q2 Corporate entities have discovered ways of generating a share of their capital by offering a stake of their company to be bought and financed by the general public. In so doing companyacirc;s have to strive to build a desired public reputation and financially sound track record to ensure that their stakes remain high. Stock markets are where these stakes are bought and sold. The volatile economic situation that has resulted from the recent global financial instability has jolted the stock markets. This is so because the companies boasting high profits and returns have began to experience the ripple effect of this financial melt down. Further still some of these companies may be relying on other companies which were also affected and therefore the overall effect boomerangs back to them. The financial situations are now being closely monitored by many companies than never before especially for those enlisted on the stock markets. The aim of this is to have favorable trading on the stock market and avoid or minimize any financial losses that may result. Hyperbolic discounting tries to explain a wide range of anomalies related to human activities. The variation in patience over the life cycle is a clear reason why sometimes more often than not we end up making erratic decisions in life. This may be as a result of other underlying factors which will come up when an assessment has been clearly carried out. For example the economic instability being witnessed in the global financial market has led to hyperbolic discounting even in the area of stock trading. With speculations arising here and there we see stock traders making decisions which seem to be driven by impatience. While the stock market may be slowly recovering there are still evident signs of an erratic global economic trend which makes the stock traders somewhat impatient. The fact that profits are not quickly forth coming and market stability is taking longer to be realized, most decisions on the stock market are exhibiting hyperbolic discounting. Unit IV Q3 Following the global financial instability the federal government devised a way in which they would inject $700 billions from the reserve to financial institutions that were affected or were quickly having their credibility eroded. The initial plan dubbed Troubled Asset Relief Program indicated that this money would buy what the economists called toxic assets thereby relieving the banksacirc; balance sheet. However in the real bailout plan Treasury Secretary of the Federal Reserves, Mr. Paulson handed out $350 billion in capital injections to banks, rather than his original plan to buy so-called toxic assets, primarily mortgage-backed securities, that were weighing down bank balance sheets. The Federal Reserve also cut interest rates essentially to zero, bought hundreds of billions of dollars of mortgage-backed securities and took a wide range of extraordinary measures to provide liquidity. (Credit Crisis Bailout Plan, 2009) This already was not serving well the banking interests first because they had a reputation they wanted to maintain and secondly by the federal government regulating their interest rate it actually was going to financially affect the banks standing. These led to the big banks opting out of this plan by paying back the loan infusions plus an executive fee to the federal government. The banks in doing this desired to exit from the regulations that had been set out by the Federal Reserve which were not promoting a conducive business environment for them. While these banks appreciated the decision to receive infusion to help them clear the toxic assets from their balance sheets, they were cautious about the regulatory role that the federal government was intending to play in the process for example the regulation of the interest rates to zero percent. While opting out of this plan the banks were clearly reasoning in a self serving manner to protect their interests because they realized t hat with the federal regulations they would not bring in profit the very reason why they are in business. Unit IV Q4 While purchasing a commodity or service a proper decision must be arrived at to avoid impulse buying. Impulse buying defines a situation where there is an unplanned purchase. This will usually take place when one has an unusual motivation which eventually turns into a desire to purchase a commodity instantly. This purchase may be having no specific objective at that time. Studies indicate that these purchases normally involve cheap products. When we go to the market place to purchase some goods or services we already have a preconception of whatever we want or expect. However our preconception is related to the purchasing power and pricing of the product or service. Motivation and emotion do play a part in the decision we arrive at during any purchase. However most often the motivation and emotion must operate within some bounds, the strongest of which is the purchasing power, simply put how much you are willing to pay for the good or service on offer. There were two homes on offer within the neighborhood. One had a car garage to go with which meant an extra amount of money to buy though the buyer did not need the garage at the time. However this home had almost all the things the buyer wished in a home whereas the other did not but had room for the buyer to buy the things they needed to furnish it. The buyer needed to arrive at a decision quickly enough because the offer would soon close. They ended up buying the home with the car garage though they had no need for the garage at that particular time. They purchased this home because they thought it was necessary to do this because one day they would have an automobile which would find a place at the garage though their initial intention was to buy a home within the budget and curr ent setting.

Folly as Wisdoms Jacket - Literature Essay Samples

The Silenus box is a case carved like an ugly Silenus that can be opened to reveal beautiful, precious objects (Erasmus 43, footnote). This box appears in Erasmus The Praise of Folly as a metaphor for the central claim in the novel, which is that that which appears to be Folly (ugly) externally, is wise (precious) within. Erasmus reveals this dichotomy on three levels: in the image of the box itself, in his genuine praise of Folly, and in the structure of the novel as a whole. Erasmus, using the female voice of Folly, introduces his reader to the image of the Silenus box early in the text, thereby allowing his reader to carry the image with her for the rest of her time reading (and see its metaphoric nature when appropriate). Folly makes the introduction, saying, All human affairs have two aspects quite different from each other. She then goes on to explain that this means, according to Plato, that things that appear at first blush to be death, will, if you examine [them] more closely, turn out to be life in brief, you will find everything suddenly reversed if you open the Silenus (43). In more direct terms, something which on its surface seems one way (the bad way), has opposite (good) guts. In The Praise of Folly, the pair of opposites that Erasmus focuses on is that of folly and wisdom.By including a passage dedicated to the description of the Silenus, Erasmus gives his readers a concrete picture to grasp onto that stands for the novels link between this pair of opposites, which is that wisdom comes under the wrapping of folly. The passage allows the reader to understand this central concept more easily. The concept, in its many manifestations, can be brought back to the same single image: the box. Silenus box serves as an illustration (a picture book, if you will) for the complicated Praise of Folly, thereby making the readers task of distinguishing between different narrators, and different textual layers, easier.Folly, being folly, goes on from her initial description of the box to give the majority of her list backwards (although she begins correctly), claiming that if the list goes in one direction, it must, of course, go in the opposite direction as well (shes a woman you cant expect her to be reasonable (28)). To do this, she abruptly inserts the word conversely (43), and continues with a long backward list. Life will turn out to be death; beauty will become ugliness, and so on, she says (43). In this backwards list, good outsides cloak bad insides. She then uses this inverted list as a springboard to celebrate wise appearances (although this is the exact opposite of the central message of the book, which is the celebration of foolish appearances).She declares that esteemed members of the community are truly members of her (Follys) clan, and that all they have of wisdom is its appearance. Kings and great courtiers find suitable pretexts within which they can steal from their citizens and live in luxury so that dow nright injustice at least has some appearance of justice (107-8). Popes, cardinals and bishops also behave artificially. They play their roles with theatrical pomp and ceremonies, but as much as they abide by the superficial demands of their positions, inside they are not genuinely pious. These are just a few examples of generally respected authorities regularly acting on the outside as if they are morally impeccable, while inside, they are morally rotten. Folly celebrates their false wisdom, saying, To destroy the illusions by exposing them would ruin the whole play of life (43). Folly defends their false grandeur by claiming that people could not be happy otherwise, for lifes play would be ruined. Although this application of the metaphor is an inverted version of the Silenus box, it is interesting as a criticism of esteemed authorities. The reason the Silenus box metaphor is used in a backwards (foolish) way in this section may be Erasmus way of distancing himself from his books criticisms of these powerful people. By having Folly deem them as being wise only externally, Erasmus removes himself from being politically incorrect. If anyone was insulted, he could just point to the text and laugh at them for being insulted by Follys understanding of them.Finally, at the end of the novel, Erasmus seemingly true voice is temporarily inserted in place of Follys. He applies the Silenus box metaphor properly, and makes a singular genuine praise of Folly (who before had only herself to praise her). He brings his reader back to the original (non-inverted) metaphor, saying that what is ugly (foolish) without is beautiful (wise) within. To do this, he states, Only fools have a license to declare truth without offense (123). To substantiate his extreme claim, he quotes Paul: take me for a fool we are all fools for the sake of Christ, says the wise apostle (127). Likewise, Erasmus appeals to Jeremiahs attribution of wisdom to God alone, leaving folly as the lot of all men (119). Paul and Jeremiah say that those who think themselves wise are actually fools for allotting themselves an attribute that only God has. Erasmus clearly has a similar message in mind in his statement that only fools have a license to declare truth without offense because he chooses to quote Jeremiah and Paul to substantiate his statement. Erasmus is praising those who call themselves fools, for they are the ones who exhibit humble modesty under God, thereby declaring truth without offense. Again, the parallel to the Silenus box is easily drawn. The self-professed (self-carved) fool is the ugly exterior, and the wisdom within is the beautiful, precious object (43). This specific point echoes the solidly humanist phrase which Erasmus himself reputedly said: Men are not born, but fashioned. Wise men must fashion themselves the faces of fools.Erasmus true compliment to Folly, that she is the shroud for wisdom, is also a compliment to the novel itself. For the novel, Erasmus covers his naturally reasonable and male (28) writing voice with a humorous and base (112) fictional voice. This character voice is itself Folly a woman (silly creatures, but nevertheless amusing and pleasant(28)). Yet, despite the fact that Erasmus gives himself the voice of this Platonic fool, The Praise of Folly holds in its pages much wisdom, including the very wisdom that is designed at convincing the reader of its own high status (that that which is foolish without, is wise within). Erasmus is demonstrating his true wisdom by artificially giving himself the tongue of the fool. In other words, he is exhibiting his wisdom by dressing as a woman to cover his reasonable manliness. In this same literary tradition, Rabelais utilizes this peculiar narrative technique in Gargantua and Pantagruel, where he too hides the wisdom in his work behind the veil of foolish, and even vulgar, language. Erasmus inclusion of the passage explaining the Selenus box allows it to be a metaphor for the central concept in the novel. Through its presence, Erasmus gives us, his readers, a tool with which to separate the layers of his text. Without it, we might be stranded (after reading) with the inaccurate belief that Erasmus was a babbling hypocrite, with contradictory ideas sprinkled throughout his work. But, I suppose, we could have just attributed that fault to Folly, who is always more than willing to accept such a title.