Posted: January 20th, 2023

Discussions

Organization management is an essential component of the success of the organization. The success of the organization depends on how the organization resources – human resources, skills and expertise, and capital are management. The organization management comprises of two main components – internal management and external management. Internal management refers to how organization regulates operations within the organization such as production, employee relation, organization profits, and other operations within the organization. The other component of organization management is external management. The external management comprised of managing how external factors such as the interest rates, stock market government policies, and the general market affect the organization’s performance.

These two management practices are essential for organizational performance. The organization should give them equal effort since they work together to affect organizational performance. This study intends to analyze how Société Générale conducted its organization management and how it affected the organization performances. In this case, the study will analyze whether Société Générale bank sufficiently balanced the internal and external management.

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The Société Générale €5 billion trade loss helped us to analyze the firm management practices. Société Générale has been doing well in the financial market; thus, this made many financial analysts believe that Société Générale bank was the best-managed organization (Clark, 2008). Though after the €5 billion probes, this idea has changed. From the analysis of this incident, we can say that Société General focused mostly on achieving on many fronts, thus, neglecting to invest in strong systems in the organization and internal control. The €5 billion probes proved this statement. After the firm announced the loss of €5 billion, the investigation department started investigating this incident.

The investigation department found that Jerome Kerviel, an employee to this back, was making unauthorized speculation bets in 2005, risking clients’ billion of money. Thus, this resulted in the loss of billions of bank clients’ money. The investigators found that the bank’s internal control procedures were insufficient to uncover Kerviel operations. The reports also indicated that no enough evidence shows that Kerviel violated the organizations’ policy. The investigation suggests no evidence can link this incident to the embezzlement of funds or internal and external conspiracy. Thus, after the event, the committee was formed to investigate the mechanism Kerviel applied to hide activities and help identify lapse in the oversight that helped the trader to expose firms billions of money secretly.

The committee reports indicated to agree with the auditors at the Price water house Cooper on the information presented by the banks’ managers. However, the committee demanded a more detailed form. The managers of the Société Générale bank had indicated that Kerviel had used in-depth knowledge on the control procedure that he had earned in the previous bank’s risk department to conduct this operation (Clark, 2008). The new report also provided information that indicated that Kerviel took benefit from the organization’s policy weakness to begin trading beyond the organization’s authority almost immediately after he moved to the firm trading desks.

The committee reports also indicated that the bank procedures undertook most of the bank’s controls during the time Kerviel made the trade. However, banking systems didn’t identify the fraud three years down the line. It is believed that the organization management did not conduct a detailed analysis of the organization operations; thus, this made them not identify Kerviel trade. The report also indicated that in some incidents, a certain banking control system was absent; therefore, are implemented in the banking system to identify frauds (Clark, 2008). These committee findings come after the governor of the Bank of France indicated that the central bank had previously warned Société Générale that its risk control departments were inadequately staffed.

Thus, with these findings, it is clear that the Société Générale bank had no sufficient system that could be able to detect unusual operations in the organization. The banking system with such huge working capital should have implemented effective systems that regulate daily organization operations. It was evident that the organization had an effective work policy that regulates employee conduct. Thus, with these findings from the investigative committee, we can conclude that Société Générale focused on achieving tremendous growth on many fronts, thus neglecting to invest well in the system and concentrating on the internal operation. Thus, this gave the employee a lot of liberty to gamble with clients’ money. If the organization was serious with it in managing its internal operations, Société Générale could not have bet with such huge amount of money of the incident could be identified immediately.

1.Evaluate one pro and con about the above writing.

Response Requirements:

Must:

1.Be 2 paragraphs in length

2.Be supported by the required textbook and one additional reference

Points deducted if the submission:

1.Does not use the required textbook as one of the two reference sources

2.You CANNOT use Wikipedia, LinkedIn articles, blogs, paid vendors, certification websites, or similar sources in academic writing. You CAN use reputable industry articles from publications similar to ComputerWeekly, PCMag, Wall Street Journal, New York Times, or similar sources. Academic journals and popular industry articles are accessible in the university’s library databases and Google Scholar. All references should not have a publication date older than 2005.

3.Does not respond to the question(s) thoroughly meaning with more than 2 paragraphs.Primarily consists of bullet points

4.Uses statements such as “I have gone through your post,” “I have gone through your discussion,” “adding a few more points,” “based on my knowledge,” “according to me,” “as per my knowledge,” or similar

5.Contains contractual phrases, as an example “shouldn’t” “couldn’t” or “didn’t,” or similar

Uses vague words or phrases such as “proper,” “appropriate,” “adequate,” “it is obvious,” “it is clear,” “in fact,” or similar to describe a process, function, or procedure

As an example, “proper incident response plan,” “appropriate IT professional,” “adequate security,” or similar. These words are subjective because they have different meanings to different individuals.

Submission results in a ZERO if it:

1.Does not adhere to the University’s academic dishonesty and plagiarism policies

2.Is off-topic and does not address the discussion question(s)

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