ACase Study on Change or Status Quo
[Author Name(s), FirstM. Last, Omit Titles and Degrees]
Investment banking should berevamped to realize a sustainable growth. Curran Ruth andChapple They point out that the pressure for quick returns hindersthe firm from taking opportunities that will enhance the firm’seconomic value. In the investmentindustry, market failures have been attributed to corporates adoptinghigh-risk strategies that yield a high return in the short term. It’sapparent that investment perspective and the preferences adopted bythe partners of the organization have been entrenched in the firm.The going concern of the organization is at risk because of directinga lot of attention on the volatile trading business.
Howto convince partners through Bob to support the growth of investmentbanking
Dan is committed to producing thebest results because he urges the subordinate staff to ensure that hegives the best to the task given by Bob. The subordinate staff shouldbe committed to giving the best so that he can be able to build agreat reputation in the firm. Also, show the partners how the growthof investment banking will benefit the company and support the ideaswith research, examples and facts. Similar, do a benchmarking of somecompanies that have an established investment banking arm and proposewhat can be adopted to enhance the growth in the firm’s investmentbanking arm. In addition, suggest to start new things on a trialbasis with the support of coworkers. Get the coworkers aboard bycollaborating with them. Get suggestions from them on how theimminent change will be implemented.
The present earning of the firmwill be affected in favor for the potential held in the future. Thefirm will also invest a lot of resource to establish the investmentbanking arm.
Curran Ruth and Chapple Alice (2011) in reporting Lydenberg workdefined long-term investment as the kind of investment that involvesspeculation of the value of corporation as they seek to enhance theirvalue. Investment banking enhances long-term investments,avoiding market Volatility. Short term investments are more turbulentand when the market turn sour, investors react with an excessivespeed to avoid losses. Long-term investment, on the other hand,guarantees stable returns and are safe from such market volatility.Similarly, long-term investments have lower transaction fees. Inshort term investment, frequent trading makes the organization toincur more costs that eventually reduce the gains derived fromtrading. There is a high cost in maintaining and rebalancing variousportfolios. Lastly, long-term investments with a period of more thanone year have enormous tax benefits like lower capital gain taxes. Itis apparent that the growth of investment banking will enable theorganization to record an increase in earning, achievecompetitiveness in the stock industry and eventually achieve acompetitive advantage over the rival firms.
The impact to the subordinateCareer
The growth of investment bankingwill give the employee the job security since the going concern ofthe business will be strengthened. In addition, the employee moralewill be enhanced by being in a position to utilize his or herpotential and see their idea working. Career growth and a sense ofachievement will be realized.
Whatto do when the organization does not see the benefits of expandinginvestment banking
Give your boss the necessarysupport to succeed in the roles assigned by the organization. Even ifhe or she does not embrace the suggestions you’ve made, go aheadand give him the full support. It is also crucial to take care ofyour self-esteem by creating a psychological boundary that cushionsyou against emotional damage. Eventually, understand why investorsavoid long-term approaches to see if a paradigm shift can beentrenched in stages.
Curran Ruth & Chapple Alice. (2011) Overcoming the Barriers toLong-term Thinking in Financial Markets.London, MagentaPublishing Ltd.
Sabramanyam, Pratap. G. (2004). Investment Banking: An Odyssey inHigh Finance. New Delhi, Tata McGraw Hill.