Thursday, February 27, 2020

Ethics behind Credit Rating Agencies business and the role of Assignment

Ethics behind Credit Rating Agencies business and the role of regulator issues - Assignment Example The credit rating agencies plays an important role in assessing the credit worthiness of the company. Creditworthiness is considered as a parameter in evaluating the willingness and the capacity of the debtor to repay the debt. There are various credit rating agencies in the world. Among the various credit agencies, the three most popular and well known credit rating agencies are Standard and Poor, Fitch group and Moody’s. Each credit rating agencies has its own rating scale for ranking and rating the companies across the world (Bahena, 2010). The Credit rating agencies played an important role in influencing and facilitating the investors to invest in the international securities. The credit rating agencies have devoted themselves in designing the structure of the agencies. The Credit rating agencies were assigned with responsibilities during the period of financial crisis prevailing in the economy. But it has been observed that the agencies were unregulated before the financial crisis. After the financial crisis the government has imposed restriction and emphasized on maintaining transparency in its rating procedures for the growth and development of the agencies. The credit rating agencies faced criticism during the period of financial crisis, since it failed to publish verifiable and valid data about the rating performance of the companies. The criticisms encountered by the rating agencies were mainly due to the following reasons such as the underestimation of the correlation due to the default during the economic downturn, the lack of sufficient data, overreliance on the statistical and mathematical methodologies by the credit rating agencies has resulted in furnishing of inadequate data and the disregard of various conflicting interest. The credit rating agencies receives revenue from the issuers of the companies. Suppose a company is rated high by one credit rating agency as compared to other credit agency then the company will prefer to rate

Tuesday, February 11, 2020

Strategic management study case analysis of AvtoVAZ Essay

Strategic management study case analysis of AvtoVAZ - Essay Example The internal strength and weaknesses of AvtoVAZ including the best ways on how these weaknesses can be converted into strength will also be tackled. Considering the given situation of AvtoVAZ, it is advisable for the company to enter into merger and acquisitions. This strategy will enable the company to meet all the needed requirements such as: having a sufficient fund for a total restructuring, competent leaders and individuals assigned to run the business, and having a group of engineering and car designing experts within the business organization among others within the shortest possible time. In order to prevent losing control over the company, it is very crucial for the company owner to pay close attention to the negotiations of the merger plan. A win-win negotiation with the chosen partner should push through. AvtoVAZ or Volzhsky Automobilny Zavod (VAZ) was established back in 1966. The Russian government used to have a strong hold over AvtoVAZ since it was a state-owned company. For some time, the Russian government imposed strict rule that the local citizens could only purchase cars made by AvtoVAZ to protect its sales and profitability. After AvtoVAZ upgraded its technology in early 1990s, the company began to increase its prices. This made the Russians to switch over the use of imported cars. The company started to lose its market share to imported cars. Four years later, the Russian government decided to privatize the company. Since then, the Russian government withdrew its support to AvtoVAZ. In fact, high taxes made the company experience financial difficulties as early as in mid-1990s. Over the succeeding years, the market share of AvtoVAZ slides down from 90% to 60% in 2004. (Shlyornin, 2004) The tight competition in the Russian car market is expected to become stronger due to the entrants of foreign automobile manufacturers such as General Motors, BMW, Kia motors, France’s Renault, and Japan’s