Government Bailouts Essay Example | Topics and Well Written Essays - 750 words

Government Bailouts - Essay Example If the government does not intervene and does not provide financial assistance to the financially unstable large corporations, unemployment and other related problems would further aggravate an economy. Already, the economy of United States of America is facing very severe and harsh waves of financial crisis, which showed their presence in the year of 2007 and they continued till the end of 2009. History of bailouts The finance history has sufficient record about the events of government bailouts. In the year of 1979, Chrysler had lost $ 1.1 billion. At that time, it was feared that this could negatively hit the entire US automotive industry. In order to avoid the subsequent impacts of this loss of Chrysler, the Feds had no option except to intervene and save the corporation. Instantly, in the year of 1980, the Chrysler Loan Guarantee Act was discussed, approved and passed. In this Act, Chrysler was given a loan of $1.5 billion by the federal government (Gup, 4). Furthermore, in the year of 1989, savings and loan institutions became financially crippled. The failure of these savings and loan institutions was considerably spreading almost all companies working in this industry. At that time, then President George H.W. Bush and his Government were required to devise and determine a bailout plan to address and stop falling this entire industry. Consequently, The President Bush and Congress passed a bill and made it as the Financial Institutions Reforms, Recovery, and Enforcement Act in the year of 1989 (Rehm). But, this government bailout was only limited to save the savings and loan institutions. In the year of 2001, United States of America was attacked with some deadly terrorist attacks on many cities. In which, the terrorists used aeroplanes to carry out the attacks on the land of America. Due to the use of aeroplanes, the entire airline industry became a subject of economic and financial crisis. These financial crises became so severe that the Government had no other option except to play the role of saviour. As a result, the then President Bush discussed the issue with the Congress. And this discussion brought a bill and that bill was passed as the Air Transportation Safety and Stabilization Act. This Act mentioned some fundamental steps necessary to rescue the entire airline industry. The Act released $5 billion compensation and an additional amount of $10 billion in loan guarantees (Rehm, Barbara &Mandaro). The year of 2007 and 2008 were worst of all. The onslaught of financial crises was uncontrollable and heavily damaging the economy of America. In October 2008, Congress passed the Emergency Economic Stabilization Act. This Act authorised the Treasury Department to spend the amount of $700 billion for the purpose of handling and tackling the problem of financial crisis of 2008. Government bailouts are not a wish but a necessity on the part of government. The government has no choice but to intervene and play the role of saviour. No government ever wants to use its own funds and money to provide financial assistance or extend a loan to a corporation under normal financial circumstances. Rather, the government ensures that the corporation must and should be financially well-equipped and financially strong enough to meet its expenses and its other financial and non-financial obligations. But, due to a variety of economic and political factors some corporations become unable to continue doing business

Technology Strategies. Kudler Company Essay Example | Topics and Well Written Essays - 750 words

Technology Strategies. Kudler Company - Essay Example The aspect of selection and implementation of relevant changes in technological advancements for the improvement of the company needs expert opinions as it would flop if it were to be done without following the due process as stipulated in rules and guidelines that provide the guidance on the way forward. In light of this fears, an approach is proposed that will be good in a contingent way as well as in a way that accommodates a socio-technical approach (Floyd, 2010). One of the mostly applied strategies includes the Initial Public Offering. This is also referred to as the IPO. This strategy is often resorted to by new companies that are out to facilitate the expansion of their operations. The IPO serves such crucial functions that are elementary and of significant importance to the company. It occurs when the firm offers common shares openly to the public. There can always be possibility to raise capitals through commissions of exchanges that are registered to undertake the public offering. When the company takes this step, it must be ready to face an obvious amount of public scrutiny. The company however faces increased responsibility that are accompanied by opportunities to strengthen the relations between the firm owners and the major stakeholders that make the wheels of change turn and move forward. (Floyd, 2010) One such company that practices IPO is the Kudler Fine Foods. The company has made immense growth on the competitive field of busin ess. The company tends to issue preferred securities or common stocks and that in the long run create essential growth of capital and its acceleration. Kudler Company can achieve accelerated growth through hiring of new personnel, expanding development and the forms of research that are involved. The major effect of this strategy is to enable the company penetrate into global investment base to facilitate large investment of capital. Kudler Fine Foods is now required to keep the stakeholders up to date on the management strategies of the company as well as the business operations and legal obligations as they arise. Working under public examination works well to keep the company on toes. (Paul, 2007) The second strategy that a firm can opt for in bringing in a new perspective of seeing things is that of acquisition. Through acquisition, a company acquires on or more of the companies that work within the same market. Acquisitions often get done with the main aim of growing and expand ing the firm. One such firm that practices such form of strategy is the BOC gases. They have acquired other smaller manufacturers of gases and put them under the same umbrella. (Lawson, 2006) Acquisition can happen in two possible ways. One way is that of mutual understanding whereby the companies agree to join hands or to be acquired. The other form is that of forceful takeover which can mostly just be done by companies that are publically traded. When the latter happens, more than 50 % of the acquired company is taken under control by the big company that forcefully takes over. However it looks more than obvious that the situation for BOC gases. The other smaller firms that are under the umbrella were mostly acquired in a willing seller and willing buyer basis whereby the small firms opted for this option as they may have noticed their profits going down. The companies’ desire for growth can now be achieved from a comfortable position whereby they are secure. This form of s trategy also enables the bigger company to venture into new geographic locations and to expand their base for doing business hence increasing opportunities. (Floyd, 2010) The third strategy that a firm can apply in the growth and expansion is that of merger.