Ethics and decision making in financial institution Essay

Ethics and decision making in financial institution - Essay ExampleIn the second part the study will hear role of business ethics and ethical decision making in circumstance to banking industry. Although the concept of business ethics, fair and free emulation, abolishment of monopolistic competition are pretty much older in comparison neo classical concepts like trade protection, corporate governance codes but surprisingly really few researcher have time-tested find how these implications are relevant in context to banking industry. To understand the importance of open and free competition it is natural for the researcher to try these concepts by using theories of economics (Misra and Arrawatia, 2012). Nature of Competition in Banking Industry In recent times, various research scholars have tried to investigate nature of competition in global banking industry with help of different concepts of economics. Modern economists have stated that conjoint impact of internationalizati on, liberalization and harmonisation has changed the dynamics of competition in global banking competitions. ... their primary and only responsibility is to increase profit by using its resources whereas understanding the second strata such as doing business in open and free competition environment without engaging in deception and frauds (Cheng, 2011). There is no doubt the world has changed a solidifying from the time Milton Friedman defined the responsibility of managers. In twenty first century, the world has seen many of the major financial scams, financial frauds, unethical competitions hence it is necessary to analyze the viewpoint of Milton in context modern business world. Now the fact is that, research scholars have raised question over the assumption of Milton Friedman in context to banking industry. For example, competition in banking sector has been created due to multitude of factors such as financial food markets deregulation, liberalization, consolidation, merger b etween various financial institutions etc hence it will not be justifiable to take a unilateral approach to analyze the level of competition in banking sector. The study will take help of research works of eminent research scholars such as Bresnahan (1982) to understand competition theories in context to banking sector. According to Bresnahan (1982), market power of a bank is should be analyzed with the help of mark-up of price instead of marginal cost of a particular bank. The proposed model was based on two equations such as supplement equation and inverse demand equation in context to first order profit maximization (Misra and Arrawatia, 2012). Shaffer (1993) has found that North American banks were competitive during 1965 to 1990 when the market was consolidated in nature. In that period, few North American banks competed in partially monopolistic competition environment where they had created entry barrier for