System Engineers and System Architects work on different scales, and have different responsibilities. Much like in construction where an architect doesn’t need to know how to hang dry wall to design a building that uses it.

Console Server Beauty Institute

Industry Shake-up

In December 2003 Mzwimbi went on a well deserved family vacation to the United States, satisfied with the progress and confident that his sprawling empire was on a solid footing. However a call from a business magnate in January 2004 alerted him to what was termed a looming shake- up in the financial services sector. It appears that the incoming governor had confided in a few close colleagues and acquaintances about his plans. This confirmed to Mzwimbi the fears that were arising as RBZ refused to accommodate banks which had liquidity challenges.

The last two months of 2003 saw interest rates soar close to 900% p.a., with the RBZ watching helplessly. The RBZ had the tools and capacity to control these rates but nothing was done to ease the situation. This hiking of interest rates wiped out nearly all the bank’s income made within the year. Bankers normally rely on treasury bills (TBs) since they are easily tradable. Their yield had been good until the interest rates skyrocketed. Consequently bankers were now borrowing at higher interest rates than the treasury bills could cover. Bankers were put in the uncomfortable position of borrowing expensive money and on-lending it cheaply. An example at Royal Bank was an entrepreneur who borrowed $120 million in December 2003, which by March 2004 had ballooned to $500 million due to the excessive rates. Although the cost of funds was now at 900% p.a., Royal Bank had just increased its interest rates to only 400% p.a, meaning that it was funding the client’s shortfall. However this client could not pay it and just returned the $120 million and demonstrated that he had no capacity to pay back the $400 million interest charge. Most bankers accepted this anomaly because they thought it was a temporary dysfunction perpetuated by the inability of an acting governor to make bold decisions. Bankers believed that once a substantive governor was sworn in he would control the interest rates. Much to their dismay, on assuming the governorship Dr. Gono left the rates untamed and hence the situation worsened. This scenario continued up to August 2004, causing considerable strain on entrepreneurial bankers.

On reflection, some bankers feel that the central bank deliberately hiked the interest rates, as this would allow it to restructure the financial services sector. They argue that during the cash crisis of the last half of 2003, bank CEOs would meet often with the RBZ in an effort to find solutions to the crisis. Retrospectively they claim that there is evidence indicating that the current governor though not appointed yet was already in control of the RBZ operations during that time period and was thus responsible for the untenable interest rate regime.

In January 2004, after his vacation, Mzwimbi was informed by the RBZ that Royal had been accommodated for $2 billion on the 28th of December 2003. The Central Bank wanted to know whether this accommodation should be formalised and placed into the newly created Troubled Bank Fund. However, this was expensive money both in terms of the interest rates and also in terms of the conditions and terms of the loan. At Trust Bank, access to this facility had already given the Central Bank the right to force out the top executives, restructure the Board and virtually take over the management of the bank.

Royal Bank turned down the offer and used deposits to pay off the money. However the interest rates did not come down.

During the first quarter of 2004 Trust Bank, Barbican bank and Intermarket Bank were identified as distressed and put under severe corrective orders by the Central Bank.

Royal Assault

Royal Bank remained stable until March 2004. People who had their funds locked up in Intermarket Bank withdrew huge sums of funds from Royal Bank while others were moving to foreign owned banks as the perception created by Central Bank was read by the market to mean that entrepreneurial bankers were fraudsters.

Others withdrew their money on the basis that if financial behemoths like Intermarket can sink, then it could happen to any other indigenously controlled bank. Royal Bank had an advantage that in the smaller towns it was the only bank, so people had no choice. However even in this scenario there were no stable deposits as people kept their funds moving to avoid being caught unawares. For example in one week Royal Bank had withdrawals of over $40 billion but weathered the storm without recourse to Central Bank accommodation.

At this time, newspaper reports indicating some leakage of confidential information started appearing. When confronted, one public paper reporter confided that the information was being supplied to them by the Central Bank. These reports were aimed at causing panic withdrawals and hence exposing banks to depositor flight.

Statutory Reserves

In March 2004, at the point of significant vulnerability, Royal Bank received a letter from RBZ cancelling the exemption from statutory reserve requirements. Statutory reserves are funds, (making up a certain percentage of their total deposits), banks are required to deposit with the Central Bank, at no interest.

When Royal Bank began operations, Mzwimbi applied to the Central Bank – then under Dr Tsumba, for foreign currency to pay for supplies, software and technology infrastructure. No foreign currency could be availed but instead Royal Bank was exempted from paying statutory reserves for one year, thus releasing funds which Royal could use to acquire foreign currency and purchase the needed resources. This was a normal procedure and practice of the Central Bank, which had been made available to other banking institutions as well. This would also enhance the bank’s liquidity position.

Even investors are sometimes offered tax exemptions to encourage and promote investments in any industry. This exemption was delayed due to bungling in the Banking Supervision and Surveillance Department of the RBZ and was thus only implemented a year later, consequently it would run from May 2003 until May 2004. The premature cancellation of this exemption caught Royal Bank by surprise as its cash flow projections had been based on these commencing in May 2004.

When the RBZ insisted, Royal Bank calculated the statutory reserves and noted that, due to a decline in its deposits, it was not eligible for the payment of statutory reserves at that time. When the bank submitted its returns with zero statutory reserves, the Central Bank claimed that the bank was now due for the whole statutory reserve since inception. In effect this was not being treated as a statutory reserve exemption but more as a penalty for evading statutory reserves. Royal Bank appealed. There were conflicting opinions between the Bank Supervision and Capital Markets divisions on the issue as Bank Supervision conceded to the validity of Royal’s position. However Capital Markets insisted that it had instructions from the top to recall the full amount of $23 billion. This was forced onto Royal Bank and transferred without consent to the Troubled Banks Fund at exorbitant rates of 450% p. a.

FML Saga

When FML was demutualising, the executives were concerned about the possibility of being swallowed by its huge strategic partner, Trust Holdings. FML approached Royal Bank and other banks to act as buffers. The agreement was that FML would fund the deal by placing funds with Royal Bank so that Royal would not fund it from its balance sheet.

Consequently FML would leave the deposits with Royal Bank for the tenor of the loan. The deal was consummated through Regal Asset Managers and was to mature in December 2004, at which time it was anticipated that the share price of First Mutual would have blossomed, allowing Royal Bank to harvest its investment and exit profitably. The deal resulted in Regal Asset Managers owning 57 million FML shares. Royal Bank gave FML some securities in the form of treasury bills as collateral for the deposit.

The Reserve Bank and the curator wrote off this investment because at that time FML was suspended at the ZSE. However the fact that it was suspended did not invalidate its value. Recent events have shown that this investment has generated huge capital value for Regal Asset Managers as the ZSE rebounded. Yet the curator valued this investment negatively. Around March 2004 there had been a contagion effect at FML due to the challenges at Trust Bank. This resulted in the forced departure of the FML CEO and chairman. FML was suspended from the local bourse as investigations into the financing structure of Capital Alliance’s acquisition were carried out. Because of the pressure brought to bear on FML, it wanted to withdraw the deposits held by Royal Bank, contrary to the agreement. FML could not locate and return the treasury bills that had been provided as collateral by Royal. Royal Bank suspected that these had been placed with ENG, another asset management company which collapsed in December 2003. A public row broke out. Royal Bank executives sought counsel from Renaissance Merchant Bank, which had brokered the deal, and the Chairman of the ZSE, who both agreed with Royal that the deal was legitimate and FML had to honour the agreement. At this stage FML sought court intervention in an attempt to force Royal Bank into liquidation. Even the curator contested the FML position resulting in his taking it for arbitration. Royal’s position remained that if FML fails to return the securities then it will not get the funds.

Royal bank directors claimed political interference on the issue. The Royal Bank executives believe that the governor, against his better judgment, decided to act against Royal Bank under the pretext of the political pressure. In retrospect, the political support for cracking the whip at Royal gave credence to the rumour that the governor had an underlying agenda in taking Royal and merging it into ZABG because of its strong branch network.

Royal Bank had been warned by friendly RBZ insiders that if it ever accessed the Troubled Bank Fund it would be in trouble, so it sought to avoid this at all costs.

However on 4th August 2004, Royal was served with papers that effectively placed it under the curator. Interestingly, the curator’s contract was signed two days earlier. Until this time no depositor had ever failed to withdraw his deposits from Royal Bank.

The lack of credibility of the Reserve Bank in handling this case is exposed when one considers that some banks were given more than eight months to stabilise under curators, e.g. Intermarket and CFX Banks, and were able to recover. But Royal and Trust Bank were under the curator for less than two months before being amalgamated. The press raised concerns about the curators assuming the role of undertaker rather than nurse, and hence burying these banks.This seemed to confirm the possibility of a hidden agenda on the part of the Central Bank.

Victor Chando

Chando was an excellent financial engineer who set up Victory Financial Services after a stint with MBCA. He had been the brains behind the setting up of the predecessor of Century Discount House which he later sold to Century Holdings. Royal Bank initially had an interest in discount houses and so at inception had included Victor as a significant shareholder. He later acquired Barnfords Securities which Royal intended to bring in-house.

Victory Financial Services was involved in foreign currency dealings, using offshore companies that bought free funds from Zimbabweans abroad and purchased raw materials for Zimbabwean corporations. One such deal with National Foods went sour and the MD reported it to the Central Bank. On investigations the deal was found to be clean but the RBZ went ahead to publish that he was involved in illegal foreign currency transactions and linked this to Royal Bank. However this was a transaction done by a shareholder as an account holder, in which the bank had no interest. What confused matters, was that Victory Financial Services was housed in the same building as Royal Bank.

After failing to nail Chando to any criminal charges, the Central Bank issued an order for Royal Bank to force him out as a shareholder and board member. It is ridiculous that the Central Bank would vet who is a shareholder or not in banks – particularly when the people had no criminal records.

Negotiations with OPEC were underway for it to take over Chando’s shareholding. The Reserve Bank was aware of these developments. OPEC would then help in the recapitalisation as well as open up lines of credit for the bank.

The Arrest

In September 2004 the executive directors of Royal Bank, Mzwimbi and Durajadi, were arrested on five allegations of fraudulently prejudicing the bank. One of the charges was that they fraudulently used depositors’ funds to recapitalise the bank.

Three of the charges after police investigations were dropped, as they were not true. The two remaining charges were:

a) a conflict of interest on loans that were made available to the directors. The RBZ alleges that they did not disclose their interests when companies controlled by them accessed loans at concessionary rates from the bank. However the enterprising bankers dispute these charges, as they claim the Board minutes prove that this interest was disclosed. Even the annual financial statements of the bank acknowledge that they accessed loans as part of their employment contract with the bank.

b) money was owed to Finsreal Asset Management. However Mzwimbi argues that Finsreal actually owes them money and not the other way round. Royal Bank shareholders needed to inject money for recapitalisation of the bank and were requested to deposit their funds with Finsreal Asset Management. Since some had not paid their portion of the recapitalisation by the due date, Royal Financial Holdings, which had an account with Finsreal, paid the money on behalf of the shareholders – who were then indebted to Royal Financial Holdings. Somehow the RBZ confused this transaction as the bank’s funds and therefore accused the

shareholders of using depositors’ funds to recapitalise.

By retrospectively analysing the court case wherein the Royal Bank executive directors are accused of defrauding the bank it appears that the RBZ created a falsehood in order to frustrate the bankers. The curator who initially refused to take a stand before the RBZ appointed Independent Appeal, has in court clearly testified that no monies were stolen from the bank by the directors and that the curator did not (contrary to RBZ assertions) recommend charges against the bankers. In January 2007 the former executive directors of Royal Bank were acquitted by the High Court on the remaining criminal charges after the prosecution failed to present a convincing argument.

Royal Bank assets were sold by the curator to ZABG barely two months after being placed under the curator, without any audited financial statements. The speed at which an agreement of sale was reached is astonishing. The owners of Royal Bank went to court and, after a protracted legal struggle, the court ruled that the assets were sold illegally and hence the sale was “illegal and of no force or effect and therefore null and void”. The court then directed that the owners should appeal to the Central Bank for a determination of the actions of the curators. The Central Bank begrudgingly set up an “independent panel” to adjudicate the case. Strangely ZABG continued to trade on the illegal assets.

The panel advised that the appeal by Royal bank be rejected as it would be difficult to disentangle it from ZABG. They also cited the fact that ZABG had some contractual obligations with third parties who may not want to do business with Royal bank. This strange ruling fails to explain why these considerations were not made when the amalgamation was done. The ruling also redefined the agreements between the curator of Royal bank and ZABG as not being an “agreement of sale” even though the parties which entered into the agreement clearly intended it to be viewed as such. This was a way of circumventing the Supreme Court ruling that the agreement of sale was null and void.

But the panel did not explain how this disposal of the assets should be considered if it was not a sale.

Consequently the major shareholders of Royal appealed to the Minister of Finance who upheld the RBZ decision. Mzwimbi and his colleagues have therefore appealed to the courts. In the meanwhile there was a failed attempt to sell the disputed assets by ZABG despite the outstanding legal challenge. Just ice delayed is justice denied.

Mzwimbi and his team have been denied access to all bank records and yet are expected to defend themselves. As he characteristically puts it, “We are going into this fight blind folded and our hands bound, while fighting someone who has armour and a sword.”

Around 2002-3 there were press reports indicating that the ruling party/state wanted to have a stake in the profitable banking sector. A minister of government at the time of the arrest confirmed this to Mzwimbi and his team. Another bank, NMB, had allegedly been assaulted and the major shareholders were told to dispose of their shareholdings to certain politically connected persons. They refused and had to leave the country after some trumped up charges were preferred against them. Unfortunately, the governor faced resistance and the politicians distanced themselves. One indigenous banker reported how he was summoned to the Central Bank governor’s office and informed that he should leave the country, as his bank would be closed. This banker credits Royal Bank’s resistance to being manipulated as the reason why his own bank survived. The bank was placed under curatorship on 4th August 2004. Mzwimbi had secured potential investors for the recapitalisation of the bank just before the deadline of 30th September 2004. Three days before that deadline, Mzwimbi met the curator and explained in detail the position for the recapitalisation exercise. Investors who had shown interest and were in advanced negotiations were OPEC, Fidelity Insurance and some South African investors. He further asked the curator to request the Central Bank for an extension of about a week. The very next day he was arrested on the pretext that he was about to leave the country. Mzwimbi and his team believe that his arrest at that critical stage was meant to intimidate the would-be investors and result in the failure to recapitalise. This lends credence to the view that the decision to acquire the bank and amalgamate it in ZABG had already been made. The recapitalisation would have scuppered these plans. Notably, other banks were given an extension to regularise their recapitalisation plans.

Shakeman Mugari reported that the central bank has in principle agreed to enter into a scheme of arrangement with Royal, Trust and Barbican banks which could see the final resolution of this issue. He argues that the central bank disregarded the value of securities that the banks had pledged to the central bank for the loans. If these are factored in, then the bank shareholders have some significant value within ZABG. If this scheme had been consummated it would have protected RBZ officials from being sued in their personal capacity for the loss of value to shareholders. From the article it appears like a memorandum of agreement had been signed to effect a reduction of Allied Financial Services’ share in ZABG while the former banks’ shareholders will take up their share in proportion to the value of their assets. This seems to indicate that the central bank has noted a weakness in its arguments.

If this proves true Royal Bank could regain a fairly big stake of ZABG due to its assets which included the real estate and its paper assets which had been undervalued.

The legal hassles show that entrepreneurs in volatile environments face unnecessary political and legal challenges. The rule of law in these countries is sometimes nonexistent. The legislative and political environments, instead of supporting investors, pose serious challenges to entrepreneurs. Entrepreneurs in these environments have to assess the associated risk in setting up their enterprises. However a new breed of entrepreneurs who do not fear the vicissitudes of political interference is making a difference. Entrepreneurs recognise that the environment is a constraint but can be manipulated until worthwhile opportunities are exploited for commercial value. These entrepreneurs choose not to be victims of the environment.

Assault on Entrepreneurs’ Character

The information asymmetry whereby the Central Bank played its case in the public press while the accused bankers had no right of response created a false impression, in the minds of the populace, of entrepreneurs being greedy and unscrupulous.

The Central Bank accused Jeff Mzwimbi and Durajadi Simba of siphoning funds from the bank. An example appeared in a press article in which it was alleged that the sale of Barclays Bank branches to Royal Bank was annulled and the refunded funds were remitted to Mzwimbi and Durajadi at Finsreal Asset Managers and not Royal Bank’s account. This was a clear case of deliberate misinformation as the Central Bank was aware of the truth. Royal Bank had included the purchase of the Bulawayo Barclays Bank branch building which Barclays Bank would lease a portion of from Royal Bank. When Royal Bank fell short at the Interbank Clearing House, it renegotiated with Barclays. This was after Royal was threatened that if it did not clear this amount it would be placed into the Troubled Bank Fund – which carried severe penalties.

The result was that Barclays refunded the amount paying it directly to Royal’s Central Bank account. The RBZ acknowledged receiving these funds. How can they now accuse the founding shareholders of siphoning the same funds which went directly to the RBZ account? Mzwimbi insists that Barclays can easily testify to this.

The RBZ also alleged that Mzwimbi and Durajadi withheld information from their CVs on application for the bank licence and hence questioned their integrity. They claimed that Mzwimbi withheld information on his involvement with a failed bank, UMB. But the business plan for Royal Bank which was filed with RBZ clearly states this involvement. The Central Bank would have these records anyway. They also queried Durajadi’s source of funds and cast aspersions on the net worth statement. Yet Durajadi had been involved in Zimbabwe Trust and a transport business with his brother, which gave him sufficient net worth value.

The RBZ contends that the Board of Royal Bank failed to comply with a directive to recapitalise by 29th July 2004. Royal Bank executives and Board state categorically that they never received this directive. Mzwimbi and his team argue that this is misinformation, as all banks were required to have recapitalised by 30th September 2004.

The regulators also allege that the balance sheet of Royal Bank had a deficit of $140 billion, which the bankers dispute. If one were to consider the disputed $23 billion for statutory reserves and the $20 billion as accommodation from the clearing house, this would amount to $77 billion with interests. However with the undervaluing of the assets and the $160 billion which was written off as uncollectible, there would be no negative balance sheet. The contention of the Royal Executives is that the curator, at the behest of the Reserve Bank, deliberately tampered with the accounts to provide a reason for the take-over. This may be validated by the fact that the curator’s balance sheet kept changing whenever he was challenged and he increased the write-offs, even of funds that had since been collected. Since Royal and Trust Banks were amalgamated into ZABG, the bank is still profitable, without any recapitalisation having been carried out. The very fact that this new amalgamated bank can operate for this long from insolvent banks’ capital without recapitalising lends credence to the argument of the Royal Bank’s owners.

The entrepreneurs contend that they were dealing with a Central Bank which was determined to see them sink and not to protect the integrity of the banking system. This environment was not conducive to survival and it amplified normal weaknesses which could have been resolved in the course of normal business.

Entrepreneurial Determination

Mzwimbi and his colleagues refused to give up under challenging situations. Despite intimidation they took the Central Bank to court and refused to budge until justice was done. They were presented with numerous opportunities to quit the country but would not.

It is reported that they have not given up on their dream. They have set up Royal Financial Services in Kenya, despite the challenges in Zimbabwe. Indeed a sign of perseverance. Press reports indicated that they are in negotiations with Trust Bank so that once they win their case they can merge and continue their operations in Zimbabwe. Trust did not confirm or deny this. The more likely scenario however is that both Trust and Royal could reach a compromise with the central bank resulting in them taking up equity in ZABG subject to an independent revaluation exercise of the assets which were taken over.

Entrepreneurial Principles

The entrepreneurial journey is fraught with risk but can be very rewarding. Some lessons that can be learned from the case study are as follows:

• Entrepreneurs take calculated risk. Mzwimbi did not use all his resources in the bank but left his shareholding in Econet intact. He also sought to diversify his wealth by keeping some investments with FML and Screen Litho. This has been the mainstay of his wealth creation strategy. The disaster that befell the bank did not completely wipe him out because of this prudent investment strategy.

• Entrepreneurs learn from their experiences. Mzwimbi’s vast experiences taught him critical lessons. His international banking experience enabled him to see the emerging trends as Barclays and Standard Chartered withdrew from country towns, creating a route for his entry strategy. His work with Econet taught him perseverance as he and his colleagues fought legal battles with government for the award of the licence. Little did he know that this was just training ground for the battle of his life – the battle for Royal Bank.

• Entrepreneurs need to continuously scan the environment for threats and opportunities. Whereas Mzwimbi and his team were good at noticing the emerging positive trends in the environment at inception, they failed to pick the changes in the regulatory environment when the new governor came on board.

• Entrepreneurial strategy emerges and therefore entrepreneurs should be flexible. Although Royal Bank had a plan to grow at a steady pace, when the opportunity arose to acquire other branches cheaply the entrepreneurs seized the opportunity.

• Entrepreneurs are faced with credibility challenges as customers, regulators and suppliers test the credibility of newcomers. Royal Bank minimised this by recruiting experienced and well known personnel in the market. However the lack of institutional shareholders led to credibility gaps with some corporate clients.

• Entrepreneurs need to craft into their organisations both managerial and leadership competences to ensure both the ability to exploit opportunities (entrepreneurial activity) and sustainable company performance (strategic management). The more contemporary view of entrepreneurship transcends just the venture creation and now encompasses strategic growth. Although Mzwimbi was an excellent leader he needed a strong and powerful manager to consolidate the gains and create solid systems to sustain the rapid growth. Leaders thrive on change while managers thrive on handling complexity and creating order.

• Business is built on relationships as these help in the scanning of the operating environment e.g. critical information about opportunities and threats was obtained from close relationships

Lets close this article with a few questions that an entrepreneur should consider. For instance, if Mzwimbi had expanded less aggressively, would Royal Bank have been safer from the regulators? How could Mzwimbi have protected Royal Bank from political and regulatory interference if he anticipated those risks? If Mzwimbi had selected to pursue his enterprise ideas in a country with a more dependable political and regulatory environment, how would he have performed? Would it have been wiser to keep the equipment, real estate and other assets in Royal Financial Holdings or other corporate entity and only lease them to the bank? In that scenario would the predators have been able to pounce on the bank?

Sources: I Dr Tawafadza A. Makoni confirm being the author of this work. The material for this case study was drawn from my interviews with Mr J Mzwimbi CEO of Royal Bank in February 2006 and two Royal Bank Board Members. Some material was drawn from an unpublished Royal Bank Strategic Business Plan, (2000)

Wedding Corner

Writing activity progress notes can be time consuming but it is an important aspect of documentation. F-tag 248 clearly states that there must be a method in which each resident’s program of activities is monitored. There are many ways to complete progress notes. Below are two examples of a quarterly progress note.

Mrs. X

Quarterly Review:

1/20/02

Since her admission on 10/9/01, Mrs. X has pursued an active leisure lifestyle. She is alert and oriented to all realms and makes her needs known. She is sociable with both staff and peers and initiates conversations. Her family members are very supportive and visit weekly, providing additional reading materials and Mrs. X’s favorite foods. Mrs. X is an active participant in daily recreational activities both on and off the unit including exercise programs, adapted physical games (bowling, basketball, ball games), word games, bingo, trivia, discussion, Beauty groups, music programs, cooking and crafts. Mrs. X also joined the Resident Council and has attended 1x this quarter. She has been invited to attend the Young Adult Group, however has declined. She enjoys going to the greenhouse for horticultural therapy sessions and the off unit special events. Although a practicing Roman Catholic, Mrs. X states she finds much strength in attending chapel services of all faiths. Mrs. X enjoys a variety of independent activities including: talking on the phone in her room, listening to music on her Walkman (country and 50-80’s music), reading large print books, crossword puzzles and watching movies in her room. Recreation Staff provides movies, crossword puzzles and large print reading materials. Mrs. X has episodes of tearfulness and often dwells on her illness. Recreation staff encourages her to pray, listen to favorite music, or find solace in the greenhouse if Mrs. X does not express interest in joining the group activity. Recreation staff will continue to invite Mrs. X to daily recreational activities and provide supplies for independent pursuits. In addition, Mrs. X will be encouraged to attend the Young Adult Group to spend time with residents of her age group for additional support and companionship. See care plan number 3 addressing mood and behavior, for specific interventions. Mary Sunshine, ADC Activity Director

Mrs. P

Quarterly Review:

9/8/02

Mrs. P remains alert with confusion and forgetfulness. She is oriented to self and her speech is limited. She responds to simple direct questions by nodding her head or mumbling. Mrs. P is OOB daily in a recliner chair and spends much of the day in the dayroom where she is engaged in recreational activities including Snoezelen, Five Alive, Sensory and Movement, Music Therapy and adapted reminiscing groups. R/t to poor cognitive status, Mrs. P requires extensive assistance (i.e. hand over hand, physical/verbal cueing) to participate in leisure programs. R/t contractures of both arms she is provided with U/E and L/E PROM during adapted physical games and exercise programs to maintain physical functioning. During sensory programs, a variety of Recreational techniques are utilized to elicit responses to stimuli including: Aromatherapy for olfactory stimulation; hand massages, textured objects and props (yarn) for tactile stimulation; pictures of interest (cats) fiber optic lights and bubble towers for visual stimulation; ice cream, pudding, flavored lip balms etc. for gustatory stimulation; and music (Italian and singalong) as well as nature sounds, for auditory stimulation. Mrs. P responds to sensory stimulation by tracking objects, vocalizing, smiling, laughing, humming, and tapping feet and hands. She especially enjoys Italian music and the song “O Solo Mio”. She also participates in discussion and reminiscence groups when asked closed-ended questions. Recreation staff provides one to one sensory programs PRN. Family visits are irregular. Recreation staff will continue to provide sensory stimulation to enhance responses to external stimuli and maintain quality of life. See care plan number 2 addressing contractures, for specific interventions. Mary Sunshine, AAC Activity Assistant

If you’re interested in an easier way of completing progress notes you may want to consider the following product from Re-Creative Resources Inc. Recreation Progress Note: This one-page form helps you write Progress Notes, easily and thoroughly. Simply write phrases or short sentences in the spaces provided. It includes areas such as: One to One Interventions, Group Activities, Responses to Activities, Level of Participation, etc. You also receive the “Components of a Progress Note” tool that designates various examples in conjunction with the Progress Note Form for each category listed. To order this product visit the re-Creative Resources Inc. website.

Global Kitchen Knives Occupational Health Service

Sustainable advantage of an organization can be determined by its ethical capability. Ethical capability of an organization is its duty to do what is right. Some organizations such as Enron, Sathyam, and Tyco etc have made false statements in their accounts and cheated both the stakeholders and government. These kind of issues gave rise to the importance of business ethics in business schools all around the world.

Sustainable advantage can be defined as the beneficiary element that determine the long term objectives of an organization, where objectives would be the economic development that generates wealth and meets the needs of the current generation while saving the environment, so future generation can meet their needs as well. There are number of factors that determine the sustainability of an organization, which are its ethics, strategy, employees, financial capital etc. in present scenario, human resource of an organization considered to be its competitive advantage, but it will not provide sustainability. Sustainability of an organization will depend on the impact it has on the people, in the form of trust, honesty, integrity, respect, quality and responsibility. Organizations with poor sustainability will fall back as happened in case of Enron and Sathyam.

Enron was an American energy company founded in 1985 by Kenneth Lay after merging Houston natural gas and internorth( citetation). In early 1990’s Enron sold electricity at market price. At around the same time US congress passed a bill regarding the deregulation sale of natural gas which favored Enron to sell energy at higher prices. In 1992 Enron was the largest merchant of natural gas in North America. Online trading model developed in November 1999 known as Enron online has developed and extended the abilities to negotiate and manage its trading business. By 2001 Enron had both owned and operated gas pipe line, pulp and paper plants, broad band assets, electricity plants and water plants internationally. Enron stock was priced at US $ 83.13 and market capitalization exceeded US$60 billion, and Enron was rated the most innovative large company in America in fortunes most admired companies survey. By the end of 2001 the Enron scandal was revealed. The CEO Jeffrey Skilling with some of the executives have hidden billions in debt from failed deals and projects. Chief financial officer Andrew Fastow and the other executives were able to mislead the board of directors and audit committee by presenting them psydo account statements. Once the scam was published the Enron stock priced at $90 per share in 2000 plummeted to less than $1 by the end of November 2001. This fall in stock value has caused at $11 billion loss for its share holder. The employees of the organization received a limited amount of their salary and pension when it was bankrupted. Several law suits were filed against the company CEO and other executives.

Similar is in case of Sathyam computers, which is termed as the Indian Enron scandal. Sathyam computers were an information technology company which produces software’s headquarters at hyderbad, India. Its chairman Ramalinga Raju produced an account sheet which has a 7000 crore fraud. The chief auditors were also not able to identify this adjustment. As a result of this scam the employees lost their job and chairman was jailed for fraud.

These two cases throw a light on how an organizations as well as economy of the country or in large the world can be impacted with their unethical practices. That, if the organization does not practice ethics will not have sustainability.

Need for the business ethics: for the following

1. Business operates with in the society

2. Every business irrespective of size exists more on ethical mean or in total regard to its social concern to survive long.

3. Business needs to function as responsible corporate citizens in the country.

Business is a part of subsystem of a society, therefore its functioning should contribute to the welfare of the society. If the business earns social sanction of the society, where it exists then it would be able to survive, develop and excel in activities, because only through earning social sanction the business can get loyal customers. Loyal customers are sustainable advantage and therefore can survive in market without which it will collapse and die away. Large organizations put more interest on public, the managers are eager to have public opinion and always seek to maintain a proper image of company in their minds.

Now a day’s minimizing profit is not the only priority of business, it should have sustainability, which can only be achieved through ethical practices. Any organization big or small should follow ethical practices as it brings in a sense of social responsibility which eventually provides sustainability to the organization. Business should also be a responsible corporate citizen which does not allow narrow mentality goals and motives.

Cross culture variability

Ethical practices in a country or society will depend on various factors such as religious, beliefs, historic, traditions, social customs, and existing political and economic rules or policies. For example in Asian countries such as Japan, China etc loyalty to work groups and corporations has strong ethical values. This kind of ethics has been brought down through centuries long traditions, therefore one does not think of oneself but rather think of family, government and others involved with him, thus providing social responsiveness.

Nature of ethics

The concept of ethics deals only with human beings, as they only have the freedom and means to choose free will. Human being can distinguish between good and evil, right and wrong, and just and proper. For example a Japanese employee believes that it Is unethical on his part to attend an interview with other company when he is still with the current company. So human can fix a goal and the means to achieve it. Ethics is also science that nowadays has become a set of systematic knowledge about moral behaviour and conduct. Ethics deals with human conduct which is voluntary and not forced by any person at any circumstances.

Business ethics and profits

The cases of Enron and Sathyam makes a point that ethics and profits are opposed to each other, as when an organisation is ethical it makes short term profit and if the organisation is unethical it makes huge profit. The same cases prove us one more thing that is it makes huge profit unethically but will not sustain in the market. Ethical companies not only make profit but also overcome their competitors and other turbulent changes happening through out the years and have contributed to social welfare. Ethical companies have social responsibilities which allow them to flourish undiminished and make profit. Tata group of companies is one company which follows ethical practises. It is said that the chief executive officer of Tata is also its chief ethics officer. Some of the ethical policies followed by the company include national interest, support from open market economy, gift and donation for social cause, political non alignment, health safety and environment care, quality product and service and regulatory compliance etc. Ratan Tata the present chairman of Tata group has declined from airline industry because he was told to bribe then minister to enter the business, which he claimed to be unethical and against the policies the group follows. His predecessor JRD Tata had set up the first commercial airlines ‘Tata Airlines’ in India which was later overtaken by the government of India and named it as Indian airlines. So besides being a pioneer in airline industry they were not able to procure it because they felt it would not sustain them and it would bring a bad image for the company. This is the reason why people have great respect for Tata group and their ethical practices and policies have created brand loyalty which has helped them to survive in market even though many competitors came.

Cross cultural contradictions

Ethical policies become a problem when the companies are not able to do business at home, therefore the other societies where the ethical policies are liberal or works in their favour. At home they are not allowed to sell products because it is unethical to use unsafe products but they may sell it in other countries where the ethical standards allow them to sell these products. It happens especially with pharma products. Some factories which emit pollutant gases are set up in neighbouring countries because ethical standards at home do not allow the factory to run business. These pollutant gases emitted are dangerous for people and the environment. Still it is ethical in certain countries. These kinds of issues give rise to cross cultural contradiction and exploitation. These issues which arise become difficult for the managers and firms to solve. Therefore the business has responsibility for their country but to four major groups they are society, employees, customers or consumers and investors.(example drugs)

Factors influencing business ethics:

Leadership, strategy and performance, individual characteristics, corporate culture and environment

Leader is a person who leads the people towards achieving a common goal. Leader can be good or bad, great or small they arise out of the needs and opportunities of a particular time and place. Not all leaders are considered to be perfect in their decision making because each and every decision they make will depend upon the character of person which differ from person to person. Character of a person includes their inborn talents, learned and acquired traits which were imposed upon them by life and experience. Leaders are models and mentors to their followers therefore they follow the path way set by their leaders. In a large organisation the top level managers or CEO are considered to be the executive and supervisory leader. The CEO should have strong commitment towards ethics and ethical conduct and should give a constant leadership in renewing the values of an organisation. They play a key role in creating, maintaining and changing the ethical culture. It is necessary for the leader to set good examples, and follows ethics. One such good leader is JRD Tata who set a good example for his successor and they still follow it. Where there are good leaders there will be good ethical practices in business.

Corporate governance: is the set of systems and processes that a company follows to ensure that it is in the best interest of the stake holders. Stakeholders are the shareholders, employees, customers, creditors and the community.

Sustainability has three components according to john elkington’s triple bottom line concept they are economic, social and environmental. According to elkington the business does not have one single goal of attaining profit but to extend the goal set by adding environmental and social values. Thus sustainability has become the new goal set by the organisation.

Environmental perspective: natural resources.

Economic perspective: about the future generation.

Social perspective: over exploiting of employees and not providing equality in gender employment, caste creed and religion based employment employing child labour.

Organisational culture: is the set of shared values, beliefs, goals, norms etc that prevails within an organisation. The organisational culture emphasis on ethics but as it grows it may change, as in the case of tyco where its organisational culture supports unethical practices. If the company makes huge profits in unethical way then individual who joins the organisation would also have to practice unethical things to survive in the company. As in the case of enron where many executives and managers knew that the company was following some illegal and unethical practices, but the executives and the board of directors did not know how to make the ethical decisions and corporate ethical culture. Thus they fall back and managers have to pay in the form of fines and imprisonment.

Business ethics is the application of ethical principle in the organization or business. An organization should produce or make its own ethical cultures, but this ethical culture formulated should be drawn from the concept of what is ethical to all and not what is right for the organization itself. The employees of the organization, also has to follow the same ethical principles. The organisation being ethical will provide certain social responsibilities such as they do not harm the stake holders, the general public and the society as well. “business that treat their employees with dignity and integrity reap rewards in the form of high moral and productivity” (Frederic, Post and Davis).

There are three major types of ethical issues that arise in a business they are, face to face ethics, corporate policy ethics and functional area ethics. Face to face ethical issues happen between the employees of an organization in their day to day organizational life. the employee face these ethical conflicts when their personal standards differs from what their job demands. Corporate policy ethical issues happen in the basic operations of a company. The top level management including the board of directors and CEO’s are responsible for ethical practices of the organization. Functional area ethics issues arise at all functional levels of the organization. For example in the accounting department, if unfair pressure is put on employees to deliver an audit report which has been altered or not showing current accounts of the organization would be un ethical, as it does not follow the standards and policies set by the organization.

Causes for unethical issues:

There are many reasons for an organization to follow unethical practices they are personal gain and selfish interest, competitive pressures on profits, business goals and personal goals, cross cultural contradictions. When an employee gives more importance to his greed or concern for his personal gain rather than any other concerns, irrespective of the harm it can bring to the organization is termed as unethical practices that arise due to personal gain and selfish interest. When a company has tough competitors in a limited or static market; it may engage some unethical practices just to be in business or to protect their profits. If the organization uses some unethical means to achieve its goal that is unaccepted by its stakeholders will give rise to ethical issues under business goal and personal goal. Here the organisaiton has set a goal that would conflict with the personal goal of its stake holders. Under such conditions the individuals involved have two choices either to follow the ethical ways of the organization or “blowing the whistle” on organization.

Environmental perspective relates to the exploitation of natural resources in business. The company should make sure that the natural resources are not exploited; it should sustain the resources so that the future generation can also enjoy them as we did. One such example is the restriction of fishing in the North Sea, to sustain the availability of diminishing cod fish to the consumers.

Economic perspective of sustainability relates to the economic growth and fall in the society. The short term adjustments made by the companies such as bribes and cartels will only be for a short period of time, it will never achieve a long time sustainability the organizations attitude towards the environment in which it is embedded. If the organization does not pay taxes are said to behave unethically similar in the case of organization that does not give donations to public institutions such as schools, hospitals, police and other justice systems.

Social perspectives of sustainability refers to the social future of an organization which it is able to give.

Business ethics if practiced properly in an organization would provide scope to its stakeholders (which includes employees, customers, shareholders, bank and other lending institutions, government), personal policy level, social level and internal policy level.

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There are two broad categories of software. One is the off-the-shelf product which is ready to roll the minute you slide the installation CD in the drive and the other is software which is built to your specification. There is a world of difference between the two and the usability of the two types is also considerably different. A quick look at the core differences between the two can help you decide which one is for you:

Price: One of the biggest differences is the price. An off-the-shelf product is usually reasonably priced whereas a customized product can be relatively expensive to build. The logic is quite simple – the cost of development of the off-the-shelf product is distributed over a number of buyers and thus the pricing is spread over the number of licenses that will be sold. The customized software product on the other hand is made just for one buyer and thus the entire cost of development has to be borne by one customer. One might think that if the option of an off-the-shelf software product is available, why would one go for a customized development?

Generic build: The answer to the above question is again quite simple. An off-the-shelf product is made for a wide range of audience. Thus the development team has to provide a set design as well as a pre-defined framework. Since the product is ready to use, it may not cater to the exact requirement of all organizations. Usually there are some adjustments that an existing organization will need to make in order to implement an off-the-shelf product. This disadvantage is the biggest advantage in the case of customized software. Customized software picks up current processes and builds an electronic framework to automate them. There is no requirement to change any processes and people can usually get used to the software within a few days. Customized software provides flexibility as well for the organization to tinker around with the software and fine tune it for better performance.

Updates: Off-the-shelf products have off-the-shelf updates. Each time there is a revision in software purchased off-the-shelf, you will need to shell out an update fee. On the other hand, some off-the-shelf products may not have any updates for a long time, thus making you use obsolete software which might have negative repercussions on your business. Updates in customized software are done based on the requirements and budget of the company.

However, off-the-shelf software purchasing decisions are not always a matter of cost and flexibility. There are many benefits which accrue when using an off-the-shelf product as well. Firstly it allows you to get automated in a jiffy. The product has been suitably tested before being sold and you are saved a lot of pain and hassle which you might have with customized software. Many off-the-shelf products offer a money back guarantee if the software does not serve your purpose. This makes the investment in the software safe. The same cannot be said for all customized software!

The choice of using either type of software is up to you. However, consideration of the above points will help you in making an educated decision and also ensure that your organization gets the most benefit at the best price.

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