Business Articles
5 Things The Best Managers Do And Don't Do (Victor Lipman, Sep 9, 2013)
This article discusses five things best managers should do, and five things that they should avoid doing. The article argues that excellent managers do the following five things: one, they keep the big picture in mind. Two, they are consistent in behavior meaning that their employees can be able to predict their behavior. Three, they treat their employees’ time to be as important as their own time. Four, they are not afraid to criticize their own management style and fifth, they earn the trust of those that they manage (Lipman, 2016). On the other hand, excellent managers should avoid the following five things: one, let power get into their head, two, have favorites, three, be guided by emotions when making a decision, four, avoid conflict, and five, feel threatened by their employees’ abilities (Lipman, 2016).
The article postulates that a manager can become an excellent manager by cultivating the right behaviors and avoiding the bad behaviors. The argument is valid to some extent since management is about getting things done through people. Most people tend to emulate what they see happening in practice rather than what they hear. Therefore, if the manager displays the right set of behaviors in managing their employees it is highly likely that they will become effective managers at work. The traits discussed in the article can be useful in coaching new managers who may lack experience and are struggling managing their teams. However, the article neglects to consider other non-behavioral factors that may affect the effectiveness of a manager for instance, the ability of the manager to develop optimum production schedules and prepare realistic budgets. Therefore, despite the behavioral traits, inexperienced managers will have to look into other factors that will affect their effectiveness as managers. Being an affective manager requires not just following a particular set of behavior, but also exercising good judgment in making decisions.
This article argues that the benefits of low interest rates have already been achieved, and that the status quo may not be desirable. The main beneficiaries of a low interest regime are mortgage borrowers and auto-loan borrowers who are able to access cheaper credit to finance their home or car acquisition (Strumpf & Light, 2016). Low interest rates harm investors, banks, pension funds, and insurers who are net savers and therefore earn less from their investments. The low interest rates are likely to persist since many investors still consider the U.S. safe. Consequently, there is an inflow of capital from emerging economies creating a surge in demand of the U.S. government securities and thus driving the yields down (Strumpf & Light, 2016).
In a low interest rate regime, borrowers benefit from low financing costs. Auto-loan borrowers and mortgage borrowers are some of the groups in the economy that benefit from low interest rates. On the other hand, savers and investors such as banks, insurance companies, and pension funds bear the losses of the low interest. Banks profit margins dip as the interest rate spread narrow. Insurance companies and pension funds are facing lower discount rates making the present values of their future obligations larger. The low interest regime may reduce the incentive to save and may reduce the amount of aggregate savings. In addition, the low interest rates may cause moral hazard where financial institutions have an incentive to take up more risky investments in order raise their income. For instance, banks may advance bigger loans to sub-prime borrowers, while insurance companies and pension funds may invest aggressively including making investments in emerging markets. The low interest rates are likely to persist into the near future and so banks, insurance companies, and pension funds may need to reconsider how they will mitigate the interest rate risk.
References
Lipman, V. (2016). Forbes Welcome. Forbes.com. Retrieved 15 April 2016, from
http://www.forbes.com/sites/victorlipman/2013/09/09/5-things-the-best-managers-do-and-dont-do/#51c025bb3edd
Strumpf, D., & Light, J. (2016). The High Consequences of Low Interest Rates. WSJ. Retrieved
