The Bank of America
Bank of America is obligated to offering products and services that meet the borrowing and investment needs of the low and moderate income individuals and families. Furthermore, the firm is keen on carrying out sustainable business practices so that it can realize a long lasting impact on the community it serves.
In the past years, there have been informations on the financial reputation of Bank of America after its involvement in the sale of mortgages to investors despite warnings about the possible collapse of the housing market. Efing and Hau (2015) disputed that the move to sell the mortgages to investors and refinancing of their activities through rolling of credit card debts into loans made the company suffer a financial and reputational catastrophe.
Although the Justice Department tried to find out the motives behind the ‘mortgage sins’ that had a negative impact on the 2008 financial crisis, Bank of America have not fully convinced its clients on their higher charges on credit and debit cards. Moreover, it’s still viewed as one of the contributors to the 2008 global financial problems (Efing & Hau, 2015). Another point of conflict was the interest on mortgages. Most consumers had a feeling that the rates would reset in the next periods due to the original positioning.
Conflicts that arise due to the actions taken by the firm may be detrimental to the achievement of its objectives and goals. According to Scott & Davis (2015), any questionable action by an organization may make customers feel tricked into purchasing the products offered by the company. As a matter of fact, Bank of America cannot achieve their goal of providing customer focused lending and investment products if they lose customers’ trust.
References
Efing, M., & Hau, H. (2015). Structured debt ratings: Evidence on conflicts of interest. Journal of Financial Economics, 116(1), 46-60.
Scott, W. R., & Davis, G. F. (2015). Organizations and organizing: Rational, natural and open systems perspectives. Routledge.
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