“We have always known that heedless self-interest was bad morals; We know now that it is also bad economics” (Franklin Delano Roosevelt as cited in Godwin, 2008; Good Money & Quotes, 2010) 1. Introduction Business Industry has witnessed the outcomes of bad moral decisions taken by business leaders. Enron’s story is only one example of corporate scandals and cases of bad moral decisions, which has not only shaken the public trust in corporations, but also affected the bank accounts of investors and employees. Before the bankruptcy of Enron; it was included in one of the fortune 500 companies after its fraudulent accounting case the share went down to $1 (Enron scandal, 2010; PBS, 2002; Godwin, 2006; Godwin, 2008). The “bad apples” which create fraudulent are now facing prison terms, they are not morally bad character people they just face this because of their limited conceptual schema and don’t consider moral values while making decisions. Mostly managers are known for moral values, and they are not greedy and egoists, the underlying issue is that they have narrow perspective on a particular situation so they don’t view the moral consequences of their decisions. They actually lack the ability to imagine a range of possible issues, consequences and solutions. So just because of their shorter insight they make wrong moral decisions which later give undesirable impacts to society and business as well (Godwin, 2006, Godwin, 2008; Werhane and Moriarty, 2009). Business Industry has also witnessed some business leaders who have taken such a good moral decisions that result in mutual benefit to the company and wider society. Literature shows different instances of companies like Seventh Generation, Fuji Xerox, or Green Mountain ... ... middle of paper ... ...Werhane, P.H., Dunham, L. (2002) ‘Moral Imagination: A Bridge between ethics and entrepreneurship’ [Online]. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=252654 (Accessed: 06 March 2010). [35] Werhane, P.H. (2006) ‘Access, Responsibility, and Funding: A Systems Thinking Approach to Universal Access to Oral Health’, Journal of Dental Education, vol. 70, no. 11, pp. 1184-1195. [36] Werhane, P.H., Moriarty, B. (2009) ‘Moral Imagination and Management Decision-making’ [Online]. Available at: http://www.corporateethics.org/pdf/moral_imagination.pdf (Accessed: 06 March 2010). [37] Yashiro, K., Yoshida, T., Suzuki, Y. (no date) ‘Training on Corporate Social Responsibility in Japanese Companies: Based on a Survey’ [38] Young, G. (2008) ‘Advisory Panel and Committees’, Encyclopedia of Business ethics and society, vol. 5, no. 1.
It's difficult not to be cynical about how “big business” treats the subject of ethics in today's world. In many corporations, where the only important value is the bottom line, most executives merely give lip service to living and operating their corporations ethically.
Ethical behavior, in a general sense, is a definition of moral behavior in regards to lawfulness, societal standards, and things of that nature. In the business world, ethics commonly refer to acceptable and unacceptable business practices within the workplace, and all other related environments. The acceptance of colleges regardless of ethnicity, gender, and beliefs, as well as truthfulness and honesty in relation to finances within the company are examples of ideal ethical business conducts. Unethical business behavior would include manipulating procedures based on bias or discrimination, engaging in activities that promote political gain, as well as blatant fabrication of monetary factors within the company and “can affect organizational performance and is costly to employers, employees, shareholders, and other organizational stakeholders” (Cox 263). When a corporation practices proper ethics, it is representing not only itself in a positive manner, but its partners, shareholders, and clients as well. On the other hand, when an organization partakes in unethical activities, all parties are negatively affected. The collapse of Enron is a major case of unethical conduct in the corporate world, because the circumstances surrounding the firm’s chaotic plunge where so scandalous that it left “creditors wrangling over Enron's skeletal remains” (Helyar) long after the company had seen its demise. There are numerous instances to be mentioned, including deliberate failure to properly report fiscal losses, insider trading, and overall relentlessness. The inclusive purpose of this paper is to further explore the underlining factors that contributed to the downfall of the once powerful Enron, and how a new way of approaching business ethi...
Our economy has been built upon for decades creating growth within the business industry. Businesses provide jobs, finances, and security for individual’s within society and is a main source of what defines our prosperous country. Every business has an ethical responsibility to its members and employee’s and to society at large. Ethical responsibility is a major component in which society needs to reinforce because it helps create principles, values, and standards, all of which help to guide a person’s behavior (Ferrel et al. 2013). Ethics help to create balance which in turn will have positive results for the business versus negative results. It seems that no matter where we look today, companies like Enron, WorldCom, AIG and many, many others substantiate the lack of business ethics in this country. At no other time than the last few decades has the need for ethical business oversight been of such importance to the prosperity of our country. As an example, Bernard Madoff is known to be the executor of the most fraudulent and deceitful Ponzi scheme in history, creating a stark reminder that the corrosion of ethics and lack of basic moral principles have taken this country to the point where trust in institutions and the very market driven systems that make our society work are in imminent danger of collapse. The Bernie Madoff case is a clear example of what can occur when businesses ethics are not in place. This case outlines a business man who defrauded thousands of people for years and caused major problems for those involved and for society at large. This essay is going to outline the major aspects of the case which include the nature of the problem, who are the major stakeholders, what is the problem from each of the stake...
While some scholars argue for more teaching of ethics in college curriculum, others argue that a business culture or environmental change is needed. Some experts and experienced members of the field argue that business is not an inherently bad field, but that the reputation has been soiled by a few bad apples. Given all this information, I tend to agree with the argument that finance and business are not bad fields, they have just been soiled by a few evil people. I believe there are several bad businesses such as the Nestlé Corporation; and good businesses like Microsoft and the Bill and Melinda Gates Foundation that prove cases of evil and corrupt business practices can be linked to the actions of a few evil people in power. I find this argument to be relevant and interesting because unethical business practices often appear in the news, and this influences the public perspective on businesses. Many people tend to think most businessmen are evil, greedy, and corrupt. This is not always the case, and I aim to demonstrate why others should think in the same
Applying the idea of moral goodness with business, however, is often a contradictory concept in lieu of the malicious and often scandalous behavior that businesses are notoriously publicized with. Enron, an energy company based out of Houston, Texas, is perhaps the most popular of scandals of the century thus far. Their name is synonymous with corporate fraud and corruption after the allegations of accounting fraud hit the headlines in 2001. The scandal was also considered a landmark case in the field of business fraud and brought into question the accounting practices of many corporations throughout the US (Raslan, 2009). Under this shroud of deceptive business practices and activities, applying the idea of moral goodness with business is a difficult sell to readers.
Many organizations have been destroyed or heavily damaged financially and took a hit in terms of reputation, for example, Enron. The word Ethics is derived from a Greek word called Ethos, meaning “The character or values particular to a specific person, people, culture or movement” (The American Heritage Dictionary, 2007, p. 295). Ethics has always played and will continue to play a huge role within the corporate world. Ethics is one of the important topics that are debated at lengths without reaching a conclusion, since there isn’t a right or wrong answer. It’s basically depends on how each individual perceives a particular situation. Over the past few years we have seen very poor unethical business practices by companies like Enron, which has affected many stakeholders. Poor unethical practices affect the society in many ways; employees lose their job, investors lose their money, and the country’s economy gets affected. This leads to people start losing confidence in the economy and the organizations that are being run by the so-called “educated” top executives that had one goal in their minds, personal gain. When Enron entered the scene in the mid-1980s, it was little more than a stodgy energy distribution system. Ten years later, it was a multi-billion dollar corporation, considered the poster child of the “new economy” for its willingness to use technology and the Internet in managing energy. Fifteen years later, the company is filing for bankruptcy on the heels of a massive financial collapse, likely the largest in corporate America’s history. As this paper is being written, the scope of Enron collapse is still being researched, poked and prodded. It will take years to determine what, exactly; the impact of the demise of this energy giant will be both on the industry and the
An organization’s Corporate Social Responsibility (CSR) drives them to look out for the different interests of society. Most business corporations undertake responsibility for the impact of their organizational pursuits and various activities on their customers, employees, shareholders, communities and the environment. With the high volume of general competition between different companies and organizations in varied fields, CSR has become a morally imperative commitment, more than one enforced by the law. Most organizations in the modern world willingly try to improve the general well-being of not only their employees, but also their families and the society as a whole.
Investors and the media once considered Enron to be the company of the future. The company had detailed code of ethics and powerful front men like Kenneth Lay, who is the son of a Baptist minister and whose own son was studying to enter the ministry (Flynt 1). Unfortunately the Enron board waived the company’s own ethic code requirements to allow the company’s Chief Financial Officer to serve as a general partner for the partnership that Enron was using as a conduit for much of its business. They also allowed discrepancies of millions of dollars. It was not until whistleblower Sherron S. Watkins stepped forward that the deceit began to unravel. Enron finally declared bankruptcy on December 2, 2001, leaving employees with out jobs or money.
When an ethical dilemma arises within an organization, it is difficult to separate right and wrong with what is best for the majority. Sometimes the answer is not a simple “yes” or “no.” In 2002, Enron Corporation shows us just that. By 2002, the sixth-largest corporation in America filed for Chapter 11 bankruptcy. The case of the Enron scandal is one of the best examples of corporate greed and fraud in America.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2011). Business Ethics: Ethical Decision Making and Cases. Mason, Ohio: South-Western Cengage Learning.
In the aftermath of Enron, Washington Mutual Bank, TYCO, and World Comm these companies went against the grain of what good ethical behavior is and what their respective company’s code of ethics were. The criminal justice system has made it clear that it will not allow companies and their executives to get away with the misuse of public trust by allowing them to make themselves rich at the expense of the employee. Where these crimes are both ethically and morally wrong, the CEO’s of major corporations are being punished by a ...
In today’s fast paced business world many managers face tough decisions when walking the thin line between what’s legal and what’s socially unacceptable. It is becoming more and more important for organisations to consider many more factors, especially ethically, other than maximising profits in order to be more competitive or even survive in today’s business arena. The first part of this essay will discuss managerial ethics[1] and the relevant concepts and theories that affect ethical decision making, such as the Utilitarian, Individualism, Moral rights approach theories, the social responsibility of organisations to stakeholders and their responses to social demands, with specific reference to a case study presenting an ethical dilemma[2], where Mobil halts product sales to a garage, forcing the garage owner to stop selling solvents to young people. The second section of this essay will focus on advice that should be given to any manager in a similar position to the garage owner with relevance to the organisational strategic management, the corporate objective and the evaluation of corporate social performance by measuring economic, legal, ethical and discretionary responsibilities. It will address whom to think of as stakeholders and why the different aspect could cost more than a manager or an organisation could have imagined.
The term “ethical business” is seen, by many people, as an oxymoron. This is because a business’s main objective is to make as much money as possible. Making the most money possible, however, can often lead to unethical actions. Companies like Enron, WorldCom, and Satyam have been the posterchildren for how corporations’ greed lead to unethical practices. In recent times however, companies have been accused of being unethical based on, not how they manage their finances, but on how they treat the society that they operate in. People have started to realize that the damage companies have been doing to the world around them is more impactful and far worse than any financial fraud that these companies might be engaging in. Events like the BP oil
This paper discusses the role of ethics in corporate governance. I seek to show the application of moral and ethical principles in corporate governance. Ethics is a topic that has generated a lot of interest in the last decade especially after high profile scandals. The failures of prominent companies such as WorldCom, Enron, Merrill lynch and Martha Stewart portrays the lack of corporate ethics. The failure of such business has seen an increased pressure to incorporate ethics in corporate governance. The result of corporate scandals has been eroding investor and public confidence. The entire economic system has experienced some form of stress from loss of capital, a falling stock market and business failures.
Ethics is the study of right or wrong and the morality of the choices that individuals make. That basicly means the set of morals or responsibility that a person, group, or field have. Ethics can also be classified as code of morals. In business there are ethics that portray to business. These are called business ethics, business ethics just happen to be the application of ethics, morals, into the business field. Some examples of business ethics are obeying all rules and regulations even when nobody 's looking, which is pretty self explanatory, you shouldn’t be breaking rules. Even if it is as simple as washing your hands after you use the restroom or straight up lying to your customers, they are the ones making you money so if they find out