The Immoral Practice of AIG

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The Immoral Practice of AIG

Introduction

In the fiscal year of 2008 one of the largest insurance companies was faced with having to file chapter 11 bankruptcy. This company was American International Group which will be referred to as AIG. To avoid economic failure American International Group turned to the government to seek financial assistance. Since the magnitude of AIG was so enormous the government felt that this company could not fail, because it would have a strong impact on the economy. A whopping 85 billion dollars was advances to the company to assist with their recovery plan. From there things made a turn for the worse due to the un-explanatory disbursement of the funds that was given to AIG. This has caused a massive effect on public relations that will be explained throughout this document.

Hiding Essential Information

It has been in general agreement amongst the public in regard to the ethics that have been violated surrounded by the AIG scandal. According to The Practice of Public Relations there’re six perquisites that a company should adopt in order to perform good public service. One of the first obligatory is Pro communication which has been abused in every measure (Seitel, 2007). With AIG attempting to withhold and conceal the bonuses that were disbursed of 165 million is clearly abuse. Considering the bailout was given by government of taxpayer’s money in order to avoid chapter 11 bankruptcies. There is no argument that the public should have been without a doubt known every dollar spent in their recovery (Postal, 2009). What can be argued were the bonuses necessary?

Indecent Judgment

The accounting practice of AIG was morally wrong and goes against the key public relations principle of Ethics. This co...

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...needs to use its employees to rebuild trust. p. 16.

Cohan, W. D. (2010, April). Collaspe of the House of Hank. Institutional Investor Vol.44 , 40-84.

Diane, B., Marcia, V., & Mike, M. (2009, November 4). AIG WHAT WENT WRONG. Business Week , pp. 32-35.

Dictionary. (n.d.). Dictionary. Retrieved July 11, 2011, from dictionary.net: www.dictionary.net/bonus

Postal, A. D. (2009, March 23). AIG Reveals Beneficiaries Of Bailout Funds On Derivatives. National Underwriter , pp. 21-24.

Prinston University. (n.d.). WordNet. Retrieved July 11, 2010, from http://wordnet.princeton.edu/: http://wordnet.princeton.edu/

Reward Management Assoiates. (n.d.). Reward Management Assoiates. Retrieved July 11, 2010, from Reward Management: http://www.reward-management.com/Definitions.htm

Seitel, F. P. (2007). The Practice of Public Relations. Upper Saddle River: Pearson Prentice Hall.

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