1. Determine which moral philosophies (as discussed in chapter 6) is most applicable to an understanding of the banking industry meltdown. Explain your rationale. “moral philosophy is the study of moral judgements or the value that is placed on decisions about what is right or wrong” (http://www.smallbusiness.chron.com).
There is a distinction between moral philosophies and business ethics. A moral philosophy refers to an individual’s principles and values that help to define and determine what is considered to be moral or immoral. Business ethics is usually based on decisions in groups or those made when carrying out tasks to meet business objectives (Fraedrich/Ferrell, page 151).
Moral philosophies can be considered as guidelines or a blueprint to aid in “determing how conflicts in human interests are to be settled and for optimizing mutual benefit of people living together in groups” (Fraedrich/Ferrell, page 151).
Moral philosophies also guide businesspeople in formulating business strategies as well as offering guidelines for resolving ethical issues. The moral philosophies used in business decisions are teleology, deontology, the relativist perspective, virtue ethics, and justice theories (Fraedrich/Ferrell, page 153).
Teleology derives from the Greek term for end or purpose and teleology refers to “moral philosopher in which an act is considered morally right or acceptable if it produces some desired result such as pleasure, knowledge, career growth, the realization of self-interest, utility, wealth, or even fame” (Fraedrich/Ferrell, page 155).
The Essay on Critical Analysis of Kant’s Moral Philosophy
The most essential motive of moral philosophy in Kant’s view is to “seek out” the introductory principle of metaphysics of morals. Kant explains this project through the first two chapters of the Groundwork. He advances by analyzing and explicating commonsense thoughts about morality. The purpose is to come up with a clear-cut statement of the opinion on which all of our regular moral judgements ...
Basically, teleology is in place to assess the moral value or worth of a behavior by examining the consequences. There are two theories that fall under the teleology umbrella that can also guide individuals in their business decision-making and those are egoism and utilitarianism. Individuals who conform to egoism believe that they should be able to make decisions to benefit their own self-interest and each individual defines their self-interest differently. When confronted with an ethical issue or decision, the egoist is most likely to choose the option that best benefits them. Utilitarianism, similarly to egoism, “is concerned with consequences, but the utilitarian seeks the greates good for the greatest number of people” (Fraedrich/Ferrell, page 156).
Utilitarians have the belief that the decsiiosn should be made that will benefit or result in the greatest total utility and that will result in the greatest benefit for all individuals affected.
The second moral philosophy, deontology, derives from the Greek term for ethics. Deontology “refers to moral philosophies that focus on the rights of individuals and aon the intentions associated with a particular behavior rather than on its on consequences” (Fraedrich/Ferrell, page 158).
Deontology is based on the idea that all individuals must be given equal respect. Deontology can be separated into two groups: those individuals who focus more on moral rules (rule deontology) and those individuals who focus more on the nature of the act (act deontology).
Relativist perspective is used to help one understand how people make ethical decisions. The relativist perspective is based on the belief that ethical behavior is defined from the experiences of people. Individuals practicing the relativist perspective use themselves and/or individuals around them “as their basis for defining ethical standards” (Fraedrich/Ferrell, page 160).
The moral philosophy of virtue ethics is an approach that places the focus on the kind of person who is doing the act. The justice theory involves “evaluations of fairness or the disposition to deal with perceived injustices of others” (Fraedrich/Ferrell, page 163).
The Essay on Ethics Is The Study Of Morality And Moral Behavior Since
Ethics is the study of morality and moral behavior. Since morality has a social dimension, it certainly applies to institutions, institutional arrangements and policies, and the behavioral norms of various cultures and groups. Thus, the study of ethics encompasses moral norms applicable to business corporations, political bodies, medical organizations, colleges and universities, churches, sects, ...
Justice is also defined as fair treatment and/or due reward in conjunction with ethical or legal standards. In relation to business, this definitions means that the rules or criteria indiviudals use to each a decision or determine the justice of a situation “could be based on the perceived rights of individvuals and on the intentions of the people involved in a business interaction” (Fraedrich/Ferrell, page 163).
The moral philosophy that is most applicable to the banking industry meltdown would be teleology. In the case, the actions of the indviduals were a direct correlation to egoism, which is a teleological philosophy. Egoism determines that right or acceptable behavior is defined by the consequences for the individual. Nick Leeson, former chief trader for Barings Bank is a prime example of egoism. Leeson caused the firm billions of dollars as a result of his risky behavior. Leeson’s strategy in the 1980s was based on the fact that he knew that one stock market was slower in processing trades than the other.
Lesson established an error account for his losses to disguise any bad bets. No one at Barings Bank had access to see that account and as a result, Leeson was recognized widely as a brilliant trader. The managers at Barings Bank had been assured by Leeson that he was not using company money to do his tradings and that it was risk free. Leeson had the advantage because the managers at Barings Bank had very little knowledge in trading. Leeson eventually quit his job in 1995 after the Kobe earthquake hit, which caused the Japanese stock market to crash. However, Leeson’s resignation came after a significant loss by Barings Bank. Leeson still continued the risky behavior and tried to cover those losses through other risky investments but only caused more losses. Leeson was concerned with making money and making himself look good, no matter the risk. 2. Analyze the case study and discern if the “white collar” crimes committed differ in any substantive manner from other more “blue collar” crimes.
“The phrase white-collar crime was coined in 1939 during a speech given by Edwin Sutherland to the American Sociological Society” (http://www.law.cornell.edu/wex/white-collar_crime).
The Research paper on White Collar Crime
The definition of white collar and white collar crime * Various types of white collar crime B. Thesis statement: There are 3 causes of white collar and 5 way to combat with white collar crime. II. The cause of white collar crime is opportunities to commit crime. A. The loophole of the law and security B. An individual well known the operation of a company, the chances to commit fraud is higher. ...
According to the Federal Bureau of Investigations, white collar crime costs the United States approximately three hundred billion dollars a year. That factor alone is what separates white collar crime from blue collar crime. Blue collar crimininals are charged as individuals whereas white collar criminals involve indivudials as well as the organizations that employ them. Organizations can also be fined when any of its employees are charged and found guilty of a white collar crime. White collar crime is also difficult to prosecute because the offenders use sophisticated ways to hide their activities. Blue collar crimes are not as difficult to prosecute once evidence, usually physical, has been gathered against the offenders. Blue collar crime does not cost nearly as much to prevent or prosecute as white collar crimes. 3. Determine and discuss the role that corporate culture played in the banking industy scenario. Support your response with specific examples.
The corporate culture of an organization is very crucial to how employees conduct themselves. If an organization has a strong ethical culture, then employees are less likely to commit acts that are considered unethical. Lehman Brothers was the fourth-largest investment bank in the United States, but in 2008 filed for bankruptcy. The firm became a publicly traded company in 1994 and joined the S&P Index in 1998. Its stock rose to one hundred dollars per share by the year 2000. In 2007, even as the subprime crisis began, the firm was ranked number one on the “Most Admired Firms” list by Fortune magazine. Lehman Brothers CEO Richard Wald was also listed as one of the world’s thirty best CEOs. Unfortunately for Lehman Brothers, their shares had lost seventy three percent of their value. The firm was seeking aid from the government to stay afloat, yet its executives were still receiving millions of dollars in bonuses. If the firm had any form of corporate culture with a strong ethical background, those executives would not have accepted bonus pay while the organization suffered financially. 4. Postulate how leaders within the banking industry could have used their influence to avert the industry meltdown.
The Essay on Overview of the Social Costs of White-Collar Crime
How much white collar crime actually exists in the society is determined by the organizational resources available to uncover, investigate, and prosecute it, and more generally, enforce what most experts already regard as inadequate laws aimed at its control. Increase rates of white-collar crime produced social costs that is rooted from individual professional employees which is later on ...
I feel that the leaders should have been setting the example for how to conduct business and that would be by exhibiting a strong ethical background and establishing a strong corporate culture. I also believe that instead of looking to make a dollar and be the largest firm or organization, the leaders should have thought about the stakeholders of their organizations and how their actions would affect the stakeholders.
References
Ferrell, O.C and Fraedrich, John. (2011).
Business Ethics: Ethical Decision Making and Cases. 2011 custom edition (8th ed.).
Mason, OH: South-Western Cengage Learning. How to Apply Moral Philosophy to Business Ethics. Retrieved on November 30, 2012. http://smallbusiness.chron.com/apply-moral-philosopy-business-ethics-33340.html Teleology Defined. Retrieved on November 30, 2012. http://www.thefreedictionary.com/teleological White-Collar Crime: An Overview. Retrieved on November 30, 2012.
