Thesis on "Ethics Values and Morals"

Thesis 4 pages (1588 words) Sources: 5 Style: MLA

[EXCERPT] . . . .

Corporate Ethics and the Age of Scandal: Stewart, Fuld and Madoff

The early millennium was an exceptionally tumultuous time for corporate America. Revelations of major accounting, securities and trading scandals were a regularity during this time, as individuals and organizations of note became embroiled in allegations and indictments. Many such defendants were either accused of or sentenced for concealing or embezzling many billions of dollars of company and/or stockholder moneys. With many prominent figures in the world of business coming into the crosshairs for massive financial fraud or securities violations, we are given significant evidence of a corporate culture devoid of an ethical compass. A discussion here, which will consider the actions and implications of such individuals as Martha Stewart, Lehman Brothers CEO Richard S. Fuld, Jr. And Ponzi Schemester Bernie Madoff, is filtered through a basic understanding of the distinction between values, morals and ethics both with and without respect to corporate affairs.

Thus, before entering a more detailed consideration of the misdeeds of these individuals, we note that they differed in scope, nature and detail but that they all reflect a corporate culture suffering a lack of ethical conscience, a tendency amongst individuals there within to act in an immoral fashion and a proclivity for the values of corporate America to differ from those of many ordinary Americans. These are conditions elucidated by the distinction between these terms. First, we consider that there is an inherent relationship between all of these terms, even as each denotes something different. To the point, "one of the most important characteristics of moral judgments is that they express our values. Not all expressions of values are also moral judgments, but all moral judgments do express something about what we value." (Cline, 2008) Values are something less individualized than morality, instead denoting a sense of a social continuum upon which certain behaviors are appropriate and others, inappropriate. This is distinguished from morality, which is a more internal compass used to define an individual's philosophical disposition and the behaviors descending there-from.

This has a specific implication where corporate behavior is concerned as well, with one source denoting that "values are the rules by which we make decisions about right and wrong, should and shouldn't, good and bad. They also tell us which are more or less important, which is useful when we have to trade off meeting one value over another." (Changing Minds, 2009) This is a useful point of inception for understanding how ethics are related. These are typically parameters defining that which is considered acceptable in professional and interpersonal affairs, helping to apply moral individuality and social value systems in the context of a specific and formal culture. These are therefore intended to be shared amongst a collective such as those in a business, organization or industry. Without a defined ethical core in an organization, it may be difficult to harness the values which are crucial to keeping a company on its course and it may simultaneously be difficult promote an internal culture where individuals act according to a personal moral center.

As the individual cases aforementioned and discussed hereafter indicate, these shortcomings generally precipitate devastating organization-wide failures. The Martha Stewart case is, for this reason, a compelling one which demonstrates the reciprocal relationship between the breakdown of corporate functionality and ethicality. In the midst of the explosion of revelations throughout the corporate world, lifestyle, home design and clothing line magnate Martha Stewart was indicted on charges of insider trading for her actions relating to the sale of shares in bio-pharmaceutical company ImClone amounting to a worth of just over $200,000. Though her trial made significant news, even resulting in a conviction and a brief prison sentence, it nonetheless remains a debated use of prosecutorial resources, with the efforts expended in reaching conviction believed by many to have been motivated by her celebrity status rather than by the severity or relative importance of her alleged crimes.

That said, all evidence today preserves the conclusion that Martha Steward did commit the crime of insider trading when, on December 27th, she sold all of her shares in ImClone. In many ways, her behavior was evidence of a personal deviation from morality in the wake of a larger void of values in the general corporate world. As the firm in question was overseen by CEO and a close personal friend of Stewart's, Sam Waksal, and the two were mutually served by Merrill Lynch broker Peter Baconovic, the fact of their respective sales of their shares within 48 hours before a critical FDA licensing rejection was bound to be closely scrutinized. (Healy, 2004) Indeed, upon the time of public revelations as to ImClone's misfortunes with the FDA, Stewart, Waksel and members of Waksel's family had saved themselves from losses that ranged from comparably modest to significant sums. In Stewart's case, reports denote that she protected herself from a loss of just under $50,000 by selling shares on the basis of information which was not available to the public. If this is true, it most certainly qualifies as insider trading and constitutes the commitment of a crime. (Healy, 2004) as this is the version of events which was held to be accurate in court, it is justifiable to contend that she did commit a crime and that the crime would also surely be said to run afoul of corporate ethical standards. (Ferrell et al., 2007)

This is also the perception most now hold of the leadership at Lehman Brothers, which oversaw this year the largest bankruptcy declaration in corporate history and which is being regarded by the countless employees and investors who lost their life-savings to the bank's collapse as willful and malevolent greed as the party responsible. On the surface, the credit crisis and a series of 'bad investments' are being seen as the culprits for the Lehman Brothers collapse. However, the middle of October saw the inception of a Grand Jury investigation in which prosecutors issues subpoenas to Lehman Brothers' top brass, including CEO Richard Fuld. (Caruso, 1) the investigation has been undertaken with the expectation that knowledge held betwixt the executives was not shared with the public, leading to the surprising rapidity of the company's downfall and the incapacity of regular investors to make plans or respond accordingly. A recent new item from the Associated Press reports that "the speed at which Lehman failed prompted complaints by some that the company wasn't honest about its financial condition in the months leading up to its collapse. Federal prosecutors are reportedly looking into whether anyone at Lehman may have misled investors about its health or the value of its assets." (Caruso, 1) of course, the speculative nature of the investigation is underscored by a far more certain perspective amongst those who have lost savings and investments that there is absolutely a clear and aggressively unethical divergence from the truth which allowed for this collapse.

Such allegations are given philosophical support by the fact that, even in the face of massive failure, bankruptcy and sell-off, the executives at Lehman's continued to award themselves multi-million dollar annual bonuses. Even as Fuld and company drove Lehman's into the ground by engaging -- as with the rest of the ill-fated banking industry -- in a concentrated pursuit of subprime mortgage borrowers, they continued to personally retain incredible sums of money.

This is an arrangement which will, in the long run, perhaps best be identified with Bernie Madoff, who in late 2008 came into the scope of federal prosecutors for embezzling literally billions of dollars from wealthy investors, private enterprises, charity groups and non-profit sector organizations under the terms of a massive Ponzi Scheme. So named for an Italian immigrant in the early 20th century who offered investors a huge and fast return on investments, Madoff fitted the method to hedge… READ MORE

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