Research Proposal on "Moral and Ethical Theory and Responsibilities of Business or Political Appointees Serving in Public Service"

Research Proposal 17 pages (4930 words) Sources: 30

[EXCERPT] . . . .

Decision-making is one of the fundamental keys to the survival of an organization, more so now that economic boundaries between countries crumble, business becomes more complex, and the results of decisions often have global impact. Decisions are made constantly in business; it is the part and parcel of being effective in one's job. Innovation and improvement on a regular basis are required to maintain and improve the ability to make rational decisions, and some psychologists even believe that the ability to make effective decisions is at the core of the individual's success of failure within their organization (Porter, 1998). Managers, in particular, realize that if their organizations are to survive in this dynamic and uncertain environment, they have to make moral and ethical decisions concerning new business opportunities, products, customers, suppliers, markets and technical developments. This clearly indicates that the most important managerial attribute is the ability to make the right decision within an ethical rubric. The outcomes of the decisions will be used as the benchmark to evaluate whether managers are successful (Drucker, 2001).

As the global economy becomes more of a reality, and as various developing countries increase the amount of business they do with developed countries, many cultural issues arise. Doing business is not the same worldwide, and as citizens of a global village, we must realize that there are different cultural norms and behaviors that are acceptable in some countries, unacceptable in others, and even expected in some. International companies are being pressurized by different groups of people, mainly from their stakeholders, regarding social and ethical issues. Issues revolving around what the United States government calls "bribery" may indeed be part of doing business, yet cause us to ask: "Is it moral or not, when trading in a foreign country, to participate in immoral actions to survive"? Morality is typically the standard that a group has about what is right and wrong -- good and evil -- permissible or unacceptable. As trade barriers are falling around the globe, differences in morality are gaining more interest domestically regarding such issues as human rights, political behavior or even environmental conservation (Deming, 2006).

BACKGROUND of the SITUATION - Because ethics and morality are so closely linked under the rubric of International business, most countries believe that they are part of the social "requirement" of both national and international business (Kolthoff, 2007). Prior to delving into the ethics involved in the last stages of the Bush administration regarding the Treasury Department, it is first appropriate to take a broad look at the surrounding events of the financial crisis. In October 2009, the New York Times presented an overview about the recent credit crisis and its impact upon the United States:

"During the first nine months of 2008, federal officials sought to support an increasingly shaky banking system one crisis at a time. But since the collapse of Lehman Brothers in September sent shocks around the global financial system and brought down giants like the American Insurance Group and Washington Mutual, officials in both the Bush and Obama administrations have worked to create a more systemic rescue (Chorafas, 2009).

Mr. Bush's Treasury secretary, Henry M. Paulson Jr., handed out $350 billion, primarily in the form of direct investments in financial companies. His successor under President Obama, Timothy Geithner, outlined a proposal that hoped to flood the financial system with as much as $2.5 trillion - $350 billion of that coming from the bailout fund and the rest from private investors and the Federal Reserve, making use of its ability to print money. The heart of the plan, outlined in detail on March 23, 2009, called for the creation of a new federal entity that would draw private investors into a partnership meant to eventually buy as much as $1 trillion of the troubled assets weighing down the banking industry (Cho and Irwin, 2008).

But on June 3, the Federal Deposit Insurance Corporation, which was to play a crucial role in the plan by guaranteeing loans to investors, said it was putting one part of the plan on hold indefinitely, as banks were refusing to sell their troubled assets for the prices they were likely to get under the program. At the same time, some banks that had passed the Federal Reserve's "stress test" were raising funds on their own to use to pay back money they had gotten from the Treasury (Irwin, 2008).

Some observers called the banks' refusal to sell the so-called legacy assets and the move to repay the government as signs that the worst of the crisis had passed; others countered that any signs of bank profitability rested more on accounting changes than changed business conditions, and that hundreds of billions in new losses lay ahead. The other big part of the Geithner plan, aimed at troubled mortgage-backed securities, was still being prepared, officials said (Chorafas; Weale, 2008).

THE TARP PLAN - the first proposal for a sweeping bailout of financial institutions came at the height of the panic in mid-September, 2008. Mr. Paulson, with the backing of Federal Reserve Chairman Ben Bernanke, asked Congress for $700 billion to use to buy up mortgage-backed securities whose value had dropped sharply or had become impossible to sell, in what he called the Troubled Asset Rescue Plan, or TARP. As originally outlined, the government would have bought up toxic mortgage-backed securities at a premium over their current deflated values. By paying "hold to maturity" prices, Mr. Paulson said, the government would provide troubled firms with an infusion of capital, reducing doubts about their viability and thereby restoring investor confidence.

The plan in its original form was quickly rejected by both Democrats and Republicans in Congress and was criticized by many economists across the political spectrum. Congress insisted on adding provisions for oversight, limits on executive pay for participating companies and an ownership stake for the government in return for its investments.

Even so, the plan proved to be strikingly unpopular with an outraged public, and on Sept. 29 it failed in the House of Representatives, primarily from a lack of Republican support. But as the markets continued to plunge, a slightly altered version won the support first of the Senate, on Oct. 1, and of the House, on Oct. 3. President Bush quickly signed the bill ("TARP Plan," 2008; Schmidt, 2009).

CAPITAL INJECTIONS - Shortly afterward, Mr. Paulson reversed course, and decided to use the $350 billion in the first round of funds allocated by Congress not to buy toxic assets, but to inject cash directly into banks by purchasing shares, an approach that many Congressional Democrats had pushed for earlier. In an initial round of financing, nine of the largest banks were given $25 billion apiece. The Treasury also used the bailout to steer funds to stronger banks to purchase weaker ones. To the dismay of many economists, no strings were attached to the Treasury infusions, and many of the banks appeared to be using the funds to bolster their balance sheets rather than to make new loans (Kessler, 2008).

On Nov. 12, Mr. Paulson announced that he was abandoning the idea of asset purchases, and said the bailout money would be used instead for a broader campaign to bolster the financial markets and help consumers seeking loans for cars or tuition and other kinds of borrowing. To the anger of many Democratic members, none of the first round was used to prevent further increases in foreclosures. An oversight panel created by the original bailout bill also delivered a round of stinging criticisms in its first report, delivered Dec. 10. The report said that the Treasury had failed to create a system to track how bailout funds were being used or to require that banks use them to increase lending and unfreeze credit markets.The last big chunk of the first round funds ended up going to Detroit, in $17.4 billion in emergency loans to keep General Motors and Chrysler afloat. President Bush had initially rebuffed Democratic efforts to use the financial bailout for that purpose, preferring to redirect loan guarantees meant to help factories switch to building more fuel-efficient cars. But after Senate Republicans blocked a bill that would have done that, Mr. Bush agreed to use TARP funds, while adding tough conditions for the car makers, their creditors and unions that mirrored much of what Senate Republicans had sought (Greider, 2008; Lenzer, 2009).

THE SECOND ROUND - on Jan. 12, 2009, the White House said that President Bush, at President-elect Barack Obama's urging, would ask Congress to release the $350 billion remaining in the bailout fund. The decision to request the money before taking office reflected a calculation by Mr. Obama and his aides that it would be better to have both the incoming and outgoing presidents urging lawmakers to release the money, given the high level of anger and frustration on Capitol Hill over how the Bush administration had managed the bailout program ("Obama, $350 billion," 2009).

In addition, Lawrence H. Summers, Mr. Obama's top economic adviser,… READ MORE

How to Reference "Moral and Ethical Theory and Responsibilities of Business or Political Appointees Serving in Public Service" Research Proposal in a Bibliography

Related Research Proposals:

Ethical Theories: In Philosophy, Ethics Essay

Ethical Theories:

In philosophy, ethics is described as the systematic analysis of how people should behave toward themselves and others. It's also explained as the study of what character traits,… read more

Essay 3 pages (892 words) Sources: 1 Topic: Ethics / Morality

---

Ethical Lapses in Today's Business World Term Paper

Ethical Lapses in Today's Business World

Today, there is widespread worry and fear that the business world is lapsing into a state where the question of maintaining certain 'ethics' in… read more

Term Paper 4 pages (1160 words) Sources: 0 Topic: Business / Corporations / E-commerce

---

Business Proposal Report Business Proposal

Business Description

Green Delight is a wholesale food manufacturer specialized in organic food. The development of the organic food sector and consumers' increased interest in organic products have determined the… read more

Business Proposal 9 pages (2356 words) Sources: 5 Topic: Business / Corporations / E-commerce

---

Business Ethics in the Fire Service Research Paper

Business Ethics in the Fire Service

The fire service in most countries is held in high esteem and widely regarded as a paragon of ethical business practices. Because the fire… read more

Research Paper 10 pages (3000 words) Sources: 2 Topic: Ethics / Morality

---

Public Services Management According to Hood (1991) Term Paper

Public Services Management According to Hood (1991)

According to Hood (1991) the New Public Management (NPM) has come to represent a global phenomenon. This work will answer what the main… read more

Term Paper 14 pages (4690 words) Sources: 1+ Topic: Management / Organizations

---

View 100+ more related papers  >>