This document discusses various ethical scenarios and perspectives in business and professional settings. It covers topics such as utilitarianism, whistle-blowing, insider trading, and corporate culture.
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Running head: BUSINESS AND PROFESSIONAL ETHICS Business and professional ethics Name Student ID Unit Institutional affiliation
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1 BUSINESS AND PROFESSIONAL ETHICS Question 1 From the perspective of a utilitarian, the decision made by Ford of not installing a baffle on their Pinto was wrong. The analysis indicates that Ford would have used $137 million to install the baffle while liabilities due to the loss of human lives would amount to $49 million (Boutilier, 2015). The company decided not to install the baffle on the Pinto in disregard to their customers so as to earn more profit and increase their market share. A utilitarian would have place more utility on the safety of their customers which would also improve the brand’s value. When NHTSA noticed the defects, Ford could have corrected the problem to minimize bad press rather than justifying that Pinto was just as safe as other cars. Question 2 In view of theUtilitarian theory test, whistle-blowers should beable to act with the public interest. By fearing the consequences and keeping quiet, the results would be a continuation of the harmful behaviour which might eventually harm the public. Therefore, research by Kesselheim, Studdert and Mello (2010)shows that utilitarians should report to the manager which would lead to putting a stop to the fraudulent actions. On the other hand, deontologists may believe that the rule suggesting people should neglect their duties cannot be morally acceptable thus the actions cannot be morally acceptable. Lastly, virtual ethics suggest that amid the dangers brought about by whistle-blowing, the spying on companies is not supported by virtues of justice, fairness and honesty (Conway & Gawronski, 2013). Question 3 By asking the question“How Much Should I be Required to Meet the Needs of Your Children?”Mills meant how workplace policies could be tailored to meet the needs of employees with children. Mills answers the question by describing how many organizations have make significant steps in being family friendly so as to offer assistance to working
2 BUSINESS AND PROFESSIONAL ETHICS parents. In addition, she notes that some companies with family friendly policies tend to exploit childless employees so as to support workers who are parents. Question 4 For each of the following situations, analyse whether or not the person’s trading constitutes illegal insider trading and explain your position: a)Bill is guilty of illegal insider trading since the man who told him to buy Apple shares was probably an executive at Apple thus an insider who willingly shares the company secret. The fact that the shares brought forth profits means that the man had prior knowledge of the situation. b)Amirah is not guilty of insider trading since she is not an insider and does not get directly involved with the leak of the information. While the couple speaks of selling their controlling position at the company, they did not intend to tell Amirah or any other person. The leak of information was unintentionally and the couple did not even realize that Amirah had overheard them speaking of selling their position in Internet Inc. and retiring to Hawaii. Furthermore, when Amirah searches the internet, she finds rumours about the purchase of the company. Question 5 The C.E.O behaves in an unethical and unfair manner especially since he is the top most manager of the organization. By selling a great part of his stock position at the company, the CEO is guilty of unfairness since he used prior knowledge of the FDA not approving their cancer treatment in a way which goes against the virtues of fairness. In addition, the CEO misuses the powers accorded to him as the top most leader of the organization. The CEO is therefore guilty of insider trading and unfairness since people could only sell their shares at a very low price as compared to what the CEO had sold previously.
3 BUSINESS AND PROFESSIONAL ETHICS Question 6 Dorfman would not find any fault with the CEO due to his hunger for simple ways of making money, the 12-step computerized program that is a guarantee people they won’t be beggars after retiring, 10 mutual funds for the 90’s, seven stocks to buy now and the quick hit. He would quickly support the CEO by arguing that he could not wait to see price of shares fall when he has the opportunity of selling at a cheap price. Besides, Altucher advocates for the legalization of insider trading by arguing that the move would ensure that fraud is exposed earlier, there would be transparency in companies and prices would be effective (Peress, 2010). Therefore, Altucher would support the situation. Question 7 Lay audited Enron’s Valhalla oil trading firm where he realized that it was using phony financial records to depict that the company was making profits. The company was later closed with a $140 million loss (Arbogast, 2013). Question 8 Mark-to-market accounting evaluates the asset value for organizations at the prevailing price in the market. The objective is to give a clear picture of how the company is stable financially and its anticipation for profits in future. The type of accounting is significant as it gives the level of profitability of inventory to assist in avoiding losses when sold. Enron executives would have used the method by noting that their assets still have a great value in the market when their price was actually low. Question 9 The performance review and corporate culture processes instituted by Jeff Skilling at Enron resulted to deception, greed and corruption. According to a research on “What Plato knew aboutenron”conductedbyHenderson,OakesandSmith(2009)indicatesthatthe organization failed to create a sustainable environment with its employees which led to the
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4 BUSINESS AND PROFESSIONAL ETHICS company being driven towards a gloomy end. Employees were fired or ignored after trying to question their leaders’ actions. Enron’s leadership were so individualistic rather than caring for the demands of the other employees. Ethics was not being practiced at Enron which depicted a lack of shared vision between the management and employees going beyond profits. Question 10 Enron used phony financial reports. In addition, there lacked openness between employee and employer, and the toxic environment led to corruption in the organization.
5 BUSINESS AND PROFESSIONAL ETHICS References Arbogast, S. V. (2013).Resisting corporate corruption: Cases in practical ethics from Enron through the financial crisis. John Wiley & Sons. Boutilier, C., Caragiannis, I., Haber, S., Lu, T., Procaccia, A. D., & Sheffet, O. (2015). Optimal social choice functions: A utilitarian view.Artificial Intelligence,227, 190- 213. Conway, P., & Gawronski, B. (2013). Deontological and utilitarian inclinations in moral decision making: a process dissociation approach.Journal of personality and social psychology,104(2), 216. Henderson, M. C., Oakes, M. G., & Smith, M. (2009). What Plato knew about enron.Journal of business ethics,86(4), 463-471. Kesselheim, A. S., Studdert, D. M., & Mello, M. M. (2010). Whistle-blowers' experiences in fraud litigation against pharmaceutical companies.New England Journal of Medicine, 362(19), 1832-1839. Peress, J. (2010). Product market competition, insider trading, and stock market efficiency. The Journal of Finance,65(1), 1-43.