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Comparative Business Ethics and Social Responsibility Essay

   

Added on  2021-05-31

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Essay | (Student Details: )COMPARATIVE BUSINESS ETHICSAND SOCIALRESPONSIBILITY

May 21, 2018Comparative Business Ethics and Social ResponsibilityContentsIntroduction.....................................................................................................................................3Summarizing the article...................................................................................................................3Key ethical issue(s)/concern(s)........................................................................................................4Has an ethical decision been made?...............................................................................................5Process of ethical decision making..................................................................................................6Conclusion........................................................................................................................................7References.......................................................................................................................................9Appendix: Published Article...........................................................................................................112

May 21, 2018Comparative Business Ethics and Social ResponsibilityIntroduction Andrew Robertson wrote a business article on the concept of financial planning and waspredominantly related to the absence of financial professional standards. This article waspublished online on ABC News on April 16th, 2018. This article was written in the backdrop ofcollapse of Storm Financial, which resulted in a lot of people losing their hard earned money.The article also highlighted on the lack of financial planning being deemed as a profession likethe other professions like law, engineering, medicine and accounting. As a result of theprofessional standards being absent, such a huge blunder was created; even though later on,the directors of Storm Financial had to face consequences of their actions, as ASIC had initiateda case of breach of director duties against the duo running the company. This discussion is notfocused on the legal aspects, but on the ethical aspects of this incidence, particularly in light ofthe concept of business ethics. The discussion would cover a brief of this article, the key ethicalissues, the lack of proper ethical decision being made, and the requisite process of makingethical decision making, in light of the article posted by Robertson (2018). Summarizing the articleRobertson (2018) submitted the news article online which was focused on financial planningand drew evidence on the blunders being caused due to absence of financial professionalstandards. The reason for banking royal commission being present in the nation was attributedto the long list of financial planning scandals, which has proven costly for a number of people.The collapse of Storm Financial resulted in certain attempts being brought forth for brining inthe much needed reform in financial planning. The article also highlighted that this industry hasseen certain reforms, but these have not been much successful. In the collapse of StormFinancial, the directors of the company had given wrong financial advice to the investors, whowere cash strapped and vulnerable. This led to ASIC (Australian Securities and InvestmentCommission) making a case against the director duo and the two directors were disbarred from3

May 21, 2018Comparative Business Ethics and Social Responsibilitymanaging the affairs of any company for a long period of seven years. The reason for such strictapproach being adopted by the court stemmed from the destitution of 3,000 as then clients ofthe company had no scope of getting their invested money back (Hamilton-Smith, 2018).Not only a problem was highlighted by Robertson (2018), but the key cause to this problem wasgiven as well. The absence of professional standards, properly defined education standards,code of professional conduct and commitment towards fiduciary duty to the consumers weredeemed as the key attributes for this problem. Due to such blunders, individuals lost faith infinancial sector and also formed a negative imaged towards the government for not being ableto protect them. If the figures highlighted by ASIC were looked at, these highlight that 79% offinancial advice given in the nation breached the sections of Corporations Act, 2001 (Cth). Thisis not the present case but the history of this sector is also the same. In case of Storm Financial,the client of company lost about $3 billion. Such instance took place despite clear evidencebeing present. This led to reforms like bans on commissions on superannuation products andintroduction of best interest duty (Robertson, 2018). Key ethical issue(s)/concern(s)Leadership in its literal sense refers to a group of people being led by a person. In case ofcompanies, the directors of the company are the ones who lead the company towards success.This is also true in reverse situation, where the directors or the key officers of the companyhave the capacity of taking the company towards its end (Ferrell, Fraedrich and Ferrell, 2016).In case of Storm Financial, the leadership of the company was focused on personal interests,instead of being focused on working towards the stakeholders of the company, particularly theinvestors who had invested their life savings in the company, and were majorly retired people.In their role as financial advisors, they worked in favour of themselves, instead of the clients towhom the advice was being given (Robertson, 2018). This raises the issue of unethicalleadership in context of the discussed article. Apart from Storm Financial, this theme is also truein other financial scandals taking place in the nation. So, the overcharging or the wrongcharging of interest money from clients by banks like AMP and Commonwealth Bank shed light4

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