HC2121 : Comparative Business Ethics and Social Responsibility
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Added on 2019-10-30
HC2121 : Comparative Business Ethics and Social Responsibility
Added on 2019-10-30
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Comparative Business Ethics and Social Responsibility1
ContentsComparative Business Ethics and Social Responsibility.......................................................................................1Introduction...........................................................................................................................................................3Overview of the insider trading and unethical activities related to it.....................................................................31.) Are information gathering techniques like Rajaratnam's common on Wall Street? If so, what could regulators, investors, and executives do to reduce the practice?............................................................................53.) Do you think the secret investigation and conviction of Rajaratnam and other people in the Galleon network will deter other fund managers and investors from sharing non-public information?............................................8Conclusion............................................................................................................................................................9Bibliography.......................................................................................................................................................102
IntroductionThe business process of the 21st century has been considered very complex. Irrespective of thesizes, the business organisations face ethical issues. The need of the ethics and code of conduct hasbeen a vital need for all the organisations. The major studies highlight that the complex ethicalissues are witnessed by the business companies with relation to the decision-making, compliance,and governance and mostly in the diverse cultures.The ethical dilemmas have been the major concern of the companies. The course of action based onthe ethical principles is required to be framed by the organisation. The most important work of theorganisation is to find out the ethical issues related to the organisation, finding the facts, assessingthe facts and to take an alternative course of action. The activities will contribute to the properdecision-making activities of the management and it will focus on the reliability of it. Theappropriate ethical decision-making process will take care of the workers of the company & willensure that code of conduct is properly maintained in the organisation[ CITATION Beh07 \l 16393 ].The focus of the ethical activities is on the protection of the values and the belief of the employee inthe organisation.The assignment makes an attempt to study the unethical behaviour of Rajaratnam & otherconspirators who have been involved in the wrong practices. The focus is to study the issues relatedto the unethical behaviour of Insider Trading CEO. The allegation against Rajaratnam was that hewas engaged in the conspiracy with an employee of Intel Corporation gathering the insiderinformation about the leading and global organisations that follow the ethical code of conduct. Theorganisations that are affected by the conspiracy were Hilton Hotel Group, Google Inc., IBM etc.The immoral conducts of the conspiracy brought huge loss to the credential[ CITATION Bha163 \l16393 ]. The unethical activities were related to the scandals that breached the trust of theconsumers, the trust of the employees & the shareholders of the company. The unethical activitiesbrought a very unpredictable culture in the organisation.Overview of the insider trading and unethical activities related to itThe traders of Rajaratnam were allowed to remain in charge of the capitals in large quantity andthis was contrary to the standards of business. The actual practice is that managers of portfolio &analysts remain in charge of the money & the traders’ responsibility is to execute the orders. Theinformation gathering can be expected by a company but making the formation public is not legal.This can uncover a trader to the accusation of inside trader. The allegation against Rajaratnam isthat he expected his traders to make a demand for the sensitive information from his client.3
[ CITATION Boi16 \l 16393 ] The expose of the insider information was related to the biggest stocks,selling, future acquisitions and the products.The illegal activities were reported to the SEC by a junior trader in the year 1998 and Galleonignored the report. The stock was directed by the company if it had taken it seriously and thecompany could have earned millions of dollars as the additional profits.The incident shows that the company does not find out the individual’s morality and the decisionstaken by the company was based on the ethical standards of the company and the decisions wereguided by them. The moral reasoning was lacked by Rajaratnam and his behaviour was completelyunethical. The issue related to the financial disclosures of the institutional investors became a majorconcern[ CITATION Fer16 \l 16393 ]. The need of internal controls was there to be set up with the SECso that it can regulate the transparency & the disclosure and in the future, the hedge funds will beoperated successfully.The release of the confidential information without the consent of the involved parties is unethical.The confidentiality in the business refers to the secrets & techniques that are kept under custodyand this fosters self-beliefs among the partners of the organisation. The information has greatvalues for the organisation. The release of the information will bring harm to the public and thepeople those who are involved. The monetary issue is also involved and many people may lose andmuch time is wasted in the judicial process[ CITATION Fow15 \l 16393 ]. The agreement of keepingthe personal information confidential is broken and it becomes illegal to share the information tothe public. The people who are involved in doing the unethical work are prosecuted & punished andasked to pay fines. It is illegal to share the information of the customers that will lead to thecompanies to take the decision that is beyond the business ethics. This brings huge loss to thecompany.Raj Rajaratnam was a successful person and he had tremendous ability to lead his company tomotivate the shareholders. The Galleon Group was very successful under his dynamism. Theanalytical background of Rajaratnam brought huge success to his company. Unfortunately,Rajaratnam was involved in many illegal acts related to the inside trading[ CITATION Jen16 \l16393 ]. The popularity of Rajaratnam and his large & strong network and moreover his widecontacts with the officials of the financial institutions provided him leverage to get confidential dataof the companies. The most affected companies that suffered in the financial scandal are Intel,Google, and IBM & McKinsey. The unethical activities of Rajaratnam brought him a raise of $ 64million and he was charged with fourteen counts of security fraud & conspiracy. Rajaratnam wasfound guilty in 2011 in the month of May[ CITATION sev17 \l 16393 ].The unethical activity of Inside Trading is that it violated the shareholders’rights, those who ownedthe information and this information contributes to the success of the company. The unjust4
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