What stops a person from bribing someone in order to make their situation easier? Is it the same thing that allows lobbying to actually work? How can a manager make their financial statements look better than they actually were in order to attract investors? A loose set of ethical standards can allow an individual to make such judgments. Several recent legislative enactments try to define or outline what is considered ethical and unethical behavior. Although every person will have their own set of moral principles or ethics, a general standard must be set to keep order and protect fraudulent actions.
Defining ethics is not a simple or easy task, as it is ever changing to meet the needs of society. Although the linguistic definition remains constant, the technical definition transforms to adapt to people’s culture. Doing what would be considered right or correct a century ago most likely does not apply in our world today; not only by societal standards, but also in terms of economics and politics. But what if one society becomes entirely corrupt, how could you define what would be considered ethical? For example, when a regime takes over and brainwashes its population or commits genocide, such as Rwanda. In that case society redefines its code of ethics and moral values in order to protect society from decay.
The argument of nature vs. nurture can be brought to light in determining one’s ethical behaviors and beliefs. Their make-up, genetics and background, ultimately define how they perceive the actions and decisions they make to be ethical or unethical. Combined with the laws in place, decisions are made instantaneously that subconsciously take into effect all of their preconceived notions to choose what to do; ethical or unethical. Although something may still be legal, it could be unethical, and vice versa; it could be illegal but ethical. For example, if you have to transport someone to the hospital for an emergency, it would be ethical to go over the speed limit in order to reach the hospital as quickly as possible.
When a new person is hired at a company, there is usually a handbook given to the employee with guidelines and regulations that he or she should follow to be in compliance with the corporations’ rules. But not all of the situations you could be faced with while working will be outlined in the handbook given to you which leaves you to your own judgment on how to handle what may arise. For instance, Publix has a no tipping policy for carry out service, however, if a customer insists after you decline their offer, you can accept the tip on their second offering. Although it’s against company policy, it seems to be the ethical choice to make in order to avoid upsetting the customer and starting an argument about the rules of the corporation.
Several new laws and legislation have been enacted, as well as organizations created for the sole purpose of governing businesses and entities on their conduct, whether it is for transactions, public relations, or any other area. If one employee commits an action that is considered illegal, it would tarnish the reputation of the company. Likewise, if the decision is legal, however, it is unethical, it would also make the company look bad, which in turn would hurt the shareholders and other employees and officials. The Foreign Corrupt Practices Act of 1977 was passed to discourage bribery, violations of lawful duties, and other unethical and or illegal actions in business. Some executives could take extraordinary measures in attempt to perpetuate their corporation and avoid bankruptcy by persuading others to help out their situation by bailing them out and in return they would offer some compensation later. The methods that the companies provide their financial statements is also regulated by legislation in order to ensure accurate and honest information is being recorded and displayed to investors and stockholders. With the laws in place, the consequences and penalties for committing the illegal and unethical actions discourage future incidents from occurring.
In addition, the Sarbanes Oxley Act of 2002 was written into law as a result to the business scandals that took place in the 2000’s. A new oversight committee was organized in an attempt to restore the public’s confidence in the market, especially with securities. By altering documents that detail a company’s financial condition, those responsible must face criminal charges if there is no genuine evidence and factual certification to back what they did. The act called for enhancing corporate transparency and proper disclosures of documents in a periodic manner. Moreover, it protects and encourages those who see something wrong in their workplace to report it immediately, also known as “whistle blowers.” President George W. Bush called it “the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt. The era of low standards and false profits is over; no boardroom in America is above or beyond the law. No more easy money for corporate criminals, just hard time.” (SEC)
As for government officials, the United States Office of Government Ethics was created in 1978 in order to “help ensure public confidence in Government decision-making.” The executive branch’s financial statements are regulated and overseen by this office to ensure proper disclosure. Also, employees are trained and educated so that the laws and regulations are followed in compliance and ethically. When government officials and employees behave accordingly, they influence those around them, such as foreign countries visited, other branches of government, and most importantly, the citizens. The Department of Justice, the U.S. Attorneys’ Offices, Inspectors General, General Services Administration, and many other organizations help regulate legal and ethical behavior in the United States’ government and business.
In the states’ governments, there are additional agencies to help control entities to stay within legal and ethical limitations. One such organization is the Florida Commission on Ethics, which was founded in 1976 due to the “Sunshine Amendment.” It is based out of the state’s capitol in Tallahassee with nine members of the commission and about twenty individuals make up the rest of the staff. They listen and respond to complaints regarding legal issues, public information matters, investigations, financial disclosures, and administrative topics. The areas their standards are enforceable are to local government employees, lobbyists, public officers, and candidates. Judges however, have their own benchmarks set by the Code of Judicial Conduct, which was implemented by the Supreme Court of Florida. Another example is the Florida Bar Association, which helps lawyers determine what is the ethical decision or action to take when facing a dilemma. Similar to the Florida Commission on Ethics, on their website there is a page where experts voice their opinions on common topics or specific requests. Additionally, questions can be asked seeking advice on matters by those registered with the association. Articles are published periodically relating to controversial or trending topics in society and the media.
There have been numerous examples of businesses and corporations that have made blatant unethical decisions in recent history. However, as these scandals occur, new legislations are passed in order to cover the loopholes in the system and hopefully prevent future occurrences. For example major banks in the United States granted loans, mostly for homes, to people they knew were not going to be able to pay it back or afford what they were going to use it for. This was the major contributing factor to the housing market collapse, caused by banks who wanted to make money from loans given out to the population. In addition, the loans of the same time period were given good ratings such as AAA by Fitch, Moody’s, and Standard & Poor’s when they were aware that they didn’t deserve the high grade, and in reality they should have been rated CCC or D at best.
Now to take a look at this from a much closer view to see what decisions exactly were made and why, pretend to be the Chief Executive Officer of Morgan Stanley or Merrill Lynch at the time. You must take into consideration that you have the duty as the head of an investment bank to maximize profit for your shareholders, which generally is accomplished by increasing revenues and decreasing costs. It is ethical and legal to find ways to generate profit to do your job, however, by issuing these loans to those who didn’t qualify hoping to make quick money, it turns into an unethical and illegal method by misleading consumers into believing they can afford something that was given a good rating; meaning it is secure and a good investment, whereas actually neither can they pay for it nor is it a secure investment or loan.
Unfortunately, that was just the business side of the story. Although the United States of America was founded on a free market strategy to encourage competition, when a company gets “too big to fail,” the government intervenes and basically bails it out. This unbalances the situation of the other banks and basically undoes what happened to cause that entity to get into the situation they put themselves in. For example, the government took over major companies such as AIG, and spent $700 billion in order to bail out the specific major banks that caused the collapse, and the same person who was the chairman of the Federal Reserve, Ben Bernanke, who authorized this process, was in the same position before the collapse happened and has several ties to those banks. In this case, nothing crossed over the illegal line, however just about all the actions taken would be considered completely unethical. Instead of allowing the market to run its course and allow new banks to be established while shifting the powers away from the major ones through deregulation, the major banks received a lump sum of money that didn’t even help the situation because the top executives took most of that money as bonuses to collect.
As for the businesses that follow good moral and ethical practices, there are incentives and reasons outside of just doing what is right. Having a respectable reputation in a competitive market encourages prospective employees to seek employment and students to pursue an internship. This way the corporation is able to select from a diverse and high-quality pool of potential workers. Furthermore, certain companies like Better Business Bureau and The Foundation for Financial Service Professionals give out ratings and awards based on a company’s standards and history. For instance, The Foundation for Financial Service Professionals presents The American Business Ethics Award to companies who commit to ethical integrity of their managerial and employee conduct and performance. The Better Business Bureau states clearly in its mission statement that it looks to advance the trust in our marketplace by encouraging ethical practices so that a sense of trust exists between buyers and sellers. When a consumer issues a complaint or notifies the Better Business Bureau of scam scheme, an investigation initiates which can alter the rating of a corporation, ranging from A+ to F. In addition, registering with the Better Business Bureau as an accredited business means that the business will commit to resolving consumer complaints with a sincere effort.
All in all, the legislation of the land is what ultimately determines what is legal and illegal, however, it is the ethics of the individual citizens that governs whether they abide or not. Ethics gives the decisions we make and the actions we take a meaning, without it they are aimless and random. Qualities that encompass an ethical decision include virtuous, honest, just, rational, courageous, productive, considerate, and honorable. Without ethics, it is practically impossible to make a decision or select a course of action because the possibilities would be limitless; you do not worry about the consequences of your choice. Whether this sense of moral standards comes from their parents, education, religion, or community, when the situations arise one must take all these influences into account when choosing what decision is right, and best to make accordingly. As time progresses, our standards of ethics will continue to change in the marketplaces, the communities, the governments, and everywhere else, but it is ultimately our responsibility, the citizens, to ensure that what is best for us is implemented and followed.
Defining ethics is not a simple or easy task, as it is ever changing to meet the needs of society. Although the linguistic definition remains constant, the technical definition transforms to adapt to people’s culture. Doing what would be considered right or correct a century ago most likely does not apply in our world today; not only by societal standards, but also in terms of economics and politics. But what if one society becomes entirely corrupt, how could you define what would be considered ethical? For example, when a regime takes over and brainwashes its population or commits genocide, such as Rwanda. In that case society redefines its code of ethics and moral values in order to protect society from decay.
The argument of nature vs. nurture can be brought to light in determining one’s ethical behaviors and beliefs. Their make-up, genetics and background, ultimately define how they perceive the actions and decisions they make to be ethical or unethical. Combined with the laws in place, decisions are made instantaneously that subconsciously take into effect all of their preconceived notions to choose what to do; ethical or unethical. Although something may still be legal, it could be unethical, and vice versa; it could be illegal but ethical. For example, if you have to transport someone to the hospital for an emergency, it would be ethical to go over the speed limit in order to reach the hospital as quickly as possible.
When a new person is hired at a company, there is usually a handbook given to the employee with guidelines and regulations that he or she should follow to be in compliance with the corporations’ rules. But not all of the situations you could be faced with while working will be outlined in the handbook given to you which leaves you to your own judgment on how to handle what may arise. For instance, Publix has a no tipping policy for carry out service, however, if a customer insists after you decline their offer, you can accept the tip on their second offering. Although it’s against company policy, it seems to be the ethical choice to make in order to avoid upsetting the customer and starting an argument about the rules of the corporation.
Several new laws and legislation have been enacted, as well as organizations created for the sole purpose of governing businesses and entities on their conduct, whether it is for transactions, public relations, or any other area. If one employee commits an action that is considered illegal, it would tarnish the reputation of the company. Likewise, if the decision is legal, however, it is unethical, it would also make the company look bad, which in turn would hurt the shareholders and other employees and officials. The Foreign Corrupt Practices Act of 1977 was passed to discourage bribery, violations of lawful duties, and other unethical and or illegal actions in business. Some executives could take extraordinary measures in attempt to perpetuate their corporation and avoid bankruptcy by persuading others to help out their situation by bailing them out and in return they would offer some compensation later. The methods that the companies provide their financial statements is also regulated by legislation in order to ensure accurate and honest information is being recorded and displayed to investors and stockholders. With the laws in place, the consequences and penalties for committing the illegal and unethical actions discourage future incidents from occurring.
In addition, the Sarbanes Oxley Act of 2002 was written into law as a result to the business scandals that took place in the 2000’s. A new oversight committee was organized in an attempt to restore the public’s confidence in the market, especially with securities. By altering documents that detail a company’s financial condition, those responsible must face criminal charges if there is no genuine evidence and factual certification to back what they did. The act called for enhancing corporate transparency and proper disclosures of documents in a periodic manner. Moreover, it protects and encourages those who see something wrong in their workplace to report it immediately, also known as “whistle blowers.” President George W. Bush called it “the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt. The era of low standards and false profits is over; no boardroom in America is above or beyond the law. No more easy money for corporate criminals, just hard time.” (SEC)
As for government officials, the United States Office of Government Ethics was created in 1978 in order to “help ensure public confidence in Government decision-making.” The executive branch’s financial statements are regulated and overseen by this office to ensure proper disclosure. Also, employees are trained and educated so that the laws and regulations are followed in compliance and ethically. When government officials and employees behave accordingly, they influence those around them, such as foreign countries visited, other branches of government, and most importantly, the citizens. The Department of Justice, the U.S. Attorneys’ Offices, Inspectors General, General Services Administration, and many other organizations help regulate legal and ethical behavior in the United States’ government and business.
In the states’ governments, there are additional agencies to help control entities to stay within legal and ethical limitations. One such organization is the Florida Commission on Ethics, which was founded in 1976 due to the “Sunshine Amendment.” It is based out of the state’s capitol in Tallahassee with nine members of the commission and about twenty individuals make up the rest of the staff. They listen and respond to complaints regarding legal issues, public information matters, investigations, financial disclosures, and administrative topics. The areas their standards are enforceable are to local government employees, lobbyists, public officers, and candidates. Judges however, have their own benchmarks set by the Code of Judicial Conduct, which was implemented by the Supreme Court of Florida. Another example is the Florida Bar Association, which helps lawyers determine what is the ethical decision or action to take when facing a dilemma. Similar to the Florida Commission on Ethics, on their website there is a page where experts voice their opinions on common topics or specific requests. Additionally, questions can be asked seeking advice on matters by those registered with the association. Articles are published periodically relating to controversial or trending topics in society and the media.
There have been numerous examples of businesses and corporations that have made blatant unethical decisions in recent history. However, as these scandals occur, new legislations are passed in order to cover the loopholes in the system and hopefully prevent future occurrences. For example major banks in the United States granted loans, mostly for homes, to people they knew were not going to be able to pay it back or afford what they were going to use it for. This was the major contributing factor to the housing market collapse, caused by banks who wanted to make money from loans given out to the population. In addition, the loans of the same time period were given good ratings such as AAA by Fitch, Moody’s, and Standard & Poor’s when they were aware that they didn’t deserve the high grade, and in reality they should have been rated CCC or D at best.
Now to take a look at this from a much closer view to see what decisions exactly were made and why, pretend to be the Chief Executive Officer of Morgan Stanley or Merrill Lynch at the time. You must take into consideration that you have the duty as the head of an investment bank to maximize profit for your shareholders, which generally is accomplished by increasing revenues and decreasing costs. It is ethical and legal to find ways to generate profit to do your job, however, by issuing these loans to those who didn’t qualify hoping to make quick money, it turns into an unethical and illegal method by misleading consumers into believing they can afford something that was given a good rating; meaning it is secure and a good investment, whereas actually neither can they pay for it nor is it a secure investment or loan.
Unfortunately, that was just the business side of the story. Although the United States of America was founded on a free market strategy to encourage competition, when a company gets “too big to fail,” the government intervenes and basically bails it out. This unbalances the situation of the other banks and basically undoes what happened to cause that entity to get into the situation they put themselves in. For example, the government took over major companies such as AIG, and spent $700 billion in order to bail out the specific major banks that caused the collapse, and the same person who was the chairman of the Federal Reserve, Ben Bernanke, who authorized this process, was in the same position before the collapse happened and has several ties to those banks. In this case, nothing crossed over the illegal line, however just about all the actions taken would be considered completely unethical. Instead of allowing the market to run its course and allow new banks to be established while shifting the powers away from the major ones through deregulation, the major banks received a lump sum of money that didn’t even help the situation because the top executives took most of that money as bonuses to collect.
As for the businesses that follow good moral and ethical practices, there are incentives and reasons outside of just doing what is right. Having a respectable reputation in a competitive market encourages prospective employees to seek employment and students to pursue an internship. This way the corporation is able to select from a diverse and high-quality pool of potential workers. Furthermore, certain companies like Better Business Bureau and The Foundation for Financial Service Professionals give out ratings and awards based on a company’s standards and history. For instance, The Foundation for Financial Service Professionals presents The American Business Ethics Award to companies who commit to ethical integrity of their managerial and employee conduct and performance. The Better Business Bureau states clearly in its mission statement that it looks to advance the trust in our marketplace by encouraging ethical practices so that a sense of trust exists between buyers and sellers. When a consumer issues a complaint or notifies the Better Business Bureau of scam scheme, an investigation initiates which can alter the rating of a corporation, ranging from A+ to F. In addition, registering with the Better Business Bureau as an accredited business means that the business will commit to resolving consumer complaints with a sincere effort.
All in all, the legislation of the land is what ultimately determines what is legal and illegal, however, it is the ethics of the individual citizens that governs whether they abide or not. Ethics gives the decisions we make and the actions we take a meaning, without it they are aimless and random. Qualities that encompass an ethical decision include virtuous, honest, just, rational, courageous, productive, considerate, and honorable. Without ethics, it is practically impossible to make a decision or select a course of action because the possibilities would be limitless; you do not worry about the consequences of your choice. Whether this sense of moral standards comes from their parents, education, religion, or community, when the situations arise one must take all these influences into account when choosing what decision is right, and best to make accordingly. As time progresses, our standards of ethics will continue to change in the marketplaces, the communities, the governments, and everywhere else, but it is ultimately our responsibility, the citizens, to ensure that what is best for us is implemented and followed.