Banking Industry Meltdown Essay Sample

1. Determine which moral doctrines ( as discussed in chapter 6 ) is most applicable to an apprehension of the banking industry meltdown. Explain your principle. “Moral doctrine is the survey of moral opinions or the value that is placed on determinations about what is right or wrong” ( hypertext transfer protocol: //www. smallbusiness. chron. com ) . There is a differentiation between moral doctrines and concern moralss. A moral doctrine refers to an individual’s rules and values that help to specify and find what is considered to be moral or immoral. Business moralss is normally based on determinations in groups or those made when transporting out undertakings to run into concern aims ( Fraedrich/Ferrell. page 151 ) . Moral doctrines can be considered as guidelines or a design to assistance in “determing how struggles in human involvements are to be settled and for optimising common benefit of people populating together in groups” ( Fraedrich/Ferrell. page 151 ) . Moral doctrines besides guide business people in explicating concern schemes every bit good as offering guidelines for deciding ethical issues. The moral doctrines used in concern determinations are teleology. deontology. the relativist position. virtuousness moralss. and justness theories ( Fraedrich/Ferrell. page 153 ) .

Teleology derives from the Grecian term for terminal or intent and teleology refers to “moral philosopher in which an act is considered morally right or acceptable if it produces some coveted consequence such as pleasance. cognition. calling growing. the realisation of opportunism. public-service corporation. wealth. or even fame” ( Fraedrich/Ferrell. page 155 ) . Basically. teleology is in topographic point to measure the moral value or worth of a behaviour by analyzing the effects. There are two theories that autumn under the teleology umbrella that can besides steer persons in their concern decision-making and those are egoism and utilitarianism. Persons who conform to egoism believe that they should be able to do determinations to profit their ain opportunism and each person defines their self-interest otherwise. When confronted with an ethical issue or determination. the egotist is most likely to take the option that best benefits them. Utilitarianism. likewise to egoism. “is concerned with effects. but the useful seeks the greates good for the greatest figure of people” ( Fraedrich/Ferrell. page 156 ) . Utilitarians have the belief that the decsiiosn should be made that will profit or ensue in the greatest entire public-service corporation and that will ensue in the greatest benefit for all persons affected.

The 2nd moral doctrine. deontology. derives from the Grecian term for moralss. Deontology “refers to moral doctrines that focus on the rights of persons and aon the purposes associated with a peculiar behaviour instead than on its on consequences” ( Fraedrich/Ferrell. page 158 ) . Deontology is based on the thought that all persons must be given equal regard. Deontology can be separated into two groups: those persons who focus more on moral regulations ( regulation deontology ) and those persons who focus more on the nature of the act ( act deontology ) . Relativist position is used to assist one understand how people make ethical determinations. The relativist position is based on the belief that ethical behaviour is defined from the experiences of people. Persons practising the relativist position usage themselves and/or persons around them “as their footing for specifying ethical standards” ( Fraedrich/Ferrell. page 160 ) . The moral doctrine of virtuousness moralss is an attack that places the focal point on the sort of individual who is making the act. The justness theory involves “evaluations of equity or the temperament to cover with sensed unfairnesss of others” ( Fraedrich/Ferrell. page 163 ) .

Justice is besides defined as just intervention and/or due wages in concurrence with ethical or legal criterions. In relation to concern. this definitions means that the regulations or standards indiviudals use to each a determination or find the justness of a state of affairs “could be based on the sensed rights of individvuals and on the purposes of the people involved in a concern interaction” ( Fraedrich/Ferrell. page 163 ) . The moral doctrine that is most applicable to the banking industry meltdown would be teleology. In the instance. the actions of the indviduals were a direct correlativity to egoism. which is a teleological doctrine. Egoism determines that right or acceptable behaviour is defined by the effects for the person. Nick Leeson. former main bargainer for Barings Bank is a premier illustration of egoism. Leeson caused the steadfast one million millions of dollars as a consequence of his hazardous behaviour. Leeson’s scheme in the 1980s was based on the fact that he knew that one stock market was slower in treating trades than the other.

Lesson established an mistake history for his losingss to mask any bad stakes. No 1 at Barings Bank had entree to see that history and as a consequence. Leeson was recognized widely as a superb bargainer. The directors at Barings Bank had been assured by Leeson that he was non utilizing company money to make his tradings and that it was risk free. Leeson had the advantage because the directors at Barings Bank had really small cognition in trading. Leeson finally quit his occupation in 1995 after the Kobe temblor hit. which caused the Nipponese stock market to crash. However. Leeson’s surrender came after a important loss by Barings Bank. Leeson still continued the hazardous behaviour and tried to cover those losingss through other hazardous investings but merely caused more losingss. Leeson was concerned with doing money and doing himself look good. no affair the hazard. 2. Analyze the instance survey and discern if the “white collar” offenses committed differ in any substantial mode from other more “blue collar” offenses.

“The phrase white-collar offense was coined in 1939 during a address given by Edwin Sutherland to the American Sociological Society” ( hypertext transfer protocol: //www. jurisprudence. Cornell. edu/wex/white-collar_crime ) . Harmonizing to the Federal Bureau of Investigations. white collar offense costs the United States about three hundred billion dollars a twelvemonth. That factor entirely is what separates white collar offense from bluish neckband offense. Blue collar crimininals are charged as persons whereas white collar felons involve indivudials every bit good as the organisations that employ them. Organizations can besides be fined when any of its employees are charged and found guilty of a white neckband offense. White collar offense is besides hard to prosecute because the wrongdoers use sophisticated ways to conceal their activities. Blue collar offenses are non as hard to prosecute one time grounds. normally physical. has been gathered against the wrongdoers. Blue collar offense does non be about every bit much to forestall or prosecute as white collar offenses. 3. Determine and discourse the function that corporate civilization played in the banking industy scenario. Support your response with specific illustrations.

The corporate civilization of an organisation is really important to how employees conduct themselves. If an organisation has a strong ethical civilization. so employees are less likely to perpetrate Acts of the Apostless that are considered unethical. Lehman Brothers was the fourth-largest investing bank in the United States. but in 2008 filed for bankruptcy. The house became a publically traded company in 1994 and joined the S & A ; P Index in 1998. Its stock rose to one hundred dollars per portion by the twelvemonth 2000. In 2007. even as the subprime crisis began. the house was ranked figure one on the “Most Admired Firms” list by Fortune magazine. Lehman Brothers CEO Richard Wald was besides listed as one of the world’s 30 best CEOs. Unfortunately for Lehman Brothers. their portions had lost seventy three per centum of their value. The house was seeking assistance from the authorities to remain afloat. yet its executives were still having 1000000s of dollars in fillips. If the house had any signifier of corporate civilization with a strong ethical background. those executives would non hold accepted fillips pay while the organisation suffered financially. 4. Contend how leaders within the banking industry could hold used their influence to debar the industry meltdown.

I feel that the leaders should hold been puting the illustration for how to carry on concern and that would be by exhibiting a strong ethical background and set uping a strong corporate civilization. I besides believe that alternatively of looking to do a dollar and be the largest house or organisation. the leaders should hold thought about the stakeholders of their organisations and how their actions would impact the stakeholders.

Mentions

Ferrell. O. C and Fraedrich. John. ( 2011 ) . Business Ethical motives: Ethical Decision Making and Cases. 2011 usage edition ( 8th ed. ) . Mason. Ohio: South-Western Cengage Learning. How to Use Moral Philosophy to Business Ethics. Retrieved on November 30. 2012. hypertext transfer protocol: //smallbusiness. chron. com/apply-moral-philosopy-business-ethics-33340. html Teleology Defined. Retrieved on November 30. 2012. hypertext transfer protocol: //www. thefreedictionary. com/teleological White-collar Crime: An Overview. Retrieved on November 30. 2012.