...Business ethics NICOL Maëlle ISEG BFS5 1A [Nom de la société] | [Adresse de la société] ------------------------------------------------- FINAL ASSIGNMENT Business ethics Should executives have to be offered bonuses to do their job well when other employees are expected to do their job well in the absence of bonuses? Should executives have to be offered bonuses to do their job well when other employees are expected to do their job well in the absence of bonuses? Introduction Nowadays, in many companies, executives receives more and more incentives like bonuses if they do their job well. In these same companies, it’s a rare fact that workers have bonuses. Equality between executives and other employees’ compensation is often not respected, most of workers find the bonus system very unfair. That bring us to the following question: should executives have to be offered bonuses to do their job well when other employees are expected to do their job well in the absence of bonuses? In this paper we will see that executives have to be offered bonuses to do their job well only if others workers are expected to do their job well with the same advantage of bonuses as reward. Through this paper, we will see that bonuses can leads workers to be jealous of executives, we also see that bonuses improve the company performance and finally we will see that bonuses make the workers more devoted to their company. Thesis statement Executives have to be offered bonuses to...
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...Running head: BUSINESS RESEARCH ETHICS 1 Business Research Ethics RES 351 February 28, 2013 BUSINESS RESEARCH ETHICS 2 Business Research Ethics Before the debt crisis of 2008 exploded, one of the two American banks that backed a large portion of United States mortgages was fined in 2006 because of improper accounting practices. Ethics are a set of standards derived by individual or company ideals of what is right and wrong. Looking back, it should have been clear the poor ethics of this bank would contribute to the economic disaster that would follow. A report conducted by the Office of Federal Housing Enterprise Oversight (OFHEO) from 1998 to 2004 discovered that Fannie Mae’s senior management deliberately influenced improper accounting by swaying internal auditors resulting in undeserved large bonuses. This was accomplished without advising any stockholder or other interested parties; the rest of the world. During this time, Fannie Mae reported unfettered profit growth and reaching publicized earnings targets per share for each quarter. "The image of Fannie Mae as one of the lowest-risk and 'best in class' institutions was a façade" (Fannie mae: Unethical, 2006). During this investigation, Fannie Mae evaded the OFHEO further adding to their harsh fine levied by them and the Securities and Exchange Commission. Fannie Mae’s mismanagement, manipulation of earnings, and unhindered growth culminated in $10.6 billion in losses, “well over a billion dollars in expenses...
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...Occupy Wall Street Movement Holly Hyder Professor Zimmerman Business Ethics July 28, 2013 Occupy Wall Street Movement In the fall of 2011 there began a movement in America. This movement would forever be known as Occupy Wall Street. Taking over Liberty Square in the Manhattan Financial District in New York, a group of Americans began a nonviolent protest over the economic state in America. One of the stances that Occupy Wall Street held was that 99% of American’s economic well-being was controlled by the top 1% of Americans. This economic truth would no longer be accepted by this group of Americans. This group also called for solidarity inside of the 99% of Americans defining this in a set of principles. These principles involved a direct and transparent engagement of participatory democracy, exercising responsibility on collective and individual levels, empowerment of each other against all oppression, redefining how labor is valued, the sanctity of individual privacy, that education is human right, and that all knowledge, technologies, and culture be open to free access, creation, modification, and distribution (Stone, 2011)). Together in this movements solidarity they came together in New York to speak out about the injustices that they have suffered at the hands of corporations. These facts were that homes had been placed in foreclosure without the original mortgages, bonuses have been given to executives after corporations have received bail outs from taxpayers, the...
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...1.0 Introduction of Issue Ethics dilemma will occur when two organizational goals are in conflict. In this issue, it is involved how to generating revenue and at the same time practices ethics procedure. In this issue, manager is facing with a risky in making decision. If she is ignoring about the ethical procedure, so she will try to generate a huge profit to the company. The company does not have to lay off workers, but also provides year-end bonuses to its employees. So, Gina plans to side-out proper procedure to faster get advantages to she herself and department. She also tries to persuade Jason to support her decision. While, the Chairman of the Board, Jack has assured Gina that vote will be pass and he will have talked to the shareholders personally. But in the fact, Jack is does not have the power to make this decision without the boards’ actual vote. Jason as a department’s manager of the company, he had to think wisely and make the right decision to make sure that both the company and himself do not get into trouble especially related to the legal issue. 2.0 Unethical Behaviour In this case, unethical behaviour occur when Jason reluctant to make the deal that offer by Gina to allow Bestel Inc. investing 4 million dollars in their company, Gina try to influence Jason to agree the deal. However, Jason refuses to make the deal because the transaction would not have approved by the shareholders and it’s not following the procedure. Gina becomes anxious and angry by show...
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...Angelica Olivarez 430 ethics Fannie Mae Accounting Scandal 2001 Ethics is based on how people should act through well-based standards. Ethics on the other hand, does not describe the way people actually act. Ethics is a prescriptive term in which people should always aim to make the right decision. Those who act on ethics do not rationalize their actions founded own perceived self-interest. The accounting profession has its own understanding and framework of ethics. Accounting applications of ethical reasoning can become a common dilemma faced by auditors, internal auditors and all others who work in the business field. For example, The American Institute of Public Accountants (AICPA) Code requires CPAs to place the interest of the public first. To place the interest of the public first means that CPAs should not place themselves, their client or their employer’s interest above the public. Many business dilemmas involve managers, CPAs, and/or top management who have placed their interest above the public’s interest. An example of an accounting and business dilemma where the public interest was not placed first is Fannie Mae accounting scandal in 2001. Fannie Mae is the Federal National Mortgage Association, a government supported entity that assist lower and middle income Americans to buy homes. The Federal Home Loan Mortgage Corporation (Freddie Mac) also assists lower and Middle Americans to buy homes. Both supported entities gain special treatment and “aimed to increase...
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...suspicious outcomes let the United States Securities and Exchange Commission (SEC) to launch an investigation in April 2004. The company continued to plunge and deteriorate. In January 2009, Nortel filed Chapter 11 bankruptcy protection in the United States, and Companies' Creditors Arrangement Act (CCAA) in Canada. The rise of Nortel was due to innovation and timing. In July 2000, at the height of its success, with a market capitalization in excess of $350 billion Canadian dollars, Nortel accounted for 37 percent of the Toronto Stock Exchange Composite Index Value (Collins, 2012). This fast track did not last long as management was participating in unethical behavior. The top executives at Nortel were getting wealthier from substantial bonuses based on the falsified earnings that were being posted. In 2007, the SEC filed civil fraud charges against four former senior executives for repeatedly engaging in accounting fraud to bridge the gaps between Nortel’s true performance,...
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...AIG: From Bailout to Bonuses (2008) Based on a paper by: Paige Vandermyn & Holden Canty Summary by: Andrew F. Roberts During 2008's "too big to fail" bailouts exercised by the federal reserve, many struggling multi-national companies were awarded cash in hopes of avoiding bankruptcy. One company deemed simply too big to fail was the American International Group, Inc. (AIG for short), which provides insurance for individuals and businesses. The company, which would have almost certainly been forced into bankruptcy if not for the bailout, received hundreds of millions of dollars to keep from drowning. However, in an utterly shocking series of events, the company paid $218 million to top executives in bonus money. In a completely unethical fashion, the company used taxpayer bailout money to fund vacations and private jet flights to the executives who many blamed for causing AIG's financial troubles in the first place. Additionally, many senior employees were flown to California for a "retreat" including spa treatments and golf outings. This retreat cost over $400,000 dollars. By the end of 2008, AIG had received over $100 billion in bailout money. Unfortunately, the general public was not sure if the money was going toward improving business of simply paying for luxuries of the organization. These actions by AIG completely ignored each and every theory related to the study of ethics. In regards to the individualistic theory of ethics, AIG seemingly followed...
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...Philosophical Approaches to Ethical Decision Making Matrix Determine the ethical course of action for the following three scenarios from the perspective of each of the three philosophical approaches: consequentialism, deontology, and virtue ethics. Then, complete the matrix below by writing a few sentences stating the ethical course of action and the reasoning from that approach’s perspective. Clearly differentiate the reasons for each of the three approaches. Keep in mind that, although rationale might differ, the ethical course of action for a given scenario might be the same for each philosophical approach. Be sure to state the ethical course of action as well as the rationale behind it, according to the philosophical approach. Scenario 1 The mayor of a small seaside town faces a tough decision. A prominent developer has submitted a proposal to build a large mall and resort in the town. This development is estimated to bring $150 million in tourism each year and several hundred new jobs to the community, which badly needs the economic boost. The proposed location of the new development, however, is a site that now houses the only nursing home and senior citizens’ recreation center in the area. Both the nursing home and recreation center would have to be demolished, affecting 100 seniors and 30 employees. There is no other location in town where the new development can be built. How should the mayor decide: in favor of economic prosperity or in defense of his elderly...
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...Awarded to Major Bank Executives Their Impacts on Utilitarianism and Deontology Price TUI University Abstract This paper explores two published articles that report on banks receiving billions of taxpayers’ dollars awarded from the government known as the Trouble Asset Relief Program (TARP), who in turn paid their top executives billions of dollars for bonuses. TARP is a program to assist in the stability and strengthen its financial sector by paying for bad mortgages and other trouble assets. In order to prevent economic collapse, the Bush administration changed the programs goals. (Gold, 2008) Using the TARP funds to support and pay off executive’s bonuses poses a moral dilemma within society, which I will later discuss in the paper. The purpose of this paper is to answer the question, Should top executives of the major banks that received bail-out money be allowed to receive large bonuses? I will present my personal view on the matter using the bases of my values, beliefs and research that I have done on the topic. In addition, I will explain how bailout money awarded to major bank use for executives bonuses impacts on utilitarianism and deontology. Bailout Money Awarded to Major Bank Executives and their Impacts on Utilitarianism and Deontology The United States began experiencing the recession during the early years of 2000. On September, 11, 2001 a tragedy in New York City occurred when the World Trade Center Towers were struck with airplanes, which...
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...What is Business Ethics Troy Jaskolka MGT/216 July 26, 2010 William Carroll What is Business Ethics In today’s business culture, ethics is a trait highly publicized by not only the media but also by business professionals. According to “BNET Business Dictionary” business ethics is a system of moral principles applied in the commercial world. Business ethics provide guidelines for acceptable behavior by organizations in both their strategy formulation and day-to-day operations. Business ethics is also known as morality in business. This definition constitutes a trait that should be acceptable business acumen. Today, business ethics are portrayed as skewed and self serving. Because of such scandals as Bernie Madoff, Enron and the Arthur Anderson scandal, millions of people have come to the conclusion that businesses have pushed aside these ethics and welcomed the bottom line as their only source of morality. With such scandals taking over print media, television and radio, it is hard for one not to develop mistrust. Consumer confidence issues are a category of business ethics that affect not only the community but also the well being of the company. In order for a company to sustain in both the community and business world, sales must incrementally adjust to the growth of the company. A drop in sales because of mistrust issues can result in declining stock performance, layoffs, and eventually company closings. Consumer confidence also...
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...Ethics of Rerouted Accounting Steven J. McQueen Jr. ETH/376 November-24, 2104 Sylvia Baughey Ethics of Rerouted Accounting Excello Telecommunications had pitfalls in the year of 2010, this is clear by the fear exuded by their CFO, Terry Reed. The fear of earnings estimates wouldn’t be met amplified by the consequences of this circumstance compelled Mr. Reed to look for a way out. The effect on bonuses, stock options, and even the share prices of Excello made Mr. Reed emulate behavior outside the scope of ethical behavior and he subsequently enrolled the help of subordinates in such a way that violated conduct protocol. The sale of $1.2 million of equipment may have seemed irrelevant until Mr. Reed began his quest to have that amount recorded in 2010 instead of the date the equipment would actually change ownership. A summary of Section 302 of the Sarbanes-Oxley Act reads “The report does not contain any material untrue statements or material omission or be considered misleading…” (SARBANES-OXLEY ACT OF 2002, 2006) As CFO, Mr. Reed’s thought process of re-directing the transaction’s entry to reflect in 2010 to increase numbers for his earnings statements is simply that, misleading. Section 401 of the Sarbanes-Oxley Act reads “Financial statements [that] are published by issuers are required to be accurate and presented in a manner that does not contain incorrect statements or admit to [the] state material information.” (SARBANES-OXLEY ACT OF 2002, 2006) These two statements...
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...and electrodes. Let’s look at the Continuing Influence of the Founders of the Company. John C. Lincoln business was incorporated but in 1906 and he expanded his workforce to 30 and sales grew to over $50,000 a year. James F. Lincoln joined the company still small and he became the General Manager and Vice –President of the company. Employee morale and productivity remained with higher profits and bonuses and Lincoln’s market share is stable. When the advisory Board came into power, between 1915 and 1917, a paid-up life insurance policy was given by the company to the employee and a welding school was begun. In 1918, an employee bonus was attempted. In 1919, the Lincoln Electric Employees’ association was formed. In addition, the Board of Directors voted to start a suggestion system in 1929. The legendary Lincoln bonus plan was proposed by the Advisory Board and accepted on a trial basis by James Lincoln in 1934. The golden rule emphasizes on James Lincoln’s Christian ethics which he says “Treat People as you would like to be Treated” “In his words, he says if the Christian ethics control our acts, the savings in the cost of distribution will be tremendous.” In his view, the customer should always come first. Lincoln’s Incentive Management Plan was defined by the company’s rules, regulations, practices and programs which have been consistent since the inception of the company.(Recruitment and Selection, Job security, Training and Education, Work Assignment, Performance Evaluations)...
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...respect its suppliers and reward their shareholders. The Costco Organization strongly believes that taking care of their employees and providing them a generous pay is Costco’s key to success. Costco holds nearly one hundred and twenty-five thousand highly motivated employees. It is know that Costco’s employees are one of the best paid and happy employees in the retail business. The warehouse club has become the consumers place to go to, where they will find high quality products at rock bottom prices. Moreover, the issue that Costco is facing is the continuous expansion of their warehouses globally and paying their employees more than the average salary for warehouse employees. Costco’s employees are rewarded with very generous wages, bonuses and healthcare benefits. The employees salary is about forty two percent higher than competing retail stores. This could affect the organization in the long rung. Even though they are the number one leading warehouse club, overpaying their employees can destruct the organization. If the economy was to fall, the organization will loose revenue. “Most people agree that we’re the lowest-cost provider. Yet we pay the highest wages. So it must mean we get better productivity…you get what you pay for” Sinegal states. I will disagree with Sinegal in this matter...
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...ILE 335 Engineering Ethics Alexandra Velichko 20121545 2013-2014 Business Ethics in the News LLOYDS BANKING GROUP: The Pitfalls of Performance-Based Pay Case Study Wednesday, Lloyds Banking Group was fined £28 million ($46 million) by the U.K. Financial Conduct Authority for “serious failings” in the bonus and pay structure for its sales staff. The incentive structure, which ranged from substantial pay increases (and cuts), cash bonuses, and even bottles of wine, resulted in widespread instances of sales representatives pushing products that customers did not necessarily want or need. The FCA said that the incentive structure was so extreme, at times increasing or cutting a sales representative’s pay by 50%, that sales staff were likely driven to sell ill-suited products to customers. The FCA also expressed concern over a conflict of interest, as sales managers, whose compensation was tied to the performance of the sales staff, were in charge of administering the incentive structure. When do performance-based pay structures result in improper practices? How could Lloyds adjust its incentive structure to alleviate these concerns? Case Study Solution Lloyds Banking Group is in such status of capacity that enabled them to cripple to their customers by pushing products that customers did not necessarily want or need. This is an example of unethical or socially irresponsible behavior. There is a sort of negative impact within the firm, when unethical environment may...
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...Associate Level Material Appendix B Philosophical Approaches to Ethical Decision Making Matrix Determine the ethical course of action for the following three scenarios from the perspective of each of the three philosophical approaches: consequentialism, deontology, and virtue ethics. Then, complete the matrix below by writing a few sentences stating the ethical course of action and the reasoning from that approach’s perspective. Clearly differentiate the reasons for each of the three approaches. Keep in mind that, although rationale might differ, the ethical course of action for a given scenario might be the same for each philosophical approach. Be sure to state the ethical course of action as well as the rationale behind it, according to the philosophical approach. Scenario 1 The mayor of a small seaside town faces a tough decision. A prominent developer has submitted a proposal to build a large mall and resort in the town. This development is estimated to bring $150 million in tourism each year and several hundred new jobs to the community, which badly needs the economic boost. The proposed location of the new development, however, is a site that now houses the only nursing home and senior citizens’ recreation center in the area. Both the nursing home and recreation center would have to be demolished, affecting 100 seniors and 30 employees. There is no other location in town where the new development can be built. How should the mayor decide: in favor of economic...
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