In reference to Chapter 7, did Goldman Sachs use:
I) Moral management,
II) Immoral management or,
III) Amoral management
when it assisted the federal government of Greece to secure entry into the Eurozone? Discuss and explain your answer.
When Goldman Sachs assisted the federal government of Greece to secure entry into the eurozone it practiced Intentional Amoral management.
Maastricht Treaty created the Euro. As per the treaty the economy deficit level of the country was already predefined for those countries who were willing to enter euro zone. But Greece entered the European union with a budget deficit that exceeded the allowed threshold. The Greek government borrowed heavily and went on spending after the adoption of Euro as their currency. Instead of reducing the spending and borrowing heavily it adopted creative accounting practices to hide its true budget deficit. It was Goldman Sachs that helped the Greek government to borrow billions in the form of loans and assisted it to hide this huge loan amount from the public view by treating it as currency swap. Now as per the European rules it was not required for Greece to disclose this transaction. This favored the Greek government to remain under the European Union’s deficit spending limits and join the euro.
Intentional amoral management
Amoral management is not just a middle position on a continuum between immoral and moral judgment. Amoral managers of this type do not factor ethical considerations into their decisions, actions and behaviors because they believe business activity resides outside the sphere to which moral judgments apply. Such managers think that different rules apply in business than in other realms of life.
In this instance Goldman Sachs knew that Greece was having a budget deficit that was higher than the allowed threshold but still it assisted Greece by adopting unfair accounting practices. Goldman Sachs knew the...