PHL 323 - Ethics in Management
Dr. Rose Safir
Week 3 Assignment
February, 23 2009
Current Ethical Issue in Business
The importance of having ground rules in an organization is critical for the well being of the organization on for it client. The ground rules allow the organization to build its reputation among other competitor companies. These ground rules also leads to prioritize the organization ethical behavior and this will also lead the organization to have a strong reputation that will set the organization to be one of the most reliable organization among other competitors. Is evident that some organizations have strong ethical values than others; in this paper the author will briefly summarize an unethical issue of today’s organization. The author will also identify the ground rules manifested in the situation and as well as the ethical issues. In the article the president Obama rebuked banker from Wall Street who receive bonus last year, this bonus were valued in millions of dollars. The president Obama called this payout “shameful (Shear, 2009)” and blamed executives for the lack of responsibility during this economy crisis the nation is currently facing. The reaction of the president was based on a report by the New York Times where stated that “Wall Street executives who had given themselves almost $2-0 billion in bonuses in 2008…the report done by the New York state comptroller’s office that said last year’s total of Wall street bonuses was the sixth-highest ever, despite the poor economic performance of the firms (Shear, 2009)..” The president reject such as behavior from the executives. The president felt frustrated and puzzled by the unethical decision taken by the Wall Street high executives. The frustration of the president was more than evident based on some declaration he made after he find out this shameful situation. “There will be time for them to make profits, and there will be time for them to get bonuses…We shouldn’t have to that, because they should know better…We will continue to send that message loud and clear (Shear, 2009).” The main trigger of the issues is after a report from New York Times where stated the Wall Street executives gave themselves bonuses valued in almost $20 billion in year 2008. The amount was the same amount the Wall Street executives received during 2004 in order to inject stimulus to the economy. This money was supposed to bail out the economy crisis that Wall Street was facing at the time. But Wall Street executives used that money to enrich themselves instead using that money to come out of the crisis (Shear, 2009). The ethical conflict that this situation brought up is that this people receive money from tax payers, and the main purpose of this loan was to ensure that this money is use toward helping middle class individual to relieve from finance collapse, but instead they use for the own well being showing any remorse for those individuals who are struggling and even in the edge of living on the street with their entire family. The ethical change is that these executive became greedy and they saw a big opportunity to secure their selves interest by given themselves higher bonuses comparing to last years. “Mack received no cash bonus a year ago but received stock and options worth an estimated $40.2 million, well above his $800,000 base pay. Cayne received a bonus of $33.6 million in 2006 and base pay of $250,000 (Bonuses on Wall Street surge 14 percent, 2007.” “Goldman Sachs CEO Lloyd Blankfein reportedly is in line for a bonus of up to $70 million this year, as the nation's largest investment bank has largely navigated past any mortgage-related losses. Lehman Brothers' CEO Richard Fuld was granted a $35 million stock bonus for 2007, up 4 percent from last year (Bonuses on Wall Street surge 14 percent, 2007).” It seems that the deficiency is more than evident...