Merrill Lynch-Bank of America Merger

Topics: Utilitarianism, Bank of America, Merrill Lynch Pages: 5 (1992 words) Published: November 11, 2012
Ethics is a branch of philosophy that focuses on the moral, philosophical characteristics from formal, systematic and ethical principles. Moral judgments are calculated from ethical principles which need to be applied as a standard for everyday choices in life and business. This is directly related to the decisions human beings make. Cavico (2009) states utilitarianism is more than just moral philosophy. It is a way of reformation and used extensively in government decision making. This will be discussed further in the Bank of America-Merrill Lynch merger. Utilitarianism is considered a scientific system of ethics and not just a philosophical theory of ethics. Utilitarian ethics follows the belief of maximizing the greatest good for the largest number of people. As utilitarianism is identified, one needs to learn that the greatest good could be based on aggregate principle or a distributive principle. The Bank of America-Merrill Lynch merger will be assessed in regards to who, what and how the greater good will be affected in this merger. Within utilitarianism, a moral philosophy is developed that focuses on the consequences of specific actions. An action is done, then observed and then analyzed. After identifying all the people that were involved, one needs to ask the question, “Do the sum of good consequences outweigh the sum of the bad consequences?” Quantify all the good and bad consequences in the scenario and if the good consequences are greater than the bad consequences then the action was moral and vice versa. In this paper, the actions of the Bank of America-Merrill Lynch merger will be discussed, evaluated and quantified with the Richard DeGeorge Utilitarian perspective. Pinpointing the stakeholders in this case will show who was direct and indirectly affected and how they were affected. Furthermore, it will be discussed the overall affect it had on society from a global perspective, reaction from competitive markets and the economic impact it created within the United States and worldwide. Critical points and actions will dominate the course of action on how utilitarian ethics was applied in this situation. Identifying the individual people or groups that were in this scenario will be evaluated on a pleasure v. pain scale where it will show the extent of good or bad in the situation and the possible outcomes that followed. The pleasure v. pain comparison will then be quantified on a grading scale that represents extreme pleasures and pains in Bank of America-Merrill Lynch merger. After totaling up the good and the bad points, it will determine if the actions in this merger were moral. In late 2008, Bank of America and Merrill Lynch were in negotiations for a business deal. Bank of America was going to buy Merrill Lynch for one of the largest bank mergers and acquisitions in the world. On the surface, Bank of America thought the merger was a good idea and a good business deal to pursue. Former Chief Executive of Bank of America, Kenneth Lewis, and the board of Bank of America saw this business deal as a way to expand into different sectors of the financial markets and strengthen many of its counterparts. With all the extensive financial records of both companies and balance sheet assessments, the deal looked great for smooth sailing. Catastrophically, the deal went through and contributed towards a massive failure in our financial markets that affected and crippled everyone worldwide. The private deal that once seemed so good has now become a nightmare. All of a sudden, the government has stepped in and has announced it will give twenty billion dollars in assistance from tax payer’s money. Investors and the public were shocked something of this magnitude was happening and felt betrayed, cheated and crippled. Within all the mayhem, the actions that will be evaluated come from Merrill Lynch and Bank of America and their failures to disclose pertinent financial information that would have shown greater losses than...
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