Business Ethics Focus on Merrill Lynch According

Business Ethics Focus on Merrill Lynch

According to Laura Hartman and her co-writer, Joe Desjardins in the work entitled "Business Ethics: Decision Making for Personal Integrity & Social Responsibility" philosophical ethics may be clearly differentiated from theological ethics because theological ethics attempted to disseminate the well-being of an individual on a religious basis while the ethics of an individual's philosophy is such that provisions of justifications that can be applied to all people regardless of their religious starting points. (paraphrased) In other words, there is always a reason for doing the ethical thing in business from a philosophical view without religion even having to enter into the discussion because ethics in business are rational, honest and in the end more profitable to all stakeholders in terms of the ROI or return on investment.

It is certain that individuals such as Bernie Madoff and those at the helm of companies such as Merrill Lynch and others who fell from public grace due to unethical practices in banking business. This study asks the question of what it is that makes a difference in whether ethical decisions are those made in business dealings. Is it one's spirituality, religiosity, regimen, creed, protocol..or any such thing, that when, collectively applied result in a decision based on ethics? It is certain that some shared rationality of that which is inherently ethical exists. Likewise, it would appear rationale that inherently in each individual is a rational knowing when something is inherently unethical. Ethics are a standard for living that are agreed upon proper and equitable behaviors in business dealings. These are the golden standard and have been for all of recorded history on earth. Ethics are not ethnic, race, or gender rooted in nature because ethics apply across the board giving each individual, company, or stakeholder a viable business proposition or deal that could prove to be lucrative but at least is based in providing truthful information so that one can enter into faulty dealings at their own risk, and there are those who prefer it to be risky.

The issue of leadership in the world of business ethics is addressed in the work of Claudia Parsons entitled "From Madoff to Merrill Lynch, 'Where was ethics officer?' (2009) which states "Lax lending standards left banks with too many souring loans and insufficient capital, contributing to the collapse of long-established Wall Street names like Bear Stearns and Lehman Brothers and prompting a $700 billion U.S. bank bailout. Millions of ordinary Americans have seen their retirement savings hammered and hundreds of thousands have lost jobs." (Parsons, 2009, p.1) Parsons relates that these events should serve to "inspire companies to embrace the need for sound ethical practices, but experts in business ethics say that not all companies received the message." (2009, p.1)

Parsons shares the statement of Roy Snell, chief executive of the Society of Corporate Compliance and Ethics who relates as follows: "I don't think seeing dead bodies in the street always wakes people up, I've watched this for 13 years. There are always people rationalizing it, saying 'Our people wouldn't do that.'" (2009, p.1) Marjorie Kelly writes in the work entitled Next Step for CSR Economic Democracy" that she would have marked the Prudential scandal in the 1980s as the 'Most Fascinating Scandal' were it not for the gold standard scandals in the 1980s when Ivan Boesky and Michael Milken were hauled away in handcuffs for junk bond fraud, insider trading and stock parking." (Journal of Business Ethics, 2002, p.1)

What was shocking in the 1980s, including "hostile takeovers, massive layoffs, and exorbitant CEO pay -- became ordinary stuff in the 1990s." (Kelly, 2002, p.1) What was lacking in all of these situations was not government laws and regulations but instead accountability within the organizations. Accountability on both the personal and collective level of individuals within the organization serves to keep ethics in place and working. Ethics education and training is required in today's organizations more than ever as it appears that business has become desensitized to unethical behavior.

II. What kind of organization would one like to work for? What would be the best organization and the most realistic.

The type of organization that any individual would like to work for is one that promotes ethics, equity, fair chances for promotion, a clean physical environment and a company that has open lines of communication. The optimal organization is one that treats employees fairly, that uses ethics in recruiting and promoting employees and that is accountable within the organization and to the community as well. Contributions to the community might mean that employees receive less in pay however, the community contributions will result in a longer staying power of the organization and this means job security for the organization's employees.

III. How Should the Decision-Making Process Be Handled?

The intrinsic values of the individuals in the organization should be considered just as closely as extrinsic values. This requires that the corporation invest in the 'social capital' of the organization. The concept of 'social capital' is such according to the OECD that "became fashionable only relatively recently" however the term has been used for nearly one-hundred years and the ideas behind social capital have an even longer history. Social capital was defined by writer Lyda Hanifan as "those tangible assets [that] count for most in the daily lives of people: namely goodwill, fellowship, sympathy, and social intercourse" among the individuals that form a social unit.(OECD, nd, p.102)

Social capital can be divided into three primary categories: (1) Bonds or links to people on the bases of common identity; (2) Bridges or links that reach beyond a shared sense of identity; and (3) Linkages or links to people or groups "further up or lower down the social ladder." (OECD, nd, p.103) The OECD definition for social capital is "networks together with shared norms, values, and understandings that facilitate cooperation within or among groups." (OECD, nd, p.104) The OECD states that this is networks which are "real-world links between groups or individuals." (nd, p.104) Norms are stated to be the definition that sociologists apply to "society's unspoken and largely unquestioned rules." (OECD, nd, p.104) Social capital is that which "provides the glue which facilitates cooperation, exchange and innovation." (OECD, nd, p.104)

Within the realm of social capital application in the organization is what is known as the 'participative decision-making processes' or PDM, which is reported as such that affects several disciplines including management, public administration, non-profit organizations, health, education, etc." (Floris, 2012, p.1) Participative decision-making processes are reported to include the macro-categories of: (1) individual and (2) organizational factors. (Floris, 2012, p.1) Included in the individual factors are knowledge and motivation. Knowledge in that "PDM is effective when participations are aware that their contributions are relevant, making it necessary to create and spread knowledge, expertise and skills and motivation in that when individuals are involved in PDM "their level of motivation tends to increase an effort to demonstrate ability, skills, and commitment." (Floris, 2012, p.1) Organizational factors include task attributes, group characteristics, leader attributes, and other organizational factors. PDM is reported to operate in tandem with social capital in that they "operate in a positive feedback loop." (Floris, 2012, p.1)

Social Capital and the Participative Decision-Making process present a strategic framework for decision-making processes in the organization that includes consideration of both intrinsic and extrinsic values and motivations. The value of individual worth considers many factors that cannot be measured on a financial level alone. Therefore, social capital theory offers a more accurate measure of the worth of individuals in the corporation because social capital includes all aspects of the value that can be assigned to an individual in the organization when attempting to place value on the individual employee. Included in the value consideration within the framework of social capital theory are all the contributions that the individual makes to the organization. For example, is the individual involved in the community, does the individual contribute their time to social causes and do they volunteer to assist with community initiatives? Does the individual contribute their own free time to assist others in the organization better learn their job or become more proficient in their work? Other questions that must be considered when placing value on individual employees include whether the individual attends continuing education classes at their own expense that results in their being more professional or better at their job and does the individual go above and beyond their duties to ensure the organization's future success?

IV. The Ford Pinto and Hazards of Considering Only the Instrumental Value of Life

In 1968, the Ford Motor Company was faced with a dilemma. The Pinto had been engineered with a rear tank assembly and it was discovered that during collision that the rear-end tank was very likely to explode. The Ford Motor Company made a decision to allow the Pinto to remain on the market on the basis that it would be more costly to conduct a recall than to pay the costs of liability for injuries and death. Ford's senior management calculated the cost per life lost on the basis of the National Traffic Safety Administration's data and stated that recall for correcting the problem with the Pinto would cost $121 million as compared to only $50 million for injuries and deaths caused by the problem.

The decision-making process in this case was flawed in that the Ford Motor Company attempted to place value on the life of a human being. How could it possibly be that lives lost totaled less than the cost of a recall and modification to the company's vehicles? This happened because of the failure of the Ford Motor Company and its employee to assign intrinsic value to the life of human beings which would mean that the company failed to assign value to the individuals from the view of their family members, community, and those who knew and cared for these individuals as well as failing to assign value to the contributions that these individuals make to their community and the world around them.

For example, consider if one of the individuals who lost their life due to the bad engineering design of the Pinto were someone famous. The costs to the industry in which they were famously participating would be huge, not to mention the losses of income this individual would bring into their own family and the families of those who were employed in connection with this individuals' famous occupation.

Consider for example that one of the individuals who died because of the engineering fault on the Pinto was the foster parent of 10 children who were then left homeless being bounced around from house to house because no one wanted to deal with these children. Aside from the costs to the State, imagine the cost to the lives of the children who finally had a safe and stable home only to be once again sent out into the foster parent system not finding stability for months, years, and perhaps never again. What are the accumulated costs to these lives as they move on through their lives without the benefit of the stable home that they once had but lost due to Ford Motor Company's decision to not recall and modify the Pinto and all based upon the meager sum of $50 million dollars in damages.

Consider as well the damages caused to the child who did not die in the accident in which the Pinto exploded but the child was burned beyond recognition which would require years of plastic surgeries in hopes to restore some semblance of the child's former looks. What are the actual costs to this child and their family? Can a cost be actually applied to the child who loses their face and use of their limbs from the fire of the Pinto that could have been fixed but was not fixed because the costs were irrationally held to be more to fix the Pinto than to simply stand by and watch individuals die or become disfigured and crippled from the results of the engineering faultiness of the Pinto. Ford Motor Company erred miserably in addressing this problem which should have been addressed from the view of the real value of the lives of individuals rather than from the view of what the courts would award in the event of accidents or deaths due to the Pinto's faulty real-end gas tank design.

V. Rethinking the Social Responsibility of Business

Social and human capital in the world of business are gaining more acknowledgement. For example, consider the case to Quantas Airlines who is now facing a situation with communication that is quite simply, out of their control and growing in strength. Quantas is reported to have launched a contest through the social media service Twitter that asked participants to use Twitter to describe their 'dram luxury in-flight experience' The competition is reported to have dissolved "as nearly 15,000 people worldwide used social media for the purpose of venting their problems with the airline." (Seirjts, and Bigus, 2013, p.1) This case demonstrates the power of social capital and how devaluing social capital serves to work against the organization. In the work of Mackey the concept is introduced that corporations are adding more to society by maximization of long-term shareholder value than by donating time and money to charity. It is the opinion of this writer that both of these endeavors are important for the organization however, that long-term shareholder value is an investment that continues to give back to the community many times over through creation of stable and profitable investments for those shareholders who invest in the company as well as providing long-term and stable employment for the employees of the company.

VII. Inquiring Employers Want To Know

This section of this study has the objective of answering as to which of the following items about an employee might an employer have a legitimate claim to know, and why? (1) social security number; (2) arrest record; (3) medical records; (4) marital status; (5) whether the applicant is a smoker; (6) political affiliation; (7) sexual orientation; (8) credit rating. This section of the study will also consider the following questions in assessing the scenario: (1) What facts are relevant to the stated decisions? (2) What would the consequences be of refusing to answer any questions on an employment application? (3) Are you basing your decision on particular rights of the employee or the employer? (4) Are there people other than the employer and employee who might have a stake in what information is released to employers? According to the authorities on information allowed in job interviews the prospective employer may lawfully ask the employee for their social security number but may not ask about the prospective employee's arrest record, medical records, sexual orientation, marital status and credit rating. The reason that the individuals' credit record may not be inquired about is because so many poor individuals are also minorities and this might result in discrimination in hiring. In regards to sexual orientation, the same is true because obtaining this information might lead to discrimination in hiring. Marital status and arrest record are also not lawful to inquire about during an interview. However, if the arrest record is newer than seven years the employer has a right to lawfully gain this information. The consequences of refusing to answer questions during an interview is likely to lead to the individual losing a chance to get the job. This information was obtained via the Privacy Rights Clearinghouse. It must be noted that state differences do exist on these laws.

VIII. Term Papers

For the individual who orders the term paper to use as an example only in writing their own work, these services are quite useful to students. Students with integrity will not use the paper they ordered and submit it as their own but will use it only as an example to further their knowledge and writing skills. There is no defense to turning in someone else's work as though it is one's own to turn in. This is termed as plagiarizing and is a horrible offense which can leave one ethically and morally labeled as a cheater. Many professional individuals use services such as these to assist them in organizing their thoughts and in having an example to follow for formatting purposes.

There is no inherent wrong in using such a service however, it is inherently wrong to use the service to cheat. Many students attend school in the United States who are ESL students and have trouble with sentence structure. Ordering a term paper can assist them in understanding better how to structure sentences in the subject area they are writing about. It must be understood that nothing is evil in and of itself but it is the use that some things are put to that make them wrong.

If a student orders a term paper from one of the services providing such papers and then writes their own paper using the one they ordered as an example only, this could not be considered as a violation of any type. However, the individual who is simply lazy or does not care about unethical behavior and who turns in another's writing as their own, is likely to be unethical throughout their professional life as they are setting a precedent for their own behavior.

For the services that urge students to use the papers as their own a great deal of unethical behavior is at play however, research has revealed that the better services in this area of business are those who emphasize that the papers are examples only and not to be used in any manner by the individual as though the paper were their writing. In the end, it appears that the services are not themselves unethical and neither is ordering a paper from one of the services but the lack of ethics comes into play when the service does not uphold ethical behavior and when the student is unethical and cheats by submitting the paper as though they wrote the paper themselves.

IX. Dangerous Products: Marketing

There are some products certainly that are too dangerous to be marketed under any circumstances and included in these are weapons that are so powerful that the common individual would have no rational use of the weapons. Also, there are drugs that are too dangerous to be marketed and the pharmaceutical companies are very cautious in their efforts of marketing and advertising. The American Marketing Association, Statement of Ethics, states that ethical norms among marketers means that marketers must "Do no harm." (2013, p.1) Ethical marketers must also "foster trust in the marketing system" and must "embrace ethical values." (The American Marketing Association, 2013, p.1) Ethical values include: (1) honesty; (2) responsibility; (3) fairness; (4) respect; (5) Transparency; and (7) citizenship. (The American Marketing Association. 2013, p.1)

X. Pelman v. McDonald

In the case of Pelman v. McDonald's it was alleged that McDonald's was partially responsible for the health problems associated with the obesity of children who eat MacDonald's fast food. This study will address the issues in this case and answer the question of whether McDonalds and other fast-food restaurants be judged negligent for selling dangerous products and failing to warn consumers of the dangers of a high-fat diet and deceptive advertising? The case of Pelman v. McDonalds involves a child under the age of 18 years who, by her guardians, her mother and father, sued McDonalds. The Plaintiffs in this case alleged "that the practices of McDonalds in making and selling their products are deceptive and that this deception has caused the minors who have consumed McDonald's products to injure their health by becoming obese." (The Law, Science & Public Health Law Site, 2013, p.1 )

Presented in this case are questions regarding "personal responsibility, common knowledge and public health" in addition to the question of the role of society and the courts in addressing issues such as these. The question addressed in this case is "where should the line be drawn between an individual's own responsibility to take care of herself nd society's responsibility to ensure that others shield her?" (The Law, Science & Public Health Law Site, 2013, p.1) The court states that its opinion is guided by the principle that "legal consequences should not e attached to the consumption of hamburgers and other fast food fare unless consumers are unaware of the dangers of eating such food." (The Law, Science & Public Health Law Site, 2013, p.1) The court states as well that when consumers know or if consumers should reasonably know the possible bad effects of eating McDonald's fast food, then the consumers are not in a position to blame McDonalds in the case that they should choose to "satiate their appetite with a surfeit of supersized McDonald's products." (The Law, Science & Public Health Law Site, 2013, p.1)