Banking Industry Meltdown: The Ethical and Financial Risks of Derivatives

Banking Industry Meltdown: The Ethical and Financial Risks of Derivatives

Determine which moral philosophy (as discussed in Chapter 6) is most applicable to an understanding of the banking industry meltdown. Explain your rationale.

The values by which people live are usually the general system of values. Moral philosophy is the specific rule or principle use to decide what is right or wrong by the people. Moral philosophy is the principle of the person and the moral and immoral differentiating values. It is person specific whereas, business ethics is the group decision or the decision that are made to carry out tasks to meet business objectives.

Ethics refer to what the firm, group, strategic business unit (SBU) pertaining to objectives of profits, business operations, earning per share and measure of financial success as had been defined by the group, which defines as right or wrong actions. Moral philosophy defines guidelines for “determining how to conflicts in human interest for optimizing mutual benefits of people who live together are to be settled”.

Moral philosophies provide individuals with abstract principles and are ideal moral perspectives fir guiding their social existence, for instance, individuals' who recycle waste or who sell or purchase recycled products are more influenced by moral attitudes and philosophies toward recycling. Thus, within the business organization's complex environment it is difficult to implement an individual's moral philosophy. On the other side, the individuals come together and share philosophy to create moral values, expectation and trust that allow the system to work; this is the functioning of our economic system. Most employees do not think, what moral philosophy within a business organization they are using when they confronts the ethical issue. Through cultural and social development, individuals learn decision making approaches. Moral philosophies refer to economics, relativism, idealism and value orientation of such things. According to this theory, if more value is produced by the act than its efforts, then it is ethical and accepted. Idealism is a moral philosophy, in comparison with the world's view places special values on ideals and ideas as products of the mind. There is a positive correlation ethical decision making and idealistic thinking; this term refers to all objects in nature. Realism if the view that the world exists is out of our perception and is external to our thoughts. Realists assumes that mankind is inherently competitive and self centered and each person is guided by self interest of himself.

In the end, Egoism and utilitarianism is the most applicable to an understanding of the banking industry meltdown, as egoism has to do with the right actions that give maximizes the self interest of the person as an individual and utilitarianism is the right actions that maximized greatest good, total utility for large amount of people. (Ferrell, O. C., Fraedrich, J., & Ferrell, L., 2011, pp. 151-159)

Analyze the case study and discern if the “white collar” crimes committed differ in any substantive manner from other more “blue collar” ...