The Ethical Dilemmas faced by Business Corporations

Introduction

Ethical failures in multinational corporations have been prominent in the world news headlines over the last decade. Accounting scandals in particular have been highlighted as many billion dollar global corporations, including Arthur Andersen, one of the five largest auditing firms in the world, collapsed under the weight of fraudulent financial reporting. Annual costs to the world economies of fraudulent financial reporting are in the billions and in the U.S. alone, corporate fraud has been estimated to cost at least $600 billion each year. In addition to the direct costs associated with financial fraud, shareholders of firms registered on the U.S. stock exchange have lost billions of dollars as companies have been forced to implement costly new corporate governance programs to comply with legislation enacted by the government in response to the fraudulent financial reporting in the early part of the decade (Ahmed, 2003, 102).

The increase in corporate ethical failures has generated numerous questions by the business and finance community, government regulators, and in the academic arena about potential reasons for the large increase in ethical lapses during the last decade. Possible explanations have included insufficient accounting regulations, ineffective corporate governance programs, and inadequate ethics training programs in business schools. Broader blame for the ethical lapses has been directed towards a capitalistic culture where the focus on money has resulted in the deterioration of peoples' overall values and behavior (Badawi, 2005, 14).

Methodolgy

This Research is based on secondary data analysis. Various data and literature were taken from the secondary sources and reseach papers for analysis and discussion.

Outcome of the Research

This paper will be solving two case studies on Ethical Challenges for Businesses which includes the BP oil spill and the case of McDonalds and aims at identifying the main and the secondary moral/ethical issues with in these business corporation, the relevant stakeholders, and distinguish between facts and our own considered opinion. Also, this paper would include several alternative solutions for such ethical issues, and reflect a deep understanding of how ethical principles and moral reasoning can be used to resolve moral /ethical issues. Further, the paper will discuss global implications of the dilemmas taking a global perspective in the analysis.

Discussion

Gulf BP Ethical Issue

In the light of the growing magnitude of ecological problems, the natural environment has become an important avenue for firms to gain competitive advantage. This phenomenon is well illustrated by the loss of around $30 billion of BP's market value in the first month following the Gulf of Mexico oil spill in April 2010, causing BP to trade at a 20% discount to its rival, Royal Dutch Shell. This event is a reminder of the extreme costs that can be imposed on firms that cause environmental degradation, and recent evidence suggests that the management of U.S. firms is becoming increasingly cognizant of the strategic importance of the natural environment. This trend has gained increased ascendancy over the past decade for three main reasons. First, as illustrated in the case of BP, research findings support ...