BUSINESS ETHICS

Business Ethics Case

Business Ethics Case

Introduction

Nowadays in every business organization around the word, we hear about the importance of ethical behavior, but most importantly we listen about the code of ethics which define and make obligatory the respect of ethical behavior. Ethics can be defined as moral values and principals. It is a decision of choosing the right among wrong and right. Business ethics are that functions which leads to choosing right decision at the right time which leads for the welfare of not only business owners but also society, consumers, stakeholders and its employees. Business ethics now days have become so important that no business can survive in the market without following them.

Case Discussion

The reason Paulson & Co. would play the role they did is fairly simple, they get a big payout really fast by poisoning the CDO with subprime mortgages they feel have the best odds of failing. Tourre goes along with everything because it is his job to unload this package and as he himself said in reference to this at the time “The whole building is about to collapse anytime now.” If he expects to retain his job and likely very healthy bonuses it behooves him to make sure he does his end. The problem is that doing his end was not going to be easy, a falling market with CDO filled with the worst possible garbage was going to be hard to unload on anyone following the proper legal disclosure policies not to mention ethics.

So you may now wonder how this could have impacted you, me, or any regular person not moving in the world of billion dollar investments. The answer to that is that to some degree we all paid for this. The money to pay for protection had to come from somewhere. The money that was invested came from somewhere. That somewhere was for the most part banks and insurance companies that financed the deal not knowing they were about to become the victim of fraud.

When the banks, insurance companies, and other financial backers lost money on the deal, sometimes everything as was the case with IKB Deutsche Industriebank AG who lost a $150 million, that means that the people who had accounts in the banks or money tied into the insurance companies all lost money. These entities invest with the money that comes from regular people paying premiums and adding to their passbook accounts for instance. As these entities are still obligated to their customers they have to take a loss and find a way to make up for the lost money which often translates to lower interest rates and higher premiums.

Why are this quality, compensation, balanced scorecard and corporate governance issue? What factors contributed to the problem?

Goldman Sachs issue is related to each of the following facets of a business, the quality, compensation, balanced scorecard, and corporate governance. Each item helps in the detection, reputation and operations of the ...