Ethics in Business



Ethics in Business

Problem Area

The problem to be investigated is business ethics. Business ethics hold huge importance in the corporate world. Ethics is one of the most important elements for the people involved in operations of a business. The business ethics must be promoted by the CEOs as business culture. For the growth of business, the realization of importance of business ethics is important. It also affects the productivity directly. The main obstacles for the achievement of business ethics is the performance-oriented culture and shareholder's interest. It is difficult for the businesses to define a border between ethical behaviour and unethical behaviour. The inquiry of bribery and gift giving in businesses is also a matter of an unethical behaviour. It is important for the businesses to make their decisions and activities go according to the business ethics (Jennings, 2012).

List of actions in gray area

Gray area is specific issues and situations which are unfit within the ethical analysis and its mode. Often, few cases have disputes related to the involvement of ethics. The main attributes of gray area is false representation and lying. It is believed that Goldman may have adopted both of the factors above to have a successful company (Jennings, 2012). A few practices by Goldman included in the gray area are as follows:

A company is created by Goldman and even 90% of the shares were bought by Goldman himself. The public was kept uninformed and offered to buy the shares. This made the public buy the shares for more money. Goldman bought the shares in secondary market and caused an increment in prices. He used his own money for establishment of another business.

Laddering practice was adopted by Goldman which is an agreement between the best clients and Goldman. It is done for the allotment of a specific point of IPO at a re-established price. Under this laddering agreement, clients were made agreed to purchase a specific number of shares during the rollout price of $10 to $15.

Participation was made by Goldman in the auction-rate markets.

In return of shares, loans were provided to the executive members by Goldman.

Goldman also participated in ABACUS (Jennings, 2012).

Evaluation of the actions and practices

The code of conduct defined by the businesses must be followed. It is not necessary that everything must be illegal but can be unethical. Within the Goldman Company, many things occurred which included insider trading among other things and conflict of interest. The conflict of interest arose when Goldman bought the stock and made his customers buy the same stock without them knowing the background of the shares. Usually the conflict of interest arises when the owner or the management take such action which can create difficulty and problem for the company and effect in a negative way (Jennings, 2012). Business ethics are a general set of guidelines which can be adapted in any given situation, unlike the laws. The general adaptable policies of conduct are business ethics. Law is unable to cover all aspects of actions and ...