Summary: Summary Ethics in Finance

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Summary: Ethics in Finance. Ethical values play an important role in the world of business and finance. However, it is important to note that ethical issues have constantly plagued the financial/business world. Many of these issues eventually led to cases of illegal activities, such as corporate fraud, as stated in the mini-case: Worldcom Inc. Ethics plays a significant role in the success of a financial career. The five main reasons for the use of ethics in the decision making process are- it creates a sustainable business, builds trust which brings rewards, builds leadership skills, has a higher standard than laws, and foster good reputation and conscience. When making financial decisions it is imperative that ethical situations are recognized, processed, understood and finally handled appropriately. In business, ethical choices may not be as clear cut as in ones private life. Thus, it becomes a situation of finding which more right than the other. The analysis of ethical issues can be broken down into three main parts. These three are the right and wrong as defined by the consequences, duty or intentions, and virtues. Consequences looks at the outcome of a choice and if the utilitarian approach is used in society, therefore the right action would be the one that brings about the most amount good for the most amount of people. Duty or intentions, consider whether or not an action take is an immoral act. Duty ask the question of whether your action is that of a rational thinking person. Finally, virtues based ethics view states that one's happiness is attained through virtuous acts. Virtue ethics have had arguments raised against it. Some people argue that virtue is relative to each person and also it changes over time. It is important that a business or company takes the time to develop sound ethical practices. The head of a company should lead by example and
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