The main purpose of this article is to discuss the Caux Round Table (CRT) Principles for Responsible Business which has described moral standards for suitable behavior in the workplace. Breaks in company honesty, whether among a small amount or a lot of individuals, compromise the beliefs of workers and for this reason the ability of an organization to provide people’s needs. The main idea of the article is to determine a universal code of ethics in the CRT and talk about the standards for behavior in the workplace. The most important information in this article is the principles themselves and the similarities and/or differences to Jerry White’s Biblical guidelines. The first principle of CRT is to respect stakeholder beyond shareholders
1. Why is it important to focus on ethics in a global business management course? It is important because every multinational company and multinational managers face ethical challenges when operating in a foreign country. Multinationals engaging in questionable behavior receive bad publicity and can lose goodwill. Also multinationals can get sued and suffer losses.
Because of Mr. Madoff’s dishonest activities many of the people who trusted him lost everything. There is no place for fraud in business, the innocent are affected, a company can suffer monetary damages, damage its reputation or even shut down which will also affect the employees of the company who could possible lose money and their jobs. Theft is defined as “the act of stealing; the wrongful taking and carrying away of the personal goods or property of another; larceny.” Theft is also unethical and illegal and has no place in business. Through his Ponzi scheme Mr. Madoff stole millions if not billions of dollars for innocent people. It was alleged that Mr. Madoff made false statements.
Hiding accurate earnings, reporting inventory sold when it was not, and recording erroneous cash flows are just some of the ways that corporations have used to side step proper ethics. As citizens and government officials alike began to notice the increased frequency of these reports, legislation was based to combat corporations from using unethical business or financial practices. This legislation is called the Sarbanes-Oxley Act of 2002 (SOX), which dictates that standard practices and internal controls for financial reporting (Odom, 2012).
It is clear that the parties involved in the Citigroup merger were operating under the moral philosophy of egoism. Egoism defines right or acceptable actions as those that maximize a particular person’s self-interest as defined by the individual. John Reed, Sandy Weill and Robert Rubin all acted in order to gain power and wealth for themselves; their actions were detrimental to the average consumer with deposits in their banks because the merger was risking their money in order for the individuals at the top to obtain monetary gains. They believed that they were doing right by themselves in this merger, by taking the opportunity that arose, and using business
SOX also sought to strengthen consumer and investor confidence and confidence in financial information by changing the auditing procedure and making management more accountable for fraud prevention, catching, and existence within the pot. Lastly, it shielded whistleblowers from corporate retribution and endowed them with protecting freedoms. Based on aforementioned information, I would like to consider the implementation of SOX would have been an immediate check to financial statement fraud in its initial launch in 2002; unfortunately, there will invariably be somebody who believes she is above reproach and disregards societal measures of intellect, decency and control to pursue her own
There were also unethical issues involving the entity that was supposed to secure and watch over those that are investing our money. That entity, known as the Securities and Exchange Commission, failed to properly investigate certain claims that were made against Madoff long before this scheme broke wide open. The SEC was warned numerous times about the inconsistent information from Bernie Madoff. Ethical misconduct within this case has made more investors aware of what is needed besides forking over large sums of money and charitable contributions to someone who claims they are doing the work of the people. Investors now know that it is also their job to challenge and be more “in tune” to what their money is doing and how their money is working.
If this was not the case, Congress would not have enforced the Sarbanes-Oxley Act. In 2002, the financial scandals that occurred by multiple corporations proved that the accounting profession was in dire need of some regulation by the government. I predict that corporate fraud will remain the same based on the research produced during the writing process for this assignment. There is no fool proof way to completely diminish financial fraud or to protect investors. As people as a whole have proven time and time again, there are rules and laws and there are people whom break those rules and laws for personal gain.
She is the person have red flags which lifestyle beyond their current means. The weak internal control let Sue see perceived opportunity to get the extra money. Under the rationalization of compulsive shopping disorder, she start committed the fraud with her assistance Julie. According to the Sarbanes-Oxley Act (2002), the senior management especially CEO have responsibility of design, maintenance and effective operation of internal control. Clearly, Michael, serves as vice chairman, president, CEO, COO, and CFO have responsibility on internal control.
According to Robert Solomon, “Good Ethics is Good Business” and “unethical conduct hurts business as a whole”. I agree with his point of view because in the business world, we have witnessed big companies fail and fall down due to their unethical practice. I also agree that being aware of the 3C’s, which are Compliance, Contributions, and Consequences, is the best tool to define Good Ethics in Business. Solomon used Break Breaker Inc. case to prove that unethical business strategy will lead to the quick failure of business. Break Breaker Inc. to some extent obey with some legal rules, but failed to comply with principles of morality and community, contribute to the society by producing honest high quality services, and account the consequence of damaging their reputation.