Business Ethics Homework 6 20 March 2013 GlaxoSmithKline Case 1. Since 2005, GSK was hit with several severe lawsuits regarding product liability. When Andrew Witty was assigned the chief executive role of the company, post-merger, the ice of shares declined 50 percent, which harmed the company’s earnings, sales and reputation. The first ethical lapse came about when GSK was criticized for selling drugs to the public without informing its buyers of the detrimental side effects. The detrimental product was Paxil, designed to relieve depression, generated disastrous side effects such as addictive behavior and birth defects.
How could Home Depot expect to address its human capital issues by decimating the HR ranks, eliminating the professionals trained to focus on them? Where were the HR executives when all this came down? Were they outside the loop while others determined their fate? It turns out they were initiators of and prime advocates for the plan. Partnership carries responsibilities, and, in this case, HR executives were resolute that they could "take one for the team."
I think Jon Winkelried is someone with great passion for the company. Goldman Sachs is suffering due to the financial crisis and their share price is decreasing. The four top men of the company know they only can save Goldman Sachs from bankruptcy by finding investors. And by finding Warren Buffet it is their only way to survive even though it brings high restrictions with it; they need this deal. A deal with Warren Buffet would also inspire the market – other investors.
And in the name of restoring financial confidence, they have so mistreated Bank of America that bank executives everywhere have concluded that neither Treasury nor the Federal Reserve can be trusted. Mr. Lewis has told investigators for New York Attorney General Andrew Cuomo that in December Mr. Paulson threatened him not to cancel a deal to buy Merrill Lynch. BofA had discovered billions of dollars in undisclosed Merrill losses, and Mr. Lewis was considering invoking his rights under a material adverse condition clause to kill the merger. But Washington decided that America's financial system couldn't withstand a Merrill failure, and that BofA had to risk its own solvency to save it. So then-Treasury Secretary Paulson, who says he was acting at the direction of Federal Reserve Chairman Bernanke, told Mr. Lewis that the feds would fire him and his board if they didn't complete the deal.
Considered a white-collar crime, Mr. Madoff broke the law and deceived clients and investors in order to amass millions of dollars. The ethical issues came about when Mr. Madoff utilized his new investors’ money to pay off the earnings of his existing customers, instead of actually investing the funds he received from his new investors. In an effort to keep the scheme going Mr. Madoff was on a constant quest to gain new investors. Although Mr. Madoff’s legitimate business was not based off of fraud, according to the reading, there is evidence that he occasionally injected funds from his illegal business into his legal one during times of low revenues (Ferrel, Fraedrich, Ferrell. pg.
Group 3 – Martha Stewart: Inside Trader There are many critical ethical issues that exist in the case involving Martha Stewart, Sam Waksal and family, and Peter Bacanovic. If these unethical concerns were to be numerically ranked, with number one being the most severe, the list would be the following: 1. Sam Waskal selling his family’s shares and attempting to sell his own shares of ImClone before the news of Erbitux had been publically released, in an attempt to save their money without any concerns for how it will impact the shareholders of the company. 2. Bacanovic tipping Stewart with non-public information received from Waksal knowing fully it is illegal and ethically wrong.
He enjoyed a good reputation in the market because his firm was consistently giving high return for his clients. It was revealed later on that he employed Ponzi scheme to defraud his entire investor portfolio. With the promise, of large returns as bait, the fraudster took in money from new investors and used it to pay off the earlier investors until no more new recruits could be found and the whole scheme collapsed, with the newest clients losing all especially the nonprofit organizations and education institutions. Bernard Madoff had a legal firm to attract investors with high return rate also eluded the investigation from SEC; he injected money to the legal firm from illegal one when the loss happened. His family did a lot for this fraud, Bernard's son, and his brother was involved in his business, his wife did the social networking to attract celebrities to open account in his firm.
The purpose of the loan was to buy personal property. The loans were off-the –books. Ebbers persuaded WorldCom’s board of directors to provide him corporate loans and guarantees in excess of $400 million to cover his margin calls. The board hoped that the loans would turn aside the need for Ebbers to sell substantial amounts of his WorldCom stock, as his doing so would put further downward pressure in the stock's price. However, this strategy ultimately failed and Ebbers was ousted as CEO in April 2002.
I believe that’s exactly what GM was trying to do by “calling out” the other companies. It was showing a confidence in something unknown, which could backfire and cause them to suffer in the long run. GM also showed traits of being reactionary in their planning. They apparently were in a lot of debt and couldn’t go forward without the government bailout. They waited until they were forced to do something about the problem to actually confront it.
Had he succumbed to the pressure inflicted by his boss , A Walter Rognlien , false documents would have been presented in court in favor of Cardillo . The general publicwould have been cheated of the truth the investors , company 's creditors and government agencies would have been duped into believing the erroneous equity and income figures that Rognlien wanted to publish William Kaye , on the other hand , was instructed to debit receivables from United Airlines amounting to 203 ,210 and to credit travel commissions or fees for the same amount . She did these things without questioning such s . In doing so , she , in effect , agreed to recognize as outright income the amount that was supposed to be properly booked as advance payments from UAL to be used for expenses pertaining to Cardillo 's shift of computer system from the one offered by American Airlines to that by UAL . Furthermore , she also was instrumental to Rognlien 's designs to falsify the company 's financial statements to avoid the bankruptcy that it was bound to end up in .