Case Study Aig

These three elements are important to what ethical culture the company is portraying. Management must be very clear in the code of conduct, where employees understand what the organization expects of them (Ferrell, et al, 2013). Without a clear and strong written code of conduct, employees and management can act in an unethical behavior as they did in the financial breakdown. During this time customers did not have faith in the financial world because of the unethical behavior. My belief is absent of poorly communicated code of conduct creates an environment for all parties of the organization to behave in a manner that benefits the organization or themselves over the

The survey was performed in 2010 involving members of the Ethics and Compliance Officer Association (ECOA). They focused on the evolution of business ethics by analyzing six other studies over a span of two-and-a-half decades. Members of the survey were ethics manager, but members on the previous studies were regular employees and management. The results of the analysis of the previous studies showed that ethics programs in companies during a time span of the 1980’s through the 1990’s was used to show social responsibilities and not necessarily to enforce it throughout the company. It showed that ethics programs now that companies follow ethical laws and they are motivated to be ethical. Another result of the study showed that ethics training at companies has increased since the 1990’s due to the passing of Sarbanes-Oxley and other laws directed at ethics. The passing of the laws in the early 2000’s has led to ethics being a major component of everyday

An initial new hire and employee ethics training has to be develop and administered. Also on-going ethics refresher training for use throughout the employees career with Company Q will need to be incorporated in the program. Systems will be developed and put in place to monitor, audit, and report ethics violations. A time-line to re-evaluate these programs and their effectiveness towards meeting the companies social responsibility goals will be established. Based on the evaluation a revision or revamp of the program if necessary will be initiated. The ethics program needs to be reviewed and understood by all employees and expectation for compliance very clear. This can be accomplish by tying compliance in some form to employees and leadership individual performance goals. Shareholders all the way down to entry-level employees will benefit from the ethics program which will also put the company on track to being more socially responsible. Once a code of ethics is in place and training has been given, then Company Q can begin developing trust within the company and employees as well as the community. Continued education and training will enable the company to become more socially responsible.

The business ethics programs I believe will convey our company values, these are often stated in a code of conduct, where employees will have to follow and understand policies to guide decisions and behavior. This recommendation I am giving will require employees at INDE to participate in extensive training as as well evaluating situations where ethical dilemmas can arise and lead to crisis such as the one we are facing currently. However, the ethics program will be useless if all staff members aren’t trained about what it is.

In difficult financial times, companies face various moral issues to try to keep up with their competitors. Although these issues have a direct impact on employee decision making, businesses rarely address how employees should assess the ethics of their actions and incorporate ethics into their decisions. Often this can be alleviated by creating and maintaining a corporate culture with a focus on

Unethical behavior…sounds bad doesn’t it? But what employee can truly say that he is completely innocent of any unethical behavior in the workplace? Some of the most common unethical business behaviors are fudging work hours, making phone calls on business lines and photo copying of personal paperwork. Simple acts such as these are highly unlikely to have an employee face criminal charges but when the acts of embezzling money or falsifying business records are committed a company is more apt to prosecute. People have different views regarding what is ethical and what is unethical. Some feel that it’s

Companies such as Enron from approximately 1996 to 2001 were thriving and the stock price rising constantly. Such a move on the company’s stock was attracted millions of investors who wanted to invest in a stable company they could trust. Little did they know that the company with over 60 Billion dollars in market capitalization at one point, was about to collapse. The company’s stock reached a high of approximately 90 dollars per share in 2000, and the following year shares plummeted to less than one dollar. As one can imagine, investors were terrified, millions lost the entire retirement savings, and other were just afraid to trust the financial markets. Enron, and others were taking advantage of the loose accounting regulations to recognize revenue improperly, make use of special purpose entities to create “fake” revenue, and weak corporate governance.

One of the workers at AIG FP, Gene Park, discovered that there was a high chance of default on the credit default swaps the company was selling because the loans themselves were not high quality. In the end, he was right. Lippmann was trying to get people to realize what Park realized; there was money to be made off of these swaps. Park convinced Eisman, as well as Paulson and Ledley to join his ‘side’. To further his side along, he pitted the two sides against each other at a dinner. Eisman, after one conversation, realized that Lippmann was completely right about the market, and he ended up investing more. All these men and their companies, ended up making extreme amounts of

However, Economist Barry Eichengreen points out that vesting the Fed with additional regulatory power and responsibility for the stability of the financial system was a political nonstarter. The recently bailed out AIG was using money provided by the Fed to pay retention bonuses totaling up to $6.4 million to 73 of its leading employees. Aware of the bonus payments, the Fed claimed to be powerless in preventing them. Later, a darker fact revealed that AIG was allowed to pay off obligations to Goldman Sachs using Fed bailout funds. The Fed knew about these transactions, and even instructed AIG lawyers not to divulge to the Securities and Exchange Commission (SEC) internal memos authorizing said payments to Goldman Sachs.

"Too Big to Fail" took a fictional approach as it followed the "United States Treasury Secretary as he struggled to make the big decision to bailout large, failing Wall street companies. It was based off a series of factual events, however, it was presented in the form of a movie with its own level of fictional emotions and events. Though this was meant to be an informative movie, it was a drama movie none the less and like most movies there has to be a protagonist and antagonist. It was clear that the protagonist in this film was US Treasury Secretary Henry Paulson and the antagonist were the CEOs of the failing Wall Street companies. The movie implies

One is the fact that the bailout was saving many Americans their jobs by ensuring these companies stay afloat. GM had many employees and many retirees that depended on the company, and if the company closed down, it would render so many people jobless and without a source of income. On the other hand, according to the law of utilitarianism, it was ethical for the government to lend a helping hand to GM to keep the company afloat. The initial agreement between GM and the government provided the option of the company redeeming its stake back from the government once they achieved financial stability. Unfortunately, this never came to be. The government invested taxpayers’ money in a collapsing company that was experiencing losses year in year out. This was unethical; the company should have bailed itself out from this crisis since there were other automotive companies still afloat. Justice dictates that since it is GM that got themselves into this mess, then the same company should figure out a way out of the same mess. This is true since even when the government opted to bail out GM, it was the company that drew up a plan that would give them financial stability. Therefore, one would argue that GM should have figured out a way to solve their financial crisis by selling out the non-profitable plants and sections of the company and cutting costs to become profitable once more. They should also have invested in

(Panza & Potthast, n.d.) Ethics is very important to a company’s success. Ethical behavior can bring benefits to a business. They can attract customers, which can lead to a boost in sales and profits. It can attract the right employees and increase productivity. It can also attract investors and keep the company’s share price high. Unethical behavior on the other hand can damage a company’s reputation and make it less appealing to stakeholders. It could also result in lower profits.

Goldman Sachs should have been punished for its behavior in the years leading up to the financial crisis. Goldman ended up settling with the federal government for $110 Billion, which I do not believe was sufficient based on the magnitude of problems created. This amount should have been much larger, and at minimum they should have forfeited the $14 Billion paid to them by AIG. (Inside Job, 2011) In addition, AIG should have had the right to sue Goldman Sachs for fraud. It was in the public’s best interest to keep Goldman up and running, however additional penalties could have been put on a repayment schedule to keep them solvent. Instead, you had Goldman giving out large bonuses.

The purpose or aim of every organization is to establish such an organizational culture and behavior among its employees that helps in achievement of ideal ethical standards. There are certain determinants that play a critical role in helping achieve the right organizational culture. Some of these include personal moral intensity, social ties, codes of ethics, locus of control and Machiavellianism. These

In 2001, shortly after Jeff Immelt became the CEO of GE, a series of events changed and impacted the corporate landscape. The immediate challenges that he faced included 9/11, and a subsequent series of high profile corporate scandals (Enron, WorldCom). In 2008, the financial crisis hit and had a severe impact on GE’s primary growth source, GE Capital causing it to accumulate bad debts and asset write-downs. These events caused slow domestic economic growth, crisis of confidence among investors and more global competitors.