Ethical Conflicts that can arise within Companies

2280 WordsJun 20, 201810 Pages
The problem to be investigated is the conflict that can arise within companies between doing what is right (or moral) and doing what is often viewed as more important the attainment of corporate goals. This conflict is highlighted in the case study involving Fannie Mae (FM). (Jennings, 2009) In this case, corporate executives choose to focus on corporate goals and meeting the market expectations, ignoring any moral issued witch conflicted with the attainment of their goal. (Jennings, 2009) To understand the reasons for the executives actions and learn from their mistakes and misjudgments the following topics are reviewed: 1) ethics and social responsibility, 2) the importance of devolution, 3) the power and value of incentive plans, 4)…show more content…
(Ormiston, 2010) Other examples of the rating firm’s reliance on others would include police reports, watchdog groups and the public media. A rating organization conducting personal interviews of the organization is sure to have been presented a “one sided” view with the interviewed organization putting themselves in the best manner possible. Devolution In the FM case signals were missed and ignored. According to Merriam-Webster Dictionary, the meaning of devolution is the transferring of rights or powers to subordinate bodies. (Merriam-Webster, 2006) For FM there was no devolution – only centralized control around the goal of Earnings Per Share (EPS) of $6.46. (Jennings, 2009) In the case of the missed items, it is general knowledge that many employees and middle management are busy with their days work. In this rush of the day, it is foreseeable that when something looks as odd as an auditor giving an EPS speech a person might question this practice. Since many employees don’t have a lot of spare time and are only involved in a small piece of the organizations work they likely do not have a “big picture” concept of the organization. When knowledgeable of problems, proper questioning may not have occurred causing missed signals. If some employees would have known what
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