Ethical Issues Faced By The Adelphia Case

We as Americans tend to focus on companies unethical behavior, lapses of judgement, corporate misconduct or the methods corporations may use to hide unethical business practices from the public view this process leads to national scrutiny. We seldom recognize an organization that displays positive-intentional ethic behaviors that are defined as acceptable by the American people.

Ethics is a word that most described with doing what is right, and to be a company that wants to supply a good or service to people, doing what is right is a quality that company would want to have. One of the first companies that comes to mind when I think about integrity would be United Services Automobile Association also known as USAA. This is an insurance company that has so much to offer other than just insurance like banking services. USAA is a company that started with a noble cause of just wanting to help those who have served this country by providing discounted rates on insurance. When you go to USAA online website, you will find “Service. Loyalty. Honesty. Integrity. Our core values guide everything we do,” and this is literally how every employee under this company’s name serves each one of their customers.

Taking the ethical stand can be risky. There is no guarantee that being ethical can increase profits. Nonprofit organizations for example operate in good faith, and not necessarily out there to make a profit. The ability of an organization to remain transparent is a must do if they are to remain in business. When organizations are not transparent, they could be under a cloud of suspicion and at risk, affecting their profit and damaging their good name. The whole world and non-governmental organizations will be looking for that transparency. Technology has become so widely available that positive or negative information will be known, almost immediately around the world.

For any corporation or organization both the situation and culture of the group are critical in evaluating the possibility for unethical behavior. Confidence in both the brand and the integrity of the organization provide additional revenue opportunities and confidence in the service and products. To paraphrase economist Milton Friedman “the only acceptable corporate responsibility is the enhancement of revenues that will allow higher profits back to shareholders, who may then reinvest according to their individual values”. (Arguments from Dead

Even though a considerable amount of the regulation regarding corporate ethics and acquiescence is fixated on financial procedures, organizations still need to give attention to nonfinancial parts of its operation in order to maintain its integrity (Ferrell, et al., 2013). In other words, an organization need to have balance in relation to its overall ethical perspective, focusing on both ethical financial decisions and ethical in its corporate culture (Ferrell, et al., 2013). Although the “Sarbanes–Oxley Act” place emphasis on problematic accounting and the versification that devastated shareholder worth, however there are

Records falsification was not the only illegal activity the Rigas family was wrapped up in. The family used company funds, unbeknownst to their investors, to finance personal endevours and interests. Examples include using corporate money to build a $12.8 million golf course on the Rigas property, using the company plane for personal vacation trips including a safari to Africa, and funding for two Manhattan apartments for his family (Markon, 2014). Not only this, but John Rigas purportedly used the company jet to fly a Christmas tree two times to his daughter in New York (Barlaup, 2009)! All of these incidents are just brief excerpts of the fraud and misuse of company funds that John Rigas and his family committed without any intention of ever paying back into the company. These actions, namely lying and stealing, prove to be the heart of the two moral issues that will be further analyzed.

Ethics is defined as what is right and what is wrong. Every business should behave ethically. The moral principles that guide the way a business behaves are business Ethics. Ethics are moral guidelines to people or to an organisation which govern good behaviour. So behaving ethically is doing what is morally right. Doing an ethical business may always be not profitable but it will be more beneficial to company and the people involved in company as well as the people who are getting influenced by the company. If a company is acting ethically then it is trying to differentiate between right and wrong and then chose the right decision for everyone. It is very easy it identify any unethical

Many large corporations are often are faced with ethical issues that determine the success of the company. Two of the most famous companies that were faced with ethical dilemmas was Johnson and Johnson and Enron. One of these companies was able to deal with their ethical dilemma correctly and it saved the company, while the other company did not properly handle its ethical issues and it resulted in the collapse of the company.

"By investing in companies that are doing things in which you improve, you would actually be helping these companies to continue their good work. Similar logic applies to avoiding those companies whose activities you find objectionable. If enough people follow suit, the shares may lose favor and management may be forced to alter its policies. "If our power as consumers were used to the full, every company would have to account for its business practices". (Stuart Kotler ) By investing ethically, one can gently influence companies to improve their ethical record. Like it or not, money makes the world go round. If companies found that unethical behavior caused investors to withdraw their money, it would make them think twice. "In the USA, one in every eight dollars is invested ethically, and this trend is expanding globally". (Asset Financial Management )

A company’s ethics stems from its values. A companies values come from the visionary of the company. Sam Walton was the visionary and founder of the Walmart Corporation. Walton’s vision was based upon bettering people’s lives and serving the good

According to Milton Friedman, "stockholders are the owners of the corporation, and hence corporate profits belong to the stockholders. Managers…have a moral obligation to manage the firm in the interest of the stockholders" (Friedman 45). Adelphia was managed in such a way that it was not in the stockholder's interest, in fact, it was only managed in the interest of the Rigas family. It is wrong to harm the stockholders because they have entrusted the company with their money with an expected return and maybe an

The second ethical issue surrounds the company’s executives, specifically Rigas family. Company’s executives should never use their company’s profits for personal gains (Lowenstein, 2004). This is exactly

In the Securities and Exchange Commission v Adelphia Communications Corporation 2002, the SEC charged Adelphia of three specific acts. First, executives fraudulently excluded billions of dollars in liabilities from its consolidated financial statements by hiding them in off-balance sheet affiliates. Adelphia management kept this liability off the books by allocating the co-borrowing loans among its unconsolidated subsidiaries. Debt of the subsidiary was increased and Adelphia's bank debt was reduced by the same amount. It gave investors the false impression that the company was leveraging and paying off debts. The company made additional misrepresentations in public statements and filings to keep up this appearance as well as creating bogus transactions and fictitious documents to prove that the

Being ethical as a company is important for both, consumers and the media. It’s also important for employees to feel that they are working toward the good of the people. Belonging to a company that

There are executives and top managers who seek the easy way to make the most money for them, without consideration for their shareholders who should be the priority. There will be no end to people with varying motivations trying to gain an unfair or even illegal advantage to get more of it. It’s not unreasonable to expect companies to act ethically: this is one reason so many laws and regulations are implemented. However, it is just difficult to find a company with a large number of personnel to conduct themselves ethically.