Lehman Brothers : Ethical Dilemma

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Ethics is an important factor for business activities, as it is a method for which businesses have to consider in order to achieve their business goals. Each individuals and companies interact with each other and forms one business organisation. Statistically, those businesses that have made ethical management gained higher trust and profit compared to other businesses. Lehman brothers attracted the media’s attention due to ethical issues.
Provide an overview of the company’s background, i.e. its business operations, etc.
Lehman brothers was founded on 1850, which provided services such as asset management, managing private equity fund and private banking. It was ranked as 4th amongst other Investment Banks in America.
Lehman brothers, who couldn’t handle their debt have applied for bankruptcy on 15th of September, 2008. As they did so, there were numerous loss of customers as well as fall in price of investments and a fall in asset values.

What ethical issue has arisen? Clearly explain the ethical dilemma faced by the involved parties
Lehman brothers started increasing their sales on subprime mortgages. A subprime mortgage is given to households with a low credit rate for their houses. As the subprime mortgage was targeted to those with a low credit rate, the rate of return was high. Also, as the return was high, the following risk was also high. Lehman brothers has had growth of their business as their priority, where they continued with aggressive investments.

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