Code of Ethics and Morality in Business - Essay Example

? Introduction The understanding of morality, as well as the struggle to define what is right or wrong in a given situation, is one that defines the code of ethics in business. The code of ethics which is followed is the defining factor of actions taken by those who are associated with a business. In the movie, “Wall Street,” there is an understanding of the morality that is within a business, as well as the different applications which move business men to ignore the codes of ethics. With the association that is taken in the movie are also conflicts which question the code of ethics and the morality that is in business, as well as how the corporate American structure and the ideologies of Wall Street pressure changes and compromises within morality. Examining how the code of ethics is altered and what is involved in this becomes the basis for understanding the thin line between morality and becoming successful as a business leader. Gekko’s Approach to Make a Buck The main ideology which is presented in “Wall Street” is based on the combined efforts of Bud Fox and Gordon Gekko. Bud is learning how to maneuver within Wall Street while compromising ethical considerations, specifically because of his advice from Gekko. The principles which Gekko uses; however, are based on breaking morality and swindling illegal deals to make extra money. The concepts which he approaches are based on taking more money, information and ideologies from the company and trading these in for money, no matter what the measures or morality is. It is his belief that this is the only way to begin making money and to recover with finances, specifically because of the way in which money is swindled by other business leaders. The only ideology which Gekko is certain of throughout the movie is money and how to make this to become extremely rich, no matter what the cost. The approach which Gekko takes is one which is based first on finding ways to make money. From this viewpoint, there isn’t anything that is wrong with the movement toward greed or his belief that an individual has to do anything to make money. This approach is one which keeps businesses alive and which allows different corporations to try to find ways to become stable and to prosper. The question of morality which is approached with Gekko is from his belief that anything should be done in the name of money, specifically because this can help an individual to live a comfortable life. The problem which arises is how the ability to make money from one side causes others to be hurt in the process, such as a loss of jobs, inability to maintain a position in a company or problems with moving toward innovation and freedom of choice from an individual. The conflicts continue with effects that occur with the manipulation which occurs for money and how this becomes distorted, ruthless and is based on destroying both individuals and companies in the name of money. These several outtakes also create questions of morality and how it relates to the objective of making money on Wall Street (Green, 2006: p. 121). Insider Information from Bud and Morality The questions of morality continue with the conflicts which Bud is faced with, specifically when he begins to look for insider information to help with making money. The initial conflict with Bud is one which isn’t attributed to moral problems, specifically because his intent is based on finding information to help a company and to begin making more money with the initiatives that he takes. However, the insider information that is confidential also becomes a conflict because it can hurt others and is illegal to take because of the problems which may arise from this. The several problems which Bud faces after finding the information then becomes problematic and creates a moral standard that he is violates. When he continues this, specifically to make extra money, despite the cost of others, then there are problems with the actions. The question of Bud violating the moral implications with insider information is also from the external environment and his responses to this. The bosses that Bud works with are responsible for his actions both directly and indirectly. There is continuous pressure for Bud to find ways to make money, recover the financial situation and to change the status that is occurring. The choices that Bud has to make then come into conflict with what the bosses tell him and the expectations in the environment. This is combined with Gekko and the beliefs that are held about his position as a broker. The belief that anything should be done to stimulate the economy and to help with recovering finances becomes the basis of many of Bud’s actions. However, Bud’s decisions won’t affect shareholders or the economy of America as a whole but instead only lead to the greed of money going to those who were involved in making the money in the beginning. While Bud believes that positive change can come, this is limited to his idealist thinking and beliefs that he should justify his position in taking insider information and trying to retrieve the companies he is looking at. The position that Bud is in is highlighted through the speech which Gekko makes, specifically because this shows the external and internal situation that Bud is faced with. Gekko first believes that America has lost its power, both politically and economically, specifically because it has moved from an industry to one that isn’t able to carry stakes. The belief which Gekko has is that this has been given away because of stakeholders and the inability to believe or invest in America. Gekko states that “I am not a destroyer of companies. I am a liberator of them….The point is, that greed – for lack of a better word – is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit” (Stone, dir, 1987: 1). This particular example shows the different conflicts within the movie. The company is one which Gekko believes is under pressures that can’t be met because of ethics. The only way to change this is to move into money as the main focus without other considerations. Greed, according to Gekko, is one that doesn’t violate morality, but instead creates innovation and evolution to compete against others. This particular approach is important because it justifies the moral difficulties which Bud has and shows how the environment which is surrounding him is trying to find a different way to make money, invest as stakeholders and to change the overall status which is a part of the corporation. Stakeholders of Bud’s Firm Another concept which is approached throughout the movie and which define the morality is the stakeholders of Bud’s firm. The stakeholders only hold 1-3% of the firm earnings and are supportive specifically for the stabilization and the growth of the company. The only way in which the stakeholders are able to affect the firm is through the support given through earnings. The jeopardy that each will go through is then based on the actions which Bud takes and the publicity which the stakeholders may receive. This will disqualify them as honest or moral supporters and will create conflicts of interest. More important, many of the stakeholders may decide to not continue to assist with the firm because of the moral implications which this has which may bring a loss of money to the firm. The first way in which the stakeholders may be jeopardized is through the economic standards that are required. The interest which each has is what changes the economic outcome. If there are negative affects within the economy, then the stakeholders will lose interest, specifically if the firm can’t stabilize. However, if this is positive, then more support and a larger percentage of money will be given to those that are involved in the situation. According to stakeholder theory, there is a dyadic relationship, which first shows a state of independence between the business and the stakeholder economics. However, this is also intertwined by the level of success which the business has economically. This particular issue is one which is also seen at a sociopolitical and technological level. The social and political groups require positive support within the group, both in terms of morality and with the representation that the stakeholders have. The technological support is based on the transparency which is required by the stakeholders, specifically in terms of where the support of money goes to. If these have a negative reflection of stakeholders, then there will be difficulties in future measurements of other businesses and interactions (Neville, Menguc, 2006: p. 377). The different areas of jeopardy that the stakeholders are in are important in defining the main struggle that Bud goes through within the movie. The stakeholders that invest in a specific company are in a position where they are only able to invest with what is seen in a company, meaning that there has to be sustainability and growth. At the same time, a company is dependent on the amount of money that a stakeholder gives to make the money. This particular controversy is what begins Bud’s questions as a broker as well as what occurs with his position of trying to save a company by working on Wall Street. The jeopardy that the stakeholders are in are then dependent on the way that the system works, which specifically leads to each taking a gamble with a company that is unknown or which may not lead into the right hands. The economic gamble is based on losing money while the social, political and technological implications are based on not getting the return through publicity or making the right efforts while investing in a company. These different areas of concern are expected with stakeholders; however, Bud tries to change the outcomes to ensure that there is the ability to make himself and the company successful. US Sarbanes Oaxley Rules Another concept which can be considered with the morality played out is from the US Sarbanes Oxley act. This was first initialized in 2002 and is based on the investor and accounting reform to tighten the regulations for swindling money. The main association is to audit, regulate and oversee any problems which may occur in financing while leaving the corporations liable for the financial problems which would arise within a corporation. The main concept was to keep corporations responsible for money that wasn’t accounted for and to ensure that the banking practices and other concepts were done with only fair deals. By doing this, fraud and negligence of the accounts could be looked into and maintained with accountability to all of the monetary needs that were within a given company (Shakespeare, 2008: p. 33). The main approach which these rules take in terms of the New York Stock Exchange companies is based on building a code of ethics that stops fraud and unaccounted for money from entering the scene. If the money is accounted for, then those who are brokers at the NYSE have the ability to invest wisely and find ways to support a corporation in terms of the listings and the stability of the company. The securities that are available then stop the companies from trying to create illusions to those that are in the stock exchange and also creates legislation that ensures that fraud, illegitimate funds and swindling of money doesn’t take place on the stock exchange so that each individual can invest in companies without losing money. The auditing that takes place, as well as the regulations which are applied legally, both work with the stock exchange to ensure that moral values are withheld (Coates, 2007: p. 91). From this particular situation, the code of ethics in the movie “Wall Street” is one that is broken, specifically because it is the NYSE that is altered to make more money for a company. This is done to get stakeholders to invest in the company and to help with the rise and innovations that are expected for the corporation. However, it also leads the stakeholders and other investors into a position where they are looking at fraudulent and mismatched money, which leads them to a loss of their own money and investment. This particular aspect of the movie is one that can easily lead to a post – economic crisis with brokers, specifically because there is money that is not accounted for or that is being withheld by others that are in the company, instead of going to investors that are in Wall Street. The loss of money that is experienced by some, as well as the greed which takes over the other aspects of the company then creates difficulties with those who are interested in the company growth. Characteristics of the Code of Ethics Each of the aspects that is related to the legalities of money and the movement is money is related to a code of ethics. The code of ethics is based on the beliefs which one has and follows to ensure that each individual in the company works with specific moral values. This states that each individual is responsible for their actions within the company in terms of morality. Cheating, fraud, committing crimes to make more money and other implications aren’t accepted within a specific company. This is combined with ethical codes that are based on corporate and social responsibility, specifically so it works with the good of others. The perceptions that this is based on begin with making sure the corporation and individuals within the corporation don’t hurt others or affect others negatively. This is combined with individual codes that are set forward by a corporation to build trust, loyalty and a perception of organizational commitment to the products and services that are being sold (Vitell, Hidalgo, 2007: p. 31). While the code of ethics is idealized through a basic corporate and social structure for responsibility, there are specific ways in which this aspect works. There are training and informational programs that are often provided within a corporation to set standards. These are combined with overlooking and auditing specific actions to ensure that the ethics aren’t broken within the organization. The characteristics are further defined by goals and expectations with actions to reach the goals that are associated with a code of ethics as well as the movements which are taking place within a business. The ethics which take place combine with the goals that are within a corporation and which are combined with the legalities that are set into place to ensure that the ethics are met. It is also known that the ethics combine with the cultural values, individual expectations within the companies and the beliefs that are a part of the corporation. For instance, if a corporation states that integrity needs to be withheld, then basic processes to uphold this are created. This is combined with the individual beliefs of what integrity means and how this will affect the actions within the operational framework of the organization (Ardichvilli, Mitchelle, Jondle, 2006: p. 445). The ethics that Bud needs to reach, specifically within the firm, is based on creating a complete sense of social and corporate responsibility. Relating this to integrity, honesty and trust are the first defined values which need to be created. The corporation that Bud is in needs to further this with an understanding of the roles and responsibilities that are within each section of the firm, such as how to work with the finances and management of accounts as well as what is acceptable and not within the practice that is being held. While these particular statements can be a part of the corporate responsibility and stated through the firm, it isn’t enough to stop specific actions. The work of the firm needs to be combined with monitoring and auditing what each individual does. This will prevent fraudulent materials from being posted and will stop information that is confidential from being found. While it can’t stop the individual decisions that one makes in terms of ethics, it can create a protective layer with the firm that deems the approach unacceptable. Through the business code of ethics, there would be specific problems that could be resolved. The first is based on the confidential materials, which is what began to create a distinction with Bud’s actions in the firm. Confidential materials wouldn’t be looked into, information would be monitored over whether it was acceptable to be seen within the company and different materials would be looked into before presented or known to the firm. This would be combined with looking at the security measures for information while ensuring that the actions taken to recover information both inside and outside of the firm were looked into with the understanding that only information freely given should be used within the firm. Auditing the information, checking to make sure that it was applicable to use and ensuring that it didn’t affect anyone negatively would then stop some of the problems from occurring. The second issue which would be in the firm would come from the basis of honesty and integrity. This would be created through the fraudulent money and the swindling that took place in Wall Street and among specific individuals. The ideology would be created through the basis of the firm and each individual would be held responsible for their own honesty and integrity. However, there would also be checks and measures within this, specifically to ensure that there weren’t any fraudulent deals that would take place. Financial audits and monitoring and overlooking the aspects of brokers would take place. Mediators could be used to ensure that there weren’t problems with each of the deals and that they were done with legitimate means and without fraudulent approaches. As perceptions as well as checks and balances could be given within the corporation, changes would be made with how the money, investments and corporate findings were looked into (Cagle, Baucus, 2006: p 213). Conclusion The concepts that are a part of the code of ethics, morality and the decisions made by business men can either lead to scandals or moral acceptance. When looking at the movie ‘Wall Street,” it can be seen that the moral implications also led to the outcome of Bud. The internal battle which he had about morality, as well as the external influences from characters such as Gekko, led Bud to situations in which he was trying to bring profit and be moral. The decisions which he was pressured into led into the problem of greed overcoming the main capabilities of the broker while morality became secondary to making money and trying to save the businesses that Bud was involved with. The particular movie works as an example of the problems and questions related to morality and how this affects several that are involved in business and in the stock exchange. When looking at this movie, one is then able to understand the deeply rooted issues with corporations making money as well as the moral implications and struggles that draw the line between right and wrong. References Ardichvilli, Alexandre, James Mitchell, Douglas Jondle. 2006. “Characteristics of Ethical Business Cultures.” Journal of Business Ethics 85 (4). Bews, NF. 2002. “A Role for Business Ethics in Facilitating Trustworthiness.” Journal of Business Ethics 17 (2). Cagle, Julie, Melissa Baucus. 2006. “Case Studies of Ethical Scandals: Effects on Ethical Perceptions.” Journal of Business Ethics 64 (3). Coates, John. 2007. “The Goals and Promise of the Sarbanes – Oxley Act.” The Journal of Economic Perspectives 21 (1). Green, Stephen. 2006. Good Value: Reflections on Money, Morality and an Uncertain World. New York: Grove Press. Neville, Benjamin, Bulent Menguc. 2006. “Stakeholder Multiplicity: Toward an Understanding of the Interactions Between Stakeholders.” Journal of Business Ethics 66 (4). Shakespeare, Katherine. 2003. “Sarbanes – Oxley Act of 2002. Five Years On: What Have We Learned?” Journal of Business and Technology Law (333). Stone, Oliver. (dir). 1987. “Wall Street.” California: 20th Century Fox. [movie]. Vitell, Scott, Encarnacion Hidalgo. 2007. “The Impact of Corporate Ethical Values and Enforcement of Ethical Codes on the Perceived Importance of Ethics in Business.” Journal of Business Ethics 64 (1). Read More