Business Ethics and Practice - Essay Example

Goldman Company Contemporary Issues Business ethics and practice over the years have been in conflict with the practices violating business ethics. According to the findings, it is hard to state that businesses are doing well in relation to the set standards of practice, but it involves the violation of the standards of ethics in a bid to make more money. Several companies have been involved in fraud with some facing legal action while others escaping legal action. The route to escape legal action is through the use of politics. Majority of the business succeeding in fraud and existing in the market exist due to political connections. Goldman Company is not an exception to this because; it has been in several occasions engaged in shoddy business. The company is seen as a greedy, with the sole intention of making money, and allowing its managers to acquire large wealth in the process leading to the creation of a negative image. The company is among other companies on Wall Street that are engaged in several business operations, and managed to overcome the storm of the financial crisis, and still doing well despite the challenges facing the company in relation to ethics. The role of the company in ensuring that it collects a lot of money is visible from the inception. The company, Goldman Sachs began in 1869 as a humble company with the sole purpose of clearing for commercial paper. The company founded by Marcus Goldman, and his son in law Samuel Sachs began as a loan provider for small banks. Later the company was influenced with the market environment thus moved from the set idea of the founders to start of the one-on-one loans. The company due to the method of operation led to the market crash of 1929. Despite the negative contribution, the company managed to overcome the negative image and continued to become a greater company with increased revenue and capital. The company engaged customers in making money leading to the development of a new strategy of operation, which created a chance for the company to raise more capital. The approach employed in the system was to create an investment company buys 90% shares. In buying 90% of the investment company shares, Goldman drives the share prices up, and because the shares have been bought by the company. In response, the buyers rush to buy the shares of the company which the Goldman sells at a price higher than the initial buying price. In such case, the company becomes a broker and has defied the honesty issue in business ethics. Goldman by conducting such businesses raises a lot of money. The money raised from such deals is used in other investments of similar magnitude. The company does not conduct its business in appropriate professional ethics or even the handle some issues that affect their performance, in the set acceptable operational standards. In engaging in brokerage of shares, the company’s image is split through the work of the negative publicity. In response to the brokerage business conducted in the 1920’s, the public started viewing the company as a greedy and company, bent on stealing, from the masses, to raise money for personal ends. The company image is still not doing well in relation to the wealth level of it top managers. Several company manager and top management are viewed as successful in wealth accumulation with all of the wealth being attributed to their presence in Goldman Company at one time. This scenario shows how ethical practices in the company are not adhered to with any punishment on the perpetrators of the change or stealing of the company funds. The existence of political connection, and allowing politics to influence the operations of the company, shows how the company does not regard ethics in how it conducts its operation and management. With the financial crisis, the company managed to stay afloat by using the same strategies it employed before the market crash of 1929. The company funded President Obama’s campaigns, thus; an indication that it requires political support to make it in the market because the company does not conduct its businesses in a professional way. Politics and ethics Through funding of campaigns, businesses and companies engage in politics in order to receive favors if the party or candidate they support wins the race and becomes the president. The engagement in politics enables the company to have protection in case it ventures into shoddy deals or undertakes operations that are not perceived as professional. The history of Goldman Company in politics is a clear indication of the gravity of the issues being faced by the maintenance of ethic in the business front that is mingling with politics. The success of Goldman in dealing in unethical business, such as brokerage, while it is established as an investment company, shows how severe politics can influence regulators to overlook the quality and kind of operation undertaken by a company. Politics by definition is the scramble for power which can be used both positively and negatively depending on the person wielding the power. Most of the companies engage in politics to obtain immunity from legislation (Crane & Matten, 2007, p. 132). Despite several claims of independence of the judiciary, the truth is that in a certain way politics affects the judicial operations of proceedings of a legal case or even may ensure that case do not s tart officially. Additionally government tenders may be offered in a political way rather than merit, in such instances, companies try to engage in politics to be able to get business deals and contracts (Ghillyer, 2010, p. 45). In the case of Goldman, their past is hilly and with several setbacks that may warrant wounding up of the business. The continuous breeding of political figures in the company has enabled the company to shut critics in the political font. The company has bred several leaders, who have later left the company and engaged in politics wining several seats, in the senate while also supporting presidential candidates in the long run leading to the creation of a new approach to business. The role of politics in the business cannot be overruled the company. The situation is evident by the contributions made by the company towards the campaigns of several leaders in political fronts. Under proper professional ethics, it is essential for the company to have minimal engagement on the political front. This cannot be achieved in the almost all business environments due to the impact of politic in the performance of the company. However, by engaging in politic the company ensures that it can be given favors that may be considered as unacceptable in the ethical approach and skillful in the money making sense. Through high value, most deals conducted unethical yield more profit compared to following the set directives (Jones, Parker, & Bos, 2008, p. 23). Effect of greed and dishonesty on business ethics The activities of a business entity are viewed as legal and should be conducted in honesty so that ethical standards are met. The need to raise capital makes companies to engage in activities that may not be ethical such as; the engagement of Goldman in activities that if evaluated shows the company is fleecing the consumers, is an example of the effect of greed and dishonesty. Greed and dishonesty are a significant factor influencing the activities of both individual and businesses. Greedy individuals cannot practice ethics in how they relate to the society due to the increased drive to get more from the society than what they give to the society. In light of such developments; it can be stated that even business with reputable professional vision and mission may lose focus, if the management cannot practice devoted governance and leadership. Goldman is an example of a business managed by greedy professionals who in turn made money both for business and themselves. The creation of individual wealth by some of the managers of the company shows the magnitude of personal greed and organizational greed (Jones, Parker, & Bos, 2008, p. 55). The company decisions made, by the greedy leaders involved the stealing of customers contributions, and creation of stock market deficit, through the creation of an investment company and buys shares in the company aiming to create a deficit and making the share price increase and later selling the shares thus making money in what it should not be conducting business on. In dealing with greed, it is vital to state that the company needs to encourage the development of personal ethics because they are related to the business ethics. The values highlighted by professional ethics include integrity, honesty, transparency, and equity among other values. These values can be transposed to the organizational level through the creation of policies that inspire and encourage the conducting of business in a professional way. In view of the values, the mission statement for Goldman clearly illustrate the focus of the organization, the creation of the mission statement target greed is a terrible precept in business practice. The business entity must target to create positive thinking on issues, such as; the ethics and activities that are conducted by the officials of the company, thus resulting in the development of a harmonious working environment and encouraging the development of positive public image. According to Fisher, ethics must be cultivated by the development of plans and policies that encourage its practice (Fisher, 2000, p. 189). Without encouraging of its practice, the workers of the organization may lose focus on the ethical standards demanded by the company, leading to participation in activities that are prohibited and even illegal. The success of Goldman in business is based on the deals struck by the manager with some of them pocketing a lot of money in the process of achieving the personal success at the expense of the company. The argument of most of the business managers is that, maintenance of a high standard of ethics will reduce profitability of the business, as such; they encourage violation of ethics for the growth of the business and encourage employees to do the same if need be. Under response to the ethics philosophy, several ideologies have been created to ascertain the need for ethics with some researchers indicating that ethics must be in born and should cause conviction to the person for it to be successful. In response to success and ethics debate, it can be noted that the two entities can go hand in hand with the success of the company if properly structured. Recommendations From the inception to date, Goldman Company has been engaged in the activities that are unethical and the need to change operational policies and operation directives. The evaluation and creation of ethical standards within the company will encourage the development new methods of operation. Additionally, the company needs to identify itself with specific activities, and to engage in almost all the activities in the business field. The creation of company image and identity will facilitate the development of a new approach to the business and development of ethical standards that can be raised in the company to make it effective and improving of the public relations of the company (Ghillyer, 2010, p. 19). The past image and involvement in question able business activities have soiled the companies public image, as such; there is a need for the company to engage the public relations department in improving the image of the company through the use of social media and other related engagements which could improve the image of the company. Conclusion Business ethics are not easy to practice if the management does not offer support through encouraging members of the leadership to practice ethics on both personal and organizational levels. Leaders in business and other organizational levels must conduct themselves in a way that encourages participation of the employees in maintaining ethical standards. Despite the existing belief that ethical standards are governed by the moral believes, it is paramount to state that they are not easy to employ ethics in the development of new standards of practice in the company setting. Setting of policies will encourage the development of ethics through stipulating, what can and should not be done, by the employees, when conducting activities of the organization. Goldman Company must now change in strategy in operation and avoid engaging in politics, while shifting from politics to corporate social responsibility, thereby improving its public image and encouraging the participation of customers in the activities of the company encouraging the development of brand and facilitating loyalty creation within the company. The creation of a new approach to business and operation will encourage the development of new methods of operation and encourage the improvement of the ethical standards within the organization leading to the success of the organization. References Crane, A., & Matten, D. (2007). Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization. Oxford: Oxford University Press. Fisher, C. M. (2000). The Ethics of Inactivity: Human Resource Managers and Quietism. Business & Professional Ethics Journal, 55-72. Ghillyer, A. (2010). Business Ethics: A Real World Approach. Michigan: McGraw Hill Higher Education. Jones, C., Parker, M., & Bos, R. T. (2008). For Business Ethics. London: Routledge. Read More