Ethical indiscretions and missteps: The slippery slope is all downhill Unethical behavior can increase over time Published: You get comfortable with that, and before you know it, it snowballs into something big. The phenomenon of the slippery slope — how small ethical indiscretions lead to bigger ethical missteps — is the focus of new research by Michael Christian, an organizational behavior professor.
Investment Bernie Madoff failed to obey the laws that are considered the minimum code of conduct to which society has agreed to respect.
In turn this means that society has the right to punish him by revoking the rights granted by it. If we were to apply utilitarianism theory Madoff did not promote a behavior that maximizes the best for the stakeholders.
His need for self-interest superseded the best interests of all other members of society. Indeed, many could argue that he demonstrated classic sociopathic tendencies.
It was deposited instead into his business account at Chase Manhattan bank. In June 11, Madoff was sentenced to maximum sentence of years in prison. Many investors lost their entire life savings and it ruined their lives.
Furthermore, the nonprofit organizations were compelled to end their operations. Hence, they are no longer able to contribute to the society. Life in prison or even capital punishment sometimes does not meet just requirements.
In extreme cases such as this, where societal damage occurs and reoccurs on multiple levels, affecting both individuals and corporations, because of the acts of one immoral person, the justice system should deliver punishment in the swiftest and most thorough manner possible.
These include needy families. As a result of the Ponzi scheme many individual investors, financial institutions, hospitals and charitable organizations suffered a great deal of economic depression which in turn, resulted in loss of employment, reduction in wages, bankruptcy for some people, an increase in the unemployment rate, and in the worst of cases, even suicide.
Since many families experienced a substantial reduction in their finances, more people were in need of seeking assistance from the government as well as from charitable organizations.
Therefore, agencies which receive less financial support would be able to support fewer families, even if there are more families in need of financial assistance.
It runs the risk of causing financial institutions and businesses to default on their promises, particularly those that have invested in hedge funds which could, in turn, bring down other investors, including major infrastructure and industrial corporations which have made loans to them.
Consumer confidence has dropped to an all time low, in no small part to the behavior of one unscrupulous gentleman. All of the stakeholders were not affected equally; that depended on the level of their financial capacity.
Some of the individual investors were faced with bankruptcy or even committed suicide. Larger corporations were involved in lawsuits or write-downs.
Individual donors changed their pattern of their donation and so on. Among others, charitable organizations were vulnerable to his Ponzi scheme because of his alleged consistency of high and stable returns.
Madoff was attracted to charitable organizations because of the fact that they did not need to withdraw any proceeds from the Madoff investments to pay income taxes on their returns since they were tax free organizations.
Employees that were involved in the scheme, such as the accounting firm are just as responsible as the mastermind of the Ponzi scheme. Other employees that were not involved experienced a great deal of humiliation, loss of credibility as well as financial loss. Industry image Financial industry throughout its history has been faced with numerous scandals that contributed to fear, cynicism and distrust.
Undoubtedly, this has caused powerful emotions among investors. Looking back at the financial scandals that occurred over the years, we come to realize that unethical behavior and unprofessionalism led people such as Madoff conducting schemes causing a chain of negative reactions from individual investors to the economy as a whole.
By setting the rules, encouraging everyone involved to hold to the highest of ethical standards, the industry ensures that it is and will remain fair and transparent for everyone. We are aware of the fact that the financial industry is based on principles of integrity and equality and focuses on stakeholder interests.
Federal guidelines Bernie Madoff not only disregarded the federal guidelines. His blatant disregard for the rules and regulations that govern the financial industry indicate his scorn for the legitimacy of wealth creation.
Personal conscious if involved in a similar situation If I were an employee of this company and became aware of the circumstances of its operation, it would be my moral obligation first to desist from working there, but more importantly, to report my findings to the appropriate authorities.
It would be impossible for me to look at myself with a clear conscience if I did not do just that.Corruption in the Context of Moral Tradeoffs scandals reveals a sobering fact about society – corrupt acts are often committed by otherwise virtuous people.
Bernie Madoff, Richard Nixon, and Kenneth Lay, for example, are not psychopaths who lack a ). Finally, unethical behavior may arise from more general cognitive biases such as. Transparency and Disclosure: The Bernie Madoff Case. On the face of it, without referring to Alan Greenspan, I can simply say I think the markets needed more regulation and the banks needed more regulation.
The Bernie L. Madoff Ponzi scheme is hopefully an example to others of what is unethical and it will hopefully prevent Ponzi schemes from occurring in the future. Work Cited Gregoriou, Greg N.
and Lhabitant, Francois, Madoff: A Riot of Red Flags (January )%(21). In terms of unethical research behavior, the Madoff’s wealth management company skewed research and performance results.
Highly positive results were provided to new potential investors to attract new money to be invested into the firm (Henriques ). When it comes to unethical behavior, good people don't tend to go right off the deep end like Bernie Madoff or Kenneth Lay.
Rather, the mind plays tricks on them, pushing them down the slippery.
Sometimes cheaters do get caught. New York financier Bernie Madoff faces a possible life sentence after pleading guilty to 11 felony counts in one of history's largest investment frauds.