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Post by instructor on Sept 27, 2012 22:37:05 GMT -5
Go to this link and read the story about Goldman Sachs. (hint: it would be wise to also read the stories linked within this article...) business-ethics.com/2012/08/14/10074-goldman-sachs-not-criminal-just-deceptive-and-immoral/Review the allegations against the company and discuss those actions in light of the individual values described in the chapter as well as the obstacles to achieving an ethical corporate environment. Consider the following in your answer: - If you were an executive at Goldman Sachs, how would you have acted? - What would guide your decision making? - How difficult might it be for you to "do the right thing"? - Should there really be a difference between being legal and being ethical? Why or why not? Please see your syllabus for the requirements for the discussion forum so you will get full credit.Some of you are posting answers that are pretty short. Don't write a book. But two or three sentences probably isn't going to get you where you need to be... This forum will close at 11:59 PM on Wednesday, October 3, after which time you will not be allowed to post. |
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Post by bcald20 on Oct 2, 2012 12:19:03 GMT -5
Individual values are the ultimate source of ethical values for business decision making. There are five questions a person can ask themselves before making a decision, and I can't help but think that if Goldman Sachs had asked themselves even one of these questions, they wouldn't have done what they did. They knew the action was wrong; there is no way they would be proud to tell their family, or the news media what they were doing; they definitely wouldn't want other people acting in this way; the decision caused a lot of harm to other people AND the environment; and finally, this action hasn't proven to violate a law yet, but possible will in the future. Emphasis on profit is a huge obstacle for businesses to overcome. There is so much demand for profit that sometimes it pushes companies to behave unethically to make it. The effect of a group is another obstacle. People are more likely to behave unethically in a group than individually because they don't feel as responsible, and they are more likely to follow the majority. The last obstacle discussed in the book is that resources are controlled by non owners. Managers have a duty to manage resources in a way that benefits the owners, and since they aren't one of those owners they may do this in unethical ways that no one will ever find out about. If I were an executive at Goldman Sachs, I would have done what Greg Smith did and resigned. I probably would have done it a lot sooner than him though, as soon as I found out what they were planning to do. My own personal morals and values are what would have guided my decision. It would have been extremely difficult to try to "do the right thing" within the company because there would be so many people going against me, but doing the right thing for myself (by resigning) would be very easy under the circumstances. I believe that there should be a difference between something being legal and being ethical just because the idea of ethics is so broad and changes from person to person.
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Post by mmjhnsn7 on Oct 2, 2012 23:28:30 GMT -5
The Goldman Sachs case is very interesting to me, because the company was never convicted of any criminal charges. The chapter mentions the sources of values for business ethics and it includes individual values. When an unethical business decision is made it comes from the individual. Only that individual can make the decision to proceed or not. One of the five questions that should be asked prior to making business decisions is whether or not I am wiling for everyone to act as I am thinking of acting. This question should’ve truly been dissected with Goldman Sachs.
I would love to say that any successful company rises and falls based on its ethical standards/reputation; however, this is so far from the truth. Most extremely large and wealthy companies, such as Goldman Sachs, have underlining immoral procedures that have aided to its massive success. In the case of Goldman Sachs the decisions they made were not done on one rare occasion, rather over an extensive amount of time, hence, the company, as a whole, no longer saw a moral dilemma.
As a person who is guided by Christian standards I would hope that I would've made decisions that contributed to a mutual success between the company and the client; however, when excessive amounts of money are at risk, the concept of right and wrong can become null and void, and it is often replaced with desirable and obtainable.
As I stated earlier, I would love to say that this would be an easy decision, but honestly I am unsure. Money, in excess, can distort a person’s judgment. Many would argue that a person who does such things is simply an unethical person; however, I disagree. Situations can create unethical behavior.
I definitely think there should definitely be a difference between being ethical and being legal, because following laws does not make one ethical. Legal is following the law and may include exploiting holes in the legal system. Ethics is doing what is morally and socially right. Some laws may not have any ethical inferences of any kind. For example, parking in a loading zone is illegal, and kind of stupid, but not unethical.
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Post by dphelps1223 on Oct 3, 2012 9:03:25 GMT -5
Goldman Sachs’ business principles were not taken into consideration, since its states that the clients’ interests always come first. How could they come first if Goldman knew this was a bad investment from the start? Was he planning a big payout for himself? They should not make such principles if they are not going to abide by them. If I were an executive at the firm, I would have resigned when I found out what was going on. It’s unethical to steal. We’re brought up that way. We learn it in school, church and at home. It’s the law. Stealing is just WRONG! I feel this way because I was brought up this way and I think the majority of the population was brought up this way and it just wrong. It doesn’t matter how you steal, it still stealing and it wrong. If you were raised correctly, you would ask yourself some questions before doing something unethical like whether the action is right or wrong, would be proud to tell your family or employer that you did it, would you want someone to that to you, would this cause harm to someone else or the environment, and most important would this act violate the law? An ethical thinking person could not go through with it. It’s not difficult for me to do the right thing because I was brought up that way. People may fall on hard times, I understand, but things can be worked out to your benefit without stealing from someone else. In some cases being ethical may outweigh being legal. So there should be a difference. Like in this case, it is legal to invest other people’s money. It’s unethical to misuse the funds for your own benefit. It’s unethical to lie to a person about something you know is wrong. Goldman should have been prosecuted, but the Justice Department said the “burden of proof to being a criminal case” could not be met. Was this another ethic situation?
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Post by clepps1 on Oct 3, 2012 12:22:44 GMT -5
I think Goldman Sachs employees were well aware of the damage they were causing others by swindling them out of over a billion dollars in mortgage fraud. I think it was more about ethics as oppose to the legal deception however if one knows that they are involved in deception as it related to making a profit for a business I believe a certain amount of accountability should take the forefront of making the best decision to continue to cooperate in the scheme. I personally don’t think I would feel comfortable in taking part of this type of behavior but I do understand that it’s a tough decision when it comes to your job and your livelihood. I also would think about all of the innocent people that would be affected by my behavior and also the fact these people could be people in my family that I would be causing harm. The firm is accountability free and until the laws are passed to stop them they will continue to make money at the expense of others. Most believe that this type of behavior is the “culture” of Wall Street and is “understood”. I definitely feel like my morals would be my gage in my decision making therefore if I was an executive at Goldman Sachs I don’t know if I could have stayed on long enough for this type of scheme to have happen but if I did once I found out the magnitude of the scheme I would definitely be looking for another job. I think there should be a difference between being ethical and being legal. I know it sounds contradictory but I think in businesses there should be laws put into place to help protect innocent clients against these giants but on a level of everyday living I still believe people are entitled to make their own moral judgments.
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Post by melston on Oct 3, 2012 18:13:32 GMT -5
The Goldman Sachs Group Inc tried to profit from the mortgage crisis by selling mortgage securities and then they betted against them. If I was an executive at Goldman Sachs, I pray I would not have acted like Lloyd Blankfein. The decisions he made caused a lot of grief for a lot of people. The code of ethics he prided his company in were not taken into account when he sold them the risky mortgages. My decisions would be based on what I felt was right. There are laws that take care of some things, but honest people who want to do good are more than likely going to do good whether or not there is a law in place. Being legal, abiding by the laws, and being ethical would seem to be about the same thing. However, ethical people are more apt to do the "right" thing. What Goldman Sachs did was deceptive and immoral. Although the company was not criminally charged, a lot of people felt that they were served an injustice. The definition of ethical is knowing the difference between right and wrong. In my opinion Goldman Sachs knew what they were doing was wrong when they sold the risky mortgage securities and they should be held accountable for their actions.
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Post by melston on Oct 3, 2012 18:29:48 GMT -5
I agree that the laws should be changed to protect the innocent people. They tried to include the new conflict-of-intrest provision in the Dodd-Frank Wall Street reform laws. I just can not believe they could not find anything incriminating or against the law that they could of charged them with. So many people lost so much money it is a shame they were not able to get any restitution. Goldman Sachs were not punished at all for their wrongdoings and even if they do abide by the law, their name will forever be scarred.
[quote author=clepps1 board=general thread=8 post=69
time=1349284964]I think Goldman Sachs employees were well aware of the damage they were causing others by swindling them out of over a billion dollars in mortgage fraud. I think it was more about ethics as oppose to the legal deception however if one knows that they are involved in deception as it related to making a profit for a business I believe a certain amount of accountability should take the forefront of making the best decision to continue to cooperate in the scheme. I personally don’t think I would feel comfortable in taking part of this type of behavior but I do understand that it’s a tough decision when it comes to your job and your livelihood. I also would think about all of the innocent people that would be affected by my behavior and also the fact these people could be people in my family that I would be causing harm. The firm is accountability free and until the laws are passed to stop them they will continue to make money at the expense of others. Most believe that this type of behavior is the “culture” of Wall Street and is “understood”. I definitely feel like my morals would be my gage in my decision making therefore if I was an executive at Goldman Sachs I don’t know if I could have stayed on long enough for this type of scheme to have happen but if I did once I found out the magnitude of the scheme I would definitely be looking for another job. I think there should be a difference between being ethical and being legal. I know it sounds contradictory but I think in businesses there should be laws put into place to help protect innocent clients against these giants but on a level of everyday living I still believe people are entitled to make their own moral judgments.[/quote]
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Post by elizabethamathews on Oct 3, 2012 20:49:47 GMT -5
The employees that were involved in the selling of the mortgages they were betting against either did not ask any of the five questions you should ask yourself before making decisions or just did not care what the answers were. They knew what they were doing was wrong. I'm sure none of them wanted this on the front page of the paper. I do not think they would be willing for everyone to act in the way they are. In other words, I don't think they would want some other company selling them mortgages and betting against them. Their decision did harm others. They did violate the law.
One of the obstacles they faced were the company's emphasis on profit. The number one goal of any business is the make a profit. While they knew what they were doing was wrong, they needed the company to make money. The textbook states, "How a profit is made becomes less important than that it is made." I believe that could possibly be the case here.
As an executive at Goldman Sachs, I would have kept my business principles. Two of them particularly stick out to me. (1) Our clients interests always come first. Obviously, their clients interests were not in mind when the decision to bet against their mortgages was made. (2) Integrity and honesty are at the heart of our business. If this was true, this decision would not have been made. My decisions would be guided by what I believed to be right and wrong. However, for me to stand up for what I thought was right would have been quite difficult, especially if everyone else was on board with the decisions that were being made.
Lastly, I do believe there should be a difference between being legal and being ethical. While, with no difference, there would a more exact definition of what was right and wrong, your morals would, more than likely, be different than my morals. Laws need to be in place so that there is a kind of boundary on what is right and wrong in the eyes of the law. However, there should still be some freedom in what someone thinks is right or wrong on a personal level.
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Post by elizabethamathews on Oct 3, 2012 21:00:54 GMT -5
The Goldman Sachs case is very interesting to me, because the company was never convicted of any criminal charges. The chapter mentions the sources of values for business ethics and it includes individual values. When an unethical business decision is made it comes from the individual. Only that individual can make the decision to proceed or not. One of the five questions that should be asked prior to making business decisions is whether or not I am wiling for everyone to act as I am thinking of acting. This question should’ve truly been dissected with Goldman Sachs. I would love to say that any successful company rises and falls based on its ethical standards/reputation; however, this is so far from the truth. Most extremely large and wealthy companies, such as Goldman Sachs, have underlining immoral procedures that have aided to its massive success. In the case of Goldman Sachs the decisions they made were not done on one rare occasion, rather over an extensive amount of time, hence, the company, as a whole, no longer saw a moral dilemma. As a person who is guided by Christian standards I would hope that I would've made decisions that contributed to a mutual success between the company and the client; however, when excessive amounts of money are at risk, the concept of right and wrong can become null and void, and it is often replaced with desirable and obtainable. As I stated earlier, I would love to say that this would be an easy decision, but honestly I am unsure. Money, in excess, can distort a person’s judgment. Many would argue that a person who does such things is simply an unethical person; however, I disagree. Situations can create unethical behavior. I definitely think there should definitely be a difference between being ethical and being legal, because following laws does not make one ethical. Legal is following the law and may include exploiting holes in the legal system. Ethics is doing what is morally and socially right. Some laws may not have any ethical inferences of any kind. For example, parking in a loading zone is illegal, and kind of stupid, but not unethical. I, too, am guided by Christian standards. As a Christian, I would hope that I would not "distort my judgement" but, as we all know, money is a big contributing factor in anything and everything in our daily lives. I also agree that there may not be so many unethical people as much as a situation causes a person to be unethical. I did not think about the fact that this happened often. Therefore, Goldman Sachs decided to keep doing it over and over, making the decision easier to make each time. |
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Post by jcox0821 on Oct 3, 2012 21:18:06 GMT -5
The fact that these banks were so deregulated they were able to make bets on bad mortgages. This however should have never of been done if it came down to having ethically sound morals. Greed was the sole provider of why this took place and unfortunately many people suffered. I would hope that I would have never taken place in this action, just because it is obviously a wrong thing to do. My own personal morals and ethics would have guided my decision. As soon as I had found out what took place I would have resigned just like Greg Smith did. When in a business sometimes things get overlooked and seen as "ok" just because everyone else it doing it and it is making people serious amounts of cash, which in many situations money tends to cloud peoples judgement. There is a major difference in being legal and being ethical. Many legal issues do not deal or pertain to ethical problems that people face, however that being said their should be something in place that protect people from something like this happening, which is is deep rooted in ethical issues of knowing what the right and wrong thing is to do.
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Post by bjlong on Oct 3, 2012 21:36:01 GMT -5
In the case of Goldman Sachs, I found it interesting that they were not charged with any criminal actions. The company, including employees knew that they mislead their investors, deceived their clients by selling them securities that they were betting against. I see this as stealing. They knew this was unethical and wrong. I know company 1st goal is to make profit but at whose expense? My parent always told us that wrong is wrong. We need to suffer the consequence of doing wrong. I believe in the saying" money is the root of all evil". How can they go home everyday, facing their families and friends, knowing they are working in an environment that is unethically wrong? They claimed that they profess to follow their Business Principles, which is "our clients interests always come first. What happend to clients interest? Managers are held to be accountable for the company actions, so in this case, I would have resigned. People were hurt, innocent people. Management should be committed to making good, ethical and legal decisions for everyone because everyone will be affected. Making right decisions should be everyone #1 priority. Yes, I think there should be a difference between being legal and ethical. Ethics are values and beliefs that are not enforced by the state. They are your own personal values and beliefs. Being unethical is not the person, it is your actions. Being legal is enforced by the state, courts through civil and criminal sanctions. They both deals with right and wrong.
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Post by jyork1 on Oct 3, 2012 21:52:26 GMT -5
Clearly the actions of this firm are unethical. The fact that there were no criminal charges brought against the company does not mean that what the executives did was not wrong. The fact that the company told its clients to invest in stocks that the firm itself was betting against is conflict of interest. There is no way around it. There is obviously not a single formalist that works at this company. Perhaps that's why Greg Smith resigned and refered to the firm as "toxic". I would have followed Mr. Smith and resigned the firm should I have been working there. I seem to believe the formalist approach to ethics. Clearly if you are lying to clients and to your employees something is wrong in the ethical department of your company no matter if the outcome boasted a profit or not. If you know right from wrong doing the right thing is always essential. It may not be easy, in this case you probably would have lost your job, but it must be done. The law does not do a thourogh job of defining ethics since different people have differect ethics. There is a difference between being ethical and being legal. In the 1950s it was legal to refuse service to African Americans in the United States. That doesn't make it ethical. In Asia it is legal to kill your child if she is born female. Again, this is not ethical.
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naman
New Member
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Post by naman on Oct 3, 2012 22:40:18 GMT -5
Goldman was selling securities to investors that he was betting against. He was acting unethically, even though he did not have any criminal prosecution. He should have been honest and handle the situation the correct way. After this incident his reputation as a morale man is ruined and he cannot be trusted. His company was losing money, but he should have figured something out or just cut his losses. He should have asked himself what it would feel like if someone treated him this way and is it the right thing to hurt other people for his benefit. It would be difficult to do the right thing, but I would not step on anyone for a short term solution and especially if it could have major consequences. There is a minor difference between being legal and being ethical. Something might be legal, but unethical. In this article he was legal, but unethical. There is even an example of something that is illegal, but ethical. When a doctor gives samples to their patients to save their lives; it is illegal, but ethical.
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Post by bcald20 on Oct 4, 2012 13:25:47 GMT -5
Goldman Sachs’ business principles were not taken into consideration, since its states that the clients’ interests always come first. How could they come first if Goldman knew this was a bad investment from the start? Was he planning a big payout for himself? They should not make such principles if they are not going to abide by them. If I were an executive at the firm, I would have resigned when I found out what was going on. It’s unethical to steal. We’re brought up that way. We learn it in school, church and at home. It’s the law. Stealing is just WRONG! I feel this way because I was brought up this way and I think the majority of the population was brought up this way and it just wrong. It doesn’t matter how you steal, it still stealing and it wrong. If you were raised correctly, you would ask yourself some questions before doing something unethical like whether the action is right or wrong, would be proud to tell your family or employer that you did it, would you want someone to that to you, would this cause harm to someone else or the environment, and most important would this act violate the law? An ethical thinking person could not go through with it. It’s not difficult for me to do the right thing because I was brought up that way. People may fall on hard times, I understand, but things can be worked out to your benefit without stealing from someone else. In some cases being ethical may outweigh being legal. So there should be a difference. Like in this case, it is legal to invest other people’s money. It’s unethical to misuse the funds for your own benefit. It’s unethical to lie to a person about something you know is wrong. Goldman should have been prosecuted, but the Justice Department said the “burden of proof to being a criminal case” could not be met. Was this another ethic situation? Good point about them not following their principles. This is very true. Another one of their principles is "Integrity and honesty are at the heart of our business: we expect our people to maintain high ethical standards in everything they do, both in their work for the firm and their personal lives." There is no way they follow their business principles if this is one of them. |
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Post by caitlandd on Oct 9, 2012 16:56:17 GMT -5
If I worked at Goldman-Sachs, I would not have been as cocky as some of their spokespeople tended to be on the matter. I would most likely have been extremely grateful that we had not been taken to court over such a serious matter. However, I also would never have tried to sell customers things that I knew were not going to do well.
I wouldn't try to mislead customers because I think lying to them is wrong, they pay my salary, why would I purposely mislead them just to make a little extra money? I think that is extremely wrong.
No, I do not think it would have been hard for me to do the right thing. However, since I am human, I know that if the powers at be made it sound as though selling them these securities was something that was truly going to be of value, maybe I would have done it, in hopes of doing the right thing.
Finally, yes, I do believe that being ethical and being legal should go hand in hand. Laws are rules against doing bad things, such as stealing, murdering, etc. While I don't think making a law against lying is realistic, I do think that lying in a professional setting like they did should be illegal.
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