Organizations Promoting Business Ethics Article Review

Pages: 20 (6128 words)  ·  Bibliography Sources: 20  ·  File: .docx  ·  Level: College Senior  ·  Topic: Ethics / Morality  ·  Written: April 27, 2019

SAMPLE EXCERPT . . .
Fannie Mae and Freddie Mac played a key role in the housing market plunder, as they provided mortgage loans that failed to be in conformity with established standards (Hume, 2004).

The executive officers of Fannie Mae were unethical in regard to providing false information to the state regarding subprime loans. Consequently, both major investors and the general public had trust and conviction that it was less risky as compared to other prospective investment choices. The adverse effect of these unethical practices is that there was an unrelenting increase in housing credit, which facilitated the sustained expansion of the mortgage housing market up until its unexpected and precocious collapse. This adversely impacted numerous citizens. This is largely for the reason that in the course of the financial crisis, privately owned corporations were removing and redeeming themselves from the market whereas Fannie Mae and Freddie Mac were expanding their activities. As a result of increased interest rates on mortgage, a great deal of people ended up defaulting on loan repayment. This gave rise to numerous financial institutions to cancel the loans, plummeting the real property market into a financial collapse. These events climaxed to the financial crisis of the 2008 in the United States, which rapidly expanded and progressed to adversely impact other markets across the globe (Khan, 2004).

Enron Scandal

Buy full Download Microsoft Word File paper
for $19.77
With regards to this case study of Enron, there are several aspects related to ethics which include omission or concealment of information and the confinement of organizations. In particular, in this case, the aspect of ethics comes in at the point where managers or individuals with leadership positions in the firm have go to make a decision between implementing what is beneficial to them individually or to the company as a whole. Ethics advocates for the responsibility towards the interests of the shareholders.

Article Review on Organizations Promoting Business Ethics Assignment

One of the ways in which the Enron case is related to ethics is the aspect the managers or executives consider and highly regard profits and financial matters at a higher level as compared to ethical matters. For instance, to begin with, the traders at the company unlawfully and illicitly influenced the energy prices in the state of California so as to produce revenues and proceeds for Enron. This would be done by creating power failures for power plants all over the state and as a result increasing the level of demand for power at a very fast rate. As a result, the energy prices increased and the company made huge profits. For instance, in the case study a trader is documented calling a certain power plant and telling them to cause power failure for a number of hours. This caused blackouts across the state and steeply rising prices and this made the traders laugh. Another aspect concerned with ethics is the manner in which Andrew Fastow, the Chief Financial Officer of Enron manipulated the financial structure of the company. Fastow created several companies and firms in order to conceal the level of debt that the company had and also to increase and augment the stock prices of Enron (Li, 2010).

At the top most level of the organization, Jeff Skilling who is the CEO of the company exploited and made the most out of accounting ambiguities and dubious procedure and processes to upsurge Enron’s profits. Simply because Skilling had been granted permission and given consent by the Securities and Exchange Commission to employ mark to marketing way of accounting, did not imply that it was ethical to do what he did. This form of accounting permitted Enron to documents and report revenues and proceeds from future transactions in the current financial statements. In a fiscal year, the company reported and documented fifty three million dollars in profit from a transaction with Blockbuster video just as they had declared it. However, the deal never actually went through and neither did the stated returns either. In as much as this way of accounting was deemed legal, Enron employed it in a manner that was not ethical (Petrick and Scherer, 2003).

Additionally, Skilling acted out of interests for himself and those in high levels in the company. This is because, once they has ensured the stock prices had increased greatly, they sold their shares and obtained great profit levels but left the consumer penniless. At the time when the stock prices of Enron kept falling, those in top management has already departed with profits. This was unethical as they should have safeguarded the interests of the shareholders or the owners. Additionally, the company has instituted an unethical organizational culture. At the outset of every financial year, the company gave rewards to the topmost employees that generated profit and did not bother or care how such profit was made and fired or sacked the bottom 10% of the workers who had the poorest profit returns (Healy and Palepu, 2003). As a result, the employees started to gamble and come up with unethical ways they could get away with just as long as they generated and brought in profit for the company. This scandal by Enron significantly rocked the accounting environment to the extent that it forced the need to generate new rules and regulations and this gave rise to the Sarbanes-Oxley Act (Nelson, Price and Rountree, 2008).

PART 3

Go to www.ethicssage.com, go to categories, and choose 2 articles of interest, provide a summary, Summary should include an abstract, 15 facts

Article 1

Abstract

Article 1: Artificial Intelligence (AI) Changing the Way Audits Are Conducted

The article by Mintz discusses the manner in which artificial intelligence is transforming the way audits are undertaken. Artificial intelligence (AI) in a broad sense takes into account technologies that aids in making machines to be smart. AI facilitates the continued trend in progression of technology that has released the practical applications, numerous… [END OF PREVIEW] . . . READ MORE

Two Ordering Options:

?
Which Option Should I Choose?
1.  Buy full paper (20 pages)Download Microsoft Word File

Download the perfectly formatted MS Word file!

- or -

2.  Write a NEW paper for me!✍🏻

We'll follow your exact instructions!
Chat with the writer 24/7.

Business Ethics and Ethical Purchasing Research Paper


Business Ethics in the Fire Service Research Paper


Business Ethics a Contradiction in Terms? Case Study


Business Ethics the Code of Business Conduct Essay


Business Ethics Is Defined as the Study Thesis


View 200+ other related papers  >>

How to Cite "Organizations Promoting Business Ethics" Article Review in a Bibliography:

APA Style

Organizations Promoting Business Ethics.  (2019, April 27).  Retrieved July 12, 2020, from https://www.essaytown.com/subjects/paper/business-ethics-resources/9456404

MLA Format

"Organizations Promoting Business Ethics."  27 April 2019.  Web.  12 July 2020. <https://www.essaytown.com/subjects/paper/business-ethics-resources/9456404>.

Chicago Style

"Organizations Promoting Business Ethics."  Essaytown.com.  April 27, 2019.  Accessed July 12, 2020.
https://www.essaytown.com/subjects/paper/business-ethics-resources/9456404.