Ethical Challenges and Agency Issues
Ethical Challenges and Agency Issues
Analyzing ethical challenges Most people are aware of the ethical challenges businesses face in today’s world especially, in the financial services industry. Financial services became a major target after several scandals such as Enron and MCI. Unfortunately, the financial industry is very large, which encompasses entities such as banks, insurance companies, mortgage lenders, pension, and securities funds. “The financial service sector represents 20 percent of this index’s market capitalization. Because of the vast size, the industry tends to garner lots of headlines, many of which tout its ethical lapses” (Federwisch). Based on the case study, “Level of Executive Pay” the Chairperson of NYSE is compensated $1.4 million in salary and $1 million in bonuses. This shows he was greedy and his goal was to maximize profit for his personal interest. Individuals should take responsibility of their organization’s financial security. For example, as in the case study, “Timely Reporting of Budget Problems” the client failed to provide auditors with appropriate records to complete the audit. This behavior caused the company additional funds and additional time for completing the process. The daily operation of a business globally is another ethical challenge organizations encounter during expansion especially, dealing with various cultures. Competition is another challenge and in the process of completion may force individuals to cut corners to remain on the competitive edge. In today’s business world, managers are not confident that employees possess the organization’s desired ethical values. Instead some people have their personal values; therefore, management must be diligent and frequently implement its ethical values. “Thus the organizational integrity strategy fully acknowledges the importance of compliance with the law; its aim is to achieve right conduct in general” (Hartman, 2004). Need page number “An
Analyzing ethical challenges Most people are aware of the ethical challenges businesses face in today’s world especially, in the financial services industry. Financial services became a major target after several scandals such as Enron and MCI. Unfortunately, the financial industry is very large, which encompasses entities such as banks, insurance companies, mortgage lenders, pension, and securities funds. “The financial service sector represents 20 percent of this index’s market capitalization. Because of the vast size, the industry tends to garner lots of headlines, many of which tout its ethical lapses” (Federwisch). Based on the case study, “Level of Executive Pay” the Chairperson of NYSE is compensated $1.4 million in salary and $1 million in bonuses. This shows he was greedy and his goal was to maximize profit for his personal interest. Individuals should take responsibility of their organization’s financial security. For example, as in the case study, “Timely Reporting of Budget Problems” the client failed to provide auditors with appropriate records to complete the audit. This behavior caused the company additional funds and additional time for completing the process. The daily operation of a business globally is another ethical challenge organizations encounter during expansion especially, dealing with various cultures. Competition is another challenge and in the process of completion may force individuals to cut corners to remain on the competitive edge. In today’s business world, managers are not confident that employees possess the organization’s desired ethical values. Instead some people have their personal values; therefore, management must be diligent and frequently implement its ethical values. “Thus the organizational integrity strategy fully acknowledges the importance of compliance with the law; its aim is to achieve right conduct in general” (Hartman, 2004). Need page number “An
References: Addison-Hewitt Associates. (2006). A Guide to the Sarbanes-Oxley Act. Retrieved from http://www.soxlaw.com/index.htm Eldenburg, L Emery, D. R., Finnerty, J. D., & Stowe, J. D. (2007). Corporate Financial Management (3rd ed.). Retrieved from The University of Phoenix eBook Collection Database. Federwisch, A. (2013). Ethical issues in the financial services industry. Retrieved on August 22, 2013 from http://www.scu.edu/ethics/practicing/focusareas/business/financial- The Data Manager 's Public Library. (2012). SOX-online: The Vendor-Neutral Sarbanes-Oxley Site. Retrieved from http://www.sox-online.com/basics.html