What effects ethics has had on government policies

I thought this was an interesting article because it highlights what all these resent unethical decisions CEO's and other top level executives have made is doing to the United States government. This article is about a new bill that has passed in the House of Representatives requiring more disclosure of top level management's compensation as well as new rules on voting for pay increases and other items that shareholders will vote on. This article also talks about how these new rules will increase the oversight by the government on large institutions specifically aimed at banking institutions.

This article relates to class because we are seeing how unethical decisions are affecting the business world. These unethical decisions are leading to more governmental control over publicly held business because we have seen how they can affect our economy. This also realated to leadership because this bill was started president Obama's Administration. This shows his ethical decision to protect the community and help prevent others unethical decisions from affecting the whole economy. President Obama is using the five principles of ethics in this article by building community through protecting the community from unethical decisions. As well as using this to show honesty in business. Although he is forcing manifesting honesty it may lead to more ethical leaders in the future. This is also showing transformational leadership from Burn's perspective because Obama is stressing some of Burn's key values in his leadership. those values are justice and equality.

-Scott Ferrebee

http://www.businessweek.com/managing/content/aug2009/ca20090821_158360.htm?chan=careers_managing+your+board+page_top+stories

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http://www.nytimes.com/2011/04/10/business/10comp.html?scp=1&sq=ceo%20salaries%20&st=cse

I thought that this article relates to this blog because it is all about top C.E.O.’s who make an incredibly gross amount of money per year.  This may seem fair and justifiable to some of you, but when people are being laid off as the C.E.O. brings in over 80 million a year, it just seems unethical.  The article is all about the top paid C.E.O.’s and how many of them took raises last year.

According to the definition of ethics from Northouse, it is “concerned with the kinds of values and morals an individual or society finds desirable or appropriate”.  In this case, C.E.O.’s are getting raises when people are losing jobs, the economy is barley turning around and they are already making over seven figures.  This is a something that most of society would definitely find to be undesirable and inappropriate.  Northouse brings up the question from the theological perspective “what is right”.  This is a valid question for this scenario.  Is it right for a C.E.O. to make 87.5 million dollars in only nine months?  Sure these companies might be doing well or growing, but salaries that are this high proves that these C.E.O.’s fall under ethical egotism.  This theory states that one “should act so as to create the greatest good for herself or himself”.  If they are giving themselves substantial raises during tough times instead of paying dividends to stockholders, hiring more employees, or reinvesting the money in the company, then they are acting in the best interest of themselves.  A C.E.O. should act under the principles of altruism the leader should act on behalf of the best interest for others even if it conflicts with their personal beliefs.  As a C.E.O., the interest for the others would include all of the people involved with the corporation as well as the general public.


Thanks for reading,
-Dan Condon

Dennis Kozlowski: Former Tyco CEO

During Keynote Address Dave Mager mentioned a lot of unethical leaders and gave us his opinion regarding their unethical decisions. One of the leaders he mentioned was Dennis Kozlowski, CEO of Tyco, and I decided to further research his unethical decisions. His case was different because he was not charged with accounting fraud like many other top executives have been charged with in the past. 

Kozlowski was found guilty on 22 of 23 counts of grand larceny, conspiracy and violating general business law. Kozlowski and his CFO, Mark Swartz, were accused of taking $120 million bonuses and abusing an employee loan program. More specifically, people were not happy with Kozlowski’s lavish lifestyle at the stockholders expense. He has a $30 million NYC apartment paid for by the company and threw his wife a $2 million birthday party that Tyco paid a portion of. He demonstrated ethical egoism because he acted to create the greatest good for himself. He did maximize profits for Tyco but only because Tyco has a pay-for-performance culture and that would benefit him in the long run. All leaders have an agenda, a series of beliefs, proposals, ideas and values. Clearly, his agenda only concerned himself. Like Dave Mager said when you value money above integrity you will sacrifice anything for your number one value including integrity. 

Ethical leaders are concerned about issues of fairness and justice. As a rule, no one should receive special treatment or special consideration except when the situation demands it. Kozlowski proved he was not an ethical leader because he received special treatment himself with all of the luxuries he had the company pay for as well as all of the bonuses he would give himself and his CFO Mark Swartz. 

An ethical leader is honest so that others can see them as dependable and reliable. If a leader is dishonest it creates dishonesty in the organization. People lose faith in what they say, stand for and the respect for the leader diminishes. Kozlowski says he has lost most of his friends and his followers. It changed the way people looked at him they could no longer see him as a role model due to his lack of dependability. No one felt they could trust him anymore, including his second wife who has filed for divorce.  Kozlowski argues that he did not lie or misrepresent any data, “nothing was hidden”. He says the Jury made an assumption because he was the guy in the room making $100 million and he must have done something wrong. Kozlowski is in prison for a minimum of eight and maximum of 25 years in jail. 

Do you think his behavior deserves such a sentence? What unethical behaviors do you think Kozlowski portrayed. Thanks!

http://www.time.com/time/specials/packages/article/0,28804,1903155_1903156_1903152,00.html

Liz Ramirez

Buffett's Policies Went Unheeded

This posts relates to David Sokol's ethical practices. Formerly an employee of Berkshire Hathaway Inc. and seen by many as the possible successor of Warren Buffet as CEO of Berkshire Hathaway, David Sokol made purchases of stock in a company which he recommended Berkshire Hathaway purchase one week later. Warren Buffet explicitly defined the ethical standards he expected of his employees in a memo one year earlier titled "Insider Trading Policies and Procedures". David Sokol obviously did not heed the guidelines given in this memo and his actions can be further reviewed in this article I read titled "Buffett's Policies Went Unheeded."


http://online.wsj.com/article/SB10001424052748703806304576245271170720328.html?KEYWORDS=ethics+in+business

David Sokol's actions can be analyzed using multiple perspectives we have learned in class and from Peter Northouse in Leadership Theory and Practice. In looking at this case from conduct perspective of ethical theory, David Sokol acted with ethical egoism. As Northouse argues, "ethical egoism states that a person should act so as to create the great good for herself or himself." David Sokol's insider trading practices definitely were done only in regard for himself, in an attempt to earn personal gain. Further, in Figure 15.1 (p380), Northouse illustrates ethical theories based on a concern for self-interest versus a concern for others. Ethical egoism ranks high in concern for self-interest, with the lowest possible concern for the interest of others. It is easy to see Sokol's lack of concern for the interest of others within the company when he obviously disregarded Warren Buffet's memo to staff describing which practices and policies were unacceptable within the company. Again, this raises the questions about why someone in such a powerful leadership position would act in a way that is so observably unethical.

Northouse also states "ethics is central to leadership, and leaders help to establish and reinforce organizational values." While it is apparent that Warren Buffet attempted to lead all of his employees in an ethical manner, his follow-up about the behavior that David Sokol exhibited is less than promising. The article gives that he does not publicly scrutinize Sokol's actions and he even states that he did not ask Sokol to resign, but that Sokol resigned on his own. It is disheartening to see that such a powerful, business leader like Warren Buffet would act toward this breach of ethics in such a way. Will his actions have a trickle down effect on the values of the employees in the entire organization? What could Warren Buffet do to reinforce the organization's commitment to business ethics in their trading practices and to what extent do you believe this ethical controversy will have a negative effect on the image of Berkshire Hathaway?

Thanks for reading and for your anticipated feedback,
Justin Fisher