Acting Unethically: Understanding Consequences of Economic Scandals
- Date: 2007-01-29 - Word Count: 528
Share This!
In order to understand the value of ethical business practices to community in general, it is essential to discuss the subject matter from the perspective on the economic downturn brought in recent years by ethical malpractices. The era of the late 1990s, the time of skyrocketing stock markets as a result of wide spread Internet technologies, emergence of new business models, aging workplace and war for talent - all factors combined led to lowering degree of trust in transparent business operations by the general community. While expanding economy resulted in higher level of employment, the war for skilled employees was started. This led to formation of the image that some employees and managers were above the rules. Consequently, this resulted in unethical behavior, as some stock option rich executives inflated the market in order to cash their options. Investors continued on financing businesses that were engaged in doubtful practices and profitability and risk of which could be put to doubt; whereas this, in turn, contributed to higher pressure among corporate executives.
Consequently, in 1990s the new accounting tools were innovated to boost profitability, as perceived, whereas in reality, an organization could not cover the amount of assets reported on the balance sheet. The brightest example of this is Enron - company used sophisticated accounting practices to conceal the debt, whereas investors realized very little about the situation of the company. Consequently, the arising conflicts of interests could be balanced in traditional ways. The advent of Internet followed by overall aging of the population also contributed to doubtful ethical practices. As the level of crime is dependent on the age constitutes of society, a higher level of education among the youth made it easier for people to engage in fraudulent activity. These factors led to formation of the new business environment that now has to make up for mistakes in the past. A series of high-profile scandals placed doubt in the hearts of investors and the general community and put overall market profitability to question. As people are now afraid of investing in doubtful businesses, ethical organizations are now suffering significant losses having to make up for the investor mistrusts and rising levels of risks. This places additional pressure of profession of a Human Resource manager, as the one bearing direct responsibility for ethical malpractices, whereas failure of the past, most likely will take long to be corrected.
What are the outcomes of the scandals? From the economic standpoint, businesses now will be enjoying a lower investor activity that is followed by higher interest rates for raising money. As the role and effectiveness of accounting profession is put doubt after the scandal with Enron, there is a higher level of risks associated with investment. As ethical scandals undermine public trust, market is realizing higher interest rates, lower investment returns, and consequently, overall economic performance is not realized to the full. it is obvious that the role of ethical practices is huger and is directly related to overall company profitability and economic well-being of society.
Jennifer Burns is a custom essay writer at Custom-Writing.org, academic assistance. Being actively engaged in report writing herself, Jennifer now assists student with writing a critique paper.
Consequently, in 1990s the new accounting tools were innovated to boost profitability, as perceived, whereas in reality, an organization could not cover the amount of assets reported on the balance sheet. The brightest example of this is Enron - company used sophisticated accounting practices to conceal the debt, whereas investors realized very little about the situation of the company. Consequently, the arising conflicts of interests could be balanced in traditional ways. The advent of Internet followed by overall aging of the population also contributed to doubtful ethical practices. As the level of crime is dependent on the age constitutes of society, a higher level of education among the youth made it easier for people to engage in fraudulent activity. These factors led to formation of the new business environment that now has to make up for mistakes in the past. A series of high-profile scandals placed doubt in the hearts of investors and the general community and put overall market profitability to question. As people are now afraid of investing in doubtful businesses, ethical organizations are now suffering significant losses having to make up for the investor mistrusts and rising levels of risks. This places additional pressure of profession of a Human Resource manager, as the one bearing direct responsibility for ethical malpractices, whereas failure of the past, most likely will take long to be corrected.
What are the outcomes of the scandals? From the economic standpoint, businesses now will be enjoying a lower investor activity that is followed by higher interest rates for raising money. As the role and effectiveness of accounting profession is put doubt after the scandal with Enron, there is a higher level of risks associated with investment. As ethical scandals undermine public trust, market is realizing higher interest rates, lower investment returns, and consequently, overall economic performance is not realized to the full. it is obvious that the role of ethical practices is huger and is directly related to overall company profitability and economic well-being of society.
Jennifer Burns is a custom essay writer at Custom-Writing.org, academic assistance. Being actively engaged in report writing herself, Jennifer now assists student with writing a critique paper.
Related Tags: business ethics, business malpractices, essays on business ethics
Your Article Search Directory : Find in Articles
Recent articles in this category:
- How Hypnotherapy Can be Used on Children
Today Hypnosis can be termed as a branch of medicine which is quite unique, whereas in the past this - Confidence Workshops For Children
Every parent wants their children to be confident, happy, highly motivated and enthusiastic in order - Inspiring Children Using NLP
Neuro-Linguistic Programming (NLP) is one of the most successful therapies in psychology today. Init - Writing Term Papers
Students often tend to put off a written assignment, considering it to be a chore too formidable to - Naming In Term Paper
Give a descriptive name to each of your concept in the paper. Adhere using terms like "our approach" - Introduction Section of a Research Paper
Your introductions should not exceed more than two pages (typed, double spaced). See again the examp - Getting a Feedback of Your Term Paper is Important!
Get the feedback of your work! Finish your paper, having written it well in advance, so that you hav - The 1950's - Was Life Better?
Iconic TV shows like I Love Lucy, Dennis the Menace and My Three Sons seem to indicate that the 1950 - Online Classroom Systems Makes Home Schooling Even More Attractive
In the past it went without saying that you would send your kids to public schools. With public scho - 8 Helpful Tips For Surviving Military Basic Training
Getting through military basic training takes a lot perseverance. During this training it is best to
Most viewed articles in this category:
- Culinary Cooking Schools and What They Teach
Culinary cooking schools prepare you for a job in the culinary industry by providing you with the kn - How To Learn Spanish Quickly Without Moving To Spain
Learning Spanish is a popular pastime, as well as a serious goal for many individuals. Whether it's - How To Improve Your Life With An Accredited Online College Degree
With the information super highway raring full steam ahead, quality accredited online college degree - Online Bachelor Degree Programs Go Mainstream
The Internet has seen an explosion in online bachelor degree programs in the last five to ten years - Online Degree Program Just A Click Away
You want to go shopping, but your car is low on gas. You want to know your account balance, but do n - Online Paralegal Degree Will Open Doors
An online paralegal degree may offer the possibility of improving your chances in the legal professi - What West Point Military School Looks For In A Candidate
West Point is looking for well rounded young men and women who are good students, good athletes, and - The Importance of Effective Accounting Programs
In the past, small businesses like mom and pop stores were not required to maintain any sort of acco - California Schools Educators Retirement System And Lionstone Group Create Investment Fund
The California State Teachers' Retirement System (CSTRS) is the second largest public pension fund i - A Taste of China - Seattle Schools New Guest Teacher Shares Language and Culture of Her Native Hom
The Seattle schools have a new "guest" teacher. Zhu Dan arrived in the Seattle schools in January