Ethics Case

Ethical paper

Date: 7.11.13

Bernard L. Madoff was one of the most powerful and successful people in Wall Street. He was known by everyone, was a friend with the most powerful investors, was appointed to various Securities and Exchange Commission panels and even was a chairman in NASDAQ. So how can it be that all this time his business was just a one big scam that people invested billions in?

What where the drivers for that unethical behavior?

The first thing that drove Madoff was the greed for money. From the beginning he knew exactly what was he doing, which was taking other people's money, sending them fake statements and meanwhile improving his own life style spending on things like: vacation homes, yachts, condominiums in NY and luxury cars. This was of course the oversight implicitly that allows the overzealous pursuit of personal gain. The second drive was the company's culture that puts profitability and business performance ahead of ethical behavior. Madoff Wanted to be the number one in the industry or in his words:" to beat the market" (crafting and executing strategy, 2010) by supposable creating for the investor revenue of over 400 times what they invested. I don't believe that heavy pressure was on of the reasons he did it because I truly believe the main reason was just to scam the system and to get richer.

What should companies do to avoid similar unethical behavior?

First thing for the companies to do is to understand and explain what exactly ethical differs from unethical and which consequences going to be to this behavior. It is very important to company to understand that strategy that is unethical is morally wrong and reflects badly on the character of the company and the fact that ethical strategy can be good business and serve the self- interest of shareholders. I think that understanding and choosing to follow the right way is the number one path for a right ethical behavior for a company. It is very important to follow the five components of a corporate social responsibility in order to create the right ethical behavior not only for the managers of the company but also for the employees which includes: actions to promote diversity, actions to enhance employee wellbeing and make the company a great place to work, actions to protect and sustain the environment, actions to support philanthropy, participate in community service and better the quality of life worldwide and finally actions to insure the company operates honorably and ethically.

Unfortunately this wasn't the first scam in the business world and not the last. But the companies can reduce the unethical behavior by understanding the difference from right to wrong, the consequences and providing the right ethical training for the employees.