Ethics Paper
Mgt/498
July 4, 2012 Ethics Paper Companies must accept responsible for the consequences of the actions and pass these ethics policies to their employees. “A 2007 survey of global executives by The Economist Intelligence Unit found that the percentage of companies given either high or very priority to corporate ethics and social responsibility had risen from less than 40% in 2004 to 50% 2007 and still rising” (Wheelan, 2010 p. 74). The author of this paper will discuss how the role of ethics and social responsibility will effective stakeholders and society. In addition, the author will discuss how the Arthur Andersen Corporation overstepped their ethical boundaries to their stakeholders.
Ethics and Social Responsibilities Ethics spells out the important in order to achieve a specific result within the organization in existing or occurring issues. Moreover, the way people as a society make ethical decisions in his or her personal lives, is not necessarily the same way they make decisions in a business environment. Upper management implements ethical policies for all employees, this information should be updated continually through manuals or on the company’s website. Organizations in the United States use two views for business responsibility in the area of ethics Milton Friedman’s and Archie Carroll’s view. Friedman’s view is widely accepted in the business environment. According Friedman the best approach in business and for sociality is “ to used its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud” (Wheelen, 2010, p. 72). For example, General Mills spent millions in charity, community events, and environmental projects. According to Friedman, this revenue could have help to invest in a new product development and give more dividends to the shareholders. Social accountable involves upper and lower management taking steps beyond making income from investments for the organization, but to help prevent harm to society while making a profit for example pullulates in water or air because of a product or service. Carroll’s view involves the economic and social factors for an organization. According to Carroll, organizations have four standards of responsibilities within its organization while conducting business. These standards of responsibilities include: legally, ethically, discretionarily, and economically. Carroll states, an organization must make a profit to full the needs of its economic liability, which helps to develops for the goods and service to society. Moreover, if an organization fail to acknowledge the four standards of responsibilities through government, will act, an organization will be legally responsible.

Arthur Andersen “In the wake of World-Com, Enron, and Arthur Anderson, business academics now regard ethics, personal and corporate, to be so vital that many MBA programs have made ethics courses mandatory” (Roy, 2004, p. 22). The author of this paper will discuss how a global organization in the United States made a class involving ethics mandatory for several MBA programs. Arthur Andersen accounting firm was one of the leading auditing and consulting firms in the world. Founder Arthur E. Andersen conveyed to his employees ‘think straight- talk straight’ was the ethical and social beliefs that Andersen expect from his employees. Never want the group of accountants to change their client’s books to see more revenue from the organization then was actually calculated. Mr. Andersen emphasized accountants had a special responsibility to the public and died with that belief for his company. In 1947, Joseph Bernardino became the new Chief Executive Officer (CEO) after Andersen’s death took the classical social responsibility approach (stated by Milton Friedman) to the stockholders. The company ethical seminars for all accountants to convey Arthur Andersen’s way of doing business annually was not mandatory any longer. The employees of the company attitudes begun to change the ethical standards were lost. In addition, by doing this action by super management the culture of the company change from ethical to unethical behavior patterns from employees. Under the new management the principles of honesty and integrity were lost and accountant consultants were encouraged to keep clients happy by any means necessary get profit for the company. Management believe ethical training was a waste of time for the company that time should have be on seeking revenue for the company. The company never dismisses the ethical standards; now at annual meetings ethical procedures were in a big maroon binder on last day of meeting pass-out to all employees to take home. In 2005, “the Arthur Anderson Company serve convicted of obstruction of justice for shredding documents associated with the role of Enron’s auditing firm and quickly went out of business”( Roy, 2004, p. 24). The company had issues with unethical accounting behavior for not just Enron, but Waste Management, and Sunbeam. The employees of Arthur Andersen and Enron lost jobs, 1040ks, pensions, and stockholder lost large amount of revenue. This case had reached the Supreme Court on ruling on how the company’s lack of ethical behavior affect the people of the United States. Arthur Andersen always had an indirect responsibility to the public. One of the largest accounting firms in the world ethical behavior was a part of the trust of people. The company’s unethical behavior fails the world.

Conclusion In conclusion, any organizations that focus on ethical and social responsibilities provide a positive overall reputation in society. Ethic codes of conduct should be discussed with employee continually through implantation of upper management using tools for example: manuals, meetings, the company’s websites, social media sites, emails, and surveys. Finally, if Arthur Andersen Corporation kept the vision of Mr. Andersen the company would have been the largest accounting firm in the world.

References
Roy, A. K., & Roy, L. C. (2004), The importance of teaching ethics. Retrieved May 28, 2012 from the University of Phoenix’s library, Business and Economic Review, 50(2), 22-23. http://search.proquest.com/docview/209593757?accountid=35812 Wheelen, T. L. and Hunger, D.( 2010) Concepts in Strategic Management and Business Policy Achieving Sustainability, Twelfth Edition ISBN: 9780136097358 copyright Pearson Education. Retrieved May 21, 2012 , the reading material for the University of Phoenix for class Mgt/498.