Unethical Corporate Practices
Carol Bramlett
MGT/521
December 1, 2013
Heather Rideout

Unethical Corporate Practices
2. What was the culture at Lehman Brothers like? How did this culture contribute to the company’s downfall?
The Lehman Brothers management encouraged excess risk taking by its employees and rewarded them handsomely for this. The management also encouraged staff that took questionable deals and punished whoever was critical of company policies. It was also very secretive in addressing the remunerations of the top management and openly filed their financial reports wrongly to please investors and attract more clients. The Lehman management was also profit oriented opting to reduce health insurance of its employees in order to maximize on profits. This shows the extent management was willing to sacrifice to fulfill the company’s appetite for money placing their staffs’ interests in the backseat.
3. What role did Lehman’s executives play in the company’s collapse? Were they being responsible and ethical? Discuss.
The Lehman management openly violated the ethics code of business. For example they filed unverifiable, inaccurate financial reports openly contravening the Sarbanes-Oxley Act that states that companies should file correct and accurate financial documents. They also disregarded legit means of conducting business creating a culture where staff that practiced illegitimate means were idolized and rewarded thus encouraged to continue with their ways. In another case the management initiated a policy that reduced the health insurance of their staff showing openly that their main objective was profits. All this practices were extremely unethical openly encouraged by the top executives (Smith, 1997).
5. After all the public uproar over Enron and then the passage of the Sarbanes-Oxley Act to protect shareholders, why do you think we still