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Social Responsibility and Managerial Ethics

In: Business and Management

Submitted By zaya414
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Social responsibility and managerial ethics

You may be wondering, “Why should I care about corporate social responsibility or managerial ethics or whether or not my employees have health care benefits? Aren’t these the types of issues philosophers worry about?” To answer this question, you only need to pick up a recent newspaper or business magazine. Everything from Wall Street trading scandals to accounting frauds at AIG,
Lehman Brothers, Enron, Parmalat, Satyam, WorldCom, Tyco, and Global Crossing to corporate cover-ups and massive oil spills from British Petroleum’s offshore drilling rig explosion in the
Gulf of Mexico seem to be in the press daily. For example, Citicorp lost billions in market value when it was revealed that a group of traders in the firm’s London office had manipulated the bond market: A small set of traders disrupted the European bond market by placing 188 sell orders simultaneously (approximately $20 billion worth of bonds) on August 2, 2004 in about 18 seconds.
This drove the price of bonds, in general, down dramatically. The prices continued to drop even after the Citibank traders stopped selling. Just a few minutes later, the same traders then bought the bonds back at much cheaper prices than they had been sold. This new buying triggered buying by other traders, and prices rose. In the process, Citibank traders made about $20 million in profits in under five minutes. Although the employees did not do anything illegal, their behavior was deemed unethical.
In the end, Citicorp paid a $28 million fine to the Financial Service Authority for “failing to conduct its business with due skill, care and diligence, and failing to exercise proper controls over the London bond trading team.”1
Individual or corporate decisions that are judged to be wrong, either ethically or legally, can not only hurt those directly affected by

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