Business Ethics

4.5 / 5. 2

Business Ethics

Category: Business

Subcategory: Culture

Level: University

Pages: 5

Words: 1375

Business Ethics

The concept of ethics is an important element that enables people to understand and respond to different aspects of life. The Goldman Sachs’ case study is used to provide a better understanding of ethics by identifying dilemmas and problems the company has and using research to explain these issues. This discussion explains different types of ethics including normative and descriptive as well as identifies different business philosophies the Goldman Sachs Company follows. In particular, the philosophy of ethics based on the duties and duty of fidelity is used to explain how Goldman Sachs’ function. Additionally, an ethical problem concerning Goldman Sachs is identified, and the idea of cultural relativism explained identifying how it connects to the operation of the company. Furthermore, promotion in the workplace is sensitive and, therefore, this work discovers competition as the method Goldman Sachs utilizes to conducts its employee promotion. The work also uses course materials to determine and elaborate on the firing procedure at the General Electric Company which depicts the Darwinian’s theory of survival-for-the-fittest.
Ethical issues are often impossible to avoid, and many companies encounter ethical-related challenges that necessitate the most effective and efficient response from involved parties.
Normative vs. Descriptive Ethics
Business ethics (2016a, p. 14) describes Normative Ethics as involving how people need to perform whereas Descriptive Ethics connotes how people are performing. In other words, while Descriptive Ethics describes what individuals perceive as morally right, Normative Ethics, on the other hand, attempts discovering the value of such beliefs. In this respect, one can agree that decision making necessitates the use of Normative Ethics in situations requiring decision making since it is more rationalistic and rigorous than Descriptive. However, Goldman Sachs performance contradicts this premise and, hence the company’s corporate climate is best described through Descriptive Ethics.
More specifically, the company’s actions such as ensuring complexity in the process of endorsing new members as partners make it hard for other interested parties to compete. Furthermore, Goldman Sachs fails to disclose crucial information to the public such as about partners or the total estimated benefits partners receive despite having used public funds to avoid bankruptcy. One can, therefore, purport that Descriptive ethics encourages an ego-centric decision-making strategy in which people are morally unrestricted in pursuing individual happiness via autonomous action. This premise is more evident in Goldman’s system of operation in which the firm feels it is acting within moral restrictions by setting individual rules that are acceptable in the company whether or not the overall public agrees or not.
Merits and Demerits of an Ethics Based on Duties Philosophy at Goldman Sachs
Ethics based on duties are straightforward and easily understandable, and therefore, allows for effortless performance in different areas of life (Business Ethics, 2016b, p.58). In particular, ethics based on duties provides clearly defined rules on what actions need to be done. The philosophy at Goldman Sachs of ethics based on responsibilities allows the firm to protect its partners from public exposure especially in the matters concerning the respective compensation for top officers. Additionally, the company refuses to inform the public who current partners are but at the same time ensures it offers employees, although one per every admission in the membership program, the opportunity to become a partner. Therefore, the company has upheld its duty to protecting its partners as well as providing a chance for its workers to enjoy the benefits of partnership.
On the other hand, this philosophy of ethics builds conflicting ideas between the public and Goldman Sachs whereby, on the one hand, Goldman owes to its partners and top executives secrecy regarding benefits, salaries and identity. On the other hand, the public feels they deserve the right to know more information concerning the company and particularly feel so since this public contributed significantly to saving Goldman from collapsing. These conflicting views prove challenging for the company in that while it may want to remain loyal to its members and workers, it also needs to appear ethical to the public by being open in its operations.
Ethical Issue
The 2008/2009 financial crisis had a tremendous effect on Goldman Sachs operations to a point where it needed external assistance for survival; otherwise, it would go bankrupt. Henry Paulson, the then Secretary of the U.S. Treasury representing the federal government, facilitated a bailout by funding the firm using citizens’ taxes. Previously, Paulson had worked at Goldman Sachs as the firm’s CEO. The ethical issue presented here is that Paulson used the assigned federal office wrongly by exploiting his power to fund a private company using public funds. Moreover, it is less likely or it would have proven difficult to offer financial assistance to Goldman Sachs if Paulson had no prior relationship with the firm or he held no such position in the U.S. Treasury.
This ethical issue can be associated with the dilemma including conflicts between public interests and personal interests. One may suppose Paulson’s action to fund a private company using federal funds without seeking public opinion first as a dilemma the Treasury Secretary faced before taking the final step. In particular, Paulson had to decide whether to misuse the Treasury office by granting support to a private company he previously worked as the CEO to prevent its collapse or engage in actions that only benefit the general public he has sworn to serve.
Ethical Philosophy Best Describing Goldman Sachs’ Corporate Culture
Undoubtedly, the duty of fidelity best explains Goldman Sachs’ culture as evidenced by long-lasting dedication to protecting partners’ rights to privacy from the public scrutiny. Business Ethics (2016b, p. 54) alleges fidelity to be the duty of maintaining one’s promises as well as holding one’s end of an agreement. In this light, one can agree that Goldman Sachs’ has over the years fought the public’s demand to disclose crucial information concerning its members including the identities of those currently serving as members. Moreover, the firm refuses, despite the demands, to disclose accurate estimates of compensation among other benefits its top executives receive annually. This behavior only reveals the company’s fidelity to upholding its end of the agreement that despite external pressures from the public, its shareholders remain anonymous as well as corresponding reimbursements. Furthermore, the company faithfully offers its workers the opportunity to compete for every time the chance opens, and although only one worker succeeds per every event, Goldman’s loyalty to this pledge is admirable.
Cultural Relativism
Business Ethics (2016c, p.140) describes cultural relativism as assumptions that morality and values are culture-specific. In other words, cultural relativism supposes the beliefs of morality and values differ from one culture to another in which what one community may find to be immoral may be moral in another. The Goldman Sachs’ culture may deem it morally right to hide key information concerning its members from the public, but on the other hand, the public finds it immoral. Moreover, the survival-for-the-fittest strategy of acquiring a promotion in the company may be entirely normal based on Goldman Sachs’ culture, but the public perceives it to be unfair and morally wrong.
Promotions at Goldman Sachs
Business Ethics (2016d, p.354) suggest three points of considerations a company need to consider while promoting workers including one’s work performance at this moment an employee with the best performance with current duties deserve the promotion. Other factors include one’s seniority whereby promotion depends on the duration one has worked with the longest-serving winning the position (Business Ethics, 2016d, p.355). Lastly, Business Ethics (2016d, P.355) suggest that proton depends on projected performance in which one’s supposed performance in the future dictates whether or not they deserve the promotion. Business Ethics (2016e, p.243) explain competitive promotions as incidences in which employees not only work as colleagues to achieve set company objectives but also as rivals competing for a hierarchical opening. Promotion at Goldman Sachs’ is based or competition, as evidenced in the case study in which gaining the partnership position, is viewed as “Darwinian’s survival-for-the-fittest” method. In fact, the competition is cited to be extremely tough such that only 1 out of the 330 employees succeeds per every competition.
Darwinian’s, Survival-for-the-Fittest Theory
It is irrefutable that the General Electric Company’s philosophy of Rank and Yank portrays the survival-for-the-fittest concept whereby only those who are strong survive. Evidently, these employees compete against each other with an aim not to rank at the bottom to retain respective positions or jobs. This form of performance is best described in Business Ethics (2016e, P.243) whereby promotion, and in this case, retaining one’s position involves competition among workers. Furthermore, the reasoning behind the Rank and Yank is so that new workers can be allowed to perform better and although the top bottom may still be performing as required in the contract, they still lose employment (Business Ethics, 2016d, p.261).
The Rank and Yank is a working condition that shows a poor representation of workers who are fired yearly despite meeting their responsibilities on the basis of ranking at the bottom. This system necessitates the representation of unions which Business Ethics (2016f, p.705) describe as bodies that highlight and sensitize workers’ interests including working conditions and salaries. The concept of fairness is also lacking in this scenario in which faithful and hardworking personnel who have faithfully adhered to their duties risk losing jobs annually due to an unfair philosophy.References
Business Ethics. (2016a). What is Business Ethics? Washington, D.C.: The Saylor Foundation.
Business Ethics. (2016b). Theories of Duties and Rights: Traditional Tools for Making Decisions
in Business when the Means Justify the Ends. Washington, D.C.: The Saylor Foundation.
Business Ethics. (2016c.). Theories Responding to the Challenge of Cultural Relativism.
Washington, D.C.: The Saylor Foundation.
Business Ethics. (2016d). Managers Ethics: Getting, Promoting and Firing Workers.
Washington, D.C.: The Saylor Foundation.
Business Ethics. (2016e). Employees’ Ethics: Getting a Job, Getting a Promotion, Leaving.
Washington, D.C.: The Saylor Foundation.
Business Ethics. (2016f). The Domination Office: The Star System and the Labor Unions.
Washington, D.C.: The Saylor Foundation.

Free Business Ethics Dissertation Example

All Examples

Do you need an original paper?

Approach our writing company and get top-quality work written from scratch strictly on time!

Get an original paper