Ethics
Reason why people give up on ethics
Self-interest sometimes morphs into greed and selfishness, which is unchecked self-interest at the expense of someone else. This greed becomes a kind of accumulation fever. “If you accumulate for the sake of accumulation, accumulation becomes the end, and if accumulation is the end, there’s no place to stop,” he said. The focus shifts from the long-term to the short-term, with a big emphasis on profit maximization.
For example, swaps (where two communication companies agree to exchange the right to use excess bandwidth on their networks) fall into this category. Each company recognizes the income generated in the quarter earned and defers the expenses through capitalizing them as an asset and logging the cost as a recognized expense over time, resulting in an inflated bottom line. This is what happened at Qwest during the first three quarters of 2001, when the company was selling $870 million of capacity, while at the same time buying $868 million of capacity. These swaps appeared to be round-trip transactions, which served no purpose other than to inflate Qwest’s revenues, Duska said.
“Companies were making money out of their finance department—not from selling products, not from doing what the company did, not from fulfilling the company’s mission, but from playing around with its asset mix,” he said.
2) Some people suffer from stunted moral development: “I think this happens in three areas: the failure to be taught, the failure to look beyond one’s own perspective, and the lack of proper mentoring,” Duska said.
Business schools, he said, too often reduce everything to an economic entity. “They do this by saying the fundamental purpose of a business is to make money, maximize profit, or the really jazzy words ‘maximize shareholder value,’ or something like that. And it never gets questioned,” he said. “Now if the fundamental purpose never gets questioned, the ethics never get questioned, because the fundamental
Self-interest sometimes morphs into greed and selfishness, which is unchecked self-interest at the expense of someone else. This greed becomes a kind of accumulation fever. “If you accumulate for the sake of accumulation, accumulation becomes the end, and if accumulation is the end, there’s no place to stop,” he said. The focus shifts from the long-term to the short-term, with a big emphasis on profit maximization.
For example, swaps (where two communication companies agree to exchange the right to use excess bandwidth on their networks) fall into this category. Each company recognizes the income generated in the quarter earned and defers the expenses through capitalizing them as an asset and logging the cost as a recognized expense over time, resulting in an inflated bottom line. This is what happened at Qwest during the first three quarters of 2001, when the company was selling $870 million of capacity, while at the same time buying $868 million of capacity. These swaps appeared to be round-trip transactions, which served no purpose other than to inflate Qwest’s revenues, Duska said.
“Companies were making money out of their finance department—not from selling products, not from doing what the company did, not from fulfilling the company’s mission, but from playing around with its asset mix,” he said.
2) Some people suffer from stunted moral development: “I think this happens in three areas: the failure to be taught, the failure to look beyond one’s own perspective, and the lack of proper mentoring,” Duska said.
Business schools, he said, too often reduce everything to an economic entity. “They do this by saying the fundamental purpose of a business is to make money, maximize profit, or the really jazzy words ‘maximize shareholder value,’ or something like that. And it never gets questioned,” he said. “Now if the fundamental purpose never gets questioned, the ethics never get questioned, because the fundamental