Jpmorgan Chase: The Cost Of Doing Business
JPMorgan Chase: The Cost of Doing Business
Introduction
The past few months have been rough sailing for JPMorgan Chase, as their unethical practices have caught up with them in the form of settlement and legal fees. As the most powerful and wealthiest bank with over 2.4 trillion in assets, JPMorgan Chase’s recent risk exposures should have not only stakeholders concerned but also the general public (2). After unethical risk-taking practices and possibly breaking the Foreign Corrupt Violation Act in China, JPMorgan’s reputation as one of the cleaner banks, under CEO Jamie Dimon, has been tarnished (4). Most of their negative actions can be described by their culture, where the bottom line trumps everything else. In this paper, …show more content…
Most of that stems from the guidance of a company’s leadership, whether they set unrealistic goals, implement faulty work processes, or set the precedent to hire those who don’t value business ethics as much as they should. In the cost of doing business the unethical way, JPMorgan lost 920 million from the London Whale legal settlements, not including lawyer fees and lost 6.2 billion from making the trades in the first place (1). While the losses are more than survivable for JPMorgan, it hurts their reputation and only further encourages government presence in their industry. When the banking industry finds itself in the negative light much of the time, this incident only threw dirt in the eyes of the public. Now as Chase finds itself in another scandal after being alleged of bribing Chinese officials by hiring their children for contracts, the time for changes in their ethical structure has never been more crucial …show more content…
A firm ethical strategy, broad enough to be applied in any country, needs to be emphasized and enforced. This will lead the firm to a utilitarian approach to ethics that will allow the firm to be socially responsible while still maintaining a profitable business. Applying mandatory risk-benefit analyses and other assessment tools before traders hedge large bets would decrease the risk of further incidents similar to the London Whale. When an organization contains such a large amount of assets and has a lot of power to influence the markets, they can no longer afford to look at things from the Friedman Doctrine as they now hold a social responsibility to the people. If JPMorgan comes out learning anything from this incident, it should be how important an ethical strategy can be, and how business can get out of hand when ethics are put in the rear of the firm’s thoughts.
Outline
I. Introduction
a. In this paper, I will focus on the London Whale Incident, analyzing the impact and root causes from an ethical standpoint and applying the ethical philosophy related to the incident.
i. Then, I’ll discuss the possible remedies in order to prevent further ethical problems in the future by restructuring the organization culture.
II. London Whale Incident
a. There were several unethical actions taken by different
Introduction
The past few months have been rough sailing for JPMorgan Chase, as their unethical practices have caught up with them in the form of settlement and legal fees. As the most powerful and wealthiest bank with over 2.4 trillion in assets, JPMorgan Chase’s recent risk exposures should have not only stakeholders concerned but also the general public (2). After unethical risk-taking practices and possibly breaking the Foreign Corrupt Violation Act in China, JPMorgan’s reputation as one of the cleaner banks, under CEO Jamie Dimon, has been tarnished (4). Most of their negative actions can be described by their culture, where the bottom line trumps everything else. In this paper, …show more content…
Most of that stems from the guidance of a company’s leadership, whether they set unrealistic goals, implement faulty work processes, or set the precedent to hire those who don’t value business ethics as much as they should. In the cost of doing business the unethical way, JPMorgan lost 920 million from the London Whale legal settlements, not including lawyer fees and lost 6.2 billion from making the trades in the first place (1). While the losses are more than survivable for JPMorgan, it hurts their reputation and only further encourages government presence in their industry. When the banking industry finds itself in the negative light much of the time, this incident only threw dirt in the eyes of the public. Now as Chase finds itself in another scandal after being alleged of bribing Chinese officials by hiring their children for contracts, the time for changes in their ethical structure has never been more crucial …show more content…
A firm ethical strategy, broad enough to be applied in any country, needs to be emphasized and enforced. This will lead the firm to a utilitarian approach to ethics that will allow the firm to be socially responsible while still maintaining a profitable business. Applying mandatory risk-benefit analyses and other assessment tools before traders hedge large bets would decrease the risk of further incidents similar to the London Whale. When an organization contains such a large amount of assets and has a lot of power to influence the markets, they can no longer afford to look at things from the Friedman Doctrine as they now hold a social responsibility to the people. If JPMorgan comes out learning anything from this incident, it should be how important an ethical strategy can be, and how business can get out of hand when ethics are put in the rear of the firm’s thoughts.
Outline
I. Introduction
a. In this paper, I will focus on the London Whale Incident, analyzing the impact and root causes from an ethical standpoint and applying the ethical philosophy related to the incident.
i. Then, I’ll discuss the possible remedies in order to prevent further ethical problems in the future by restructuring the organization culture.
II. London Whale Incident
a. There were several unethical actions taken by different