Why Is Reliance On The Law Ethical
2.1
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1. The business conduct that led to the WorldCom and Enron scandals was unethical, but not all of the behavior was illegal. Please discuss why Boatright explains in the Why the Law is Not Enough section of our text, “reliance on the law alone is a prescription for disaster.” (2012, p. 10)
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Reliance on the law, alone, is a prescription for disaster. This is true for several reasons. For starters, the law is not always appropriate when it comes to helping regulate certain aspects of business activity. This is because not every activity in a business that is immoral is necessarily illegal.
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The law, also, does not always develop in new areas or types of activity of concern. At best in codifies …show more content…
The exlusive reliance on law for this purpose will often invite legislation and litigation where they are not necessary—or wanted.
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2. Please state the actions and corporate culture/corporate values that contributed to the WorldCom scandal. Base this on the description of the case on pages 43-45 of our text.
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Worldcom made a number of accounting mistatements. It had basically lied about the true value of its assests to try to accrue the amount of money needed to pay for its operations.
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Worldcom also had a very disorganized corporate culture and organizational structure. It was a massive comapny with many sub companies in its organization which lacked the integration necessary to work together more smoothly. It saught great expansion and profits over integration.
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3. Ten biases that cause errors in judgment are listed on page 16 of our text. Please discuss how three of these were demonstrated in the behaviors taken in the WorldCom case. Please use different examples for each. …show more content…
Mr. Ebbers, the CEO of WorldCom, was quoted as saying that writing a code of ethics for the company was a “colossal waste of time.” (Boatright, 2012, p. 44) Other companies have used a code of ethics as a guide for decision-making by all levels of the company. Please review the code of ethics by Johnson and Johnson, and then discuss the following:
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• Based on this example, describe the types of information that are included in an effective code of ethics.
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An effective code of ethics considers terms of fairness and compensation. It also gives particular focus to (perhaps even naming) the receivers of a service, and the duties of the service provider to them. An effective code of ethics also: honors the role of stockholders; gives the definition and and establishes the goals of improvement of ‘quality’ services; describes the service provider’s duty to perform risk analysis; and establishes the code of conduct for the long term, with an eye to the extenuating consequences of a service to the community and any other shareholders.
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• Do you think having a code of ethics would have prevented the WorldCom scandan? Why?
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1. The business conduct that led to the WorldCom and Enron scandals was unethical, but not all of the behavior was illegal. Please discuss why Boatright explains in the Why the Law is Not Enough section of our text, “reliance on the law alone is a prescription for disaster.” (2012, p. 10)
--------------
Reliance on the law, alone, is a prescription for disaster. This is true for several reasons. For starters, the law is not always appropriate when it comes to helping regulate certain aspects of business activity. This is because not every activity in a business that is immoral is necessarily illegal.
--------------
The law, also, does not always develop in new areas or types of activity of concern. At best in codifies …show more content…
The exlusive reliance on law for this purpose will often invite legislation and litigation where they are not necessary—or wanted.
--------------
2. Please state the actions and corporate culture/corporate values that contributed to the WorldCom scandal. Base this on the description of the case on pages 43-45 of our text.
--------------
Worldcom made a number of accounting mistatements. It had basically lied about the true value of its assests to try to accrue the amount of money needed to pay for its operations.
--------------
Worldcom also had a very disorganized corporate culture and organizational structure. It was a massive comapny with many sub companies in its organization which lacked the integration necessary to work together more smoothly. It saught great expansion and profits over integration.
--------------
3. Ten biases that cause errors in judgment are listed on page 16 of our text. Please discuss how three of these were demonstrated in the behaviors taken in the WorldCom case. Please use different examples for each. …show more content…
Mr. Ebbers, the CEO of WorldCom, was quoted as saying that writing a code of ethics for the company was a “colossal waste of time.” (Boatright, 2012, p. 44) Other companies have used a code of ethics as a guide for decision-making by all levels of the company. Please review the code of ethics by Johnson and Johnson, and then discuss the following:
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• Based on this example, describe the types of information that are included in an effective code of ethics.
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An effective code of ethics considers terms of fairness and compensation. It also gives particular focus to (perhaps even naming) the receivers of a service, and the duties of the service provider to them. An effective code of ethics also: honors the role of stockholders; gives the definition and and establishes the goals of improvement of ‘quality’ services; describes the service provider’s duty to perform risk analysis; and establishes the code of conduct for the long term, with an eye to the extenuating consequences of a service to the community and any other shareholders.
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• Do you think having a code of ethics would have prevented the WorldCom scandan? Why?