Business Ethics, Article Critique Example

An article on the U.S. News website reports that despite the recent financial crisis and a new wave of regulations, business ethics have still not significantly improved at the Wall Street. A recent survey of 500 senior executives in the U.S. and the U.K found that 26 percent had witnessed or had knowledge of wrongdoing in the workplace. A third of the respondents felt a pressure to break the law or compromise ethics for personal financial gains such as compensation and bonus. 16 percent admitted to their willingness to engage in insider trading if they could get away with it. 94 percent did admit they would be willing to report wrongdoing if offered protection by SEC and other financial regulators but fewer than half knew about the programs aimed at encouraging reporting of wrongdoing. Labaton Sucharow’s Jordan Thomas argues, “The heart of it is within the organization, but law enforcement authorities—with additional resources—have the ability to drive change,” (Handley, 2012). The author argues that businesses should adopt transparent business practices, transform their cultures, and regulators should also put pressure on businesses to do so.

If we study the last decade, the 2007 financial crisis occurred only few years after the corporate scandals of Enron, WorldCom, and Tyco etc. Both events have been followed by additional regulations that were also the result of public pressure and to increase public confidence in the markets. But as the survey indicates, the regulations have done little to address the root causes of unethical business practices at Wall Street. Thus, I agree with the author that a better solution to improving business ethics at the Wall Street is transforming organizational cultures. In addition, I also believe that ethical business leaders may go a long way towards achieving the objective of improving business ethics. This is because leaders can set personal examples for the subordinates and they can take steps to minimize conflict between ethical conduct and personal gains. If leaders ignore the unethical conduct they witness, it may further encourage the subordinates to continue with their unethical conduct. This is why one cannot ignore the importance of organizational cultures because they set norms that organizational members are encouraged to adopt.

Businesses should take steps to transform their culture and minimize conflict of interest between compensation plans and ethical business practices. The leaders should lead by personal examples and may even reward ethical conduct by subordinates. Organizations that have a reputation for ethical conduct such as Berkshire Hathaway are led by leaders who set personal examples for their subordinates.

Reference

Handley, M. (2012, July 20). Two Years After Dodd-Frank, Has Wall Street Changed? Retrieved October 2, 2012, from http://www.usnews.com/news/articles/2012/07/20/two-years-after-dodd-frank-has-wall-street-changed