This article focused on the moral devoid of business and political entities. We have seen he moral bankruptcy of high profile cases such as Enron and Tycoon that has led to the everlasting change of the way we do business and the way that financial are prepared and analyzed. What may not be as public Is the knowledge of why banks are failing. This article mentioned cases in how banks have engaged in fraudulent deals, currency and drug trafficking, smuggling, corruption, forged letters of credit and bank receipts, and the manipulation accounts.
These unethical activities have far reaching Impacts that may not be realized by the common person. Banks are not he only businesses engaged In unethical activities. Unethical activities have become an everyday part of dally business. Governments have also been Identified as the source of unethical behavior. Moral bankruptcy in government affect countries all across the world in different stages of development. Moral bankruptcy is said to be more severe in developing countries. We will look at a case study a little later in this review. Corruption Identified M.
R. Kumara Swampy classified corruption in the following ways: Democratic Corruption – refers to Illegal payment by the people, of the people and for the people. Hierarchic/Anarchical Corruption – relating to bribery which must be compulsorily paid to get work, devoid of prudent financial management considerations, accomplished/executed with the blessing of the political party in power through the chain of middlemen acting as agents, money laundering, fraud and allied issues are important issues and which have caused government collapse/ instability. Dry.
Hilton Root from the Hover Institute, Stanford University stated that depended on long lasting contracts to attract investments that sustain them. So therefore when one government or political party engages in corruption or the warding of corrupted contracts the subsequent person is not likely to simply change or call out these persons and change the contract. This will only attract short term investments and will result in an instable government. Dry. Hilton Root also stated: “In a democracy, corruption is difficult to hide; instead, it is publicly debated, discussed and examined. ” Professor S. K.
Queries, in his Presidential address to the 1 5th Annual General meeting of the Pakistan Society of Development Economists, stated that wide spread corruption in governance is a key indicator of poor governance and leads to corruption in the economy. Corruption actually increases spending and reduces revenues which contributes to increasing fiscal deficient and decreasing sound fiscal policy. Income inequality is also a factor caused by corruption because the well positioned, usually a wealthier, individual is who benefits from government activities which takes advantage of the remaining population.
The article looked at two case studies. And used the term Black Money which is defined by Investigated as earnings through illegal activity and, as such, is not taxed. 1 . Case Study on Business Transactions – As mentioned before black money has become an everyday occurrence and has since become the norm with businesses all across the word. However it seems to more of an occurrence in developing countries. This case study was regarding property transactions in which the builder/contractor would sale an apartment too buyer with at 60/40 split on payment. 0% of the funds had to be in the form of cash (black money) and the remaining 40% had to be in the form of check in which this was the true purchase price and value of the property. The purchaser has no choice but to conduct business this way if they want to own a property of their own in Iambi, India. Because of dharma (righteous) principals of honest conduct of business, no legislation can deter these activities since any change would have to come from within. In 2012 black money in India accounted for 10% of the G. D. P. Room research conducted by the National Institute of Public Finance and Policy. 2. Case Study on Bangladesh – Black money has been a serious problem and has been realized in two primary methods tax avoidance and evasion, and through the generation of income from illegal economic activities. Black money resulted in almost a 1 to 1 ratio of tax evasion and avoidance in Bangladesh. Unethical behavior comes about for two main reasons; need and greed. Need can be realized by the review of corporate and personal financial statements. There is a defined amount to bring the one in need whole.
It can be discovered by the lifestyle individuals have or their personal or corporate credit ratings. Need can be met by reviewing pay packages. Greed however is difficult to realize. There is no telling how greedy someone can be. There is no defined number to meet because greed it is unlimited. It is the thought that any misdoings as an agency will fix itself in the future over time. Human nature is to cover-up. The human mind can deceive itself and take itself along preplanned paths. Greed is a disease that has claimed many victims and infected even scores of more.
Pope Benedict XVI said: “Profit is useful if it serves as a means towards and end… , once profit becomes the exclusive goal, if it is produced by improper means creating poverty… , greed has brought about the worst economic downturn since the Great depression. The economy needs ethics in order to function correctly – not any ethics, but an ethics which is people centered. ” Ethic – Based Management As mentioned before this issue of government corruption affects nearly all countries round the world. As a result this subject has been discussed in every country.
Ethic based guidelines have been disbursed and encoded in customer service manuals and policy books as a teaching tool. Russia has in fact held the June 2, 2001 Congress of the Russian Association of Industrialist and Entrepreneurs in Moscow in which the focus was on the introduction civilized rules for corporate governance in Russia that is based on good ethics. Does this work? Is this the answer? If dharma principles, which is at the very fiber of Indian culture, can’t prevent unethical behavior through elf-policing then why should we expect employees to take it upon themselves to change?
Research conducted by Smirch B. Werner in 2010 in Israel of 108 government employees through the use of surveys prior to educational material on ethics and one year later after the material and courses showed that when focus is placed on ethical behavior and training programs are implemented then employees react by displaying ethical decision making, awareness of the code of ethics, ethical leadership, organizational commitment, and quality of work life and behavior. (Beer’, TIA, Dana, Gadget, & Werner, 2013) Conclusion
This article concludes by stating that if righteous, conduct, peace, love remain the pillars of sound financial management and are given equal weight then unethical behavior would be a thing of the past. I agree with this statement and believe that with widespread corruption with businesses and governments alike, it is simply not enough to make regulations or pass new laws. There has to be a revamping of the mind, by educating and instilling the code of ethics and addressing what happens to a culture when wide spread corruption is introduced. There are some cultures that operate on dharma principals.