MGMT 325 Social Responsibility & Ethics Mgmt
In today’s ever evolving world of business, companies are faced with difficult challenges day in and day out. The global recession is driving major corporations to make tough decisions such as budget and manning cuts, downsizing of corporate chains, and keeping demand at an optimum level with reduced resources. When dealing with these issues companies have multiple matters to strongly consider. These matters include staying within legal standards, ensuring that product quality remains high, that annual revenue does not decrease, and those relationships with company stakeholders remains positive. Businesses are facing many challenges in this new century and, unfortunately, some have made many mistakes and poor judgments that drastically affected their company. Many of the costly mistakes made by some of these corporations were based on ethics and moral integrity. When the word “ethics” is brought up, there are many different opinions about what it entails. Some include doing what is right when no one is looking, moral values, and conducting oneself with a high standard. Business ethics cover many different aspects such as privacy acts, equal opportunities, and responsibilities towards the global market. One hot topic that is often brought up along with ethics is “insider trading”. Insider trading is when members of a company obtain key information and use it for their personal gain. This practice is seen as an illegal tactic. Wall Street, mega corporations and even individuals were included in many unethical cases in the past 30 years dealing with insider trading.
Insider trading is something that seems to have involved many groups, from the powerful Wall Street to famous people. When the movie “Wall Street” premiered in 1987, it was said that the character “Gordon Gekko” was based off of Wall Street’s Ivan Boesky (ABC News 20/20, 2011). Boesky made a living off betting on corporate takeovers until the SEC charged him for insider trading and fined him $100 million and a three year sentence in jail. The famous Martha Stewart was involved with insider trading as well. Even though hers only involved $230,000 shares, which could be considered minimal compared to other cases, it was still illegal nonetheless. Stewart was also convicted and served a five month sentence. Insider trading was just one of the many ethical issues that plagued Enron. The CEO for Enron, Jeffery Skilling, was accused to have dumped $15.5 million in Enron stock two months before the Enron Company declared bankruptcy. Skilling was sentenced to 45 years in prison and fined $45 million (ABC News 20/20, 2011). Big companies are not the only ones that have been plagued by the legalities of insider trading.
The aviation industry has seen its share of financial miscues and ethical errors, especially in regards to insider trading. Boeing is seen in the aviation world as a power house with a wide range of departments from commercial airlines to defense, space and security. They have been seen as the model company in the aviation world. However, Boeing has been through several allegations and scandals involving business ethics that forever changes the way they run their organization.
Boeing deals heavily with the military on many projects and has an established relationship with the Pentagon. The majority of Boeing’s success comes from working with the government on contract bids. An issue that was common practice, which began in the late 1980’s, was the use of classified documents from the government to gain a competitive advantage for bids. In the 1990’s, Boeing was in constant competition with Lockheed Martin, another aviation company, for contract bids for the Air Force. One project, which became a huge scandal, highlighted insider trading for Boeing. The Air Force was developing a program during this time