Ethics are the principles and values an individual uses to govern his daily activities and decision making. The ethical philosophy an organization displays in conducting business has effect on the productivity as well as the reputation of that business. In an organization, a code of ethics is a set of principles that guide the organization in its programs, policies and decisions for the business. The ethics that organization leaders use to manage employees do have an effect on the morale and loyalty of workers. It is the code of ethics leaders abide by that determines discipline procedures and generally acceptable behaviors for all workers in that organization. There is a retroactive effect when leaders possess high ethical standards as it encourages workers in the organization to meet that same level. In the financial market and within communities, ethical leadership ...view middle of the document...
This can enhance the company’s reputation for quality products and service.
A healthy and positive corporate culture improves the morale among workers in the organization, which may increase productivity and employee retention; this, in turn, has financial benefits for the organization. When there is higher levels of productivity in the company, its efficiency heightens too. Also increasing employee retention reduces the company cost of replacing employees. An example is Bernard Madoff who was a renowned stockbroker, a financial adviser, and served as the chairman of NASDAQ. He is also solely responsible for the largest accounting fraud in all of American history. Madoff admitted to the federal authorities in December 2008 that the wealth management branch of his business, Ascott Partners, was a full on and elaborate Ponzi scheme. A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Madoff took an estimated 65 billion dollars from his investor’s fortunes over the course of nearly two decades. Bernie Madoff became successful in his fraudulent ways as a result of the façade put up by the general public of being highly respected, well established, and an esteemed financial extraordinaire. The U.S. Securities and Exchange Commission in their failure to thoroughly and extensively investigate Madoff caught a lot of heat during the proceedings. Madoff ended up being found guilty of eleven federal crimes and sentenced to 150 years in prison with restitution costs at around seventeen billion. The fallout from his master scheme went far deeper than anyone would have expected, as some of the businesses he had invested in and vice versa, were forced to close down temporarily. This is a typical example of ethical behavior as a corporate issue that affects the company’s bottom line
Vonderembse, M.A. & White, G.P. (2013). Operations Management . San Diego, CA: Bridgepoint Education, Inc.
"Bernard Madoff's Ponzi Scheme - HowStuffWorks." HowStuffWorks. N.p., n.d. Web. 26 Oct. 2014.