Business Ethics Research Paper Example | Topics and Well Written Essays - 1500 words

Business Ethics - Research Paper Example Facts that surrounded the Lehman Brothers Holdings Incorporation’s case comprise the following: first, Lehman Brothers Holdings Incorporation frequently utilized contracts as a way of financing their activities. Second, the repurchase contracts employed by the corporation are perceived as the liability and enhance the corporations' leverage percentage. Third, ambiguity in the standards of financial accounting permitted the contracts to be shifted off-balance sheet in case need is met. Fourth, Lehman Brothers Holdings Incorporation would push repurchase contract liabilities off of the financial statement all through reporting phases so as to mislead stakeholders by reducing control. Maybe if the stakeholders were aware, it may have had a negative impact on the Lehman Brothers Holdings Incorporation stock prices. Fifth, at that time, little or no financial corporations were using these deceiving tactics (Lubben 1). The fall of Lehman Brothers Holdings Incorporation was not as a result of a sole tumble in ethical decision performed by a single imprudent worker. It would have been almost out of the question for a single incident to make Lehman Brothers Holdings Incorporation collapse, particularly after the corporation had overcome numerous difficulties in the past. Instead, Lehman Brothers Holdings Incorporation’s failure was the growing impact of several mishaps caused by a number of parties and individuals (Madsen and Shafritz 23). The unethical practices can be classified into three actions: deceit declared by the corporation’s Chief Executive Officer, Richard Fuld; cover up sanctioned by Chief Financial Officer, Erin Callan; and neglect in place of Ernst & Young. In 2007, the housing marketing was starting to falter, the corporation’s Chief Executive Officer, Richard Fuld was embedded in a highly leveraged and aggressive business model. This was similar to other Wall Street actors at the period. Whereas Lehman Brothers Holdings Inco rporation’s rivals had the ability to forecast the impending fall and assess probable results of mortgage shirk, the corporation’s Chief Executive Officer did not change the strategy. Instead, He advanced into mortgage- supported safety investments, incessantly escalating Lehman Brothers Holdings Incorporation’s asset range to one of unduly elevated risk given the market situation (Lubben 1). This implies Richard Fuld was adamant, but when it was an occasion to accept the issue, he did admit his failure or take responsibility. In 2007, the Chief Executive Officer had a chance to air concerns on the corporation’s short-term financial condition and its tremendous participation in risky loans. In contrast, he disregarded it in support of communicating to Wall Street and stakeholders that there was no existence of foreseeable issues (Lubben 1). Had Richard Fuld been honest, appropriate solutions would have been developed. This would have assisted to minimize or prevent the financial problems that occurred.