PHI 445_Week 3_Discussion: Current Business Problems: Case Studies: Lehman Brothers

PHI 445_Week 3_Discussion: Current Business Problems: Case Studies: Lehman Brothers In this discussion, I will address the effects of institutional fraud by the Lehman Brothers, which was part of the banking industry. Most people are familiar with banking in some form or another; its primary basic function is accepting deposits and redistributing the money through lending to businesses and individuals. The effects of fraudulent behaviors by Lehman Brothers Holding Inc. (LBHI) caused a global ripple effect felt far and wide by almost every nation, and nearly collapsed the U.S economy among others (Wiggins et al., 2014). LBHI used what is called a repo transaction, best explained by msnbc correspondent Dylan Ratigan stating, “one company transfers an asset to another company in exchange for short-term cash, the borrower will pay back the cash and take back the asset at a specific date, usually within a week or so” (financialclips, 2010). These types of transactions are not legally wrong within the system. LBHI knowingly and falsely classified them as sales. In doing so, it allowed the bank to hide its debts while showing investigators (auditors) the cash. LBHI was cooking the books to prove everything was in good order while hiding its dirty laundry. As I mentioned, this took place within the United States of America (USA). The USA has a mixed economy combining aspects between capitalism and socialism. The USA regulates its banking firms heavily both federally and on the state level. Some examples include the Federal Deposit Insurance Corporation (), Office of the Comptroller of the Currency (), Department of US Treasury, Federal Reserve Act 1913; these merely skim the surface in a long line of regulatory Acts and agencies with oversite. I feel LBHI has committed a moral wrong. I will defend my stance on this issue by using Aristotle’s virtue ethics. Professor Gloria Zúñiga y Postigo describes Aristotle’s ideas as, “virtue as the highest moral good that is attainable by the consistent application of the Golden Mean. It is achieved by improving one’s character by using reason to discover the right way of the virtuous agent, acting in moderation (i.e., avoiding deficiency or excess), as guided by the Golden Mean, and through the development of habitually acting virtuously with every action. With the purpose of having a good life, which means to experience happiness through excellence and the fulfillment of one’s nature” (Zúñiga y Postigo, G., 2015). When Aristotle speaks of the Golden Mean, he views this as the ultimate médium, which means finding the balance between the two extremes, which the extremes are understood as a vice. The example Fieser uses in our text, overindulgence leads to addiction while completely rejecting something leads to becoming desensitized to its happiness, both being vices (Fieser, J., 2015). LBHI should have exercised a balanced approach in their business dealings. By being extremely aggressive and by conducting dangerous trading practices such as repo transactions while lying to cover up the facts they ultimately hurt themselves and the global economy when they could not pay their debts. If they would have exercised the use of the Golden Mean, they would likely still be in business today. References: Fieser, J. (2015). Introduction to business ethics [Electronic version]. Retrieved from Wiggins, R. Z., Piontek, T., & Metrick, A. (2014). The Lehman Brothers bankruptcy a: Overview (Links to an external site.)Links to an external site.. Yale School of Management YPFS Cases. Retrieved from Zúñiga y Postigo, G. (2015). The moral good in three traditional ethical theories [PowerPoint Slides]. • This PowerPoint document covers the main characteristics of utilitarianism, deontology, and virtue ethics, and what is the moral good in each of these. In the first paragraph, make sure to include the following: 1. Introduce your case study by identify the moral problem that will be the subject of your examination. Keep in mind that your case study is the company and NOT the industry to which it belongs. This portion requires some detail but make the detail count. In other words, do not address the history of the company, or previous problems. Rather, focus on the moral problem for the case study. 2. State the economic system of the nation in which the company in your case study operates. If it is a multinational company, then focus on the nation in which the particular problem takes place, or is the focus of the material provided to your in the Required Resources. Please note that this statement should take one sentence, not more. 3. Present the laws that constrain its operations. Keep in mind that laws come in many forms, from Constitutional law, legislation, and case law from law suits that may serve as precedent for future claims. The Required Resources will provide you with all the relevant information so read all the material provided to you in the Required Resources. Moreover, keep in mind that you will also be writing a paper this week on the same case study and becoming informed for the discussion post. 4. Explain how the laws affect the case study. 5. This introductory paragraph should be factual, well cited, and each citation must have a corresponding reference. Do not put your own points of view or biases in this paragraph. The rest of what you will be writing will present and defend your point of view. But the intro paragraph should only contain relevant facts to the moral problem of the specific case study of the company that you are addressing. In the second paragraph, you will need to present the following: 1. Your thesis or moral position. These are two names for the same thing: the claim that you want to defend. Please read the announcement on how to formulate a thesis. Make sure to also read the Hardy, et al. PDF and the relevant sections are indicated in the Required Resources. Above all, your thesis should be a short, clear, non-complex (no modifiers, no subclauses, no explanations) sentence. It should take a clear position on the moral problem that you present in the first paragraph. AND the thesis should not contain any reference to the ethical theory. This will come in the next sentence. 2. The ethical theory with which you identify the most. This means: of all three ethical theories, present the one that you would employ in all moral problems that you encounter in your life. Make sure to describe this ethical theory in detail, at least the two main characteristics as indicated in the Week 1 Guidance. 3. After this, explain how this ethical theory supports your thesis. 4. Nothing else should be in this paragraph. It shall be important for you to submit your post on time because you will benefit from the feedback that I will post in the discussion. You can benefit from this feedback in two ways. First, it will help you with the revision, which is a requirement in the discussions every week. Second, it will help you with your Week 3 Paper since the two paragraphs of your initial post will be the two first paragraphs of your Week 3 Paper. The paper will have additional content, but the discussion will serve you to start your paper, which is a huge time saving advantage. DO NOT FORGET THAT THE ANNOUNCEMENTS HAVE A WEEK 3 SAMPLE POST! V. Week 3 Paper As indicated above, the post this week is the starting point of the paper. Make sure to read the instructions for the paper with care and patience. PLEASE NOTE ALSO THAT THERE IS ALSO A WEEK 3 SAMPLE PAPER! You are provided with the necessary material for your discussion and paper in the course. Make sure to use all the material provided to you. The paper will require you to do some research in the Ashford Library too because you will need to include two additional scholarly sources to the sources already provided for you. Keep in mind that a scholarly source is an article from a peer-reviewed journal, not a news story, or an Internet source, or an encyclopedia entry (unless it is from the Stanford Encyclopedia of Philosophy). Have a great week!