Ethics, Organisations and Society
Volledige vakbeschrijvingA major fraud case
On 29 June 2009 Bernard Madoff was convicted for fraud and sentenced to 150 years in prison. He had turned his wealth management business into a massive Ponzi scheme. As a result, Madoff’s clients lost US$ 65 billion. Madoff pleaded guilty and apologized to his victims, saying, "I have left a legacy of shame, as some of my victims have pointed out, to my family and my grandchildren. This is something I will live in for the rest of my life. I'm sorry."
You do not need a cause in ethics and corporate responsibility to know that what Madoff did was wrong. You simply have a look at our legal system – or nearly every other legal system in the world – and you will find that fraud is illegal. The fact that it takes place – and sometimes, in the case of bribery and corruption is even condoned by those in power – does not mean that it is legit. More interesting than the obvious felony committed by Madoff are, therefore, those cases where the law is not clear, but where there might be something fishy about the actions and behaviour of a person or an organisation’s.
Take Goldman Sachs and its actions that contributed to the 2008 financial crisis. US senator Carl Levin – who chaired the US Senate’s Permanent Committee on Investigations – asked for a legal investigation arguing that Goldman “used net short positions to benefit from the downturn in the mortgage market, and designed, marketed, and sold CDOs [Collateralised Debt Obligations – a structured financial product – HH] in ways that created conflicts of interest with the firm’s clients and at times led to the bank’s profiting from the same products that caused substantial losses for its clients.” The US Department of Justice decided not to prosecute Goldman for its behaviour. According to the department “the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time”. Goldman was cleared from legal prosecution, but is it also cleared from a moral point of view? This is the moment when ethics comes in.
Need for ethical reflection
In an era in which lack of ethical thinking and competences contributed to some of the major crises that took place in this relatively young millennium, a course in ethics does not seem to be luxury. Looking at business, government, multilateral Organisations or NGOs, basic knowledge and skills to understand and improve the relationship with society seem to be an important asset nowadays.
Ethics should, however, not be confused with morality – and certainly not with the moral norms in our present society. Ethics deals with a fundamental reflection on the norms and values in our society. It is not about telling you what is right or wrong. Since we are living in a global society it means that we are constantly confronted with different norms and values as a result of cultural differences. As the saying goes ‘When in Rome, …’, but does that apply to all ethical issues?
Focus of the course
This course is offered by Prof. Dr. Harry Hummels on behalf of the department of Finance – in association with Accounting and Information Management – of the School of Business and Economics. The affiliation with the Finance department does not entail that the course is solely confined to theory and cases in the financial domain. That is not to say that many crises, whether social, financial, environmental, or political, may not find their origin in financial issues. Take, for instance, the rising food prices. Aren’t they partly caused because of financial speculation? Or think of the environmental disaster that Shell and its partners face in the Niger Delta. Doesn’t this find its roots in the (re)distribution of the proceeds of the industry in the area. Or what about BP in the Gulf of Mexico where cutting costs was a major element in causing the oil spill? The latter case will be discussed extensively in one of the tutorials.
Doelstellingen van dit vakThe core of an ethics course is to confront students with ethical and responsibility dilemmas that they have to study, reflect on and discuss in small groups. Ethics is characterised by a discourse on moral values, norms and standards and the decision-making on the basis of sound argumentation. Students who have completed the course have mastered the core insights of business ethics theory and corporate responsibility.
VoorwaardenIn order to participate in this course, all participants should have a basic understanding of the functioning of organisations, management of and co-ordination within organisations, organisational ecology, co-ordination mechanisms in industries – such as, for example, the choice between allocation through planning or through market forces – and of an ‘economic order’.
An advanced level of English