For example, imagine considering blowing the whistle on your superior who stole money from the organization. The internal pressure is likely to create significant conflict between what you know the right thing to do is and actually doing it. One limitation of the philosophical reasoning methods is how we think we should behave is different from how we decide to behave. This creates a problem of cognitive dissonance , a term first coined by Leon Festinger in . The inconsistency between our thoughts, beliefs, or attitudes and our behavior creates the need to resolve contradictory or conflicting beliefs, values, and perceptions.
We either adjust our beliefs to fit our behavior, which is not the desired outcome, or we change our behavior to fit our beliefs, the normal and preferred relationship.
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A strong set of ethical values provides the inner strength to act in accordance with our beliefs in the face of conflicting pressures. An individual who demonstrates adequacy in one component may not necessarily be adequate in another, and moral failure can occur when there is a deficiency in any one component. Ethical decision making is the heart of being an ethical person. It provides a roadway to get from identifying an ethical issue to taking ethical action.
All readers serious about being an ethical person can benefit from studying his model.
Moral Development: Advances in Research and Theory. Tags: business ethics, ethical culture, life skills, philosophical ethics. Reblog 0. The Moral Point of View.
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Moral Sensitivity The first step in moral behavior requires that the individual interpret the situation as moral. Moral Focus After concluding what course of action is best, decision makers must be focused on taking the moral action and following through with ethical behavior. Moral Action Individuals do not always behave in accordance with their ethical intention. Cognitive Dissonance One limitation of the philosophical reasoning methods is how we think we should behave is different from how we decide to behave.
Based on the adjuster's experience and knowledge of the insurance policy it is very easy for the adjuster to convince an unknowing claimant to settle for less than what they may otherwise be entitled which could be a larger settlement. There is always a very good chance of a conflict of interest to exist when one adjuster tries to represent both sides of a financial transaction such as an insurance claim.
This problem is exacerbated when the claimant is told, or believes, the insurance company's claims adjuster is fair and impartial enough to satisfy both theirs and the insurance company's interests. These types of conflicts could easily be avoided by the use of a third party platform that is independent of the insurers and is agreed to, and named in the policy. A person working as the equipment purchaser for a company may get a bonus proportionate to the amount he's under budget by year end. However, this becomes an incentive for him to purchase inexpensive, substandard equipment.
Therefore, this is counter to the interests of those in his company who must actually use the equipment. Edwards Deming listed "purchasing on price alone" as number 4 of his famous 14 points , and he often said things to the effect that "He who purchases on price alone deserves to get rooked. Regulating conflict of interest in government is one of the aims of political ethics.
Public officials are expected to put service to the public and their constituents ahead of their personal interests. Conflict of interest rules are intended to prevent officials from making decisions in circumstances that could reasonably be perceived as violating this duty of office. Rules in the executive branch tend to be stricter and easier to enforce than in the legislative branch.
Legislators cannot adequately represent the interests of constituents without also representing some of their own. As Senator Robert S. Kerr once said, "I represent the farmers of Oklahoma, although I have large farm interests. I represent the oil business in Oklahoma They don't want to send a man here who has no community of interest with them, because he wouldn't be worth a nickel to them. Second, the "political interests" of legislatures include campaign contributions which they need to get elected, and which are generally not illegal and not the same as a bribe. But under many circumstances they can have the same effect.
The problem here is how to keep the secondary interest in raising campaign funds from overwhelming what should be their primary interest—fulfilling the duties of office. Politics in the United States is dominated in many ways by political campaign contributions. The impact of this money can be found in many places, most notably in studies of how campaign contributions affect legislative behavior.
For example, the price of sugar in the United States has been roughly double the international price for over half a century. This is in essence a tax collected by a nongovernmental agency: It is a cost imposed on consumers by governmental decisions, but never considered in any of the standard data on tax collections.
This, however, does not include the cost of lobbying. Lessig cites six different studies that consider the cost of lobbying with campaign contributions on a variety of issues considered in Washington, D. Lessig notes that clients who pay tens of millions of dollars to lobbyists typically receive billions.http://theranchhands.com/images/and/das-kreditgeschaeft-im-islamic-banking-german-edition.php
The Impact of Ethics on Decision Making Essay
Lessig insists that this does not mean that any legislator has sold his or her vote. He notes that if any money perverts democracy, it is the large contributions beyond the budgets of citizens of ordinary means; small contributions from common citizens have long been considered supporting of democracy. When such large sums become virtually essential to a politician's future, it generates a substantive conflict of interest contributing to a fairly well documented distortion on the nation's priorities and policies.
Beyond this, governmental officials, whether elected or not, often leave public service to work for companies affected by legislation they helped enact or companies they used to regulate or companies affected by legislation they helped enact. This practice is called the " revolving door ". Former legislators and regulators are accused of a using inside information for their new employers or b compromising laws and regulations in hopes of securing lucrative employment in the private sector. This possibility creates a conflict of interest for all public officials whose future may depend on the revolving door.
The importance of aligning your career with your core values (essay)
Conflicts of interest among elected officials is part of the story behind the increase in the percent of US corporate domestic profits captured by the finance industry depicted in that accompanying figure. From through , the finance industry averaged Between and , it averaged From through , it averaged Some of this increase is doubtless due to increased efficiency from banking consolidation and innovations in new financial products that benefit consumers.
However, if most consumers had refused to accept financial products they did not understand, e. Stiglitz  argued that the Lates recession was created in part because, "Bankers acted greedily because they had incentives and opportunities to do so".
They did this in part by innovating to make consumer financial products like retail banking services and home mortgages as complicated as possible to make it easy for them to charge higher fees. Consumers who shop carefully for financial services typically find better options than the primary offerings of the major banks.
However, few consumers think to do that. This explains part of this increase in financial industry profits. However, it is argued that a major portion of this increase and a driving force behind Lates recession has been the corrosive effect of money in politics, giving legislators and the President of the U. To be conservative, suppose we [ tone ] attribute only the increase from There is hardly any place outside politics with such a high return on investment in such a short time. Economists unlike other professions such as sociologists do not formally subscribe to a professional ethical code.
This call for a code of ethics was supported by the public attention the documentary Inside Job winner of an Academy Award drew to the consulting relationships of several influential economists. Critics of the profession argue, for example, that it is no coincidence that financial economists, many of whom were engaged as consultants by Wall Street firms, were opposed to regulating the financial sector. In response to criticism that the profession not only failed to predict the financial crisis of — but may actually have helped create it, the American Economic Association has adopted new rules in economists will have to disclose financial ties and other potential conflicts of interest in papers published in academic journals.
Backers argue such disclosures will help restore faith in the profession by increasing transparency which will help in assessing economists' advice. A conflict of interest is a manifestation of moral hazard , particularly when a financial institution provides multiple services and the potentially competing interests of those services may lead to a concealment of information or dissemination of misleading information. A conflict of interest exists when a party to a transaction could potentially make a gain from taking actions that are detrimental to the other party in the transaction.
There are many types of conflicts of interest such as a pump and dump by stockbrokers. This is when a stockbroker who owns a security artificially inflates the price by upgrading it or spreading rumors, and then sells the security and adds short position. They will then downgrade the security or spread negative rumors to push the price back down. This is an example of stock fraud. It is a conflict of interest because the stockbrokers are concealing and manipulating information to make it misleading for the buyers.
The broker may claim to have the "inside" information about impending news and will urge buyers to buy the stock quickly. Investors will buy the stock, which creates a high demand and raises the prices. This rise in prices can entice more people to believe the hype and then buy shares as well.
Accounting Ethics Essays (Examples)
The stockbrokers will then sell their shares and stop promoting, the price will drop, and other investors are left holding stock that is worth nothing compared to what they paid for it. In this way, brokers use their knowledge and position to gain personally at the expense of others.
The Enron scandal is a major example of pump and dump. Executives participated in an elaborate scheme, falsely reporting profits, thus inflating its stock prices, and covered up the real numbers with questionable accounting ; 29 executives sold overvalued stock for more than a billion dollars before the company went bankrupt.
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