Some employees should have known that helping madoff

This preview shows page 7 - 10 out of 11 pages.

stealing from people was unethical but he did it anyway. Some employees should have known that helping Madoff was unethical but in the end, they did it anyway. The scandal also shows that Madoff and his accomplices have poor ethics. Ethics is defined as set of moral principles values, norms, or standards of conduct governing individual or group (17). They clearly have low to none moral principles because they were able to continue the scheme for years instead of just pulling the plug. This also shows that Madoff skipped through most of the ethical decision making process. The ethical decision making process starts with ethical awareness, then goes to ethical judgment, and ends with ethical behavior (Trevino, Nelson, 19). At the very least, the must have been ethically aware that they were doing wrong but they made a poor ethical
Image of page 7

Subscribe to view the full document.

Patel 8 judgment and it lead to unethical behavior. Employees of Bernard Madoff involved in the scheme most likely went through a phase of moral disengagement. Moral disengagement is when people deactivate self-control and it allows them to act unethically without feeling guilty (Trevino, Nelson, 86). They probably thought that it wasn’t their responsibility to stop what was going on and decided to let it go. Madoff had numerous family members working for him and it created conflict of interest. Conflict of interest occurs when judgment is compromised (Trevino, Nelson, 123). Given that so far, only his brother has been proven guilty and the rest of family is innocent, it is still a conflict of interest. It was a huge conflict of interest when Madoff’s brother was the chief compliance officer because Peter’s actions would directly affect his brother. Another example of a conflict of interest in this case was Bernard’s accountant, Friehling, who received $10,000 a month. Friehling’s judgment was compromised when he decided to neglect his responsibility as an accountant and take money from Madoff for lying. As soon as Madoff decided to steal money, customer confidence issues were born. Customer confidence issues include confidentiality, product/service safety and effectiveness, truth in advertising, and special fiduciary responsibilities (Trevino, Nelson, 127). He lied about his service he was providing because people weren’t getting the returns they thought they were and their money wasn’t safe. Employees are at fault for this scheme because no one blew the whistle. No one said “this is wrong and I am going to stop this”. Had someone blew the whistle at the beginning of this scheme, the damage would have been minimized. The Ponzi scheme showed that Bernard Madoff was an unethical leader because he was a weak moral person and a weak moral manager (Trevino, Nelson, 159). Madoff wasn’t honest, he wasn’t trustworthy, he didn’t have concern for people, he didn’t take ethical actions, and his decision weren’t value based. Bernard is also an example of the idea of multiple selves which states that people behave differently in different contexts (Trevino, Nelson, 257). Madoff acted like a trustworthy leader at work but in reality was a thief who stole and lied to his customers.
Image of page 8
Patel 9
Image of page 9

Subscribe to view the full document.

Image of page 10
  • Spring '13
  • WebsterBrenner
  • Business Ethics, Ponzi scheme, Bernard Madoff, Madoff

{[ snackBarMessage ]}

Get FREE access by uploading your study materials

Upload your study materials now and get free access to over 25 million documents.

Upload now for FREE access Or pay now for instant access
Christopher Reinemann
"Before using Course Hero my grade was at 78%. By the end of the semester my grade was at 90%. I could not have done it without all the class material I found."
— Christopher R., University of Rhode Island '15, Course Hero Intern

Ask a question for free

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern