Authur Andersen Understanding Capitalism

Authur Andersen was a major accounting partner firm for the massive Enron energy corporation. An audit revealed that the two companies conspired to commit fraud and illegalities, including dishonesty, fraud, and misappropriation of funds. As a result of this incidence, the company’s investors and other stakeholders fled in droves, causing the company to fail (Moore 268). Anderson has a conflict of interest because he was a direct benefit of Enroll’s fraudulent conduct while providing professional services. The Sarbanes-Oxley Act is largely used to audit accounting systems and improve their integrity through whistleblowing and transparency demands. Self-interest essentially means an individual is pursuing his or her goals which most obviously is anchored on success. Self-interest is the motivator inspiring people to build business empires and experience quality lives (Ferrell et al 34). However, self-interest may not serve the common goal when immorality like greediness, fraud, theft, and corruption is exercised to gain an individual interest impacting others negatively.

Question 3

Externalities are costs or benefit impacting on a party or corporation who do not have control over them but can result in benefits; example, government initiates. Externalism impacts on capitalism due to the increased compliance on accountability of actions of corporations.

Question 4

Bluffing is deceiving or misrepresenting a piece of information to a customer to benefit one’s organization. Engaging in business bluffing can be justified in many instances to gain business deals by misrepresenting information. However, bluffing poses a severe risk of reputation damage to an organization. In my view, bluffing is unethical and should not be practised because it risks people’s job and value for money not achieved (Chryssides et al 212).

Question 5

I will schedule a conducive moment to talk with the individual advising them on consequences of their performance to them and other employees. Accordingly, I will advise the individual to seek sufficient training in areas that need further development and mastery and monitor as a moral act. This step achieves presenting the workplace reality so that the employee appreciates the consequences of his performance also to others. Therefore, this stage and actions reveal my solution-oriented personality due to my efforts to uncover and resolve the matter.

Question 6

Building trust is a process which involves actions and decisions that seeks to gain the confidence and closeness of an individual. Truth-telling encompasses building trust by being the factor contributing to building trust. It gives a person the quality of honesty thus deemed trustworthy. Building trust depends on an individual’s feedback regarding the truth will determine if trust issues will emerge or trust will be established (Bowles et al 102).

Question 7

Rights are mostly the freedom of an individual to do anything they want but within the confines of the law. Therefore, this concept covers an individual against legal actions because they exercise their freedom inconsistent with the laws. The businessman is justified to take that position because it is in the best interest of his business growth needs. However, the businessman notes that using some rights might pose unethical issues of rights infringement regarding heath providence. The ethicist argument is valid because of infringed rights and possible hardships for the workers

Question 8

Legal aspects of business bind the parties or stakeholders in the venture which therefore attracts respect and obedience determining rules and standards. Thus, partners in a business contract or stakeholders are bonded by the legal aspects of their agreement. However, some legal contracts reached are exploitative to certain parties through certain clauses that are favourable to both sides (Sandbu 78).

Question 9

The modern and classical models of corporation insignificantly differ. Firstly, the classical model recognised the importance of the shareholders and shareholders’ input in the business. The modern corporation also highly integrates both internal and external shareholders in their decisions and actions. More to this, the model proceeds to reciprocate services and offers to the host community. The model recognizes the impacts of its activities and consistently align to put measures to curb negative effects.

Question 10

American’s firms have little choice to grab the opportunity to expand their business territories or decline and lose business. Additionally, a cultural practice of a place is as good as their ethical standards. Therefore, these firms should comply with the cultures and practice of the foreign countries to increase their business fortunes.

Question 11

Liberty is the freedom of individuals to do anything without considering its impact or consequences to others. Equality refers to exercising impartiality in treating people by subjecting them to equal standards. However, liberty in most cases overlaps to interfering with other individuals’ rights to especially on the occurrence of unethical practices. Capitalism and democracy can be controlled by legislation that limits the excesses of each one of them to strike a balance (Chryssides et al 215)

Question 12

The main goal of businesses is to maximize profits but within confines of legislation. Social responsibility being legalized and policy of companies, it automatically becomes a moral obligation because it advocates for compliance with the legislation. The essence of the corporate social responsibility is to reciprocate the hospitality of the host community through developing the area.

Works Cited

Bowles, Samuel, Richard Edwards, & Frank Roosevelt. Understanding Capitalism: Competition, Command, and Change. Princeton, N.J: Recording for the Blind & Dyslexic, 2007, pp. 102-128

Chryssides, George D, & John H. Kaler. An Introduction to Business Ethics. London: South-Western Cengage Learning, 2010, pp. 212-219

Ferrell, Odies C, Linda Ferrell, & John Fraedrich. Business Ethics: Ethical Decision Making and Cases. Mason, OH South-Western Cengage Learning, 2011, pp. 34-63

Moore, John H. Encyclopedia of Race and Racism. Detroit: Thomson Gale, 2008, pp. 268-271.

Sandbu, Martin E. Just Business, Arguments in the Business Ethics. New Jersey: Prentice-Hall, 2012, pp.78-84