Unethical Practices at Barclays Bank
In this case study we have the United
States of Justice conducting a criminal investigation into abuse of the LIBOR
(London Interbank Offered Rate) interest rate regulated by the British Banker’s
Administration. And resulting on a fine of more than $440 million by Unites
States and English financial regulatory agencies for manipulating the LIBOR to
its advantages, causing world-wide effects to business and individuals.
Ethical Development
Level
In
the case of Barclays Bank and the manipulation of the LIBOR (London Interbank Offered
Rate). It can easily be determined that the executives of this organization
correspond to the Preconventional morality level. “Preconventional morality can
be define as the most basic level, is childlike. It is calculating,
self-centered, and even selfish, based on what will be immediately punished or
rewarded” (Lamb, Hair, & McDaniel, 2014, p.34). The manipulation of the
LIBOR interest rates by proposing artificially low bank-to-bank rates to make
themselves more stable than they actually were showed that they did not care
about anyone else but rewarding themselves.
Corporate Social
Responsibility
“Corporate Social Responsibility: Is the
business’s concern for society’s welfare. This concern is demonstrated by
managers who consider the best interest of the company and the society within
which it operates” (Lamb, Hair, & McDaniel, 2014, p.37). The manipulation
of the LIBOR rate Barclays Bank not only affected London banks and business
executives, but also small business and individuals like students who have
students’ loans, and homeowners, whom interest rates depend on the LIBOR rate
since it is use all around the world as an interest rate and a financial
instrument benchmark. If Barclay’s bank executives had had any kind of
Corporate Social Responsibility they had never manipulated the rate to their
best interest without thinking on the bad consequences for the rest of the
society.
Corporate Social
Responsibility Response Actions
To
take corporate Social Responsibility of their actions after the scandal broke
up Barclays bank should of ask a public general apology and offered to
compensated the most affected victims of their unethical practices, and
compromise to do a clean up of all their unethical executives and make them
responsible for their actions. Show society that people have to be responsible
and accountable for their actions regardless of the position they held within
the organization.
Postconventional
Morality
But
in the other hand if the executives at Barclays Bank would of stopped and think
for a moment if “Even though
manipulating the LIBOR will increase company profits, is it the right thing to
do in the long run?” they would of being in the Postconventional morality
level. This is the last level of morality that represents the morality of and
adult. “At this level, people are less concerned about how others might see
them and more concerned about how they see and judge themselves over the long
run”(Lamb, Hair, & McDaniel, 2014, p.34). Being at this level show that the
organization and the people in it have an excellent ethical and moral
integrity.
Ethics and Social
Responsibility in Marketing
“Ethics
is the moral principle that generally governs the conduct of an individual or a
group” (Lamb, Hair, & McDaniel, 2014, p.32). Ethics are the base of a
successful long lasting relationship between the organization and their
customers since the businesspersons have the obligation to be honest with their
customers, they are also responsible for preserving their customers environment
and protecting their rights. By doing so they have insured a good long
relationship with them and these actions would automatically put them on the
philanthropic responsibilities level of the pyramid of Corporate Social
Responsibility since they would not only be profitable, obey the law, be
ethical, but a good corporate citizen, contributing to the community and
improving the quality of life.
References
No comments:
Post a Comment