Understanding the Business Ethics

Student
Professor
Course
Date
Ethics- Margin Call
Introduction
Business ethics are principles that examine ethical problems that can take place in a professional business environment. Typically firms treat such issues using business law; however, many did not pay much attention to the issue despite necessary research in the field (de Bakker et al., 344). For example, the movie Margin Call focuses on the prelude period of the 2008 financial crisis and the unethical conduct of the investment bank and its employees while handling a challenging situation.
Discussion
The senior management is going against the concept of deontological ethics because they are not treating people with respect and dignity by laying off several employees, including the head of the finance management division named Eric Dale, who was solely working on a project. It led to a complex situation when an employee under him called Peter Sullivan finds out the firm is overleveraged. The ethical issue here is a lack of transparency. Had the senior manager working with a team while keeping all the stats transparent to everyone, they could have identified the problem earlier. Instead, there was a lack of honest disclosure that caused a complex situation. Both the characters demonstrate enlightened self-interest because Dale worked solely on the project, and Peter wanted to make it big in the market and did have some interest in helping the firm, only to benefit himself later on.
Another factor is the school of thought of an invisible hand possessed by Eric Dale. He received many unintended benefits when trying to benefit others by constantly warning them regarding the liquidity problem (Wells). The top management offered him a severance fee to keep the issue low instead of informing the entire organization about it because it would cause an uproar and prevent the assets from being sold effectively.
Sarah Robertson is another character at the top management and was aware of the arising issues and had informed the boss about it; however, they ignored the warnings, and the boss did not pay attention to the issue at hand before it worsened. The management goes against deontology that the rights of individuals should be respected and treated with dignity. They blame her for the wrongdoings and end up firing her instead of agreeing that the company ignored the problem for a long time. The firm’s overall compliance program seems weak as it did not set ethical targets for the employees.
The movie shows that several meetings occur, and Jared Cohen, who was the division head, suggests selling all the toxic assets of the firm to the public to raise funds. That way, only the firm would benefit while others continue to suffer from bad quality assets. It is an unethical practice shown in the movie because they only want to disperse the risk by spreading it in the market. It is an irony that the characters feel they are following the guidelines of utilitarian ethics by making sure a majority of people benefit from their decision because the market was expected to decline either way; however, the management was only benefitting the firm and neglecting many stakeholders in the process. The relationship was not mutually benefitting the minority and majority...