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What role did Lehmans executives play in the companys collapse? Were they being
responsible and ethical? Discuss.
The role that executives played in the company was the influence of unethical practices.
The Lehman executives were negligent in the decisions they made as the leaders of the company,
which only led others to follow what the executives displayed as normal behavior. The behavior
of managers is the single most important influence of an individuals decision to act ethically or
unethically. In the case of the Lehman Brothers, executives, should have done more, done
better. (2010) A leader would be one who would have informed their boss about the problem
before it got out of hand. A leader would have delegated different tasks to the employees.
Executives made the companys problems worse by serious but inculpable errors of business
judgment and balance sheet manipulation. Many employees at Lehman were threatened by the
company culture that they did not question most of the transactions or decisions. The executives
were not responsible or ethical with the decisions they made, an example would be when they
manipulated the balance sheet to remove $50 billion in assets, which displayed them as being
irresponsible, careless, and unethical with their decision.
To be responsible is to be accountable. To be ethical is to be virtuous, Lehman executives
sole concern was of their own well-being, supremacy, and as all are, of money; Fuld was fearful
of the very talented people below him, and in a very Machiavellian way had his right-hand man
take out anyone who posed a threat (Harress & Caulderwood, 2013). Nothing ethical exists by
way of such conduct; purely irresponsible and underhanded behavior by an executive.
After all the public uproar over Enron and then the passage of the Sarbanes-Oxley Act to
protect shareholders, why do you think we still continue to see these types of situations? Is
it unreasonable to expect that businesses can and should act ethically?
The reason we continue to see these situations despite the public uproar over Enron and
Sarbanes-Oxley Act is the greed of unethical executives. For many executives who are able to
find ways to manipulate the system, once they realize they did not get caught conducting
unethical practices, they are more likely to continue. There are also situations that an individual
is under the stress to make certain goals that are unrealistic, or they cannot meet in a certain time
frame, so they do anything to get things done.
It is reasonable to expect that businesses are able to act ethically. To have effective and
loyal leaders as top executives and down is a way that businesses are able to influence ethical
behaviors. A few ways to encourage ethical behaviors include selecting the right employees,
having and enforcing a code of ethics, recognizing the important ethical leadership role
employees play, conducting performance appraisals and a reward system, and training
employees of ethics, independent social audits, and establishing protective mechanisms (2010).
A managers dilemma is that he/she has to consistently be better in every way. There is never
any room for error. In most cases even when a manager is off duty the manager must carry
themselves in a manner befitting of their position. Another problem at Lehman was the firms
top leadership. Valukass report was highly critical of Lehmans executives who should have
done more, done better (Robbins & Coulter, 2010, Chapter). A business can only be as
successful as those who lead it, there is always going to be an individual or group of individuals
in a business that will be unethical and deceitful because they think they bend the laws.
Simple: The most innate behavior in nature is survival: fight or flight, if you will.
Humans are no less a product of nature than any other biological entity, yet little perception of
our actuality within the animal kingdom is ever realized because our progress has fabricated a
false sense of separation. To the fore of humanities figment, money! Interestingly, money just so
happens to be single most powerful means of survival...
Reference
Harress, C., & Caulderwood, K. (2013, Sept 13). The death of Lehman Brothers: What went
wrong, who paid the price and who remained unscathed through the eyes of former vicepresident. International Business Times. Retrieved from http://www.ibtimes.com/deathlehman-brothers-what-went-wrong-who-paid-price-who-remained-unscathed-througheyes-former-vice
Robbins, S. P., & Coulter, M. (2010). Management, 11th Edition. [VitalSource Bookshelf
version]. Retrieved from http://online.vitalsource.com/books/9781269357937/outline/6