This very interesting article is from the Wall Street Journal's Market section. The main topic of this article is about two best friends that worked at a giant hedge fund called SAC Capital Advisors. One friend, manager Noah Freeman, did not hesitate to take his soon to be best man, Donald Longueuil, down in a insider-trading case. The article mentions that during a three year insider trading investigation, Mr Freeman was caught. After getting caught, he agreed to wear a wire for the government to secretly record Mr. Longueuil. In the end, the two men, plus one more, were criminally charged. It was interesting to read that, Preet Bharara, a Manhattan U.S. Attornery said that the three men formed a "triangle of trust", while they shared inside information from multiple sources with each other.
This article is very interesting because it is an example of Leader-Member Exchange Theory. Leader-Member Exchange Theory states that relationships can be classified into two groups: In or Out. Manager Mr. Longueuil and Mr. Freeman had a "In" relationship because they were very close friends outside of work. They were such good friends that Mr. Longueuil was the best man at Mr. Freeman's wedding and Mr. Freeman had a plan to return the favor. After reading about how they had a "triangle of trust", it confirms that the quality of their exchange was in the "In" group. Mr. Freeman and Mr. Longueuil trusted each other a great deal because they knew each other. It was very interesting to find out, once the FBI came into play, the two men's "In relationship went out the window for Mr. Freeman. It is no surprise that these best friends got away with inside trading for over three years because, according to an "In" relationship in the Leader-Member Exchange Theory, "In" groups perform a lot better than "Out" groups. This article also brings up the topic of Legitimate Power. Legitimate Power is associated with havign status or formal job authority. These men used their status and formal job authority of managers to gather inside information and use it to their advantage to trade.
Click Here For The Wall Street Journal Article
-Michael Cosentino
Wednesday, February 16, 2011
Ethics takes a holiday: Newsweek, New York Times, Writers in Swag Orgy
Business ethics is a complex issue. On a day-to-day basis, companies are increasingly faced with issues that can develop into legal problems. Ethical issues are interrelated with the business world and sometimes there is a thin line where an individual exhibits questionable or bad behavior that can lead to ethical dilemmas potentially damaging an organization’s good name. Other times, the line between acceptable and unacceptable ethics is quite clear and non debatable. It is obvious that ethical dilemmas be avoided at all costs.
An example of an ethical dilemma is illustrated in an article written by Jeff Bercovici titled, “Ethics takes a holiday: Newsweek, New York Times, Writers in Swag Orgy.” Bercovici presents a workplace environment where company employees were faced with temptations that generated issues of ethics’ violations. Based on this document, there was a business situation where employee’s self control was put to the test and individuals violated the companies’ ethic’s policy. This was exactly the case where 150 individuals accepted an all-expenses-paid vacation. Writers from Newsweek and The New York Times were among those 150 people who accepted this fully paid vacation.
Bercovivi states in the article, “The writers enjoyed a free trip to Jamaica last weekend, courtesy of the consumer e-newsletter Thrillist and JetBlue, among a host of other sponsors. Those guests received a round-trip flight from JFK International to Montego Bay and two nights at theIberostar Rose Hall resort, where they had beachfront balcony rooms and personal butlers, and overstuffed gift bags ... filled with T-shirts, sunglasses and other goodies (Bercovici).” When Newsweek Magazine learned that reporter Kurt Soller accepted this all-expenses-paid vacation, the firm decided to repay the full amount of the package back to Thrillist since the company determined that their employee violated Newsweek’s ethics’ policy. In contrast, when New York Times learned that their reporter Mike Albo accepted the same all-expenses-paid vacation, the firm determined no ethics rules were violated. A New York Times spokeswoman said, “Albo is a freelancer and was not on assignment for the Times, which he made clear to the organizers of the trip. So we do not see any violation of our rules (Bercovici). "
However, as Bercovivi points out, “After careful reading of the paper's stringent ethics policy suggests that Albo transgressed the spirit, if not the letter, of the guidelines. The policy expressly forbids accepting ‘free or discounted transportation and lodging and gifts, tickets, discounts, reimbursements or other benefits’ from individuals or organizations covered (or likely to be covered) by their newsroom. Those passages are directed at staffers, but further down, the policy decrees that freelancers should accept the same ethical standards as staff members as a condition of their assignments for us. If they violate these standards, they should be denied further assignments (Bercovici)." After this story was published, New York Times contacted Jeff Bercovici and provided an altered statement depicting that the company was troubled about Mike Albo’s partaking in the trip and the organization would be contacting Mr. Albo to discuss these circumstances.
What do you think about this situation of potential ethics violation? Do you think that Mike Albo violated The New York Times ethics’ code of conduct by accepting the all-expenses-paid vacation? If you feel that Albo violated the company ethics policy, what can the New York Times do to prevent this kind of questionable employee behavior from happening again?
See full article from DailyFinance CLICK HERE: http://srph.it/990Cfw
-Adam Kalkirtz
Lawmakers Face Ethics Crackdown
This recent article is from the JakartaGlobe website for global news. It addresses the need for a revised ethics code for Indonesian lawmakers. The article states that paying for sex and gambling may already be illegal, but lawmakers supposedly need reminding with a "souped-up" code of ethics. The House of Ethics Council unveiled Wednesday a proposal for a new code for its members. There are many rules that members of various houses must abide by due to their positions of power. They are all banned from going to places considered to be ethically, morally, religiously, and normatively improper, such as brothels and casinos. The draft code also proposed that lawmakers be banned from saying or doing things in public deemed improper, both inside and outside the House building. Violators are now receiving sanctions according to house rules and the worst punishment is that they could be removed from their position in the House. This new code is said to fill in the gaps and solve issues that have been a problem in the past with these individuals. The article concludes by saying, If it is against the law, then it must be against ethics,” the Indonesian Democratic Party of Struggle (PDI-P) lawmaker said.
This article strongly relates to the style approach of leadership, which focuses on what leaders do and how they act. If Indonesian leaders and lawmakers are breaking their current code and making unethical decisions when it comes to their current laws and regulations, then they are clearly not fulfilling their roles as leaders. These leaders cannot fulfill the task and relationship behaviors associated with their positions if they do not abide by the ethical codes of their country.
The article can be viewed if you Click Here
-Josh Dlabal
When the CEO Job Is Split in Two
I just encountered a very interesting article in BusinessWeek regarding power sharing and companies that have co-CEOs. The article starts by discussing companies that weren't so lucky when it came to sharing power in the past, such as Goldman Sachs, Charles Schwab, & Kraft Foods. These companies are said to have dealt with crippling power struggles and turmoil due to attempting to split the role of a CEO.
While this is true of some companies, it has also been a success factor for others. Aeropostale, Chipotle Mexican Grill, California Pizza Kitchen, and P.F. Chang's are all examples of companies that have proven to be quite successful due to the break down of power. The article even went to say that companies, such as Chipotle and P.F. Chang's have sky rocketing stocks. It is interesting to note that at California Pizza Kitchen, Larry S. Flax and Richard L. Rosenfield worked together as lawyers for 12 years before founding their Los Angeles restaurant chain in 1985. "The secret sauce is simple—we like each other," says Rosenfield, who handles real estate and investor relations while Flax focuses on operations and the menu. "We know each other so well we can make important decisions without talking to each other." The two even share a modest L-shaped office.
This topic brings up an excellent example that can be related to the Situational Approach to leadership.The premise of the theory is that different situations demand different types of leadership. In this article we see that some companies have not been so successful with their power sharing, while other companies have been in the ideal "situation" where a leadership approach, sharing power between two big name leaders, actually proved to be successful and perfect for their specific company. As another part of the Situation Approach, directive and supportive leadership dimensions are said to be applied and it appears that the CEOs of California Pizza Kitchen have successfully delegated who does what and work together to accomplish the supportive and directive behaviors for their company. With the power split the CEOs probably can also do a better job of implementing all four leadership styles.
While this is true of some companies, it has also been a success factor for others. Aeropostale, Chipotle Mexican Grill, California Pizza Kitchen, and P.F. Chang's are all examples of companies that have proven to be quite successful due to the break down of power. The article even went to say that companies, such as Chipotle and P.F. Chang's have sky rocketing stocks. It is interesting to note that at California Pizza Kitchen, Larry S. Flax and Richard L. Rosenfield worked together as lawyers for 12 years before founding their Los Angeles restaurant chain in 1985. "The secret sauce is simple—we like each other," says Rosenfield, who handles real estate and investor relations while Flax focuses on operations and the menu. "We know each other so well we can make important decisions without talking to each other." The two even share a modest L-shaped office.
This topic brings up an excellent example that can be related to the Situational Approach to leadership.The premise of the theory is that different situations demand different types of leadership. In this article we see that some companies have not been so successful with their power sharing, while other companies have been in the ideal "situation" where a leadership approach, sharing power between two big name leaders, actually proved to be successful and perfect for their specific company. As another part of the Situation Approach, directive and supportive leadership dimensions are said to be applied and it appears that the CEOs of California Pizza Kitchen have successfully delegated who does what and work together to accomplish the supportive and directive behaviors for their company. With the power split the CEOs probably can also do a better job of implementing all four leadership styles.
Click here to view the article & video
-Josh Dlabal
Green Marketers are Still Sinning
This article is very interesting and takes a very unique stance on marketing and the "green" tactics of marketers. Marketers in general have been taking a very green stance on new products that enter the market and consumers have taken a particular interest in these new roducts. But what if they aren't "exactly" green? Marketers ahve recently been accused by TerraChoice of abusing the green standard and marketing products that are far from green to consumers who thrive from this new market. The recession seemed to spark this green marketing sceme, but now the trend is blazing with support; but only because marketers have promoted this fad as so. What if opportunism came into play when marketing products as green that aren't necessarily so? I certainly feel that it does. Marketers are pulling on the vast majority of consumer's heartstrings with one single word, green. The implimentation of a single word will often entice a consumer to support this item in one way or another. But as the article and consumer reports show, many of these items do not meet the specifc green standards. After reading this article that discusses seven tactics of "greenwashing" consumers, I found the information provided very interesting. The TerraChoice consumer report is also provided in the article as well. Please check out this article with the link below:
http://www.businessweek.com/managing/content/oct2010/ca20101029_631610.htm
http://www.businessweek.com/managing/content/oct2010/ca20101029_631610.htm
Ethics in Med School
After searching through The New York Times, I came across this shocking article that really caught my eye. Its about Med students who are taking pictures of their patients and posting them on the internet and making it into a joke. For instance, a student took a picture of a piece of re-bar that punctured all the way through the stomach of a patient. They then posted it online with a caption that said, "at least they made it to the bar." This is an extremely horrible breach of patient privacy. Not only is it completely unethical and unprofessional but these medical students may be bright enough to be doctors, but they are truly harming their reputation of the profession. For one, these students are going to Med School to become leaders in their industry, mainly to lead change and to save peoples lives. Why would the teachers even allow phones in the room while working is my question. I can see the students having pictures to use them for research but not to be posting them on the internet such as facebook and twitter and making jokes about them. In my eyes, those are not leaders and they need to be taught a lesson. Although the pictures do not capture the patients face, it is unethical. What are some of your thoughts regarding this topic? Do you look at med school students as leaders, how bout doctors? How could someone put an end to this unethical act?
-Steve Fagiano
Click Here To Read The Article
-Steve Fagiano
Click Here To Read The Article
Monday, February 7, 2011
Banker's $5.5m package "Unethical"
Today’s societal ethical issues in the workplace are becoming an increasingly significant topic surrounding corporate CEOs. While surfing the web, I came across an interesting article concerning unethical business issues surrounding CEO George Frazis. The article was written by Tamsyn Parker and titled, ”Banker's $5.5m package 'unethical' .” I truly enjoyed reading this article since she brings out the issue that more people should be talking about … How much is too much?
What do you think? Please share your opinions.
As stated in the intriguing article about this CEO compensation package, “Westpac boss, George Frazis, New Zealand's highest ever paid executive with a yearly package worth $5.59 million - a figure a bank workers' union have branded unethical (Parker). ” Today, CEOs are being paid at all time highs when the common worker is having trouble finding a job in the current depressed economic environment.
Furthermore, employees who currently hold a job are not seeing salary increases and quite frequently, workers are forced in accepting salary cuts. Therefore, what is the justification for CEOs receiving these outrageous compensation packages when the worker is losing ground with little or no pay increase and increasing rate of price inflation. Finsec, bank workers' union, expressed great disapproval of the excessive CEO compensation package going as far as calling it unethical due to current economic circumstances. Finsec spokesperson Andrew Campbell stated, “It was galling to see the bank give such an extravagant package to its boss while being underwritten by the taxpayer (Parker). ”
I strongly believe that this unmerited compensation package is an extraordinary amount of money for Westpac CEO and I urge him to reconsider it and give back a significant percentage of the money one way or another. If the CEO decided to donate some money to a charitable cause, he could alleviate some of the hostile feelings and then fulfill his social responsibility as CEO.
What do you think? Please share your opinions.
Check out this website for more information on this topic: Click HERE!!
--Adam Kalkirtz
How WikiLeaks Matters
Well guys, I saw this article in businessweek and it's pretty interesting. Though it may be a little out there in some portions, it's relevance to the bigger picture is certainly worth reading in my opinion. Mr. Haque begins his own blog through Harvard by discussing the WikiLeaks that severely endangered the lives of many people, he seems to take a different spin on the subject. Haque considers that this void in confidentiality has to keep the American public wondering about what else they are missing. With this being said, in light of the irresponsibility of a few, many more could benefit from transparency in the corporate world. Haque brings up a good point about companies being audited once a year and putting out financials quarterly while millions of people around the world are making financial transactions in the interest of many of the worlds major companies daily.1
Though I personally feel that there is a bigger issue here, there certainly is some ethical reform that could make the corporate world more transparent. These changes in transparency could give the united states the upper hand in increasing the accuracy in GDP and even the ethical standards of the U.S. as an example to many economies around the world. Take a look at the article and see what you think. There seems to be quite a bit of spin on the topic in my opinion, but some of the information presented is very pertinent to any ethics discussion.
http://www.businessweek.com/managing/content/dec2010/ca20101210_492854.htm
Though I personally feel that there is a bigger issue here, there certainly is some ethical reform that could make the corporate world more transparent. These changes in transparency could give the united states the upper hand in increasing the accuracy in GDP and even the ethical standards of the U.S. as an example to many economies around the world. Take a look at the article and see what you think. There seems to be quite a bit of spin on the topic in my opinion, but some of the information presented is very pertinent to any ethics discussion.
http://www.businessweek.com/managing/content/dec2010/ca20101210_492854.htm
NY TV Executive found guilty of murder for wife's beheading
There are many scandals relating to ethics and the morality of individuals, even leaders, in our society. A recent news story posted in the Justice section of CNN's website discusses an astounding and devastating story relating to a New York TV executives brutal decapitation of his wife of many years. After a long and drawn out 3 week trial, a New York jury found Muzzammil "Mo" Hassan guilty of second-degree murder for the beheading of his wife today. The ironic part of the story is that Hassan founded a TV network (Bridges TV) aimed at countering Muslim stereotypes in 2004. Hassan supposedly hoped that the network would balance negative portrayals of Muslims, following the attacks of September 11, 2001.
To give some background on the story, in February 2009, Hassan went to a police station in Buffalo, NY and told officers that his wife was dead. Supposedly, on the day she died, Aasiya Hassan (his wife), had agreed to take some of her husband's clothes to his office, after he had chosen to move out of their home, due to his wife proposing a divorce 6 days before. According to sources, the couple's marriage was "sad and unhealthy" and Hassan's wife had threatened to embarrass Hassan and take away his children. The day she went to drop his clothes off at his office, Hassan was not supposed to be there, but of course he was and at this time chose to "viciously kill and desecrate" his wife. Both of his children testified that their father was violent in the past and Hassan had no real argument as to how his wife was killed. As a result, Hassan was found guilty and awaits sentencing.
To view a more extensive story you can view this video /\
While Hassan is not the most prestigious of leaders, he is still an executive for a TV station that has been in existence since 2004 in the U.S. This story takes the question of scandal and ethics to the next level and is truly gut-wrenching to think about. Please post your thoughts and comments on this terrible tragedy below.
News article from CNN: http://www.cnn.com/2011/CRIME/02/07/new.york.beheading/index.html
-Josh Dlabal
To give some background on the story, in February 2009, Hassan went to a police station in Buffalo, NY and told officers that his wife was dead. Supposedly, on the day she died, Aasiya Hassan (his wife), had agreed to take some of her husband's clothes to his office, after he had chosen to move out of their home, due to his wife proposing a divorce 6 days before. According to sources, the couple's marriage was "sad and unhealthy" and Hassan's wife had threatened to embarrass Hassan and take away his children. The day she went to drop his clothes off at his office, Hassan was not supposed to be there, but of course he was and at this time chose to "viciously kill and desecrate" his wife. Both of his children testified that their father was violent in the past and Hassan had no real argument as to how his wife was killed. As a result, Hassan was found guilty and awaits sentencing.
To view a more extensive story you can view this video /\
While Hassan is not the most prestigious of leaders, he is still an executive for a TV station that has been in existence since 2004 in the U.S. This story takes the question of scandal and ethics to the next level and is truly gut-wrenching to think about. Please post your thoughts and comments on this terrible tragedy below.
News article from CNN: http://www.cnn.com/2011/CRIME/02/07/new.york.beheading/index.html
-Josh Dlabal
Micosoft's Bill Gates: Giving Away A Fortune
The article " "The Gates Foundation: "Giving Away A Fortune" talks about how and why Microsoft's founder Bill Gates is giving $60 billion of his fortune away (CBS, 2010) Bill Gates, has become the most generous philanthropists in the world. Bill and Melinda Gates started "The Gates Foundation" about 10 years ago and have been giving billions away every since to charities and causes, all around the world. They recently have traveled the world to find new causes that need attention. Some examples include: education, AIDS, malaria, and childhood death. (CBS, 2010)
Many Fortune 500 leaders have chosen to become philanthropists. However, it is interesting to compare how much Bill Gates donates to other leaders. Bill Gate's Foundation has already given "$4.5 billion for vaccines, about $2 billion for scholarships in America, and $1.5 billion to improve farming in Africa and Asia." It is interesting to learn that, so far, the foundation ranks just behind McDonald's and just ahead of Boeing (CBS, 2010).
I knew Bill Gates donated a lot of his money, but this article is very interesting because, I was not aware that he pledged to donate $60 billion of it.
I think this article is one of the best examples of how a leader can really make a difference in a good way. If I had Bill Gate's fortune, I would donate what he plans on giving away. My opinion is, why not give away that much if you are living comfortably. Millions of lives are going to be saved with these donations and that is why I would give away that much, if I could.
For more information on this interesting article, check out this CBS 60 Minutes Video: Bill Gates: Giving A Fortune Away
This article brings up the question of, What would you do if you had Bill Gate's fortune? And, If you had his fortune, which has to be well above $60 billion, would you donate $60 billion? Also, what is your opinion on this article?
Article from: http://www.cbsnews.com/stories/2010/09/30/60minutes/main6915431_page2.shtml?tag=contentMain;contentBody
-Michael Cosentino
Many Fortune 500 leaders have chosen to become philanthropists. However, it is interesting to compare how much Bill Gates donates to other leaders. Bill Gate's Foundation has already given "$4.5 billion for vaccines, about $2 billion for scholarships in America, and $1.5 billion to improve farming in Africa and Asia." It is interesting to learn that, so far, the foundation ranks just behind McDonald's and just ahead of Boeing (CBS, 2010).
I knew Bill Gates donated a lot of his money, but this article is very interesting because, I was not aware that he pledged to donate $60 billion of it.
I think this article is one of the best examples of how a leader can really make a difference in a good way. If I had Bill Gate's fortune, I would donate what he plans on giving away. My opinion is, why not give away that much if you are living comfortably. Millions of lives are going to be saved with these donations and that is why I would give away that much, if I could.
For more information on this interesting article, check out this CBS 60 Minutes Video: Bill Gates: Giving A Fortune Away
This article brings up the question of, What would you do if you had Bill Gate's fortune? And, If you had his fortune, which has to be well above $60 billion, would you donate $60 billion? Also, what is your opinion on this article?
Article from: http://www.cbsnews.com/stories/2010/09/30/60minutes/main6915431_page2.shtml?tag=contentMain;contentBody
-Michael Cosentino
Four Strategic Genorosity Lessons ( Zuckerberg)
After reading this article, “Four Strategic Generosity Lessons,” by Rosebeth Kanter, it makes me think that Zuckerberg donated 100 million to the Newark public schools to just do a “nice” gesture to get his name in the public eye and to be observed and looked upon as being a leader. The article is arguing that a gift in real life may not be a give if it is forced out of you. In the article, it states, “And generosity is sometimes resented, as a display of conspicuous philanthropy, showing that you have more than someone else to begin with, which is a matter not to be discussed in polite company. Even if you have it, don't flaunt it.”
I feel that Zuckerberg is an intelligent, deliberating young man who clearly does have the money to help out the less fortunate and is therefore going to take that into consideration and do a good deed. He’s new in the business world, and as a leader, he wants to get his name out there as being someone perceived by his followers as someone who has legitimate power. Gates and Buffet were already donating money before anyone asked them to and people think that Zuckerberg just jumped on the bandwagon. I also firmly agree with this quote stated in the article, “Some gifts get returned. Others bring returns. Knowing the difference is important to make generosity a strategic skill.” After thinking this through, donating money truly does look good on the leader’s plate and will in fact bring rewards.
Please, check out this article, and leave some insight on what you think Zuckerberg’s intentions are by donating that large sum of money to the public school.
http://www.businessweek.com/managing/content/dec2010/ca20101214_945792.htm
-Steve Fagiano
http://www.businessweek.com/managing/content/dec2010/ca20101214_945792.htm
-Steve Fagiano
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