Robert 1945 until the point of the Soviet Union

Robert Cocuzzo                                                                                                 December 12th, 2017 Ethics in
Business Final Exam                                                                                                       Prof. Jung

1. The
Cold War entailed 50 years of global history. 
The conclusion of World War II, in 1945, was the start of this almost
half a century long crisis that included many nations across the globe.  From 1945 until the point of the Soviet Union
cessation in 1991, ongoing disputes about capitalism and communism were very prevalent.  The dispute was most heavily between the
United States and present-day Russia. 
The crux of the disagreement between communism and capitalism was mainly
based on government power and social structure. 
These two superpowers disagreeing divided the previously allied nations.  Although these two superpowers were the most
heavily involved in the Cold War, smaller countries such as Poland, Albania,
and Czechoslovakia, also joined the fight as alliances.  After Europe was
essentially divided into two sections of power, the nations of Western Europe for
the most part showed loyalty to the United States in their signing of the North
Atlantic Treaty Organization, or NATO, the United States’s military alliance.  The Soviet Union also created a pact for
alliance with mostly Eastern European countries called the “Warsaw pact”.  With essentially all major countries in
Eastern and Western Europe belonging to one of these rivaling pacts, Europe
remained divided.  This competition shaped the European
political and social systems greatly.  The footprints of the recent Cold War could be seen across the
globe.  The crisis severely hindered the ability
of the United Nations to keep the peace and security throughout the world.  The disagreement between the two superpowers
made any consensus and agreements on key issues of peace and security unachievable.  United Nations slowly became more of a
spectator in times of war and crisis.  The
Cold War also brought the process of Globalization to a screeching halt.   Globalization
is “the interaction
of people, states, or countries through the growth of the international flow of
money, ideas, and culture” (Wikipedia).  This
became less of a possibility during the Cold War era.  After the conclusion of the Cold War, the fall
of the Iron Curtain, and the relinquishing of Eastern European countries by
Russia, the formerly communist Eastern European countries, became
democratic.  However, the newly
democratic countries had to try to rebuild their economies completely.  Many governments faced massive amounts of
debt and poor economies.  A significant
financial investment had to be made due to the environmental contamination and
lack of proper national security.  The
Cold War also had major impacts on social aspects of the United States such as technology,
healthcare, and education.  Due to the Cold War, we
now have new availabilities in the areas of health care and technology.  These availabilities include the use of new
technologies for nuclear power and energy as well as for health care.  The use of radiation for medical treatments, such
as cancer, is now a possibility.  The Cold
War also affected education.  It had more
of an impact on education in the United States than Russia, however. Due to being
motivated by attempting to prove themselves superior over the Soviet Union, the
United States government invested more heavily in education by expanding on math
and science curriculum.  The United
States was able to benefit more from the conclusion of the Cold War than the
Soviet Union was due to their smaller debt. 
When the Cold War concluded, the Russian economy was in shambles.  It was massive amounts of debt and the
country was split into fifteen separate republics.  After the fall of the Soviet Union, some
dominant ideologies began to take over. 
Some of these ideologies include a free market ideology along with the
rise of Globalization that was impossible during the Cold War era.  Globalization has been possible since the
conclusion of the Cold War due to the commercialization of the internet and the
constant growth of the mobile phone industry. After the Cold War, liberal democracy became the popular
ideology that seemingly had very little significant competition.  It was declared the “solitary winner of history’s
ideological struggles.

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2. Upon
reading Whoops, I learned useful information about markets and the 2008 crash
that I had not previously known.  For
example, as mentioned in the sections titled “Enter the Geniuses” and “The
Mistake”, the use of financial model by investors and analysts is heavily
noted.  Early in the section of “Enter
the Geniuses”, a formula is noted that is created by David X. Li a “math jock”
from rural China (Lanchester, 97).  Li was
working at JP Morgan when he created this Gaussin copula formula for the
creation of CDOs.  This model was designed
to analyze many different things happening in the market.  However, one thing it did not properly
account for, was risk.  These CDOs
allowed people to take out more money and bigger loans than they should
be.  Author, Lanchaster argues that the
flaws of this model should have been discovered long before any major damage could
be done.  This model provided legitimate
lending but did not account for instances in which there was systematic,
organized fraud, involving false identities and multiple applications for
credit.  The whole business surrounding
the model was set up to lend.  And these
loans generated money for everyone and generated huge amounts of sub-prime debt
so that the banking industry could supply all the collateralized debt obligation
(CDOs), that they wanted (Lanchaster, 112). 
Lanchaster then touches on the insanity that no one picked up on mortgage
payments across the country being miraculously transformed into AAA investments.  So, to conclude, the recent financial crisis that
took the country by storm, was in part due to the financial industries belief
that this was a successful model and not considering how outside factors such
as risk could lead to detrimental events in the financial industry.  As Lanchaster states “the mistake can be
summed up in one word: risk” (Lanchaster, 113). 
Bankers across the country made inaccurate calculations with this model
which in essence, destroyed some banks, forced others in public ownership, and
brought the world financial system to a standstill. 

3.  The last section of the book, Whoops, addressed
in detail, the free market ideology.  It
notes its assumptions and flaws and discusses how it affects culture in the
business and financial world.  Free market is an idealized system in which the prices for
goods and services are determined by the open market and consumers (Lanchaster,145) This is known as
the “invisible hand”.  However, there are
some faults when it comes to market theory. 
For example, some good and services
that are considered public goods cannot be left to the free market to deal with.  Services such as infrastructure development, ambulances,
and public offices, cannot be dealt with in the free market.  There would be too many issues that arose
from them being a part of it. 
Competition between certain firms, or limited oversight, and control
over these services, could cause major issues.  Additionally,
unmonitored free markets could potentially lead to the oligopolies
forming in the market.  The reason why
that is the case is because as a firm increases in size, its average costs
start to decrease, making it easier to exploit economies of scale; meaning, profit
margins are higher at higher production levels (Soroushian, 1).  Some agreed upon assumptions of free market
theories are that consumers are omnipotent about the market, meaning, they know
all the available options for variety of products, price, and quality of
products.  Another assumption is that
firms only main goal is maximizing their profit.  I think that the free market affects culture
in the business world greatly, mostly in the areas of monopolies.  With a free market, it is nearly impossible to
completely develop a monopoly, as competition somewhat regulates that.  This discourages businesses from attempting
price cutting to put others out of business and controlling the market before
being able to rise their prices due to customer loyalty.  In the financial world, the free market also
somewhat regulates investing.  It does
not allow for investors to aid companies in their attempt to buy out or merge
with other powerhouses in hopes of dominating the market.

4. After
reading Whoops and constantly keeping up with current events, I was able to
form some ideas on how to regulate and change the culture that has led to
problems in many industries.  One
industry that has seen many scandals as of late is the National Collegiate
Athletic Association, or the NCAA. 
Recently some of the major schools such as Louisville and Auburn and the
University of Arizona, have been under fire for recruiting scandals.  These universities have been slipping apparel
under the radar to highly prioritized recruits, in hopes that he signs with
their team.  One way I believe this is
avoidable, is monitoring the gear that programs get.  Being the manager of Fordham’s basketball
team, I have seen the irrational amount of gear the team orders.  Every player has hundreds of shirts and
shorts yet, there are still full boxes of gear in the closet.  This makes it easy to slip the extra apparel
to recruits, unnoticed.  Another way to
avoid this is to have meetings between the athletes and coaches monitored so no
illegal activity transpires.  Gearing
more towards the finance industry, some of these scandals we have seen in major
companies, like Wells Fargo, can also be avoided.  The easiest way to avoid a scandal like Wells
Fargo had recently, is to monitor banks more closely.  They should have had a supervisor come in to
check their accounts and make sure everything lines up.  Supervisors and employees and executives
should have been on top of this issue better than they were.  I understand in big businesses it is very hard
to monitor every move made, but some overseeing of accounts could have deterred
this from happening.  The revolving door
is a political term that is used to describe the movement of employees between
roles as legislators and regulators.  In
his article “Avoiding the Revolving Door: Ethical Issues for Government Lawyers
Transitioning to the Private Sector”, Ryan Cleary describes the process of
government lawyers switching gears and moving into the Private Sector.  Cleary states, “The most pressing
ethical issues that arise during the job search phase are avoiding and
preventing conflicts of interest”.  Cleary
makes this claim in regard to the law that prevents conflicts of interest,
meaning, it is required that a worker must eliminate him or herself from any
involvement in any cases that could have a direct effect on the financial
interests of a person “with whom he is negotiating with or has any arrangement
concerning prospective employment” (Cleary 1). As far as ideas go for changing
societies habit of degrading our environment, I think businesses could come
forward and offer more programs to help make manufactures and industrial production
limit waste output and help our society become more “green”.  Office buildings can contribute to this by helping
the recycling campaign.  They can offer
employees, reusable, BPA free water bottles, and limit their use of paper.  As for moral degradation, I believe humans
over the last generation have become more self-centered and focuses on money
rather than important issues of society. 
I think people have become so invested in themselves and often fight
against anything even slightly opinionated and expect everything to always be “fair”
and handed to them.  Speaking for my generation,
I think that is a major flaw.  It could
just be people that have the privilege of going to a private university, but it
seems today’s generation believes they are entitled to certain privileges and they
often forget to think of the reasons that make it so that we live in a country
where you can think that way.  To improve
moral standards and limit the moral degradation, more companies should be
getting more involved in thanking heroes such as our veterans through giving
back in any way possible, whether it be donating to Wounded Warrior Project, or
PTSD foundations for veterans.  Actions
such as this could completely raise morale in the office and set the tone for
the acceptable culture of the company. 

 

 

 

 

 

 

 

Part II:

5.
The values of many companies and countries are formed in a variety of ways.  Usually it begins with a mission statement of
a company being created, then ways to accomplish this mission, then values for employees
to follow.  I believe that the United
States does have some values that we would fight to preserve.  For example, I believe the US would step in
in the case of a genocide.  Even within
the nation, I believe that many Americans have values that they would be
willing to fight other Americans over such as gun rights, abortion, or
legalization of drugs.  In the case of a
business, I believe that one thing that would not be tolerated in any business
is any sort of discrimination, whether it be racial, religion, or gender
oriented.  I think more and more companies
are going out of their way to provide opportunities to minorities.  Recently, companies have been hosting many
events to recruit minorities, hoping to increase diversity in the workplace.  I believe that all throughout the United
States, nationwide, discrimination would not be tolerated and equal opportunity
in the workplace will be fought for.  This
is something that I am using as a guide for my future.  If I ever become a manager, founder, or CEO
of a firm, I will use this to ensure diversity in my workplace and provide
equal opportunity to all. 

6.
In the United States, there are many key players in the world regulatory
system.  For example, the US Securities and
Exchange Commission, Financial Industry Regulatory Authority, the Federal
Reserve System, Financial Service Industry, and more.  They effect business activities mainly by
regulating institutes.  For example, the
SEC enforces federal security laws and the FINRA is in charge of enforcement and
arbitration operations of the New York Stock Exchange.  Every branch and organization has their job
and is in charge of regulating a certain aspect of the financial industry.  I do not think these organizations could develop
a universal consensus on international business ethics, certain firms have
different values and ideologies that they desire to follow.  Firms have different beliefs and moral
standards that they choose to set forth. 
This is why I do not think these organizations can develop a universal
consensus on ethics.  There will be many
organizations that I would need to keep tabs on in my field of finance.  For example, I would need the SEC to enforce
federal security laws in my business and ensure there is no illegal activity
taking place.  If I end up with a career
in the stock market, as I would like to, a regulatory system that would be
needed would be the FINRA.  The FINRA has
the task of enforcing rules and supervising behavior in operations of the New
York Stock Exchange.

7.
If I were a manager or executive of a company, I would have a system to
developing the company culture.  In this
day in age, it is becoming increasingly more difficult to have a good company
image as the world is so technology dominated. 
Technology allows for many actions that were not possible in the past.  Many of these actions are illegal or immoral,
however.  With the technology available
to banks, it is infinitely easier to create fake accounts and trick systems
into doing certain actions that are unethical such as moving money from one
account into another.  Additionally, with
snapchat and text messaging and other forms of communication, it becomes easy
for individuals to get themselves into trouble through sexual harassment issues,
much like Matt Lauer has been accused of most recently, which also gives the
company a bad image.  My company culture
would be derived from defining a company mission, to drafting values, to strictly
enforcing the values.  I would not stand
for an employee giving the company a bad image or acting in an unethical way
that would undermine the firm’s values. 
Job security and loyalty would also be stressed at my firm.  I believe that if a man or woman is
successfully completing their tasks and providing great value to the firm, they
should be treated with loyalty.  I would
not have employees on the edge of their seat wondering if their job is safe
solely because of outside factors.  I
would also look out for the best interest of my stakeholders and make sure they
are being rewarded properly for their investment.  For other areas such as climate changes and
environmental protection, as I stated before, I would make sure my firm is
involved in the recycling campaign.  I
would have the company set aside a budget for water filters and fountains in
the office for reusable plastic water bottles. 
Additionally, I would have most tasks and paperwork be electronic to
limit the use of paper in the office.  I
would also start the tradition of donating to charities and giving back to heroes
as I mentioned before.  This would
greatly improve company morale and set the groundwork for great moral
values. 

 

8.
I have taken away much useful information from this class.  I thoroughly enjoyed my time in class this
semester.  I found the conversations very
intriguing.  I enjoyed hearing the
opinions of other people in the class and hearing multiple viewpoints.  I was also able to keep more up to date with
current events as our class required detailed discussions about what is
happening in the world today.  This was
my favorite aspect of the class.  I
really enjoyed keeping up to date with current events and discussing them with
other members of the class.  I also
enjoyed the case studies that we did in class. 
They provided real life scenarios in terms of decision making when it
comes to an ethical dilemma.  In the
future, I think it is very important to always protect your right to speak your
thoughts and ideas in a respectful manner. 
Going forward, I will always protect my right to free speech and decision
making.  All in all, I thoroughly enjoyed
this class and all it entailed including discussion about current events and
political opinions.

 

 

 

 

 

 

 

 

 

 

 

http://www.emeraldinsight.com/doi/pdfplus/10.1108/10444060910931620

 

 

 

 

 

https://www.americanbar.org/content/dam/aba/publications/pass_it_on/pio_summer2010_cleary_revolvingdoor_ethicalissues.authcheckdam.pdf