MGMT 3020 Lecture Notes - Lecture 9: Consumerism
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- Hart’s quadrant
* Case Assignment Part #1 (+ video submission) due November 3rd
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CHAPTER 3: Whose Responsibility?
The Financial Crisis:
Not only effected finance, but corporations and ethics as well
In pursuit of process fess, brokers sold adjustable mortgages to those who could
not afford them
Loans were then packaged and sold on to investors (in pursuit of annual bonuses)
With insufficient oversight by regulators, these socially irresponsible actions were
repeated for years
When housing prices declined and mortgage defaults soared, however, the lack of
social responsibility by brokers, bankers, credit-rating agencies, and Wall Street
resulted in dire consequences and bankruptcies for many firms that did not
No ethical conduct or accountability!
Do Businesses and Stakeholders Really Care?
Frequently, the focus is on responsibilities of business, while ignoring the
responsibilities of stakeholders (consumers, in particular) to demand socially
responsible actions from firms
If consumers began demanding specific minimum standards from firms and took
their business elsewhere if the firms failed to comply, those firms would be forced
to change their practices
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