BUS 410 Chapter Notes - Chapter 5: American International Group, Share Repurchase, John Stuart Mill
17 Feb 2016
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Chapter 5: ethics and business decision making (sections 2-5 only) The prevalence of buybacks: 2005 to 2007, 1. 4trillion on stock buybacks, investment banks lehman brothers, goldman sachs. Startling executive decisions american international group (aig) Management entered into an area with little expertise insuring complicated financial contracts b federal bailout. Simultaneously, management spent almost 400k on a vacation. The problem with executive bonuses became paramount after the 2008 financial crisis. Executives were paid a percentage of their profits, regardless of how risky their investments were (ex: subprime mortgages, earned huge bonuses even though very risky) Ethical reasoning examining the situation at hand in light of personal ethical standards. Religious ethical standards (ex: 10 commandments), actions are inherently immoral. Kantian ethics: categorical imperative evaluation actions in light of consequences if everyone performed that action. The principle of rights: duty-based ethics believes in basic human rights. Greatest good for the greatest number of people.
