Impact on Society and the Company both of PerceivedUnethical Behavior by Management.

Impact on Society and the Company both of Perceived Unethical Behavior by Management
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Impact on Society and the Company both of Perceived Unethical Behavior by Management
The movie under study is the Inside Job released in 2010. It is a documentary that broadly analyzes the financial crisis that took place in 2008. In summary, the movie shows how deregulation and total freedom to the financial industry resulted in the financial crisis. The financial sector made billions of dollars at the expense of the taxpayers and general public investment. In the accountability section, the movie shows that the people responsible for the crisis did not suffer any consequences, and some of them are still in positions of power. It is evident that reformation in the financial industry is necessary.
Concept of Social Responsibility in Relation to Management Behavior
According to the corporate governance principles supplied by OECD, corporate social responsibility (CSR) is highly linked with blameless corporate governance. Additionally, CSR results in a positive impact on consumer behavior. All actions taken for part or the entire society is considered CSR. These activities are the management’s tactic that helps enhance social issued. When corporations focus on performing by doing the right thing they give employees the drive to engage in both efficient and socially responsible behavior. Relationship between Corporate Social Responsibilities and Economic Performance
In 2014, Anna Blajer-Golebiewska performed a study on Polish companies called “Corporate Reputation and Economic Performance: The Evidence from Poland.

” It showed that there was a weak association between corporate social responsibility (CSR) and corporate performance. Companies with higher equity invest more in corporate social responsibilities. The study concluded that there was a correlation between CSR and its economic performance regarding profits. Also, companies with responsible leadership reported higher net profit per shares. Therefore, there exists a relationship, albeit weak, between CSR and economic responsibility.
Value-based Management and its Relationship to Organizational Culture
Companies like Walt Disney, Starbucks Coffee, and JetBlue Airways to name a few, have implemented organizational culture based on values. Strategies for sustaining, strengthening, and altering culture ought to focus on the value system of the organization. Therefore, management should understand its values and their relationship to its employee’s beliefs, goals, attitudes, ethics, and behavior so its dynamics in the evaluation of organizational culture. Values influence perception, decision-making and set the limitations of ethical behavior in making decisions. Conclusions on ethics can be done using decision making. Character encourages managerial and corporate success in firms.
Competing Ethical Frameworks and their implications for management behavior
Economic competition can destroy ethical behavior in management. In certain situations, unethical behavior can reduce production costs for example in child labor or increase revenue for example commercialization faculty research in a university. In a market, if one firm participates in such unethical behaviors, other companies will do so as well to avoid competitive disadvantage. Equally, in the long run, competition increases ethical standards. When companies grow revenues, they are more willing to pay for ethical behavior.
Reflection from the Film
The documentary is an excellent demonstration of what the lack of CSR in management practice can do to the industry. The Wall Street firms discussed, didn’t have sound CSR practices. The culprits had modeled securities with the purpose of trading them and betting on their failure. It is clear that the crisis was not an accident but rather as a result of an out-of-control industry. Iceland relaxed environmental laws allowing Alcoa’s smelting plants to damage the pristine landscape. Furthermore, privatization of banks caused the concentration of wealth in just three banks. KPMG gave an AAA rating to the banks but eventually 320,000 Icelanders lost their life savings and source of income while unemployment levels multiply by three. Application of corporate social responsibility to the financial industry’s business model through reformations.
The CEOs, leaders, and managers behaved unethically. First Citicorp and Travelers merged to form Citigroup thus violating the Glass-Steagal Act that forbids making precarious investments with customer deposits. This merger acted as the cornerstone of several other mergers causing the financial crisis. After deregulation, financial companies participated in fraudulent activities such as money laundering, bribery, fraudulent accounting methods among many others. The CEOs consciously made all these decisions that resulted in the crisis. To this day, the financial leaders have not been held accountable for their actions. Rather than getting prosecuted, the leaders paid large sums of money. Joseph Cassano, the head of AIGFP, was retained as a consultant with a salary of 1 million dollars per month. Economists’ academics and professors who supported deregulation were employed as advisors of the country and hired as directors of the large financial firms.
As a manager, the events of the financial crisis will act as a reference point for the effects of poor management. I will make it my purpose always of adopting healthy practices like CSR and value-based management. Good management will go a long way in ensuring my employees, bosses, clients, and customers will respect and appreciate my leadership style. Ideally, I would want to be a perfect manager who runs an ethical and profitable company, but this may not be realistic since a manager also has to delegate work which may create an opening for fraudulent acts.