Similarities and Differences between Madoff and Gioia
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Compare & Contrast the Ethical Decision Making Principles Applied Or Violated By Bernie Madoff And Dennis Gioia
In the business world, organizations are often faced with situations that demand sound ethical decision-making principles. Applying ethics in such cases is a challenge because if care is not taken, adverse impacts may result. Bernie Madoff and Dennis Gioia are examples of individuals in business who experienced adverse consequences for violating ethical principles. Herein are the similarities and the differences of the ethical decision-making principles applied or violated by Bernie Madoff and Dennis Gioia.
Similarities
Both Madoff and Gioia violated ethical decision principles such as virtue ethics and universalism. Virtue ethics bases its self on character traits such as being truthful. Both Madoff and Gioia were in positions of trust; thus, they should have portrayed an appropriate level of caution in their fiduciary duties, but, they breached the trust. Madoff misused his power as the fiduciary of the funds and started to fabricate returns creating false account statements (Jordanoska, 2018). Also, Gioia abused his trust as the trustee of safety, risking the lives of the Ford Pinto riders. Universalism considers the risks and welfare of all the parties involved when making decisions. Madoff and Gioia did not take the needs and values of the clients seriously because the decisions that they made only favoured their cause. Madoff persuaded millions of people to invest their money with promises of 50% retain to their investment in 3 months, but, he would divert the investors’ money for his wealth and to pay earlier investors. Despite reports of burned-out Ford Pintos, Gioia failed to analyze the accidents to trace their cause and do a recall because the Pinto would have to be eliminated from the market implying fewer profits.
Differences
There are two differences between Madoff’s and Gioia’s cases. The first one is on the principles of legal entitlement and the second one on the principle of reputation. The statutory entitlement principle is grounded on the moral and legal rights. Here, Gioia violated the more legal severe basis for citizen’s legal rights to including the right to life, given that the pintos killed close to 30 people9 Strother, 2018). In contrast, Madoff violated a less severe right because he violated societal norms such as limiting an individual’s pursuit of happiness by taking away their hard-earned money. When the Ponzi scheme crumbled under the weight of the 2008 market depression, it resulted in a fraud valued by regulators at approximately $64.8 billion. Consequently, a lot of people who had made their investments were angered by Madoff’s actions. Concerning reputation and morale, Gioia applied unethical means to encourage the inappropriate conduct of other employees to maintain Ford’s image. Gioia knew that the Pinto had a defective engine system. Still, instead of fulfilling his ethical obligation to recall, he covered for the actions of the engineers and so, they continued to manufacture faulty engines. Contrary to Gioia, Madoff did not maintain the reputation of the schemes by covering for the actions of his employees; rather, he prepared false statements that made the investors believe that his company was still making profits.
Applying ethics to business demands the sensitivity to ethical issues that may arise as a result of using a given method as the overall decision to resolve an issue. A company can ensure adverse effects do not result by maintaining the virtues of ethics and observing universalism. Business can also ensure that they do not infringe people’s rights and that they use ethical means to preserve their reputation.
References
Jordanoska, A. (2018). Bernie Madoff and the crisis: The public trial of capitalism. By Colleen P. Eren (Stanford University Press, 2017, 214pp. $25.59 ppb). The British Journal of Criminology, 58(5), 1271–1274. doi: 10.1093/bjc/azy008
Strother, S. C. (2018). When making money is more important than saving lives: Revisiting the Ford Pinto case. Vehicle Dynamics. doi: 10.18063/vd.v0i0.352