Ethics Reflections
Eryn Eledge
Business Communications 212
Section 01
April 25, 2012
Background and Objective
Ethics are a vital part of the business world. If proper ethics are not followed, a business or
company is bound to fail. Knowing the importance of ethics before entering into the business
world is a necessity. Many companies and corporations in the business world have come across
questionable ethical decisions, which they were not properly prepared for. Inappropriate ethical
decisions plague not only a company, but also every person who is a part of the company. One
wrong ethical move can destroy the lives of many people. In order to prosper and build a
reputable name in the business world, one must first know how to make ethical decisions.
The following paper is intended to show how many well-known companies have made unethical
decisions and how those decisions affected their lives. The ethical observations drawn from the
specific situations will be discussed as well as my own personal ethics objectives. Every decision
that is made must be done ethically; whether it is the decision to sneak into a movie for free or
the decision to allocate money in an unethical manner in a billion dollar company. Ethical
decisions related to large corporations, everyday life, and personal experiences will be examined
to show the impact of ethics.
Ethics Information
Information Acquired from the Five Corporation Presentations
Adelphia Communications Corporation
John J. Rigas founded Adelphia Communications Corporation in 1952 with his sons. Adelphia
provided cable to 31 states and Puerto Rico. Rigas also started two other companies, Adelphia
Media Services and Adelphia Business Solutions before his scandal broke out in 2002.
 Unethical Decisions: Spreading money around to various family-owned entities
o Ordered $6,000 worth of Christmas trees for family members under the company
o Ordered 17 company cars
o Had the company order 3,600 acres of timberland, costing $26 million, to seclude
his home from others
o Used money from his public company for his own personal luxuries

Repercussions of Unethical Decisions
o John J. Rigas and his son Timothy were both found guilty of conspiracy, bank,
and security fraud
o They claimed Chapter 11 Bankruptcy causing the company to shrink
o Many parts of the Adelphia Corporation also had to be sold off
o John and Timothy Rigas are both currently serving 15 to 20 years in jail for
embezzling
o Former executives James Brown and Michael Mulcahey were also arrested
Enron
Kenneth Lay founded Enron in 1985 when he merged InterNorth and Houston Natural Gas
together. By 1992, Enron grew to be the largest seller of natural gas in North America. Before
claiming bankruptcy in 2001, Enron employed well over 20,000 employees. Enron was also
named “America’s Most Innovative Company” six years in a row by Fortune. At the end of
2001, the “Enron Scandal” was released and the company crumbled. The company was
reportedly sustained by systematically planned accounting fraud.
 Unethical Decisions
o Created offshore entities that allowed them to hide losses, making them look more
profitable
o Executives began working with insider information trading
o Kept investors in the dark about the losses they were acquiring
 Repercussions of Unethical Decision
o Bankruptcy of the over $60 billion company in December of 2001
o 90,000 employees lost their jobs
o The state of California was sued for $6 billion in energy losses
o Kenneth Lay died of a heart attack before he was convicted of anything
o Executive Jeff Skilling, and many others went to jail and were sentenced for many
years
Arthur Anderson LLP
Arthur Anderson LLP was once considered one of the “Big Five” accounting firms. Arthur
Anderson and Clarence DeLany originally founded the firm in 1913. The firm was based on high
levels of accounting standards but struggled to maintain those standards with their clients’
demands to maximize their own profits. Arthur Anderson excelled until 2001 when they were
tied to the Enron scandal and lost credibility. As one of Enron’s main auditors, Arthur Anderson
eventually dropped as one of the “Big Five.”
 Unethical Decisions
o Shredded documents related to the audit of Enron, which led to the Enron Scandal
o Helped in the hiding of the Enron Scandal
 Repercussions of Unethical Decisions
o Nancy Temple and David Duncan were held responsible for the shredding of the
documents
o Arthur Anderson was found guilty of obstruction of justice in 2002
o The firm still exists today but is nowhere as large as they were in the past
o The conviction of Arthur Anderson was overturned in 2005
WorldCom Public Relations Group
Murray Waldron and William Rector founded WorldCom in 1983 as a discount long-distance
provider called LDDS. WorldCom merged with many larger corporations like Sprint. Although
WorldCom had a very humble beginning, they grew to be the second largest long-distance
telephone company in the United States. WorldCom was also one of the largest companies
dealing with worldwide Internet data traffic before their downfall in 2002.
 Unethical Decisions
o CEO Bernard Ebbers convinces the board of directors to give him over $400
million in loans and guarantees, which he then tried to cover up
o Scott Sullivan (CFO), David Meyers (Controller) and Buford Yates (Director of
General Accounting) tried to hide the company’s losses by falsely claiming
increased profits
o Company inflated revenues with false accounting entries
o Company underreported line costs
o Inflated the company assets by about $11 million
 Repercussions of Unethical Decisions
o Scott Sullivan was immediately fired and David Meyes resigned after scandal was
discovered
o Bernard Ebbers was convicted of 25 years in prison on March 15, 2005
o Many other WorldCom officials were faced with charges as well
Bernie Madoff
Bernie Madoff was a businessman, stockbroker, investment advisor, and financier who is the
most well known Ponzi-schemer in history. Madoff’s Ponzi scheme in the early 1990’s
defrauded thousands of investors of billions of dollars. A Ponzi scheme is a form of fraud that
lures investors in with promises of large returns but in reality there is no money in it for them. He
founded the Wall Street firm Bernard L. Madoff Securities LLC in 1960 and was the chairman
until his arrest in December of 2008.
 Unethical Decisions

o Madoff ran his entire firm on a Ponzi Scheme
o Promised money that did not exist to his investors
o Rather than confessing his scheme to the officials he confessed to his son who
turned him in
o Defrauded his clients of over $65 billion
Repercussions of Unethical Decisions
o Madoff pled guilty to 11 different federal felonies in 2009
o David Friehling, Madoff’s accounting front man pled guilty to many charges as
well
o Madoff’s right hand man, Frank DiPascali also pled guilt in 2009 and is awaiting
bail
o Madoff was sentenced to the maximum of 150 years in prison, where he is said to
feel as though he is “living like a king”
Information Provided in the Text
Movie Ticket
 The information in the Movie Ticket case presents a situation on whether a person should
sneak into a movie without paying for a ticket given the chance. Sneaking into the movie
is justified by the high price of movie tickets. Also, a friend uses the statement, “it
doesn’t hurt anyone” to justify the action. When asked what they would do in this
situation, a large number of people said that they would in fact sneak into the movie
without paying; a decision that is undeniably looked at as unethical. Although the price of
movie tickets is unreasonably high today, not paying for the movie ticket can allow a
person to think it is acceptable to make more unethical decisions in their life.
Travel Expenses
 The information involved in the Expense Voucher case explains how employees claim
items on their company expense vouchers that do not apply. Such items, such as tins of
cookies and hockey tickets, are placed on the voucher and paid for on the company’s
dime. Many employees believe that their unethical actions involving expense vouchers
are justified because they do so much for the company. In reality the employees who lie
on their expense vouchers are hurting the company that employs them, which in turn
hurts them as well. Any unethical action in a company plagues the entire company.
Warren Buffet
 The information in the Warren Buffet case presents the audience with a way to question
if a decision they are making is ethical or not. When making an ethical decision, one is
encouraged to ask how the decision would make them look as a headline of the largest
newspaper. Ethical decisions not only affect the person making them, but also any person
who will be exposed to them. Although one may think a decision is ethical, others may
consider their decision to be unethical. When making a decision a person must think
about how the decision will make them look in the eyes of others.
Rigged Elections
 The information in the Rigged Elections case presents an ethical decision that shaped the
reputation of Murry Gunty. After cheating in his election for the co-president of the
Finance Club at Harvard University, the Gunty name was plagued. Although Mr. Gunty
went on to become a successful managing partner of Blackstreet Capital, he is no longer
respected by many and is known as a cheater. Gunty’s decision to stuff the ballot while
he was in college hurt many others who were running for the position and lost due to his
unfair actions. The ballot-stuffing incident will eternally tarnish Mr. Gunty’s reputation.
Information Developed in Class Through Discussions
The “Chappaquiddick Incident”
 On the night of July 18, 1969, Ted Kennedy drove his car into a tidal channel where he
left his passenger, Mary Jo Kopechne, to die. Rather than report the incident after
Kennedy freed himself from the vehicle, he fell asleep in a motel for the night and left
Mary Jo to suffocate in the car. It was found that if Kennedy would have reported the
accident, Kopechne could have survived. It is not known whether Kennedy did not report
the accident because he was intoxicated, having affair with Kopechne or simply in shock.

Many unethical decisions were made the night of Kennedy’s accident that could have
prevented the death of an innocent woman.
o Kennedy’s decision to only save himself
o Kennedy’s decision to drive Kopechne, a woman half his age, home after a party
o Kennedy’s decision to possibly have been driving under the influence
The Watergate Scandal
 The Watergate scandal refers to the incident involving Richard Nixon where five men
who were connected to Nixon snuck into the Watergate complex and stole tapes.
Knowing about this incident, Nixon had the opportunity to turn in the tapes as well as the
men who snuck in to steal them, but instead he chose to cover up the actions. Some chose
to believe that Nixon’s actions were based on his insecurities from losing copious
political races.

Regardless of his reasons, Nixon had the opportunity to make the right ethical decision.
o He could have not covered up the actions
o He should have come out with the truth and fired those who had preformed the
unethical actions
o After the whole scandal he should have at least offered an apology to the
Americans
AT&T
 AT&T has also had unethical actions take place in their corporation. Such actions as a
$300 write-off by an employee’s boss and the purchase of $40,000 wet bar that was
claimed as a cable display case are used as examples. Although these unethical actions
were not publicized and shown to the public, their unethical effects still jeopardize the
company. Unethical decisions, regardless of size or severity, tarnish a company’s
reputation and allow the company’s employees to believe that it is acceptable for them to
also make unethical decisions.
Ethics Conclusions

Unethical decisions range in sizes and severities. Whether the decision is small or large,
an ethical mindset should be applied to ensure that one lives ethically. Even if an ethical
decision appears small at the moment, it can evolve into a more serious issue. This
conclusion is proven through the cases such as the Movie Ticket scenario. Although
sneaking into a movie without paying for a ticket may seem as though it is a small
unethical decision, it can morph into the temptation to steal larger and more important
items in the future.

Determining whether a decision is made in an ethical manner depends upon those who
are making the decision. A decision that seems ethical to one may seem unethical in the
eyes of another person. Personal ethics rely on the morals and mindset of the person who
is making decisions. The Warren Buffet article provides a sufficient example showing the
audience a way to ensure that the decisions they make are ethical. By first thinking of
how a decision can be portrayed to the public, one is encouraged to think about their
ethics as well as the ethics of their peers.

Making a decision in an ethical manner not only affects a person in the moment they are
making the decision, but also for the rest of their life. The choice to make unethical
decisions shape a person’s reputation. Unethical decisions have the ability to permanently
plague one’s life. As the Rigged Election case proves, one unethical decision can remain
on a person’s record for a lifetime. Gunty’s wrongful decision to cheat through his
election branded him as a cheater and a liar.

Regardless of the personal consequences, choosing to be ethical is the correct decision.
Ethical decisions affect copious people and making a decision selfishly can have negative
consequences. Kennedy’s decision making in the Chappaquiddick case is an example of
selfish and unethical decision. If Kennedy would have made the just decision,
Kopechne’s life could have been saved. Kennedy’s decision to not make the ethical
decision and call the police after saving himself from the vehicle cost a young woman her
life.

Unethical decision making have the potential to ruin any person or company, regardless
of size or prestige. Many people chose to make unethical decisions because they believe
their company is too prominent to be jeopardized by an unethical decision. Bernie
Madoff found the opposite to be true. Although Madoff was one of the most successful
investment handler’s of his time, he found that running an unethical Ponzi scheme
destroyed his entire billion-dollar company. Contrarily, the Madoff’s prominence made
the consequences of his unethical actions worse.

The act of covering up unethical decisions postpones the consequences but also heightens
them greatly. Unethical actions cannot fully be hidden for an extended amount of time. In
the cases of Watergate as well as Enron, influential people made the choice to hide their
wrongful actions. As a result, an immense amount of disdain as well as a loss of respect
was cast upon the men. Withholding information from people associated with a business
is an unethical decision than cannot last.
Personal Ethics Objectives

Ethical decisions are a pivotal tool in determining the character and reliability of a
person. Because of the impact that ethics have on every aspect of life, making decisions
ethically is pertinent. After witnessing how seemingly small unethical decisions escalated
into extreme consequences, I will consciously involve ethics into my decisions.

The manner in which a person makes an ethical decision affects their own character but
also the character of the people around them. If one associates with a person who is
known to make unethical decisions, that person’s character is also questioned. Ethics are
a reflection of morals. The people that one chooses to acquaint himself with are a direct
reflection of that person. Knowing this, I will examine how my ethics, as well as the
ethics of my peers make me look.

Although making ethical decisions directly affects those who are making the decisions, it
also affects how others make their own ethical decisions. As a young child, I once lost
my wallet at an amusement park. I was devastated. Weeks later my wallet was returned to
me with every penny still safe. To this day, the feeling of relief I experience is engraved
into my brain. Remembering this feeling allows me to make the proper ethical decisions
because I am aware of how ethical decisions make others feel.

The conscious is a pivotal tool in determining how one lives their life. Making poor
ethical decisions corrupts the conscious, which in turn corrupts one’s life. A strong
conscious is a sign of a strong person who has strong ethical principles. As a person with
a strong conscious based on the way I was raised, unethical decisions are not acceptable.
In the hopes of keeping my own conscious clear I will also strive to keep the conscious of
those around me clear as well.

How one makes ethical decisions not only affects their mental health, but also has the
ability to damage their physical health as well. Related to the case of Enron, Kenneth Lay
died of a heart attack shortly after being revealed as a fraud. Concealing his secret and
making unethical decisions undeniably led to the death of the mogul. The choice to make
an unethical decision is also the choice to deteriorate the body more rapidly. Making the
proper ethical choices in life will not ensure me a long life but it will prevent me from
adding undue stresses.

A reputation is the most representative tool a person possesses. Choosing to make
unethical decisions will directly harm a person’s reputation. As a person who values her
reputation over anything, making unethical decisions at the risk of damaging my
reputation is unthinkable. Having my reputation damaged as Mr. Gunty and Mr. Madoff
did is not worth any unethical decision in my mind, regardless of severity. A person’s
reputation cannot be replaced just as unethical decisions cannot be undone.
Flesch Kincaid Measurements
 Grade level: 11.0
 Readability: 49.4
 Words per sentence: 17.8