Business Ethics: Adelphia Scandal
analytical Essay
1461 words
As the turn of the 21st Century evolved, it appeared as if Adelphia Communications Corporation was on a direct path of success; unbeknownst to their investors and the public, they were in reality on a direct path of destruction instead. Unfortunately, Adelphia is not the first major company in the history of the United States’ business world to lose the trust of the American public, but it is certainly one of the most notable ones to do so. As the events surrounding the Adelphia scandal unfolded in full view of the public eye, a multitude of media outlets were there to broadcast the destruction and distrust to the masses leaving many wondering if the term “business ethics” was actually nothing more than just an oxymoron. Throughout this paper, we will discuss the events surrounding the rise and fall of the Adelphia Communications Corporation and identify two of the ethical problems associated with the scandal while applying them to the deontological framework and Immanuel Kant’s Categorical Imperative.
The Adelphia Scandal
The year is 1952 and a young John Rigas purchased a cable company for a mere $300 in Coudersport, Pennsylvania with high hopes of building the company into a successful family owned and operated business (AICPA, 2005, para. 3); a business that would remain unparallel to the rest of its competition. In the late 1990s his dreams came to fruition; John Rigas, along with a few close family members and investors, purchased Century Communications for $5.2 billion and merged the companies together becoming the 6th largest cable company serving more than 5.6 million subscribers (AICPA, 2005, para. 4). Ensuring that the majority of Adelphia’s voting stock and control of the board remained in the hands of f...
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...ournal, 24(2), 183-203. Retrieved on November 19, 2013 from http://search.proquest.com.ezproxy.trident.edu:2048/ docview/274702092/141F1B825272DA090E0/1?accountid=28844. Markon, J., & Frank, R. (2002, July 25). Adelphia officials are arrested, charged with ‘massive’ fraud – three in the Rigas family, two other executives held, accused of mass looting. The
Wall Street Journal. Retrieved on November 19, 2013 from http://search.proquest.com. ezproxy.trident.edu:2048/docview/240552483/141F2C0F469AD5ECC1/2?accountid=28844. Pecorino, P. A. (2000). The categorical imperative. Retrieved on November 16, 2013 from http://www.qcc.cuny.edu/socialsciences/ppecorino/intro_text/Chapter%208%20Ethics/ Categorical_Imperative.htm
Sevenoaks School. (2011). Deontological ethics. Retrieved on November 22, 2013 from
http://www.sevenoaksphilosophy.org/ethics/deontology.html
In this essay, the author
- Explains that two practicing deontologists may make vastly different decisions based upon their self perceived duty and loyalty even if they were each placed in the exact same scenario.
- Explains that kant's categorical imperative allows for more flexibility in one’s decision making process by attesting that one should base their decisions off of how they would want others to universally base it.
- Analyzes how immanuel kant's categorical imperative serves as a guide when applying ethically decision-based framework to different situations, noting that not every situation will arrive at the same conclusion.
- Analyzes how adelphia communications corporation lost the trust of the american public after the scandal unfolded.
- Narrates how john rigas purchased a cable company for $300 in 1952 with high hopes of building it into an unparallel family owned and operated business. in the late 1990s, he purchased century communications for $5.2 billion and merged the companies together.
- Opines that there are a multitude of ethical problems that plague the adelphia scandal, but for the sake of brevity we will only address the following two and access how they each relate to deontological ethics and immanuel kant’s categorical imperative.
- Explains the purposeful mismanagement of the accounting books to deceive shareholders and increase the company’s stock prices under false pretenses.
- Explains how adelphia fraudulently excluded billions of dollars in liabilities from its consolidated financial statements, inflated earnings to meet wall street expectations, and concealed blatant self-dealing by the rigas family.
- Analyzes how the rigas family illegally used public company money for personal use in the form of unauthorized loans and the use of company property/amenities.
- Analyzes how adelphia employees failed to apply the deontological ethical framework to the illegal use of the public company's money.
- Cites barlaup, hanne, & stuart, in restoring trust in auditing: ethical discernment and the adelphia scandal.
- Analyzes how adelphia officials are arrested, charged with ‘massive’ fraud – three in the rigas family, two other executives held, accused of mass looting.
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- Essay On Adelphia Scandalexplanatory essayThe Adelphia Communications Scandal John Rigas started Adelphia Communcations in 1952 with the help of two partners, but soon bought it out. The company was taken public in 1986 and as a result would have to abide by the regulations of the SEC. By the early 2000s, Adelphia was one of the top cable companies in the United States. This was the peak of a corporation that would begin a downward spiral over the first half of 2002 as a result of fraudulent use of the company’s assets at its’ shareholders expense.
In this essay, the author
- Analyzes how the adelphia communications scandal began in 1952 with the help of two partners, but soon bought it out. by the early 2000s, the company was one of the top cable companies in the us.
- Explains that the rigas family used corporate money for personal use, including to build a golf course on their own private land, and to cover the expenses of the company's aircraft.
- Explains that the ethical decision to use the company's money for personal reasons is an ethical issue.
- Explains how the rigas family hid their transactions in the cash management system, and manipulated company metrics and numbers to hide the actual current state of the company to shareholders.
- Explains that deontological ethics and kant's categorical imperative can be used to analyze the adelphia scandal.
- Explains that act deontology states that every ethical decision is a separate occasion and by consulting out conscience and our inner being, we can be led to the right decision.
- Explains that the rule deontological ideas are the basis for immanuel kant's categorical imperative theory.
- Explains the categorical imperative, which explores the idea that an act or a decision can still be morally good as it follows the guiding rules of the universe.
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In this essay, the author
- Explains that ethics policies are implemented in almost all businesses. companies search for candidates that will be moral in their actions to ensure long-term financial success. enron corporation is best known for the scandal that led to the bankruptcy of a company with more than 60 billion dollars in assets.
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- Opines that three individuals acting alone did not create the enron scandal. twenty-one people in total were found guilty of committing this fraudulent crime.
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784 wordsRead More