The Immoral Practice of AIG
Introduction
In the fiscal year of 2008 one of the largest insurance companies was faced with having to file chapter 11 bankruptcy. This company was American International Group which will be referred to as AIG. To avoid economic failure American International Group turned to the government to seek financial assistance. Since the magnitude of AIG was so enormous the government felt that this company could not fail, because it would have a strong impact on the economy. A whopping 85 billion dollars was advances to the company to assist with their recovery plan. From there things made a turn for the worse due to the un-explanatory disbursement of the funds that was given to AIG. This has caused a massive effect on public relations that will be explained throughout this document.
Hiding Essential Information
It has been in general agreement amongst the public in regard to the ethics that have been violated surrounded by the AIG scandal. According to The Practice of Public Relations there’re six perquisites that a company should adopt in order to perform good public service. One of the first obligatory is Pro communication which has been abused in every measure (Seitel, 2007). With AIG attempting to withhold and conceal the bonuses that were disbursed of 165 million is clearly abuse. Considering the bailout was given by government of taxpayer’s money in order to avoid chapter 11 bankruptcies. There is no argument that the public should have been without a doubt known every dollar spent in their recovery (Postal, 2009). What can be argued were the bonuses necessary?
Indecent Judgment
The accounting practice of AIG was morally wrong and goes against the key public relations principle of Ethics. This co...
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Show More...o turn their securities back into AIG and demand billions of dollars. AIG was faced with a problem and they had to start asking subsidiary insurance companies to liquidate their pension and insurance holdings so they could cover their losses. If this happened those customers would have received a fraction of the money due to them and would ensure a global crisis. Of all the people complaining about AIG, Goldman-Sachs was doing it the most frequently and the loudest. An audit of AIG showed that they had no liquidity to pay off the bulk of what they owed so the Federal government issued a bail out of $80 billion which later elevated to $200 billion. Goldman-Sachs received the largest percentage of that $200 billion and would have torched the entire country in order to get that money that felt they deserved; and the housing-market bubble was just at the beginning of it.
McFarlan, F. Warren. CareGroup. Ed. Robert D. Austin. N.p.: Harvard Business School, 2005. 1-22. Print.
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The overall view clarification of the issue illustrates the evolution of Enron’s innovations and fraud. The business records of the company financial economists and accountant’s uncovered considerable number information and incentive issues. The issues both complicate and potentially resolve the appraised valuation questions such as; earnings growth, stock splits, dividend changes, free cash flow limitations, share price-based compensation and hedging of market risks. The Enron Company contributed large sums of money to non-profit organizations for the purpose of acting on probable ethical issues before they become legal dilemmas. The company failed to inform its consumers of the business decisions made even though they had knowledge that the person at the other end of the business deal did not. The Enron Company filed a Chapter 11 to seek bankruptcy protection. The uncertainty of the company’s standings impacted the market’s confidence in...
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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.
Morgenson, G. (2005, September 17). Clues to a Hedge Fund's Collapse. In The New York Times. Retrieved November 1, 2013
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Middleton, Kent, and William E. Lee. The Law of Public Communication. N.p.: Pearson Education, 2014. Print.
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