Lessons from Lehman Brothers
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Lessons from Lehman Brothers
The unethical culture that that was practiced by the top executive of Lehman Brothers Company that contributed to its downfall, is still being practiced by several organizations globally. The company encouraged risk oriented culture for financial gain and questionable characters were overlooked. The professional ethics came behind profit with the employees who made questionable deals hailed. This affected the morale of the employees and eventually bred misconduct. The Lehman brothers are reported to have used excessive accounting manipulations (Dillian, 2011). Just like Lehman’s CEO’s negligence or simply willful blindness, the top management of the several organizations globally has increasingly encouraged the filing of financial reports that are very misleading and thereby abusing the accounting procedures.
In the context of Lehman Brothers Company, it is significant to note that the unethical culture is still rampant since the management of several organizations is corrupt and the driving force is the appetite for money (Shirkhedkar, 2007). Just like the company in this case study, organizations have become greedy and this has subsequently motivated them to falsify the information that provides the true financial health of the organizations. Indeed, organizations are increasingly concerned with their image to the stakeholders and are willing to engage in riskier and bigger deals to maintain this. In a nutshell, the unethical practices such as the one seen in the company in this case study continues due to unrealistic plans of the company management and subsequently making money the ideal objective.
Businesses are expected to act ethically and there is nothing unreasonable with this school of thought. The organizational culture should be that which encourage responsibility, accountability and good behaviors. The companies should not just be concerned with the profits or financial gains but rather there must be social responsibility and adherence to ethical standards. It can be seen that the unethical practices within Lehman Brothers Company led to its collapse. Therefore, it is realistic for the organizations to act ethically not just for the sake of stakeholders but also the company.
References
Dillian, J. (September 13, 2011). Street Freak: Money and Madness at Lehman Brothers: A Memoir, New York: Simon and Schuster.
Shirkhedkar, J. (2007). Saving Lehman, One person at a time. McGraw-Hill,
