in 2008 in the financial institutions collapse and the 2008

in 2008 in the financial institutions collapse and the 2008 recesion, many financial institutions, who were involved in selling hiigh risk mortgages, were paying executivves enormous sume of money (lehman)   Consider the ethical and legal implications, both to shareholders and society, of business agents taking risks with money they do not own in return to the possibility of enourmous personal returns.

Solution

Stakeholders supply a company with its productive resources. As a result, they have a claim on and stake in the company. Because stakeholders can directly benefit or be harmed by its actions, the business ethics of a company and its managers are important to them.

The directors and managers of a company are legally liable for the actions they take to manage a company’s resources. They can be sued if they fail to carry out their duty to protect the assets of stockholders and the health and safety of employees. At the other end of the scale, companies that are performing poorly must abide by the laws that govern how they should restructure or dissolve their companies.

In case declare personal bankruptcy, so a company can declare Chapter 7 bankruptcy, in which case it is dissolved and its remaining assets go to its creditors and owners.Large companies typically declare Chapter 11 bankruptcy,in which case its creditors and owners cannot seize its assets while the company prepares a new business model. A judge decides if the new model will allow the company to survive and perform better. If so, it is approved, and the company is allowed to leave Chapter 11 and function normally.

Business ethics comprises the principles and standards that guide behaviour in the conduct of business. Businesses must balance their desire to maximise profits against the needs of the stakeholders. Maintaining this balance often requires tradeoffs. To address these unique aspects of businesses, rules- articulated and implicit are developed to guide the businesses to earn profits without harming individuals or society as a whole.

Ethical issues permeate business decision making and affect the efficiency and effectiveness of a nation’s business commerce. The result of ethical behavior is a general increase in a company’s profitability and in a nation’s standard of living, well-being, and prosperity .