`When the reported that the Adelphia Corporation was facing imminent collapse, shock waves ran through the business world. The reveal of Adelphia scandal made the world rethink their business practices. The story of Adelphia presents how one of the largest companies in the United States could also cause on of the largest cases of fraud in business history. By taking a closer look into the Adelphia scandal we are better able to determine what went wrong and what can be done in the future to prevent these types of instances.
This hidden information led to questions about how we evaluate businesses. It can be difficult to properly analyze new businesses in the age of the internet and pointed the need to reevaluate this system. Not only did Adelphia come under fire from critics, so did Wall Street (Barlaup, Hanne, & Stuart, 2009). Their loss of objectivity became a big concern for investors. Fezler states, “Some feel that investment banks often make more money from mergers or underwriting than they do from broker fees.” (Fezler, 2011). Conflicting loyalties should not have a place in Wall Street, yet the Adelphia scandal clearly laid open deep seated mistrust. Investor’s felt that Wall Street had failed to ask the needed questions to protect Adelphia’s investors due to these conflicts of interest (Hanson, 2011).
The ethical question posed by the Adelphia scandal, puts businesses in a tough position as to whether to break the confidence of investors and face criminal charges or to come forward with the truth and risk losing investors. I believe that the utilitarianism method would have been helpful in solving this ethical dilemma. Utilitarianism, developed by Bertram, means an act is moral if it produces the great ratio of good to evil for everyone involved ("3 steps to," 2008). This process would be with support of the largest number of employees and investors. This invokes a greater ratio of good.
Bertram would suggest that utilitarianism allows for decision making by analyzing cognitive biases and working out a solution that benefits the greatest number of people. Cognitive biases are defined as “thinking patterns based on observations and generalizations that may lead to memory errors, inaccurate judgments, and faulty logic.” (Stanovich, 2010). Several different types of cognitive bias include our beliefs, hindsight, omission, and confirmation (Stanovich, 2010). All make up our core understanding of decision making.
Belief bias relies on our prior knowledge and understanding (Stanovich, 2010). This also includes asking, “Will this produce the best outcomes for everyone affected?” or “Are we maximizing good and minimizing harm for everyone affected?” (“ethic ops”,). In this case Adelphia would have helped everyone better if they had divulged their problems when they occurred instead of misleading others, quick action would have minimized the affects. This is valid method because everyone is treated the same and everyone receives both the positive and negative benefits of coming forward with the information. (“ethic ops”,). What we know or believe to know affects why we chose one option over another. Hindsight bias explains why individuals feel that a decision was unavoidable after it has already happened (Stanovich, 2010). Often we rely on hindsight to explore current situations.
Everyone can relate to an instance where we have made a decision we wish we hadn’t. By looking at hindsight we are able to determine what processes worked and what did not in terms of decision making. Omission bias refers to the human nature of leaving out information they feel may be questionable of dangerous (Stanovich, 2010). For example we may make the decision to omit the fact that we told a fib for fear of getting in trouble. Finally confirmation bias referred to what we see and expect to happen as a result of our decision (Stanovich, 2010). For example if we are trying to decide to make a decision to gamble on a card game, we may see someone pick a heart card out of a deck of cards once every four attempts, we may use this observation to believe we will also have a one in four chance of drawing a heart card should we choose to play the game.
In decision making, cognitive biases can either help or hinder the decision making process (“calculating consequences”). What we understand or believe we understand most assuredly influence why we chose the options we do. Developing a framework to solve ethical dilemmas is essential for compassionate business practices (“ethics”). Virtue ethics refers to standards of behavior that we personally feel will make us better people. Developing a “good” life or career may be achieved with a framework based on virtue ethics(“philosophy”).
Many great philosophers have debated the meaning of virtue ethics and the best means to become more virtuous, however, in reality virtue means something different to every person ("Virtue ethics," 2003). To determine virtue we must first ask what purpose that decision will serve (“ethics”). Being virtuous can sometimes be difficult. For example in this instance admitting Adelphia’s mistakes would hurt investors and cause them to face criminal charges.
Virtue ethics is about achieving the fullest potential of our humanity ("Virtue ethics," 2003). Honesty, courage, patience, compassion, and integrity are all virtues that are essential for a good nurse to possess ("Virtue ethics," 2003). To establish this framework we may look to the approaches of Ruggiero for guidance. He suggests that when making a hard moral decision, we usually have to choose one option and let go of the others. Ruggiero assigns value to each option, to make the decision one must look at these values and at the cost of the values of the other options (Green, 2004). This ranking of values calls us to rank our own system of beliefs and weigh out the outcomes of all the option (Green, 2004). This system offers a way to justify our decisions based on ranking.
Obligation is also an important factor in Ruggiero’s method (Green, 2004). Obligation refers to the actions that we should take (Green, 2004). If the values assigned to the options are at the expense of our obligations then the decision may not be the most virtuous one. One must also look at the consequences associated with our actions. Ruggiero’s method doesn’t rank the various outcomes, but it does investigate them to determine who will be effected either positively or negatively (“philosophy”).Ruggiero’s methods may not always lead to virtuous decisions, but some elements of the process may be beneficial.
Lonergan also proposed a method for helping make ethical decisions. His method suggests that when making a decision we should first look to science for our methodology, and look at the procedures of natural science, such as the inner working of the human mind (Grace, 1996). Lonergan’s cerebral approach looks for basic patterns of action within the brain to explore every option and outcome (Grace, 1996). Finally the relevance of the method in relationship to other methods is encouraged.
After looking at all of the options, one must determine which one best fits my personal virtue ideals. This is the option I will take. Even though we think out all of the options it is important to realize that we are all human and sometimes we do make the wrong decisions ("A framework for," 2012). If the option turns out to be the wrong one it is important to rethink the situation and test other options that also fit with our sense of virtue ("A framework for," 2012). Finally we must turn back to Lonergan’s method to look at the outcomes and think about the positive and negative aspects that resulted.
Decision making methods are a learning process, one may not always end up with optimal results, but by being prepared and thinking carefully one can lessen the chance of making a poor decision. In the medical field decisions can sometimes be life or death. Keeping a cool head and always thinking with honesty, integrity, and compassion in mind will surely help afford me success in nursing.
Throughout this practice, I am further convinced that adequate strategy is needed to address concerns and allow for growth for Adelphia. Analyzing trends is also essential to professional identity; this includes patient characteristics, staffing, and typical day to day practice (Whitter, 2006). Proper staffing includes finding honest accountants, something Adelphia could have used! Professional identity also includes an understanding of leadership, management, and education. I feel that being an empathetic and ethical person is a key trait that will help businesses be successful. Utilitarisim is simply a way to practice these types of ethics. There can be many different factors that determine an individual’s decision making process. These including past experiences, cognitive biases, age and individual differences, and belief in personal relevance, commitment, and influence (Stanovich, 2010). By taking a closer look at cognitive bias one can gain a better understanding of the decision making process as a whole.
In conclusion, the scandals associated with the Adelphia Corporation changed how business practices are regulated and how Wall Street gathers their financial information. Adelphia proved to be guilty of many poor business practices, including presenting false information to investors, conflicting interests, and underwriting. The failure to determine Adelphia’s dishonesty before it had reached such an insurmountable force shows a serious lack of inadequacy from both Wall Street and the US government.
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