This paper discusses the unethical business decisions of Putnam Investments, which was involved in one of the worst trading scandals and the first in the mutual funds industry.
The paper explains that one’s personal views cannot completely support whether Putnam Investments made ethical decisions; therefore, this ethical evaluation utilizes the Stakeholder Theory, Utilitarianism, Friedman’s Approach, Aristotle, and Kant’s deontology. The author points out that market-timing is a serious issue in the mutual fund arena; it may not necessarily be illegal, but is definitely frowned upon in the business world. Milton Friedman’s profit theory would argue that Putnam’s market-timing fraud is unethical because the fund managers were not acting in the best interest of the company. The paper argues that, using Kantian ethics, Putnam is responsible and should be held accountable for the aftermath of its mistakes.
Table of Contents
Introduction
Background
Case Analysis
The Stakeholder Theory
Utilitarian View
Friedman’s Approach
Aristotle’s View
Kantian Deontology
Our Personal Analysis
Recommendations
Conclusion
Table of Contents
Introduction
Background
Case Analysis
The Stakeholder Theory
Utilitarian View
Friedman’s Approach
Aristotle’s View
Kantian Deontology
Our Personal Analysis
Recommendations
Conclusion
The stakeholder theory of the modern day corporation states that managers do not have a duty to stockholders only, but to stakeholders as well. Stakeholder is a more broad term that includes anyone who has stake in a particular firm. For instance, suppliers, customers, employees, stockholders, and the local community can all have stake in a corporation according to the stakeholder theory. By having this connection to the corporation, the stakeholders are entitled to a civil duty from the managers of the company. Their opinions on certain issues have to be taken into consideration when making business decisions because all stakeholders are directly affected by what goes on in a firm. Furthermore, an ethical analysis of a corporation can be performed by applying it to the stakeholder theory.