In the accompanying post, we discuss the global distress resulting from the dramatic nosedive of world economies. The general belief is that this situation was brought about by greed and corruption in financial firms, while our government loosened regulations and oversight. Most of you will agree that the lack of integrity (excerpt from lecture in September 2007 (3:09): Make Integrity a Habit) is a major cause for this mess. But but is there more?
Has there been a lack of all five positive core values (integrity, commitment, persistence, teamwork and communication) in the actions of corporate executives and government?
Can you discuss this, citing examples?
The state of the economy today is such that you will inevitably find examples of all types of lapses and breakdowns, some intentional and some perhaps not. One article cites a lack of communication as one of the factors that is playing a role in the ongoing crisis. In its efforts to help all U.S. citizens enjoy the American dream of home ownership the government encouraged the introduction of new loan vehicles that were often overly complex and confusing. When the mortgage market began to collapse the foreclosure rates shot up the public simply became scared. Adding to the fear and confusion was Secretary Paulson’s inability explain what was going on to the general public. There was an egregious communication breakdown on the part of the government in its attempts to inform the public about the situation. This lead to a considerable amount of fear, which further constricted economic activity [1].
Teamwork and cooperation also have played a role in the current global economic crisis. It may not necessarily have been a breakdown that played a part but rather a lack of increased cooperation and teamwork among. There is every indication that the current situation was predicted with a great deal of accuracy over a year ago by a report released from the World Economic Forum. The report indicates that one of the primary risks that was in need of immediate attention was the uncoordinated policy responses. Governments were putting together policies aimed at protecting economies from situations similar to the crisis we are currently in [2].
[1] http://www.thedenverchannel.com/news/17681916/detail.html
[2] http://www.commodityonline.com/news/Global-co-operation-required-to-face-financial-crisis-14738-3-1.html
In the search for blame, some say greed and some say deregulation. Both are right. The financial collapse of Wall Street is the fiscal consequence of the economic philosophy that now governs America — that markets are always good and government is always bad. But it is also the moral consequence of greed, where private profit prevails over the concept of the common good. The American economy is often rooted in unbridled materialism, a culture that continues to extol greed, a false standard of values that puts short-term profits over societal health, and a distorted calculus that measures human worth by personal income instead of character, integrity, and generosity.
http://www.huffingtonpost.com/jim-wallis/greed-in-the-economy-its_b_127428.html
I thought this was good for both of our topic.
For a number of years, up until recently, I was a firm devotee of Milton Friedman, thinking that the sole responsibility of a business was to its shareholders. Over the last year I’ve been slowly questioning what exactly the role of business is. The current crisis raises so many questions. It would certainly seem that the ideal solution would be a cultural shift wherein businesses espoused service over profit. Would a model such as this even be feasible in the long term? Is what we are experiencing now some kind of economic Darwinism where the weak, or in this case corrupt, fall by the wayside? Only time will tell I suppose, but it certainly sheds a great deal of light on the types of companies that have been at the top of the financial food chain.
Most certainly there has been a lack of integrity on the part of the corporate leaders and government officials. But as for commitment, persistence, teamwork and communication? These we attribute to purposeful leaders in the right context. Can we call our failing CEOs purposeful leaders? By our definitions probably no. But I would say they have been committed to achieving their own lustful goals. And they have been persistent with their drive towards gain/greed. Teamwork; selected teams maybe, but not as a whole company organization or community.
As for communication, I know the media “communicates” much about all situations as does the government but with guarded tongues and I would suspect with intended manipulative motives. Our officials in office seam to tell us what is in their best interest for re-election playing on people’s emotions.
In Claiming Integrity in Economic Crisis by Michael Bruner, Michael talks about Integrity being the foundation of an organizations mission statement. How well do today’s companies of the 21st century reflect their mission statements?
http://panesofglass.org/economics/the-mortgage-crisis-enron-and-sarbanes-oxley-sox/
http://www.christianitytoday.com/workplace/articles/character/claimingintegrity.html
Yes Chris. Absolutely right. Maybe these attributes which are supposed to be for the leaders, they have not been doing justice for these attributes which shows lack of integrity towards their purposes.
Absolutely! There has been a lack of all five positive core values (integrity, commitment, persistence, teamwork and communication) in the actions of corporate executives and government. Greed and corruption – those are all negative core values that created this mess. It all goes hand in hand when forming an unstable economy and financial crisis. That is undeniable! Just to pick an example…there has certainly been a lack of integrity with home buyers that lied about their income in order to qualify for more money so they can purchase more expensive houses. What typically happened is that an individual seeking a mortgage often could obtain a loan that obliged the borrower to simply state income or debt levels without any verification that the information was accurate. These were known as stated income, or limited documentation, or no documentation, loans. And certainly there was a lack of communication between the mortgage company and the borrower’s employer to verify their income.
http://findarticles.com/p/articles/mi_qn4176/is_20081031/ai_n30970021
Lack of integrity is one of the cause for the economic crisis. The crisis was happen due to loss of the five core values and the greed plays a main role in the financial firms.There is no doubt that economic factors do influence the art market, but the domino effect of the current global economic crisis leaves anyone without accurate prediction of its extent.
Though centered in North America, the sub-prime mortgage crisis in the United States in July 2007 made its impact felt globally, because loans issued in the real estate sector are linked to the world banking sector.
With the bankruptcy of 158 year-old Lehman Brothers Holding Inc., the fourth largest investment bank in the U.S., on 15 September 2008, the storm has now blown up to immense proportions a. Until recently, Lehman Brothers was known as the “professor of global finance”, it was a quality mainstay of the economic sector. However, today this “quality” has faded, with its shares nothing more than junk; not worth the paper they are printed on. Taken with a series of other cases, including the Enron energy debacle, and the Arthur Anderson bookkeeping scandal, which also sullied the names of the bankers J.P. Morgan and Merrill Lynch, the Lehman Brother bankruptcy has become a symbol of the lack of integrity in the market economy, which was analyzed in detail by 2001 Nobel Prize winner for economics, Joseph Stiglitz, in his books titled Globalization and Its Discontents and The Roaring Nineties: A New History of the World’s Most Prosperous Decade.
There is no denying it; the bankruptcy of Lehman Brothers has made investors question the credibility of other such institutions, not only on Wall Street, but all over the world. All of this has vastly expanded the meaning of “investment risk”; including for those who view art objects as investment items. This bankruptcy is also sure to have a domino impact on corporations globally, meaning the world economy is teetering on the brink of disaster.
Nevertheless, in the midst of the collapse of asset value as a result of the crisis in the United States, funds from the emerging markets (including in Asia) are pouring into this distressed superpower. Billions of investment dollars are going into the bonds being sold by the Bush administration. As a result, the bankruptcies of Lehman Brothers, Bear Stearns, Fannie Mae, or even Washington Mutual, have not caused America to lose its credibility, neither have they caused investors to fear putting their funds into the United States. America’s country risk ranking has not decreased.
Reference:
http://www.c-artsmag.com/articles/detail.php?Title=Global%20Economic%20Crisis%20and%20the%20Asian%20Art%20Market&ID_Comment=39
A lack of integrity coupled with greed has led to the current economic crisis. We are all bearing witness to the greed of corporate executives, their poor management of corporations and the impacts it has on the economy. Both the financial and auto industries are considered too big to fail and after being poorly managed for years their corporate executives requested a bailout from the government late last year. Upon receiving the funds, those same arrogant executives go on retreats, like AIG, with taxpayers’ money. Corporate executives are paid substantial salaries to set the direction of their corporation, but they are far removed from the day-to-day activities. Maybe, the higher up the corporate ladder a person is the lack of integrity they possess.
http://insidework.net/resources/articles/four-essentials-of-relational-business-integrity
http://www.huffingtonpost.com/jonathan-tasini/the-greed-continues-121-m_b_165925.html
http://www.huffingtonpost.com/2009/02/03/bailedout-wells-fargo-pla_n_163645.html?page=8
Margaux,
Your final comment should make us think. I often find A-type arrogant individuals in the positions we are dogging with our reviews and wonder if this is the personality needed to drive a company. They often seam indifferent to most people and have no empathy; focused on driving the company for profits. Power and greed seem to be their motivators. Good links….