Dutch investors, assisted by lawyer Adriaan de Gier are considering suing ABN Amro. This because of the money they lost when US merchant bank Lehman Brothers went bankrupt. During the period before Lehman Brothers went bankrupt ABN Amro worked as advisor for Lehman Brothers. Now, ABN Amro is accused for helping Lehman by using book-keeping tricks to make its financial situation look better.
The book-keeping tricks used by Lehman Brothers probably were in accordance with the discourse of law. It can be questioned if they also acted in accordance with the business discourse. The tricks they performed were aimed to make the financial numbers look better than they actually were and in this way attract more investors. These actions should have a positive impact on profits in the short term. On the other hand, the company should know that when these actions become public, this would erode the trust of their investors which could lead to withdrawals. In the end this probably would harm the firm more than it benefitted in the first place and thus the company probably did not act like the business discourse prescribes.
On the other hand, when presenting misleading financial numbers, (potential) investors are deceived. This is in conflict with the moral principle ‘not to deceive others’. If I look to morality from the hermeneutical perspective it can be argued that by acting purely self-interested in their pursue for profit-maximization, they violated the fundamental principle within this perspective to respect others.
Background Article
4 comments:
Morality stands higher in the hierarchy than the business and law discourse. From the Hermeneutic perspective humans beings are both moral and self-interested. The rational end is that all the moral principles will be upheld in a well-ordered society. In the case of ABN not all of the moral principles were uphold, because they were deceiving their stake- and shareholders. Because of this I conclude that ABN Amro acted morally wrong.
As the student above I think that ABN Amro acted morally wrong in hermeneutic perspective. However I want to put another reason of ABN being immoral on hermeneutic point of view. By hermeneutic perspective we do not only have the possibility to act moral; we are destined to be moral being. According to the book from Dubbink, because we are free, rational and willful beings, we both desire and are necessitaed to construct a conception of proper relations we ought to maintian towards us. So this is why we ought be be moral. However ABN Amro did not act moral. It acted totally wrong way against morality.
The core of the ABN Amro case, which is using book-keeping tricks to make its financial situation look better, is seen a lot these days.
In such cases, it is very important to define 'deceive', as it is immoral to deceive others.
If a firm chooses to have a different format or list its property in a different way (in accordance with law), this is not deceiving. If the firm does not violate the law, it is not acting immoral.
In addition, by using these book-keeping tricks, the firm is able to attract new capital that could improve the growth of the company and in turn provide a better perspective for the employees and other stakeholders of the company. In this respect, the firm is acting morally right by providing property and economic prosperity to its stakeholders. This is in accordance with the meaning of the business discourse.
s926012
In reaction to the comment of Robin, I think when we talk about if they do or do not deceive, we have to look at the reason behind using these book-keeping tricks. As stated in the article, they performed these tricks to make their financial situation look better. In general, when you make things look better then they really are, you are misleading the other person/party.
According to your statement about when not violating the law, you are not acting immoral; I think this is not true. The discourse of law and the discourse of morality are two distinct discourses. However, there is a huge amount of overlap, you cannot simply say that when a firm is not violating the law, it is not acting immoral.
When we look to the business discourse, I agree with you that in the short term they act in accordance with the business discourse by using book-keeping tricks. But I wonder what your opinion is when we look at the long term in this case..?
ANR: 523236
Post a Comment