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Frequent Issues in Business

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by

Marco Robles

on 13 March 2016

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Transcript of Frequent Issues in Business

Enron:
the selfish gene...
What did they build in there?
Frequent Issues in Business
Frequent Issues in Business
Responsibility, ...
sustainability and ....
... ethics
CORRUPTION or IRREGULAR PAYMENT ???
TAX EVASION AND TAX AVOIDANCE
IRREGULAR PAYMENTS
MORALITY OF BRIBERY AND EXTORTION
the systemic risk
vs
http://tinyurl.com/enronvideoingles
http://tinyurl.com/enronvideoespanol
Frequent
Issues in Business
BUSINESS CONTRACTS
and so
Roman Law
"pacta sunt servanda"

("pacts must be kept")
* CONTRACTS
are the
skeletons of business relationships
, it's a promise among parties, so honouring them is
crucial
for the entire field of
economic activity
.

* OWN COMMITMENTS:

everyone is responsible
for them, and we can't delegate them to other.

* CONTRACT ELEMENTS:

- OBJECT:
matters
or commitments assumed.
- AGREEMENT:
the will
of each party.
- DUTIES AND RIGHTS.


BUSINESS CONTRACTS
MORAL DUTY CONDITIONS for contracts:

-
CAPACITY
: sufficient mental discernment, etc...
-
APPROPRIATE MATTER
: licit matter,
wrongdoing is not
morally acceptable.
-
FAIR AGREEMENT
: acting in
good faith
.

ETHICAL ISSUES REGARDING CONTRACTS:

1.
BREACHING A LEGITIMATE CONTRACT
, fail
voluntarily
or
involuntary
(when it is impossible to fulfill).

Eg: BANKRUPTCY that is legally declared inability of an organization.
BUSINESS CONTRACTS
an so
Roman Law
"pacta sunt servanda"
("pacts must be kept")
ETHICAL ISSUES REGARDING CONTRACTS:

2.
CONTRACT WITH ILLEGAL AGREEMENT
, contrary to ethical principles or unlawful obligation.

3.
CONTRACT WITH MISREPRESENTATION OR LACK OF GOOD FAITH
, false statements or
intention of fraud
against the counterparts.

4.
CONTRACTING WITH SUBSTANTIAL ERRORS IN THE OBJECT: eg:
a false donation instead of a sale.

5.
ACTING WITH DURESS OR PRESSURE
.


MISAPPROPRIATION AND FRAUD
These are
forms

of

THEFT
; that is, appropriate personal property without the reasonable will of the owner:

1.
MISAPPROPRIATION
: consists of and
intentional usurpation
of property or funds with unauthorized purpose.

2.
INFRINGEMENT OF INTELLECTUAL PROPERTY
,
copyright
infringement,
trademark
infringement,
patent
infringement. (eg: apple vs samsung).

3.
CORPORATE ESPIONAGE
.

4.
FRAUD
, is
theft
by means of
deception
in order to secure unjust gain.


MISAPPROPIATION AND FRAUD
5.
COUNTERFEIT
, is fraud though
imitation
or copy.

6.
EMBEZZLEMENT
,
misappropriation
by the
responsible of keeping a property
on behalf of the beneficiary.
TRADE SECRETS
It is about
information
that
can not be revealed
.
CONFLICTS OF INTEREST
When
private interests
or
official affairs
of a person in a position of trust are in
CONFLICTS
.

When conflicts of interest exist it is so
difficult to act impartially
, avoiding the undue favouring of any of the conflicting interests.
INSIDER TRADING
It is the
trading of stocks
or other securities of a firm
using internal information
that
has not been disclosed to the public
that, if and when it were disclosed, could substantially influence the price of such stocks or securities.

MORALITY OF INSIDER TRADING:
-
Destroyed the TRUST
in markets and the information provides by them. It's a misappropriation of private information.
- It is an act of
unfair competition
- It is a
violation of fiduciary duty
and a
breach of professional secrecy
- People who extract information from
anyone are also guilty
.

or
but
1. BRIBERY
An action in which someone
gives
cash, privilege or other
benefit
to obtain an unjust judgement or some type of behavior.
2. EXTORTION
Take place when someone demands money through
intimidation
or
undue exercise of authority
.
3. BLACKMAIL
It's a form of extortion that occurs when a person threatens to
expose discreditable information
about someone unless the victim gives money or other valuable thing.
4. KICKBACKS
It refers to the
return of a percentage
of a sum of a contract received by a person who selects such a contract (Eg: sales managers).
5. FACILITATING PAYMENTS
- It makes up of giving some
moderate amount of money
to public officials for actions such as processing papers, issuing permits and so on.
- These payments are
not intended to influence the outcome
of the official's action,
merely its timing
(eg: getting a licence)
- Facilitating payment is not bribery in some culture, it just a little
tacit bribery
.
6. GIFTS AND BUSINESS CONSIDERATIONS
- It is a
signal of hospitality or gratitude
sometimes but other it is a bribery.
-
Practical wisdom
helps determine how far one can go, depending on the circumstances.
1) First, those who receive a bribe or who practice extortion act against justice, and those offer bribes
CAUSE INJUSTICE

2) Accepting a
bribe
is an act of
DISLOYALTY
to the company in which a person is employed or to the society served.

3) These actions contribute to the
SPREADING OF A CULTURE OF CORRUPTION
.

http://www.transparency.org/cpi2012/results
http://www.theguardian.com/news/datablog/interactive/2011/dec/01/world-corruption-index-transparency-international-map
*
TAX EVASION
refers to
avoiding the payment
of taxes lawfully due.

* This differs from TAX AVOIDANCE or
TAX MITIGATION
, which is making use of
legal methods
to one's own advantage in order to reduce the amount of tax payable.

* There is an obligation to pay fair taxes and the existence of unfair taxes should be proved beyond doubt.
WHISTLE-BLOWING
RESTITUTION AND COMPENSATORY DAMAGE
* Justice requires
RESTITUTION
,
the
RETURN of misappropriations
or COMPENSATION for damage caused.

*
COMPENSATORY DAMAGES
are paid to compensate for injuries or loss, and
refer to HARM CAUSED
in different sense. (eg: Bankia preference options).

* It is a
COURT
that will determine how to reimburse an injured party for the harm cause by another actions.
* Refers to the
reporting

of a corporation's

unethical practices
by a current or former employee.

* Whistle-blowing
entails both good and bad effects
. Hence, a
careful analysis
is necessary before deciding to blow the whistle.

* In order to protect higher goods,
whistle-blowers should be protected
but it is also necessary to be aware that false accusations can also occurs.
and so
Roman Law
"pacta sunt servanda"

("pacts must be kept")
Seeking
BUSINESS GOOD QUALITY
(GOODNESS AND EXCELLENCE) requires serious effort to
fight against corruption
.
Full transcript