Legal Pressure on Ethical Issues for Galleon Group- myassignmenthelp

Question: Evaluate the implications of the legal pressure for ethical behavior in organizations. Answer: Due to the legal pressure upon the organizational framework, the organization projected it was working within the ethical framework to its stakeholders, but in turn, the Galleon Group was projecting false pictures. It was during its investors, shareholders and the various stakeholders. The company Galleon group came into the wrong spotlight when it was doing insider trading which as per the U.S. SEC 1934 act is considered as fraudulent and misconduct. The company management was involved in such activities. The Raj Rajaratnam who attracted various investors such as the Goldman Sach, ING etc were cheating by acting on their information. Ethics has everything to do because of management. It is a decision to be taken by the individual from their concessions (Ferrell). The main idea, behind implementing the ethical framework with the legal components is a pressure to bear responsibility and accountability due to other peoples wrongdoing. For example, recently the Galleon Group which was t he largest hedge fund, was caught in the insider trading. The stakeholders and the investors were duped. The company was sued along with the management as it had a series of non-public information which was gained by the contacts. Such piece of information was timely acted, due to which the company was able to thrive. He used to provide consultation based on the materialistic and nonpublic information received. The SEC charged 14 counts of securities fraud and taking steps in the conspiracy along with its investors. The employees didnt realize while conducting the fraud, that it will have a serious repercussion effects on the company, community and the various stakeholders due to which the company has grown. The employes and the various stakeholders had to bear the brunt of the management unethical nature. There was a scandal due to the unethical nature of the management. The management has indeed compromised with their consciousness. But in conducting frauds, they didn't evaluate t he legal pressure and consequences. Due to the legal framework of the constitution where the company existed, it got shut and management was put behind the bars. They fined and given a huge penalty. All these legal actions proved detrimental for more companies to create similar fraud. Therefore, a legal pressure has implications on the ethical nature of the organization to exist and grow. The legal framework works in the protection, exposing and make the organization avoid any illegal acts. The laws protect the interests of the investors and the stakeholders. To make sure a clear communication is established, there should be a strict chain of command, strong work culture, and individual identities and there should be ambitious priorities. The organization should have a moral quality circle and the ethics advocates who can make the ethical framework to avoid any legal implications co-exist. It has been seen that the unethical business practices involve the tacit, cooperation and a reflection, values, attribution and the predefined behavioral patterns which can make the organization ethical operating culture (Huhtala). Often the organization that constitutes the poor and the failed leadership constitute the major part of the corporate misdeeds. The leaders must contribute significantly; by acting fairly and unbiasedly creating examples t make sure that the ethical framework of the organization is maintained. This strengthens the ethical framework and avoids any legal pitfalls and consequences. The executives ignore the ethical implications and work as per their on risk f personal and corporate liability makes the organization accountable for the wrongdoing. The fine and penalties based on the unlawful conduct are deemed for the organization as well, as because of their environment the executives took such steps. An organization is encouraged to have a tough ethical and c ompliance framework for the people to co-exist without breaching any lawful conduct (Roeck). Conclusion The Galleon group organization was the biggest fraud due to which, twenty-six people were charged with fraud and conspiracy. Had the Galleon Group worked within the ethical and legal framework, it would not have fallen into the trap. The Galleon group managementbreached numerous protocols and did corporate misconducts, which lead organizations to suffer heavy penalties and fines(Culiberg). The Galleon organization had a failed leadership and the mismanagement; which eventually lead to serious consequences on the organization reputation and the executives. If the Galleon organization would have avoided the use of non-public information and would not have entered into the insider trading, it would have been an advantage for the company to thrive and gain respect from the investors. The management tried to earn millions through the non-public information that it had. The organization never worked on the basis of the ethics and the compliance framework. Due to the series of frauds, which lead to the close out of all operations of the company, the investors withdrew their entire money. It greatly affected the financial status of the company and crashed the stock prices. Any misconduct or unlawful act of mismanagement is deemed impropriate should be fined and penalized to stop; else, it would have legal consequences and can lead to a shutdown. The Galleon group was using wiretaps and by convicting the twenty-six, it will deter the future breach of misconduct(Caroll). In connection, Rajat Gupta, who also earned on account of the insider trading conducting fraud along with Rajaratnam, was convicted and charged. It is evident, that the management can cheat and dupe various investors unethically by choosing the alternative paths, but in the end, the law would be able to trace them and they have the severe repercussion effects. Unlawful insider trading and conducting white collar crimes through various means, such as the wiretap, is purely acting out of the conscious. Th e conscious to cheat and dupe investors to gain undue benefits from it but it certainly cannot evade from the eyes of the legal consequences. By convicting the Galleon management and Rajat Gupta of the insider trading, the legal framework has set as an example and has helped in deterring the legal consequences. References Bucholtz, C., and A. B. Carroll. "Business and society: ethics and stakeholder management."Mason, OH: South-Western Cengage Learning(2012). Culiberg, Barbara, and Katarina Katja Miheli?. "Three ethical frames of reference: insights into Millennials' ethical judgments and intentions in the workplace." Business Ethics: A European Review25.1 (2016): 94-111. De Roeck, Kenneth, et al. "Understanding employees' responses to corporate social responsibility: mediating roles of overall justice and organizational identification." The International Journal of Human Resource Management25.1 (2014): 91-112. Dibie, Robert A., and Josephine Dibie. "Theories 2 of Business and Government Relations."Business and Government Relations in Africa(2017): 40. Huhtala, Mari, et al. "Ethical organizational culture as a context for managers' personal work goals." Journal of Business Ethics114.2 (2013): 265-282.