The Salomon Saga: How Management Causes a Culture of Impunity and Underhanded Intents
1. Introduction
The paper reviews the Salomon saga and discusses how management causes a culture of impunity and underhand intents. The paper looks at the context of ethical ideas as vital in business. The paper opines that the events at Salomon were indicative of deeper conflicts of interest in financial institutions. The paper concludes that young managers need to be better educated in ethics, and that explicit instructions from middle managers to do things they believe are unethical should be made more visible to avoid such issues in the future.
2. The Salomon Saga
In 1991, the Salomon Brothers Treasury Bond Scandal came to light. Paul Mozer, a trader at Salomon, was caught submitting false bids for Treasury Bonds. As a result, Salomon was fined $290 million, and Mike Bashan, the head of Salomon’s government securities trading desk, was sentenced to two years in prison (Rae & Wong, 1992).
The scandal caused a stir because it revealed deep conflicts of interest in financial institutions. It also showed how young managers can be easily lured into unethical behaviour by older managers who believe that such behaviour is acceptable.
3. How Management Causes a Culture of Impunity and Underhanded Intents
The events at Salomon were indicative of deeper conflicts of interest in financial institutions. These conflicts arise when managers instruct subordinates to do things that they believe are unethical. This often happens in an environment where there is a culture of impunity, where wrongdoers are not held accountable for their actions.
Such an environment can be created by management itself. When managers turn a blind eye to unethical behaviour, they send a message that it is acceptable. This can lead to a culture of impunity, where underhanded intents are tolerated and even encouraged.
4. The Context of Ethical Ideas as Vital in Business
The events at Salomon Brothers highlight the importance of ethical ideas in business. When young managers are not properly educated in ethics, they can easily be lured into unethical behaviour by older managers who believe that such behaviour is acceptable. This can lead to a culture of impunity, where underhanded intents are tolerated and even encouraged.
To avoid such problems in the future, it is important for businesses to provide young managers with an ethical education. Additionally, businesses should make sure that explicit instructions from middle managers to do things they believe are unethical are made more visible to avoid such problems in the future.
5. Conclusion
The Salomon Brothers Treasury Bond Scandal was a wake-up call for businesses. It showed how young managers can be easily lured into unethical behaviour by older managers who believe that such behaviour is acceptable. This can lead to a culture of impunity, where underhanded intents are tolerated and even encouraged.
To avoid such problems in the future, businesses need to provide young managers with an ethical education. Additionally, businesses should make sure that explicit instructions from middle managers to do things they believe are unethical are made more visible to avoid such problems in the future.