Contents

• Introduction 3
• Part A: Internal and External Environments 4
• Influence of Internal Environment on Madoff Scam 4
• Influence of External Environment on Madoff Scam 6
• Part B: Managerial Ethics 8
• Managerial Mischief and Moral Mazes 8
• Clock and Cloud Systems 9
• Part C : Corporate Social Responsibility 11
• Conclusion 13
• References 15

Description

– Corporate entities operate on the trust posed on them by investors, stakeholders, general public, consumers and employees. Without the trust of these components of public corporate entities cannot flourish. However, there instances when some companies failed the trust of the people put in their operations and integrity. Some people at the top positions of the organizations due to their sheer power and the knowledge of operations of the organizaions manipulated organizational machinery to meet their own selfish goals. One such example is that of Madoff Securities. It was probably the biggest ponzi scandal of the 20th century. The company just used up investments by charity organizations and other people instead of investing the money to earn returns for their investors. Some loopholes in the internal and external environments help such fraudulent people to meet their ulterior motives. Non-transparent ways of functioning and not allowing for audit by external agencies concealed the fraudulent operations of the organization for years. Unethical managerial practices of top management of Madoff Securities were the core reason for the breach of trust. The management of Madoff Securities not only did not carry out its corporate social responsibility, it used up the very money that was collected by charity organizations for societal causes. The paper recommends the corporate fraternity to behave responsibly, fulfill their ethical obligations, and give back something to the society that is instrumental to the success of the organizations.