BUSINESS ETHICS IN
REAL LIFE
Company Histories
Goldman Sachs
General Motors
Marcus Goldman founded Goldman Sachs in New York City
in 1869. Samuel Sachs, Goldman's son-in-law, entered the
company in 1882. In 1896, the firm became the first to use
industrial paper for entrepreneurs, and it entered the New
York Stock Exchange. The firm's wealth had grown to $1.6
million by 1898. The bank is a leading trader in the US
Treasury security sector and, more broadly, a popular
market producer, and is one of the world's largest
investment banking companies by sales. The Financial
Stability Board considers it a systemically significant bank.
Goldman Sachs was established in 1869 and has offices in
many international financial centres, including 200 West
Street in Lower Manhattan.
General Motors (GM), one of the world's largest car and
truck manufacturers, has a long and illustrious tradition that
spans more than a century and encompasses a broad range
of industrial activity across the globe, primarily focusing on
motorized vehicles and the engineering and manufacturing
that enable it. It was founded in 1908 as a holding company
in Flint, Michigan, and as of 2012, it employed roughly
209,000 people worldwide. 1st General Motors has a
corporate headquarters at the Renaissance Center in
Detroit, Michigan, which produces cars and trucks in 35
countries. In 2008, GM sold 8.35 million[2] cars and trucks
under different names around the world.
Description of Decisions
Goldman Sachs
General Motors
While it’s known that working on Wall Street
can be exhausting, Goldman Sachs Investment
Bankers had been working over 100 hours per
week while working remotely from home. While
other investment banks like Merrill Lynch
increased employee's salaries and decreased
the amount of hours they worked, Goldman
Sachs was quiet and continued to push their
employees to the max. This all comes during a
record high in money generated by the bank's
investment banking division.
During the beginning of the Covid-19 pandemic,
medical professionals were unsure how many
ventilators would be needed in hospitals to
support victims with severe symptoms. In April
of 2020, General Motors (GM) announced that
it would produce 30,000 ventilators to be add to
the national stockpile under a new contract
with the federal government. The order was
ultimately fulfilled by GM from April to the end
of August when its contract to assemble the
ventilators was completed.
Unethical Decision
Goldman Sachs
While a normal work week is 40 hours, investment bankers are expected to work
80. During the Covid-19 pandemic, business for Goldman Sachs took off and their
employees were forced to face even longer hours. One employee was quoted
saying “The sleep depraivation, the treatment by senior bankers, the mental and
physical stress…I’ve been through foster care and this is arguably worse.” Another
banker was quoted saying “This is beyond the level of ‘hard-working’, this is
inhumane / abuse.”
The decision to work employees this hard during what can already be described as
a stressful time was one made in bad faith.
Unethical Decision (continued)
While no aspect of Goldman Sachs’ decision to overwork its investment
bankers was illegal, the results of long hours at these banks result in
many of its employees leaving for opportunities in industries like
private equity and management consulting.
If I were at the helm of Goldman Sachs, I would do anything in my
power to hire more workers and give out additional bonuses to
overworked employees like competing bank Credit Suisse did for its
bankers.
Recommendation: Hire more employees and give larger bonuses.
Ethical Decision
General Motors
Surprisingly, auto sales reached record highs during the Covid-19
pandemic so it would only make sense for GM to focus on their core
business- producing cars and trucks. GM instead joined Ventec Life
Systems to provide victims of the pandemic with essential medical
equipment from ventilators manufactured under the Defense
Production Act and donated 1 million face masks to the state of
California.
General Motors was motivated by keeping Americans healthy instead
of pure profitability.
Ethical Decision (continued)
Of course, what General Motors did was legal. The results of GM’s
decisions were a decrease in its capability to manufacture its core
products for a period of time. However, the company benefited
through good press coverage with its public image getting better.
If I were in control of General Motors, I would not change anything
other than increasing the amount of Personal Protective
Equipment(PPE) donated.
Recommendation: Donate more PPE.
Compare/Contrast
General Motors
• Increased public
image.
• Did not stress and
overwork
employees.
• Helped in
increasing the
health of
Americans.
• Started
because of
Covid-19.
• High
demand for
services.
Goldman Sachs
• Decreased Public
Image.
• Overworked
employees.
• Generated record
revenues.
Sources
• https://plants.gm.com/media/us/en/gm/news.detail.html/content/Page
s/news/us/en/2020/apr/0419-coronavirus-update-14-ppe.html
• https://www.gm.com/coronavirus/communities.html
• https://www.goldmansachs.com/our-firm/history/a-brief-history-ofgs.pdf
• https://www.fintechfutures.com/2021/03/goldman-sachs-analystsreveal-abusive-working-conditions-in-leaked-survey/
• https://www.nbclosangeles.com/news/local/gm-to-donate-facemasks-across-california/2466330/