Business Ethics – International Trade Administration Essay Sample
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Introduction of TOPIC
As experts in business ethics, your expertise can be used to help breakdown a situation good or bad. In situations we can come in and erase the bad and replace with good or simple reinforce the good that is being done. In this case, we will be doing a lot of erasing for many reasons. This branch of the bank was not doing what it was supposed to in regards to protecting itself and following the country’s banking laws.
“The actions cited included failing to put in effect measures to prevent money laundering, overcharging customers for financial derivative products and making loans that helped clients carry out a variety of improper deals, regulators said.” Acts like this are major unethical decisions that should never be made by employees of a bank. Such movements open up themselves as employees and the company to major back lash and trouble. All of that would not be good for the company at all. We would deal with this by firing employees and switching some around, and changing methods of how that branch would conduct its business.
There are many ways we will go about handling these issues so that all issues will become resolved. Walking into a situation like this, will always be hard to deal with. When there are wrongdoings by employees and a company there are many steps to figuring out a resolution. The employees in this branch thought they could get away with making unethical decisions trying to get over on all parties. But not only did them getting caught bring problems on them, it brought problems down on everyone else in the company. They made Citibank look poorly represented and a bad company. Citibank was ordered to be shut down four of their branches due to major violations and problems stemming from unethical decisions.
They didn’t have any rules in place to stop from the laundering of money, overcharging and giving business to people who shouldn’t have had it. After the regulators found all of this to be true, they stated that any further business operations were to be shut down. In making unethical decisions like this caused the company extreme backlash. So dealing with this, we would fire the employees that made the bad deals. Also bring in new management so there is a new feel and look for the employees. This in turn will give the Japanese branches a new start while they are still open so they could possibly mend their disconnect between them and japan. With the unethical employees gone from the company, there should be a better business attitude present. It was also known that Citibank went out of their business market and went into real estate and art for customers.
According to the article that is not allowed under Japanese banking law. Some employees went to the farther point of being unethical by saving some passwords of
clientele. “Toshihide Endo, director of the Financial Services Agency\’s supervisory bureau,
That might be one of the main reasons this kind of misconduct happened at Citibank, he said.” There needs to be change with how the salary links to performance because that is very well the major reason of why the employees are being very unethical. The employees that went beyond the extreme and branched out to real estate and art should have to pay fines and fee for going beyond their realms of business making, as well as be fired. The ones who saved passwords never got caught but ideally they were doing so because that would let them be able to steal from clients. And to top all of these changes and ways of dealing with this branches unethical decisions, we will place someone here to over watch business activities to make sure they are made exactly how they are supposed to be.
To make everything ethical the way it is, both parties will need to do some changing. For Citibank, they need to lessen the amount of financial institutions that have the option for private banking. This will decrease the chances of this problem ever occurring again. Although it has 25 regular retail branches, those should be cut as well because this is not the first time dealing with breaches in their overseas operations. “Citibank also has 25 retail branches in Japan, but those branches are not affected by Friday\’s order. It was the second time this week that Citigroup has expressed contrition for breaches in its overseas operations.
On Tuesday, the company apologized for a huge bond trade in Europe that outraged competitors and led to an investigation by regulators in Britain; France and Germany are also looking into the trade. In early August, Citigroup traders sold 11 billion euros of European government debt ($13 billion) within minutes via an electronic trading system only to buy some of it back less than an hour later at lower prices.
The transactions were not illegal, but rivals said Citigroup violated an unwritten rule among big bond houses not to use their trading heft to manipulate prices. Citibank\’s private banking business in Japan concentrates on customers with about $1 million to save or invest and emphasizes highly personalized service. But regulators said Citibank\’s private banking division often misled its well-heeled clients. Regulators said Citibank charged some customers above-market prices for publicly traded derivatives and failed to explain fully the risks involved in many of its financial products.” Citibank needs to write rules of trading and everything that goes with it. In doing so, there will be no way that they can fool customers any longer since it will be in writing for them to seek out if not told in the beginning.
And for suspect customers that have been flagged or have previous problems with banking issues need to be declined until they come back with a clean slate or sufficient way to do business. For the regulators in Japan, they could have given the stipulations they did just with a twist. All of the decisions they made regarding the violations were just, but they did not have to shut down that part of the bank like they did. They could have put them on probation and made Citibank bring in a whole new staff to run the building. The regulators could have even put in place that they would let the business run if they were allowed to put their own management in position to over watch and control the private banking operations.
In conclusion, what happened in japan in the private banking division was very unethical. All of the decisions made were made with the thought of self. The employees were out for themselves and maybe the company but in the worst way possible. All employees involved in the unethical decisions need to be terminated and depending on their doings, brought up on charges if necessary. Citibank needs to pay better attention to the employees they hire and keep track of their business deals to ensure that they are not doing anything unethical that could hurt the company in anyway. And lastly, the regulators in Japan Could have went about punishing Citibank a little different but other than that all of the stipulations they put on them were justified.