The Gm Bailout Case Study


BUSINESS ETHICS CASE ASSIGNMENT“The GM Bailout”Imanda Mulia Rahman – 361161!Ho" "ould #o$%e& Smith& and Ma'( e)aluate the )a'iou* e)ent* in thi*$a*e+

Locke believes in the idea that human beings have a “natural right” to liberty anda “natural right” to private property. He said that if there were no governments,human beings would nd themselves in state of nature, meaning that eachindividual would be politically equal and would be perfectly free of any constraintsother than the law of nature. He thought that the government should only havelimited relines. mith is the originator of utilitarian argument. He thought that !" was best to staya free market with the government assistance. He would think thank the failurewas not due to his theory, but due to poor management and vision. "ar# might think that the failure was due to privati$ation and capitalism becausethe government stepped in and owned partially the companies. %here, it is bestthat privati$ation is eliminated, instead, owned by public.

,!E(-lain the* im-lied /0 the *tatement* o2 the lette' to the U!SCon.'e** *i.ned /0 1 leadin. e$onomi*t& 4o*e-h Stie.lit5& Bo/ Co'%e'&the Re-u/li$an 'e*olution on the /ailout*& Ro/e't Hi..*& and Mi$haelinthe'+

&.. %reasury created the new “!eneral "otors 'ompany” whose share owned bythe !overnment for ()*. %hus, the government held a ma+or control over thecompany. %he purpose might be changed from making the better welfare for thepeople in the country to ma#imi$ing prot. t can be concluded that the ideologythey implied was socialism.

3!In 0ou' )ie" *hould the GM /ailout ha)e /een done+ E(-lain "h0 o' "h0not! a* the /ailout ethi$al in te'm* o utilita'iani*m& 7u*ti$e& ' and$a'in.+

-rom utilitarian perspective, which all about costs and benets. !" bailout hasmore benets pr advantage, for as stated before, created +obs that save economicfrom harm, utili$e human resource. %he cost or disadvantage is losing bailoutmoney. 'ompared to not implement the bailout strategy, it indeed saves ta#payerfrom paying more and the money can be used in another sector but there would beemployment more and the ta# revenue of the government would be reduced.hich also could lead to social problems. %herefore, according to this view, !"bailout should have been done.-rom +ustice perspective, it is actually not ethical to bailout !" because the othercompany also need to get bailout since +ustice means all of them deserve to betreated in the same way, which is di/cult to implement. t is impossible to bailoutthe other companies in the same industry because they have di0erent problem as!" thus it cannot be generali$ed. %herefore, according to this view, !" bailoutshould not have been done.-rom right perspective, the company has the right to ask for nancial help fromother parties that have potential to help the overcome the problem. %hus, bailoutis ethical.-rom caring perspective, bailout is ethical because it prevents !" from bankruptcy.1ll parties that are related to !" get benet from it. uch as more +ob elds, whichsociety is benetted from it, and the government where ta# is increased from theemployee2s salary.

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