Barclays Bank: Banking on Ethics
Unit 2 Assignment
Ethics and Social Responsibility in Business Assignment
In this Assignment you will read the Cengage� Case Study: �Barclays Bank: Banking
on Ethics� and then respond to the checklist items in a critical essay based on the
scenario below.
Assignment Scenario:
As a new marketing associate with Barclays Bank, you are tasked with writing a critical
essay summarizing what transpired during the investigation conducted by the United
States Department of Justice into the abuse of the London Interbank Offered Rate
(LIBOR) interest rate regulated by the British Banker�s Administration. This essay, if
chosen by your new employer, will be the report presented to the Board of Directors.
Write a 2�3 page, (not including a title and references page), double-spaced, critical essay
responding to the checklist items. For assistance with your Assignment, please use your
textbook and library research resources. The instructions for you to execute this task are
as follows:
CRITIQUE 2
Barclays Bank: Banking on Ethics
Professional ethics is a universal standard that is applicable to all professions in addition
to corporate and any other business type. There are rising cases of ethics being thrown out at the
expenses of unknowing customers with the primary goal being making profit (Valeentin, 2010).
In relation to the case study on Barclays, it is quite evident that the executives of the Bank gave
little consideration to the basic idea of ethics when they decided to falsify information so as to
get better ratings and increased profit. This is in particular to manipulating the LIBOR interest
rates to portray a stable economy rather than show to their customers that they were doing badly
in the market. The idea that Barclays was caught and fined which led to the resignation of some
of the executives is an indication that they had acted unethically (p. 1).
According to Bickerton and Louis Gruneberg (2013), LIBOR is a form of analyzing the
economic outlook and creating fair competition in the market particular to banking industry.
LIBOR when low the economic stability is high and when high the economic stability is low.
Social responsibility refers to an ethical theory that any given entity, whether an individual or a
firm, has the duty to ensure that their actions or activities are of positive impact to the society.
This is aimed at ensuring that there is a balance between the ecosystem and the economy.
According to the case study (p.2), the reason for Barclays being charged was because it proposed
for setting of low rates to promote the idea they were stable, which was not the case. This is an
indication that their biggest concern was their corporate image at the expense of all the other
factors that would be impacted. Acting in a social manner entails maximizing the resources
available into serving the needs and requirements of shareholders and stakeholders without
breaking the set business ethics.
CRITIQUE 3
Following the court’s decision that British Barclays Bank had knowingly manipulated
LIBOR in their quest to hide their current financial status at the time, they were fined $ 440
million (p.1). This is an indication that they had overlooked the whole basic idea of corporate
social responsibility. One way that the organization can come back and entrench corporate social
responsibility that would ensure no future such cases will take place is through conducting an
audit from outside sources and offering their financial statements to the public to create trust.
This will provide a general basis of what had led the organization to take such measures and by
involving the public, strategies can be drawn up that will ensure such issues do not arise in the
future.
A given company’s management is believed to have a relatively large impact on
establishing how an organization comes up with and goes about to set ethical conducts. For
instance, in a given organization, if the management acts on the perception that the only thing
that matters in the organization is to make profits, then it is highly likely that all the employees
will have this same perception. Therefore, it is the responsibility of the management to set ethical
principle standards regarding what is wrong and right in relation to how the employees should
carry themselves (Champoux, 2010). In essence, the top management of Barclays should not
have focused largely on making profits and portraying a thriving corporate image, but rather on
what impact their decision will have on all people and the ecosystem at large.
Ethics and social responsibility from their definitions should be integrated. Social
responsibility comprises of the government, society at large and businesses working together to
improve both the economy and the ecosystems (Paetzold, 2010). However, without the guiding
factor of ethics social responsibility cannot be achieved. For instance, in the case of Barclays
CRITIQUE 4
they were trying to market the idea that they were stable and that the economy at large was stable
even with the impact of the global financial crisis still being felt in most regions globally.
Although through the increased profits Barclays would have in the long run become stable, it
would have created a marketing environment that would have been unfair competition wise,
unstable and unethical.
Conclusion
It is apparent that ethics helps in maintaining the balance; the process of getting or
achieving your overall goal should not be a justification to the outcome. This is in the case where
regardless of the negative impact the process has had on people or ecosystem, it does not matter
as long as the outcome is positive. Ethics should act as a moral compass that reminds us we are
part of a society and whatever actions we take we will impact those around us whether for
financial gain or other benefits. Therefore, the decision to fine Barclays is right in addition to
hiring new executive employees to propel the organization in the right direction.
CRITIQUE 5
References
Bickerton, M. and Louis Gruneberg, S. (2013). The London Interbank Offered Rate (LIBOR)
and UK construction industry output 1990-2008. Journal of Financial Management of
Property and Construction, 18(3), pp.268-281.
Champoux, J. (2010). Organizational Behavior: Integrating Individuals, Groups, and
Organizations. 4th ed. USa: Taylor & Francis.
Paetzold, K. (2010). Corporate Social Responsibility (CSR): an International Marketing
Approach.London: Diplomica Verlag.
Valeentin, S. (2010). Ethics and organizational practice: questioning the moral foundations of
management. Denmark: Edward Elgar Publishing.
