Assessment 2 Information Subject Code And Name

Assessment 2 Informationsubject Code Subject Name Assessment Title

Research and answer all of the following questions based on the case study of major corporate scandals in 2015, focusing on ethical issues, responsibilities for managing ethical behavior, causes of breaches, and strategies for promoting ethical corporate culture. Refer to credible sources and support your discussion with examples where appropriate. Use Harvard referencing style.

Paper For Above instruction

The year 2015 witnessed a series of significant corporate scandals that highlighted critical ethical breaches across various industries, raising concerns about corporate governance, accountability, and ethical standards. These scandals encompass a range of ethical issues, including environmental deception, corruption, financial misconduct, and unethical marketing practices. In this essay, I will first summarize the ethical issues demonstrated by these cases—the Volkswagen emissions scandal, FIFA corruption, Toshiba accounting fraud, Valeant Pharmaceuticals' sales practices, and Turing Pharmaceuticals’ price gouging by Martin Shkreli. Following that, I will analyze responsibilities regarding managing ethical behavior within organizations, emphasizing the roles of both individuals and management. Subsequently, I will explore a specific case—Toshiba’s accounting scandal—to illustrate the root causes of breaches of ethical conduct, focusing on management style and organizational culture. Finally, I will examine a company that fosters an ethical culture—Google—and discuss strategies it employs to uphold ethical decision-making and prevent misconduct.

1. Ethical Issues in Corporate Scandals of 2015

The 2015 corporate scandals revealed a multitude of ethical issues that undermine trust and integrity within organizations. Volkswagen’s emissions scandal demonstrated environmental dishonesty, where engineers manipulated software to evade pollution regulations, damaging environmental integrity and consumer trust. FIFA's corruption uncovered bribery and fraud, as officials engaged in racketeering and misuse of power to secure lucrative broadcasting and hosting rights. Toshiba’s accounting scandal exposed financial misconduct, with the company overstating earnings by nearly $2 billion over seven years, thereby misleading investors and regulatory authorities. Valeant Pharmaceuticals’ sales practices highlighted unethical marketing and financial integrity issues, involving complex relationships with pharmacy companies to inflate sales figures artificially. Turing Pharmaceuticals, under Martin Shkreli, engaged in price gouging—significantly increasing the price of essential drugs—placing profit over patient welfare and ethical standards. Collectively, these scandals illustrate systemic ethical lapses including environmental deception, corruption, financial fraud, and exploitation, all driven by a pursuit of monetary gain and reputation management at the expense of stakeholder trust (Gandel & Matthews, 2015).

2. Responsibilities for Managing Ethical Behaviour

Managing ethical behavior within organizations involves a shared responsibility between individuals and management. Ethical responsibilities are embedded in individual decision-making, where employees and managers must adhere to moral standards and organizational codes of conduct. Individuals bear responsibility for making honest, transparent, and principled choices in their daily operations; they must exercise moral judgment and report unethical conduct when observed. However, management plays a critical role in establishing the ethical climate and setting expectations for behavior. Leaders influence organizational culture through their actions, policies, and reward systems, which can either promote or hinder ethical conduct. Ethical management involves implementing clear policies, providing ethics training, enforcing accountability, and fostering an environment where ethical considerations are prioritized in decision-making processes (Trevino, 2012). Ultimately, effective ethical management requires a combination of individual integrity and organizational leadership. While individuals are responsible for their actions, management is tasked with creating systems and a culture that support ethical behavior, ensuring that ethical standards are integrated into everyday operations rather than merely compliance-driven.

3. Cause of Ethical Breaches: The Toshiba Accounting Scandal

The Toshiba accounting scandal stemmed from a combination of organizational culture, management style, and systemic pressures. A predominant factor was the management’s aggressive corporate culture that prioritized short-term financial performance over transparency and integrity. Senior leadership under Hisao Tanaka fostered an environment where pressure to meet financial targets led to the concealment of losses and manipulation of earnings. The company's hierarchical management style, characterized by lack of challenge and open communication, suppressed dissenting voices and discouraged employees from reporting irregularities. This top-down approach created an environment where unethical behavior was tacitly tolerated or ignored, enabling widespread accounting manipulations. Furthermore, the organizational culture was heavily focused on maintaining a favorable public image, emphasizing results over processes, which incentivized dishonesty and risk-taking. The management's failure to establish a strong ethical framework or internal controls catalyzed the breach of ethical conduct, illustrating how leadership style and corporate culture can directly influence ethical lapses (Kitazawa & Norizan, 2018). This case exemplifies how organizational culture that values results above integrity can erode ethical standards and foster misconduct.

4. Promoting Ethical Behavior: Google's Corporate Culture

Google exemplifies an organization committed to cultivating an ethical corporate culture through comprehensive strategies that promote responsible decision-making. Central to Google’s approach is its well-defined Code of Conduct, which emphasizes integrity, transparency, and respect for stakeholders. The company invests heavily in ethics training programs that educate employees about acceptable behavior, potential ethical dilemmas, and reporting mechanisms. An open, inclusive workplace culture encourages employees to voice concerns without fear of retaliation, facilitated by anonymous reporting channels and a strong whistleblowing policy. Google's leadership exemplifies ethical conduct by modeling transparency and integrity, fostering an environment where ethical behaviour is recognized and rewarded. Additionally, Google integrates ethical considerations into its innovation and product development processes, prioritizing user privacy and data protection, reflecting a proactive stance on ethical issues inherent in technology usage. The company also practices social responsibility initiatives, reinforcing its commitment to community wellbeing and sustainable practices. Collectively, these strategies help embed ethical principles into Google's corporate culture, minimizing risks of misconduct and ensuring responsible innovation aligned with societal values (Carmeli & Gittell, 2009).

References

  • Gandel, S., & Matthews, C. (2015). The 5 biggest corporate scandals of 2015. Fortune. Available at: https://fortune.com/2015/12/28/2015-biggest-corporate-scandals/
  • Kitazawa, H., & Norizan, N. (2018). Organizational culture and financial misconduct: The Toshiba case. Journal of Business Ethics, 147(2), 415–427.
  • Trevino, L. K. (2012). Managing ethics in organizations. Journal of Business Ethics, 106(1), 103-116.
  • Carmeli, A., & Gittell, J. H. (2009). High-quality relationships, psychological safety, and learning from mistakes in work organizations. Journal of Organizational Behavior, 30(1), 159–180.
  • Kaplan, R. S., & Norton, D. P. (2004). Strategy maps: Converting intangible assets into tangible outcomes. Harvard Business Press.
  • Schwepker Jr, C. H. (2001). Ethical climate’s influence on peer communication regarding unethical selling behaviors. Journal of Business Research, 54(2), 143–152.
  • Moore, C., & Ferrell, O. C. (2010). Managing business ethics: Straight talk about how to do it right. Routledge.
  • Schermerhorn, J. R., et al. (2014). Organizational behavior. Wiley.
  • Weick, K. E. (2007). Managing the unexpected: Resilient performance in an age of uncertainty. Jossey-Bass.
  • Harrison, J. S., & Wicks, A. C. (2013). Stakeholder theory, value, and firm performance. Business & Society, 52(4), 477–502.

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