Part 1: Examine A Recent Business Periodical And Report Brie

Part 1 Examine A Recent Business Periodical And Report Briefly Fir

Examine a recent business periodical, and report briefly (first page - one or two paragraphs) on some lapse in integrity that is in the news. Then discuss if this type of problem could occur in a small business and how to prevent it from occurring (approx. 2-3 pages). A lapse of integrity could be something like Enron’s financial issues from years ago or perhaps the ethics violations of WorldCom or Hollinger International. Use APA style and include at least one scholarly source to demonstrate critical thinking. The total paper length should be approximately 3-4 pages, excluding title and references.

Paper For Above instruction

In recent months, one of the most prominent examples of ethical lapses in the corporate world involves the scandal surrounding Wirecard, a German payment processing company. Wirecard's collapse in 2020 was primarily caused by accounting fraud and systemic deception involving over €1.9 billion that was falsely reported on its balance sheet (Financial Times, 2020). The scandal came to light when auditors and regulators questioned the company’s financial statements, revealing that Wirecard had manipulated its accounting data for years to inflate its revenues and assets, misleading investors and stakeholders. This case exemplifies a severe breach of integrity, where corporate executives prioritized financial gains over ethical considerations, ultimately leading to the company's downfall and significant losses for shareholders and employees. Such misconduct damages trust in the financial markets and underscores the importance of ethical behavior and transparency in business practices.

While large corporations like Wirecard face complex ethical challenges due to their scale and diverse stakeholder interests, similar issues can occur in small businesses, albeit on a different scale and scope. Small businesses often operate with fewer formal controls and less oversight, which can make them vulnerable to ethical lapses. For instance, a small business owner might manipulate financial records to meet sales targets or conceal expenses to secure bank loans. These ethical lapses could stem from pressures to succeed, personal gain, or lack of awareness about ethical standards. The consequences of such behaviors are significant, including financial losses, legal repercussions, and damage to reputation.

Preventing ethical lapses in small businesses requires the implementation of comprehensive measures rooted in ethical culture, transparency, and accountability. First, establishing a clear code of ethics that articulates acceptable behaviors and decision-making standards is essential. This code should be communicated regularly and integrated into the company's culture through training and leadership exemplification. Additionally, small businesses should implement internal controls such as regular financial audits, segregation of duties, and transparent reporting processes to detect and prevent misconduct. Leadership plays a critical role in fostering an ethical environment by modeling integrity and emphasizing the importance of ethical behavior. Moreover, creating an open-door policy that encourages employees to report unethical conduct without fear of retaliation can help identify issues early before they escalate to serious problems.

Furthermore, small businesses can benefit from engaging external advisors or consultants periodically to review practices and ensure compliance with ethical standards. Technology can also be a powerful tool—using accounting software with audit trails or monitoring systems can help detect discrepancies indicative of unethical actions. Additionally, fostering an organizational culture that rewards ethical behavior and emphasizes long-term sustainability over short-term gains can significantly reduce the likelihood of misconduct. Education on ethical decision-making tailored for small business owners and employees helps build awareness and strengthen moral judgment.

In conclusion, while ethical lapses like those seen in large corporations such as Wirecard are often attributed to complexity and scale, they are equally relevant for small businesses. The key to prevention lies in cultivating an ethical culture, implementing robust controls, and maintaining transparency and accountability at all levels of operations. Small businesses that prioritize integrity and proactive ethical management can safeguard their reputation, ensure legal compliance, and promote sustainable growth—ultimately creating a resilient organization built on trust and moral responsibility.

References

• Financial Times. (2020). The fall of Wirecard: How a €1.9bn fraud happened. Financial Times. https://www.ft.com/content/22d2b0a2-5c0b-11ea-8033-fa40a0d65b98
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• Schwepker, C. H., & Good, D. J. (2010). Ethical climate and ethical judgment: An empirical investigation of sales managers in the United States. Journal of Business Ethics, 92(2), 289–303.
• Treviño, L. K., & Nelson, K. A. (2017). Managing Business Ethics: Straight Talk about How to Do It Right. Wiley.
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