The problem to be investigated is the ethical dilemmas faced by Board members that impact their ability to be effective leaders. This problem relates to the ethical issues raised in the Hewlett- Packard (HP) and Pretexting: Spying on the Board case study which was an examination of leaking Board sensitive information and the investigation of board members. As such this essay explores key factors relating to: (a) the drivers for the investigation and the tacit approval of this conduct; (b) issues of legal versus ethical conduct; (c) issues missed when analyzing the pretext decision and; (d) the governance strengths and weaknesses of the HP board.
The drivers behind the pretexting investigation and the unspoken approval by the legal counsel
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That is, the Board’s weaknesses were more obvious than their strengths in handling the situation. Some of these weaknesses included: (a) failure to provide cohesiveness governance in leading the organization illustrated by the “board never met to discuss the Compaq merger without Carly being present” (Johnson, 2008) or “directors boosted their potential bonus from $3 million to $9 million in 2001, despite the company's erratic performance” (Johnson, 2008); (b) selfish and self-centered as exemplified by Chairwoman Dunn's eagerness for find the source of the leaks regardless of the consequences (Jennings, 2006); (c) disregard to shareholders interest or the direction of the company as noted by the dissatisfaction of employees and officers by the merger (Jennings, 2009); (d) failure to have or establish a succession plan as illustrated by the board members hiring of Carly Fiorina as someone who could save the company (Johnson, 2008) and; (e) failure to make the organization’s agenda a priority as illustrated by the board members “fighting one another and in investigating leaks than in being stewards of the corporation” (Johnson, 2006). In contrast, the Board did demonstrate strength in the recognition of the issues and wiliness to address issues faced by the organization. The problem lies in how the board addressed the issues which is reflected in the weaknesses previously …show more content…
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The movie “Glengarry Glen Ross” presented a series of ethical dilemmas that surround a group of salesmen working for a real estate company. The value of business ethics was clearly undermined and ignored in the movie as the salesmen find alternatives to keep their jobs. The movie is very effective in illustrating how unethical business practices can easily exist in the business world. Most of the time, unethical business practices remain strong in the business world because of the culture that exists within companies. In this film, the sudden demands from management forced employees to become irrational and commit unethical business practices. In fear of losing their jobs, employees were pressured to increase sales despite possible ethical ramifications. From the film, it is right to conclude that a business transaction should only be executed after all legal and ethical ramifications have been considered; and also if it will be determined legal and ethical to society.
The culture promoted by Enron was one of intense competition and achievement that fostered unethical behaviour for fear of losing one’s job or of company failure. Individuals were urged to “make the numbers…[and] if you steal, if you cheat, just don’t get caught” (Cengae.com, n.d.). This sort of unspoken message would have not only created a widespread participation in unethical behaviour but also downplayed the repercussions of this sort of behaviour as the company itself was promoting it, so the internal consequences would be
Ethical behavior, in a general sense, is a definition of moral behavior in regards to lawfulness, societal standards, and things of that nature. In the business world, ethics commonly refer to acceptable and unacceptable business practices within the workplace, and all other related environments. The acceptance of colleges regardless of ethnicity, gender, and beliefs, as well as truthfulness and honesty in relation to finances within the company are examples of ideal ethical business conducts. Unethical business behavior would include manipulating procedures based on bias or discrimination, engaging in activities that promote political gain, as well as blatant fabrication of monetary factors within the company and “can affect organizational performance and is costly to employers, employees, shareholders, and other organizational stakeholders” (Cox 263). When a corporation practices proper ethics, it is representing not only itself in a positive manner, but its partners, shareholders, and clients as well. On the other hand, when an organization partakes in unethical activities, all parties are negatively affected. The collapse of Enron is a major case of unethical conduct in the corporate world, because the circumstances surrounding the firm’s chaotic plunge where so scandalous that it left “creditors wrangling over Enron's skeletal remains” (Helyar) long after the company had seen its demise. There are numerous instances to be mentioned, including deliberate failure to properly report fiscal losses, insider trading, and overall relentlessness. The inclusive purpose of this paper is to further explore the underlining factors that contributed to the downfall of the once powerful Enron, and how a new way of approaching business ethi...
Are businesses in corporate America making it harder for the American public to trust them with all the recent scandals going on? Corruptions are everywhere and especially in businesses, but are these legal or are they ethical problems corporate America has? Bruce Frohnen, Leo Clarke, and Jeffrey L. Seglin believe it may just be a little bit of both. Frohnen and Clarke represent their belief that the scandals in corporate America are ethical problems. On the other hand, Jeffrey L. Seglin argues that the problems in American businesses are a combination of ethical and legal problems. The ideas of ethical problems in corporate America are illustrated differently in both Frohnen and Clarke’s essay and Seglin’s essay.
I certainly agree to the author and McNerney that the unethical dysfunctional company norm is the root cause of the ethical issue. It is this norm created by the predecessors who never set good ethical examples that influences the employees. They believed the politically safest way of executing tasks would be mimicking how their superiors get their jobs done.
Where the articles differ is how these play into ethics in an organization. The Organizational Determinants of Ethical Dysfunctionality article points to the vertical hierarchy as the main driver for unethical behavior. The larger the workplace and the further ethic safety nets are from the wrong doers offers opportunity for unethical behavior. Also, the more dysfunctional the organization, the more prevelant the unethical behavior within the organization. Additionally, the article suggests that unethical behavior has a contagion factor as well, spreading to other organizations within the same geographic area. This article differs for the Virtuous Persons and Virtuous Actions as the structure of the organization and not the individual is the true culprit of ethical choices. The Virtuous Persons and Virtuous Actions article takes a more philosophical approach to ethics pointing to the individual and his or her virtues (gratitude for
Ethical behavior is behavior that a person considers to be appropriate. A person’s moral principals are shaped from birth, and developed overtime throughout the person’s life. There are many factors that can influence what a person believes whats is right, or what is wrong. Some factors are a person’s family, religious beliefs, culture, and experiences. In business it is of great importance for an employee to understand how to act ethically to prevent a company from being sued, and receiving criticism from the public while bringing in profits for the company. (Mallor, Barnes, Bowers, & Langvardt, 2010) Business ethics is when ethical behavior is applied in an business environment, or by a business. There are many situations that can arise in which a person is experiencing an ethical dilemma. They have to choose between standing by their own personal ethical standards or to comply with their companies ethical standards. In some instances some have to choose whether to serve their own personal interests, or the interest of the company. In this essay I will be examining the financial events surrounding Bernie Madoff, and the events surrounding Enron.
Whether or not a company is attains acclaimed success lies not in the fact that it spends huge amounts of money on Research and Development, rather, and as stated by Bauer and Erdogan (2010), success is determined principally by the people within hat specific organization; they are the assets whose output resonates wit he company’s success. However, while this is an established fact, it is also important to state that both the organization and the people who constitute it mutual impact arriving at collective success. Therefore, as Bauer & Erdogan (2010) continue to assert, it is necessary to understand how people relate at work both at the individual and group levels, and how the organization is impacted by this interrelationship. This is what Bauer & Erdogan (2010), define as organizational behavior. It informs on what is wrong, and what is correct; essentially assisting one as an employee become ore engaged in work. Leadership or governance is one of the constituent components of organizational behavior. More often than not, it is usually associated with power, ethos, and cultural inclinations of the organization. This paper seeks to examine in-depth, management problems associated with leadership and governance at Hewlett-Packard and how it impacts on the company’s organizational culture and behavior.
Corporate governances actually illustrate that no entity or agent is immune from fraudulent practices (Arjoon, 2005 p 342-344). Therefore, it is crucial for an organization to have a stable ethically healthy corporate culture, Patagonia is "doing things right" by influencing the actions of the workforce. Through the integration of ethical conduct in an organization, employees see the complexity of making ethical choices; also, it helps the staff understand what an ethical decision entails and how to talk about hard ethical choices and taking responsibility for making moral choices carefully and
...nd presumably like it, or they would have removed themselves from it. The existentially compelling question of culture in organizations is well documented, but suggested answers for it are many and constantly fluctuating. What can be known is that corporate culture is a powerful force that affects individuals in very real ways. Bibliography: Sackmann, S.A. (1991). Uncovering culture in organizations. Journal of Applied Behavioral Science, 27: 295-317. Schneider, B. (1987). The people make the place. Personnel Psychology, 40: 437-453. Solomon, R.C. (1997). It’s good business: Ethics and free enterprise for the new millennium. Parham, Maryland: Rowman and Littlefield Publisher. Statement of Corporate Mission vol. II. (2000). Bonar Group, Inc. Weiss, J.W. (1994). Business Ethics: A managerial, stakeholder approach. Belmont, California: Wadsworth Publishing Company.
Tyco provides products and services across the world. The company is global and diversified providing a variety of products including electronics, healthcare, fire and security services and engineered products and services. While employing over 250,000 people worldwide they grossed approximately $40 billion in revenue in the year 2005. In 2002 Tyco was involved with the corporate scandal where the management mis-appropriated corporation funds. The previous CEO Dennis Kozlowski was convicted in 2005 on 22 counts of the 23 that he was charged with. This is an example of not only a legal issue of responsibility but also one of an ethical issue that the Tyco Corporation has had to face. In the face of the legal and ethical issues that this mishap had placed the corporation in, Tyco placed Ed Breen in as chairman and CEO. Mr. Breen joined the company in 2002 after the scandal and immediately began the rebuild of the company’s name. With the appointment of Ed Breen and his changing of the company’s ethical standards (to be discussed in the next portion of the paper) he promotes the legal responsibilities of not only the company’s employees but the responsibilities of the suppliers and buyers to report any wrong doing. This reporting also speaks to the ethics of the Tyco corporation employees as well as those of the companies th...
In many circumstances, employees’ behaviors are likely to follow their leader. Enron’s leadership has been extremely influential due to exemplified charismatic. For example, Heffrey Skilling and Kenneth Lay, CFO and one of executive member in Enron, greatly encourage employees to follow their lead. Their incompetence accounting profession directly affects lover level of employees. Eventually, those manipulating accounting activities affect company collapse. Once leadership has done unethical professional accounting behaviors, unethical acts become accepted. Employees have many reasons for remaining quiet. While Enron still have ethical internal rules, when leadership in Enron did not abide and did not provide corresponding example of employees to follow (Prentice 2003, p. 417). Which eventually make Enron’s become one of the largest corporate scandal frauds.
What role do you think culture played at Enron? Give five specific examples of things Enron’s CEO could have done to create a healthy ethical culture. It has been stated that ethical culture can be measured by the following key attributes. “Employees must feel a sense of responsibility, and accountability for their actions and the actions of their peers. Employees must feel secure enough to raise issues, and concerns freely without fear of retaliation. Most importantly managers must lead by example, and model the behaviors that they demand from their employees.” (Dessler, pg.489) The following are examples, of things Enron’s CEO could have done to promote a strong ethical culture. First there must be a checks and balance system put in motion. For example, Office of Inspector General sole purpose is, “OIG’s mission is to (1) conduct and manage independent audit, evaluations, and investigations concerning Agency programs; (2) prevent and detect against Agency fraud, waste, and abuse; and (3) promote economy and efficiency, and effectiveness in Agency programs and operations.” (EEOC, OIG Semiannual report to Congress) “OIG is conducting ongoing investigations in several field offices involving prohibited personnel practices, ethics violations, conflicts of interest, time and attendance fraud, falsification of government records, misuse of government vehicles,
In the aftermath of Enron, Washington Mutual Bank, TYCO, and World Comm these companies went against the grain of what good ethical behavior is and what their respective company’s code of ethics were. The criminal justice system has made it clear that it will not allow companies and their executives to get away with the misuse of public trust by allowing them to make themselves rich at the expense of the employee. Where these crimes are both ethically and morally wrong, the CEO’s of major corporations are being punished by a ...
This paper discusses the role of ethics in corporate governance. I seek to show the application of moral and ethical principles in corporate governance. Ethics is a topic that has generated a lot of interest in the last decade especially after high profile scandals. The failures of prominent companies such as WorldCom, Enron, Merrill lynch and Martha Stewart portrays the lack of corporate ethics. The failure of such business has seen an increased pressure to incorporate ethics in corporate governance. The result of corporate scandals has been eroding investor and public confidence. The entire economic system has experienced some form of stress from loss of capital, a falling stock market and business failures.