| Case Analysis | Empress Luxury Lines | | Naomi DukesNovember 3, 2012MGT 500Dr. Glenn RodriguezStrayer University | | | Case Analysis: Empress Luxury Lines Introduction An ethical issue is present in a situation when the actions of a person or organization may harm or benefit others (Daft, 2010, p. 130). Ethical or unethical decisions in business can have far reaching implications because of the many stakeholders involved. The Empress Luxury Lines case study details the decisions and activities of the organization and its upper level management. Kevin Pfeiffer, a computer technician on new hire probation, was asked to act unethically in regards to an insurance claim.
BYP 1-6 (a) Who are the stakeholders in this situation? The stakeholders in this situation would be the vice-president of finance, the president of Robbin Industries, Wayne Terrago, and the users of Robbin Industries’ financial statements. Each of these stakeholders will be affected by any choices Robbin Industries make that affect the company’s financial statements. These individuals each have something to lose by the company providing falsified or inaccurate financial statements (Weygandt, Kieso, & Kimmel, 2010). (b) What are the ethical issues involved in this situation?
According to Paragraphs 7-10 of PCAOB Auditing Standard No. 12, auditor should understand the company and its environment. As far as I am concerned, the first specific factor is that the industry environment will be affected by the economy, law and technology. In the case, the government made a decision to re-regulate the industry, which made the competition fiercer. Secondly, the auditors also need to take company’s business into account, which including organization, operation and capital structure.
The Buffalo Creek Flood killed many people in the February of 1972. After the flood, Pittston not only didn’t admit the responsibility, but also claimed it as a natural disaster, called it “an act of god,” and later on claimed and blamed that the Buffalo Mining Company was a separate division altogether and that Pittston couldn’t be responsible for its actions. Furthermore, since Pittston rushed to settle the survivors with only 4000 dollars for the survivors from the flood, the survivors are angry with that. So it triggered the survivors to look for a law firm that is Arnold & Porter, and to represent them and seek for justice. After the flood, many people lose everything, and they had no choice but to accept these offers because they couldn’t wait until the lawsuit to follow through, not even guarantee that they will be compensated or win lawsuits.
The members of the Audit team, the audit manager Pete and two audit staffers Ben and Maureen have to understand the client’s business and industry. 2. Assess client business risk. Business risk is the risk that Smackey will be unsuccessful in achieving its objectives. In this activity, the audit team assesses the risk of material misstatements arising from Smackey’s business risk.
Ethical standards are the code of conduct required by the organization for workers to follow. The relationship between organizational culture and ethics is that the organizational culture guides workers when faced with ethical problems. If the organization culture counters what they are required to do ethically, workers may put the organization in jeopardy by not act ethically. When a worker is faced with a decision that others within the organization think as appropriate, though it is unethical, the worker may follow what is acceptable as per the culture. It is the relationship between organizational culture and ethics that can get businesses into significant trouble in the long term.
When investors or shareholders are demanding the business to produce profit, managers must consider how to devise steps for transparency in their strategic plans to report factual business dealings. This consideration is parallel in up keeping high ethical and social responsibilities standards in their strategic planning process. Rules of disclosure and frequency of
However, such a value system must be cognizant of and be sensitive to the individual needs and manage them to the benefit of the organization. 2. Several ethical issues may arise in our daily experience and we may hike pass them unaware most of the times. Business Ethics as a subject is intended to prepare managers to face these issues as a part of everyday life so when stress and other factors which may clutter the true issue involved then an altruistic approach may be second-nature. 3.
The paternalism and the rigid hierarchy it caused led to extreme inefficiencies. For instance, Park required Taylor get his authorization to remove employees tenured over 20 years. The person best suited to make these decisions was Taylor because of his proximity to the group. He knew from daily experience who from his team could contribute most to future success. Micromanagement like this puts employees in a threatened state and unable to perform their best.
People called these times the Great Depression. During the Great Depression, workers lost their jobs and many people went hungry as well. Milton didn’t want these things happening in Hershey, so he planned all kinds of new building projects to make sure all of his workers had a job. One day, someone had pointed out a steam shovel at one of his building sites. (The steam shovel did work for forty men.)