The Implication of Corruption in Business Management

3120 Words13 Pages
HealthSouth’s Culture of Corruption Introduction HealthSouth began as an idea that someone could provide a better quality service, more efficiently than large hospitals with significant overhead costs. From this humble beginning, the business grew at an accelerated rate with Richard Scrushy as its founder and chief executive. Scrushy was considered a dynamic and compelling personality who had acquired a taste for the lavish lifestyle he could now afford. The business model of HealthSouth flourished, but as Medicare regulations changed, it became increasingly more difficult to remain on the same high performing track HealthSouth enjoyed. Under Scrushy’s leadership, HealthSouth developed a culture which was focused on keeping the company’s stock as attractive as possible. Through fear and intimidation, Scrushy and his senior staff, blocked all attempts to come forward with information that might be detrimental to their perceived performance. This intense desire to maintain the appearance of strong performance was manifested in the fraudulent financial disclosures, which would successfully circumvent detection from analysts, auditors and regulators for several years. To overcome any piercing queries into HealthSouth’s financial statements, the intense charisma displayed by Scrushy and his systematic elimination of less impressionable subordinates helped to perpetuate the ethical lapses his management teams were engaging in. Additionally, Scrushy’s constant need for adulation prompted him to undertake massive philanthropic endeavors, which further flamed his egotistical personality and emboldened his justification for continuing the fraudulent practices. Scrushy and his management team were not concerned with the potential negative impact their actions would have on investors, employees and other HealthSouth stakeholders, but became motivated by greed and the benefit

More about The Implication of Corruption in Business Management

Open Document