When unethical decisions are made, everyone involved in the corporation and its well being are affected in a negative way and will jeopardize the well being of the business. “Ethical responsibilities of an organization’s management are to follow the generally held beliefs about behavior in society” (Wheelen and Hunger, pg 58). An ethical role within the corporation is not mandatory, however it is practiced in most businesses would be giving employees notices of
Kenneth Lay, the former chairman of Enron was prosecuted on 11 criminal counts of making misleading statements and fraud. Jeff Skilling, former Chief Executive Officer (CEO) of Enron was charged on 35 counts that included conspiracy wire fraud, insider trading, securities fraud, and making false statements on financial reports. Andrew Fastow, former Enron’s Chief Financial Officer (CFO), faced 98 counts of money laundering, fraud, and conspiracy in connection with the improper partnerships he ran. This included a Nigerian power plant project that was aided by Merrill Lynch, an investment banking firm. However, Fastow was pled guilty of conspiracy to commit wire fraud and the other charge was of conspiracy to commit wire and
Acre Woods Retirement Community Case Study HSM/230 What are some potential legal and ethical issues present in this case study? There many legal issues present such as the fact that if someone falls down and injuries themselves and there is definitely nothing in terms of safety rails of nonslip treads, we have a lawsuit waiting to happen. Ethically Mark did not care at all about the clients that reside in the retirement community. How would you characterize the director’s behavior? Clearly Mark was a director that showed no concern at all for the clients and I believe that he mishandled the funds.
This caused frustration among the members. Moreover, the MCA team lost its quality in company positions and couldn’t make any reasonable offer alternatives to LFA counter-proposals. MCA had no clear plan or objectives and didn’t understand the strengths and weaknesses of their own and LFA’s positions. On the other hand, LFA was well-prepared and more professional during the negotiations. They defined the bargaining outlines.
U.S. economy suffered greatly after that incident. That made three of the biggest customers of Simmons, namely Montgomery Ward, Heilig Meyers, and HomeLife, declare bankruptcy. These companies contributed $110 million of the $658 million of Simmons sales revenue. That makes up about 16.7% of Simmons total business. Nothing was going Simmons’ way.
Most corporations state that they did not realize that they had a high risk of fraud, which causes one to ask whether fraud could be prevented (Samociuk & Iyer, 2010). This is often because most companies base their operations on trust among their employees, which often leaves a company vulnerable to the idea that their employees will work honestly. This is
Skilling was indicated on 35 counts of wire fraud, securities fraud, conspiracy, making false statements on financial reports and insider trading. Lay was indicted on 11 criminal counts of fraud and making misleading statements. He died in 2006 (Weiss, 2009). b) A corporate culture that supported unethical behavior. Enron listed its core values as: Communication, respect, integrity, excellence (Enron Annual Report, 2000).
It establishes a fundamental systems and processes for presenting and detecting misconduct, for investigating and disciplining, and for recovery and continuous improvement (Ferrell, Fraedrich, & Ferrell, 2011). The corporate governance did not protect the stakeholders because there was embezzlements from some employees and greed from the executive leadership. There was a lot of turnover at the executive level which made the organization weaken and may not able to carry out its mission. Not having this process in place to detect when there was some unethical acts being taking place has caused a lot of turmoil for this no-profit agency. There was not process in place to follow for recovery for when a mistake was discovered or a problem was reported.
I think that the error in decision making came because the CEO didn't know the terrible status of the company. I think that he thought he was alright to do what he did financially, even though spending that kind of money just to upgrade your office is absolutely ridiculous. The only thing that could've prevented that situation is for the CEO to have some common sense about how to spend your money or even know the company's standing. 3. I think that both CEO's should've let their employees know the status of what was going on, because it seemed that they had no idea of the things that were occurring.
The firm’s senior managers had engaged in fraud for an extended period through a scheme in which partnerships owned by the managers could receive payment for goods and services never provided to Enron. Enron’s executive team was trying to create an enterprise, which would increase wealth among their shareholders. However, when it revealed that their stock prices were less desirable, certain aggressive accounting measures were required. Arthur Andersen, auditor and consultant to Enron, helped to make Enron’s shares look more favorable. Andersen knowingly certified false financial statements as accurate.