crime doesn't pay sometimes is a whole point which can't be applicable, especially when you're trusted with the management of multi-billion dollar corporation, and to be in charge of the well -- being of thousand of people. It's so difficult to criminalize someone's action, if such action doesn't cause any harm to anyone or if someone doing a lot of critical charity works. The case of Richard M. Scrushy can be described as one of the most important scenario which can acts as one of the success stories, showing how far most of these business ethnical values can be abused to hurt everyone for a period of time. As stated by Jennings (2012) in his book "Business Ethnics Class" unethical practices can only last for a short time, and nothing helpful can be found out of it.
However, the carpenter teachings regarding people who do not pursue wisdom that are more "like a foolish man who built his home on the san, the rain descended, and the floods came, and the winds blew, and beat upon that house, and it fell and great was the fall of it" (Matthew 7:26-27, King James Version). The traits of a person who liar, or utilize other people's weakness to bend the law and steal from them.
In this paper, we interpret the Implications of Health South and Scrushy and its Impact to HealthSouth Stakeholders and Outcome and Fairness of Punishment. The paper however, compares and contrasts the approaches of the parties who influence business decision making as it relates to ethics and of those who are influenced by their decisions. It also provides the analysis of the conflicting objectives of business leaders who influence business decisions. Finally, it evaluates the actions that a company may take to meet ethical considerations relative to social performance, financial performance, and reputation and assess the extent to which social, ethical and public issues must be considered in internal and external stakeholder relationships.
Impact on Stakeholders
The author Jennings (2012) explains on how the business which was built by Scrushy changed the attitude of a number of people including stakeholders of the company. The author indicated how a number of stakeholders became very dishonest including Richard Scrushy, his management team, his board of directors, his employees, the patients of HealthSouth, and the U.S. Government. However, in this paper we discuss these people one by one and the kind of contributions and results of their deeds both inaction and on action.
Richard Scrushy was a self-made person and a businessman, who dropped out of high school and went to pursue a degree in therapy from the University of Alabaman at Birmingham (UAB), immediately after completing his GED (Heylar, Cherry & Neering, 2003). He established HealthSouth between 11984 and 1997 from zero value facility to a multimillion dollar investment working together with Citicorp Venture Capital, started with two thousand (2,000) facilities and offering treatment to more than one hundred and twenty (120,000) patients each day across the United States with approximated investment returns of one hundred and six (106) million dollars (Solieri, Felo, & Hodowanitz, 2008).
However, during these periods there were a number of accusations of shameful behavior and financial misappropriation against Richard Scrushy. Solieri, Felo & Hodowanitz (2008) noted that an internal auditor was sent packing for exposing HealthSouth's financial difficulties in 1989. Solieri (2008) also highlighted some of the allegations raised by Medicare that HealthSouth was stuffing bills charged against Medicare for both out-patient and in-patient restructuring as outrageous.
During 1989, Medicare altered the entire payout structure to minimize the kind of misuse and payments which have affected HealthSouth negatively. Solieri (2008) further stated that a number of complaints which have been filed against HealthSouth by both Blue Cross Blue and Shield of Alabama which they claimed of improperly billed Medicare for therapy by students, interns, athletic trainers, and other unlicensed aides were on steady increase (Solieri, Felo, & Hodowanitz, 2008) and by Medicare alleging fraud by "billing for services it never provided, delivering poor care, treating patients without a formal plan of care, and using unlicensed therapists" (Solieri, Felo, & Hodowanitz, 2008, p. 318).Finally, the U.S. Securities and Exchange Commission (SEC) filed suit against Scrushy and HealthSouth complaining the company had falsified at least $2.7 billion worth of profit between 1996 and 2002 (p. 320). The company therefore settled the claims and issue was dropped.
Richard M. Scrushy was the CEO and Chairman of the Board of management (B.O.M) with HealthSouth right away from the time when it was established to the final days when charges were raised against it. He was the man who was absolutely in charge of all the operations and management of the firm. He scaled up to the top in a suspicious away (Beasley, Carcello, & Hermanson, 1999, p. 12) which raised a lot of questionable signs of bribery, which according to ethnical standards deeper inquiry into the firm should have been carried out earlier before it collapsed. The people were never treated fairly; his dealings with people were symbolist with a number of an ethical deficit, the negligent feelings of management towards internal controls and his lavish lifestyle.
However, according (Mokhiber, 2003, pg.8) Richard Scrushy managed to run HealthSouth through taking control of others and manipulating employee's minds by issuing threats, intimidation, electronic and telephonic surveillance and reading emails of other people. Throughout his tenure his employed an autocratic and coercive-based leadership. He believed that when making someone to shines, it will make him/her grows faster which make it look funny how fast the membership of HealthSouth grew (Jennings, 2003a, p. 50). It was noted that Richard M. Scrushy involved in weekly torturing of employees and members who happened to discuss. Richard M. Scrushy obviously managed to control from top to down by creating fear, threatening critics with reprisals, and paying his loyal subordinates well (Jennings, 2003, pg. 50).
Many questions which have been asked are how the cruelty treatment of employees and other people relates with his character and most importantly his downfall. As stated by Howell and Avolio (1992) what he caused to the institutes and to supporters of both ethical and unethical leaders is catastrophic. They confirmed that immoral leaders have a tendency to pursue their own personal agenda (Jennings, 2003, pg. 44), and use power in dominance and authoritarian ways to pursue their personal self objectives, to influence others for their own reasons, and to succeed at all costs. Even when outlining the corporate agenda, unethical enigmatic leaders normally convey agenda that endorse their own personal interests which are always doesn't benefit others but act for their own disadvantage. In most cases, these leaders usually are one-way communicators and very close minded to participation and proposal from others and finally they pursue standards and see if they can convince their immediate self agenda (Jennings, 2003, pg. 49). They are skillful on management indications that what they are doing conforms to what others consider the right thing to do. Through the use of their enormous skills of conveying information, and can provide them with easy time to manipulate others to support their personal agenda.
Howell and Avolio (1992) further explained the point on what took place to the followers of those leaders who were indicated on unethical enigmatic tendency to get people's attentions and descend towards loyal and uncritical followers who learn to offer the leader information that he or she wants to hear, whether that information is correct or not and these followers "easily become dependent on the leader who provides a clear action plan to pursue. The leader's power over them seems unlimited (Howell & Avolio, 1992, pg. 50). Eventually, immoral enigmatic leaders select or produce respectful, needy, and compliant followers. They undermine followers' motivation and ability to challenge existing views, to engage in self-development, and to develop self-sufficient perceptions. In due course, funs' of self-worth becomes inextricably linked to supporting the achievement of the leader's vision. If the leader deviates into unethical means for achieving his or her vision, followers are unlikely to question the leader's action. Since the leader is the moral standard bearer, followers can control even the most unhelpful actions and behaviors (Howell & Avolio, 1992, p. 49-50).
Lax attitude towards internal controls
This point is established based on the action which took place at HealthSouth of the Board of Directors. It's noted from the discussions that there are limited ways to control directors or any control measurements which were put in place to prevent conflict of interest amongst the directors or executives. Most importantly, mechanisms which could encourage the reporting any immoral act or illegal practices would be established. Holmes, Langford, Welch, & Welch (2002) accounted that, lax attitudes towards management may have resulted to a lack of employee carefulness and therefore to an environment which tolerates or maybe even encourages deceitful activities, while it discourages the reporting of such activities (Welch & Welch, 2002, p. 86). In general the whole issues of fraud which HealthSouth…