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This was designed to limit the total amounts of insider selling for tax purposes. As time went by, Swartz used this program to give all employees loans for any reason. This helped Kozlowski and other executives to receive large loans from this program (that were forgiven in the future). ("Tyco," n.d., pp. 389 -- 402) (Farrell, 2011, pp. 442 -- 446)
The Impact of Auditors
Price Waterhouse Coopers was the auditor of Tyco. When the unauthorized loans were discovered they asked executives about them. but, they did not report their findings to regulators and investors. Instead, this was considered to be an issue of non-material significance (which allowed the fraud to continue). The combination of these factors is showing how the author is discussing the role of the different parties with the fraud. As a result, this is indicating what factors helped to make the scam continue for so long.…
Farrell, O. (2011). Business Ethics. Mason, OH: South -- Western
The first trial for the two began on September 29th, 2003. The trial was not concluded as one of the jurors had complained of been pressurized to convict the two former executives. The retrial was conducted, and the jury reached its verdict on June 17th, 2005. They were both acquitted for one count and convicted for 22 criminal counts. They were not found guilty of falsifying business documents. Both of them were sentenced to eight years t twenty five years in a state prison where they would be working six hours daily and earning $1.05. Eventually the charges that had resulted in the fall of Dennis Kozlowski were dismissed after he agreed to pay off his sales tax liabilities and restitution.
What do you think Kozlowski's motivation for trying to avoid sales taxes on his art purchase was?
Power and greed in this case were Kozlowski's main motivators. He had…
Beschorner, T. (2006). Ethical Theory and Business Practices: The Case of Discourse Ethics. Journal of Business Ethics, 66(1), 127-139.
Byrne, E.F. (2002). Business Ethics: A Helpful Hybrid in Search of Integrity. Journal of Business Ethics, 37(2), 121-133.
Maguire, S. (1997). Business Ethics: A Compromise between Politics and Virtue. Journal of Business Ethics, 16(12/13), 1411-1418.
Tyco International is a worldwide manufacturing company that is involved in production of various products since its inception in the 1960s. The company is currently divided into five main business segments which are Safety Products, ADT Worldwide, Flow Control, Fire Protection Services as well as Electrical and Metal Products. Furthermore, the company recently split its corporate sections into three independent companies i.e. Tyco Healthcare, Tyco International Ltd. And Tyco Electronics Ltd. In mid-2007. Tyco International continues to thrive in the New York Stock Exchange because of a strong cash flow and revenue growth.
The company was hit by a major accounting scandal in the early 2000s that involved its former three top executives. The then CEO, CFO and CLO were found guilty of defrauding the company an approximate of $600 million through fraudulent practices. These three former executives took interest-free loans from the company and spent huge amounts of the…
Associated Press. "Ex-Tyco Executives Get Up To 25 Years in Prison." Msnbc.com: Corporate
Scandals, 2005. http://www.msnbc.msn.com/id/9399803/ns/business-corporate_scandals / (accessed February 7, 2011).
Funding Universe. "Tyco International Ltd." Funding Universe, n.d.
http://www.fundinguniverse.com/company-histories/Tyco-International-Ltd.-Company-History.html (accessed February 7, 2011).
" (Cummins, 2006). The VP for Corporate Governance, Pillmore announced a series of ethical principles, to prevent such scandals. The first principle "calls for strong leaders who see themselves as stewards of the company and mentors for its future leaders." (Cummins, 2006). The second principle is to establish a "web of accountability," where corporate leaders are constantly questioned about ethics-based decisions. (Cummins, 2006). The third principle is to investigate actual behavior, which Tyco does by "including company values in every assessment of managers and leaders," as well as creating an open atmosphere for reporting ethical problems. (Cummins, 2006). In fact, ethics expert Stuart Gillman, discussing ethics changes, notices that "many of the recent measures go beyond fixing lists of right and wrong. Cultural change has become an imperitive. Organizations are being forced to move from a position in which they maximize their profits at any cost to one in which…
Cummins, H.J. (2006). Tyco exec makes the rounds spreading the word on corporate ethics.
Retrieved January 16, 2008 from StarTribune.com
Web site: http://www.startribune.com/lifestyle/faith/11327571.html
Gilman, S. (2004). The importance of workplace ethics. Retrieved January 16, 2008 from Edicta.org
First of all, they should implement a better control of the executives' actions by limiting their rights and access to corporate funds. No major decision regarding future mergers, acquisitions or investments should be taken by a single executive. All significant activities and fund usage should be approved by the Tyco board during general meetings. The number of these meetings should be of at least one or two per week.
The conglomerate should also analyse and re-establish their priorities. In this order of ideas, they should place decreased emphasis on profit maximization and focus on actions that give the company a good reputation. As such, they should place increased emphasis developing and implementing programs in the benefit of the investors, the employees, the stock holders and the consumers.
2.e) the Sarbanes-Oxley Act of 2002 was developed as a response to the multitude of accounting scandals that were tormenting American companies, such…
Tyco International: Leadership Crisis
M-Tech IDM Suite Supports Sarbanes-Oxley Compliance, M-Tech Identity Management, http://mtechit.com/cgi-bin/emaildoc?document=mtech-sox.pdf&newsession=c944818abf29b29b349f5f51d793ddf4,last accessed on October 8, 2007
Official Website of Tyco International, http://www.tyco.com/,last accessed on October 8, 2007
Tyco International: Leadership Crisis, Kozlowski's Tyco Empire
The UETA gives legal recognition to electronic records, electronic signatures, and electronic contracts. The UETA provides that a contract cannot be denied enforceability solely because it is in electronic form, or because an electronic form was used in its formation. If the law requires a written record, an electronic record satisfies the law. Furthermore, an electronic signature satisfies legal requirements for a signature. An electronic record or electronic signature is attributable to a person if it was the act of the person. An act of a person could be shown in any manner, including a demonstration of the efficacy of the security procedures applied to determine to whom the signature or record was attributable. If the law requires that a signature or record be notarized or otherwise verified, that requirement is satisfied if the electronic signature of a person authorized to verify the record or signature is attached to or…
Cohen, Andrew. "Tyco Mistrial: Blame the Media." CBS News. 2004. CBSNEWS.COM. 19
'Tyco Mistrial." Online Newshour. 2004. PBS. 19 January 2005
This is particularly important because it will give the Tyco employees a sense of accomplishment that they might not otherwise feel, and show them that they are in fact on the right track. This conversation also gives management the opportunity to provide feedback about the progress everybody has taken on the change initiative.
4. "After 18 months in this position, it is hard to believe that people still view the old leadership as being anything indicative of what this company is about. Those days are over and those criminals are on trial where they belong. This is a new company, a new Tyco, and we do things differently. We have a strong company, one that makes a lot of money for our shareholders. We are better people than our reputation would have you believe -- there are 260,000 people who are not on trial, but who conduct themselves with utmost…
Maintaining a timely schedule of meetings and progress benchmarks and keeping track of minutes and official correspondence, in case there is a dispute, is also valuable for logistical and legal reasons.
Creating a general managerial philosophy to deal with work teams may entail orienting employees how to improve their communication skills and deal with team conflicts. Because Tyco is an international organization, when work teams involve individuals from several countries or cultures, having a briefing on possible communication differences between low and high-context cultures may be helpful. Self-awareness is often one of the most important elements of communication. For example, the DISC personality inventory, which classifies individuals as either dominant, intuitive, steady, or conscientious types in their workplace demeanor can be administered to employees embarking upon a project together, so they gain a sense of their strengths, weaknesses, and biases, in relation to their colleagues.
Communication style awareness that is…
Careers and Jobs. (2010). ADT. Retrieved February 14, 2010 at http://www.adt.com/about_adt/careers/
Careers. (2010). Tyco Fire Suppression & Building Products. Retrieved February 14, 2010 at http://www.tyco-fire.com/index.php?P=careers&B=
Tyco: Our businesses. (2010). Retrieved February 14, 2010 at http://www.tyco.com/wps/wcm/connect/tyco+our+business/Our+Businesses/Overview
Tyco international Ltd. after Kozlowski resignation and Breen came in to reinstate the company's performance. The sections in the paper are: liquidity, accounting practices, free cash flow, forecast reports for companies and finally opinions revealed in the interview by Wall Street Journal with Mr., Breen.
The first section on liquidity defines the term liquidity and gives a situational analysis of the condition observed at Tyco Ltd. The discussion links the definition on liquidity explaining that the company was not in a position to meet its cash needs thus the existence of crises.
In the second section, the aggressive accounting is seen to have a disastrous effect on the company's operations by pleasing the shareholder and compromising the company's future. The practice is not illegal but, it worth in the long-run existence of the company is not ideal.
The concept of free cash flow is discussed in the section indicating that…
Duttweiler, R. Managing Liquidity in Banks: A Top Down Approach. John Wiley & Sons, 2011: John Wiley & Sons, 2011. Print.
Harrison Jr., W., C.T. Horngren, and C.T William. Financial Accounting 9th Edition. U.S.A.: Prentice Hall 2012. Print.
Lublin, J.S. "2012 Tyco's Breen Looks Back on Putting out Fires " Wall Street Journal (2012). Print.
Business Ethics," Peter Stanwick Sarah Stanwick, 2009 Read Case Study 20 (p. 389), "Tyco: I'm That It's a Really Nice Shower Curtain." Summarize viewpoint author paragraph form, discuss major issues presented case.
Dennis Kozlowski and the Tyco case study
The author in this case concentrates on providing readers with more information on the central character involved in the story and the way he singlehandedly cheated the authorities and society as a whole. The case study makes it possible for readers to acknowledge the paradox surrounding Dennis Kozlowski and his thinking. Even with the fact that he could afford paying taxes for his business deals, he evaded these respective taxes out of greed. His obsession with having the upper hand in dealings with the government put him at great risk and was ultimately the reason why he ended up in jail.
The former CEO of Tyco International certainly has an intriguing…
"Tyco: I'm sure that it's a really nice shower curtain (The rise of Dennis Kozlowski)"
Failure at Tyco
Examining a Business Failure
Analyzing the Failure at Tyco International
This essay is to analyze the situation of Tyco International and how it failed. Tyco provides, security solutions, flow control and fire protection. We would analyze the failure using Organizational behavior. We would consider trait theories, behavioral theories and Fiedler contingency model to discuss Tyco's situation. We would also conclude as to how leadership, management and organizational structures supported the downfall of Tyco International.
The Failure at Tyco International
Tyco International is a diverse manufacturing company that operates globally. It is incorporated in Switzerland but has operational headquarters in New Jersey, U.S.A. Tyco offers its customers with fire protection, security solutions and flow control.
Tyco was a very profitable company under the leadership of L. Dennis Kozlowski, the chairman and Chief Executive Officer of Tyco International. Kozlowski served Tyco from July 1992 till June 2002 when the…
R.L. Daft. (2004). Organization Theory and Design (8th ed.). Cincinnati, OH: South-Western Publishing.
G.F. Cavanagh, D.J. Moberg, M. Valasquez (1981). The Ethics of Organizational Politics. Academy of Management Journal.
Fred Fiedler (1967). A theory of Leadership effectiveness.
business scandals in the early 2000s brought the issue of business ethics to the fore -- Enron, WorldCom and Tyco. The three share some similarities but they are different in other ways. Enron was simply a case of criminal activity. The company's management did not publish financial statements and when they did the statements completely misrepresented the company's financial position. This occurred on the direction of the senior management team, with the complicity of the auditor, Arthur Andersen. These managers were heavily invested in Enron and therefore had a strong personal interest in creating phony financial statements in order to pump up the company's stock price. The corruption at Enron ran deep within the company, such that the scandal all but wiped the company out.
The situation at WorldCom was that CEO Bernie Ebbers was a heavy owner of the company's shares. As such, he benefitted from implementing an aggressive…
PBS. (2013). Accounting fraud is business as usual at the Pentagon. PBS News Hour. Retrieved December 4, 2013 from http://www.pbs.org/newshour/rundown/2013/11/accounting-fraud-is-business-as-usual-at-the-pentagon.html
The second phase needs to concentrate on initiative and performance to restart the business of Tyco and make it profitable again.
Imagine that you were CEO of Tyco when the former CEO was still on trial for fraud. You are trying to rebuild the company's corporate reputation. Write a script for your address to the shareholders after 18 months in the position. Pay attention to the appropriate use of metaphors in your change conversation to this group.
Transformation is difficult but critical for any business to attain growth and realize its full potential over the long-term. Over the last eighteen months our company has been through a crucible that has tested the trust and value we deliver as a business with our suppliers, customers, employees and shareholders. The goal is to rebuild a solid foundation of trust based on complete accountability. My appointment of a Chief Ethics Officer who is…
Ford, J., & Ford, L.. (2008). Conversational Profiles: A Tool for Altering the Conversational Patterns of Change Managers. The Journal of Applied Behavioral Science, 44(4), 445.
Glenna Gerard, & Linda Teurfs. (1997, August). Dialogue and transformation.
Executive Excellence, 14(8), 16.
Geert Hofstede, & Robert R. McCrae. (2004). Personality and Culture Revisited: Linking Traits and Dimensions of Culture. Cross - Cultural Research, 38(1), 52-88.
Stanwick and Stanwick (2009) in their case study "Tyco: I'm Sure That It's a eally Nice Shower Curtain" is that certain the Tyco CEO and his business associates, family and acquaintances misappropriated the shareholder's funds under the pretext of legitimate corporate functions and allocations. Elements of favoritism can be seen in the way the CEO, Dennis Kozlowski awarded loans from the Tyco coffers to himself and Frank Walsh without seeking the approval of the board. This was viewed as corrupt and a direct violation of the various responsibilities accorded to the board of directors by the shareholders and investors. According to Stanwick and Stanwick (2009), the CEO and the other board of directors were corrupted by the power and influence that they had in the company.
The major issues presented in the case
White collar crimes
White collar crime was defined by Sutherland (1939) as a crime that is committed…
Abrams, F (2007). Asset Search Indicia For Divorce, Debt Collection & Bankruptcy. Available online at http://www.assetsearchblog.com/articles/divorce-child-support/
Chartered Institute of management Accountants (2009).Corporate fraud. Available online at http://www.cimaglobal.com/Documents/ImportedDocuments/cid_tg_corporate_fraud_may09.pdf.pdf
Directors and Boards (2002). Tyco "s betrayal of board governance.
(Board)Accountability).Available online at http://goliath.ecnext.com/coms2/gi_0199-1824947/Tyco-s-betrayal-of-board.html
(Ferrel, Fraedrich, & Farrel, 2009)
How will the implementation of the Sarbanes-Oxley Act of 2002 prevent future dilemmas in Tyco?
Sarbanes-Oxley increases: the penalties for such actions, limits the role that the board of directors will have with managers, it creates an accounting oversight board and it requires the CEO / CFO to certify under oath that all financial information is correct. This will severe as a deterrent and help to provide mechanisms, to the prevent ways that the fraud was able to be perpetuated at Tyco. (Ferrel, Fraedrich, & Farrel, 2009)
Can the SEC trust Tyco's new board?
Yes. This is because those members who were involved with Kozlowski were purged and none of the current members have committed any acts of wrong doing. These facts along with the Sarbanes-Oxley in place, means, that there is no reason for the SEC not to trust the board. (Ferrel, Fraedrich, &…
Ferrel, O., Fraedrich, J. & Farrel, L. (2009). Business Ethics: Ethical Decision Making and Cases. Boston, MA: Houghton Mifflin.
This could have been interpreted as the company having an orientation more towards money-making than to the development of strong ethics.
Leadership, or lack thereof, made a strong contribution to the Tyco failure. The company's leaders set the cultural tone of the firm, but they were also among the primary actors engaged in the fraud. Kozlowski and the other executives were front and center in the fraud, and committed many of the egregious acts themselves. There is little doubt that the Tyco failure had more to do with the caliber of the company's leadership that with any issues surrounding the employees themselves. For the most part, the structure and the leadership were the reasons for the Tyco failure.
Management was less complicit. Although the managers were influenced by the culture passed down by Tyco's leaders, they were less directly involved in the fraud. Perhaps for this reason, the firm was…
No author. (2003). Securities Exchange Commission v. Tyco International Ltd. Securities Exchange Commission. Retrieved January 31, 2010 from http://www.sec.gov /litigation/complaints/2006/comp19657.pdf' target='_blank' REL='NOFOLLOW'>
total rewards programs for firms. This is from a large number of high profile scandals (i.e. Tyco) that are highlighting how these abuses have been taking place. To prevent these kinds of challenges in the future, there will be a focus on the current issues impacting companies and how they can address these issues. Once this happens, is when specific policies and procedures will be introduced to help firms overcome these kinds of problems in the future. This is the point that there will be a transformation in the operating environment and the relationship managers have with staff members. ("Time Line of the Tyco Scandal," 2002)
Over the last several years, the issue of compensation packages has been increasingly brought to the forefront. This is because there are disparities between the total rewards that are provided to employees in comparison with upper management. This issue has become so divisive, that…
Time Line of the Tyco Scandal. (2002). USA Today. Retrieved from: http://www.usatoday.com/money/industries/manufacturing/2005-06-17-tyco-timeline_x.htm
Bebchuck, L. (2004). Pay Without Performance. Boston, MA: Harvard University Press.
Conyon, M. (2000). Executive Compensation. Long-Range Planning, 33 (4), 504 -- 526.
Greenburg, J. (2012). ContiGroup's Chief Rebuffed. New York Times. Retrieved from: http://dealbook.nytimes.com/2012/04/17/citigroup-shareholders-reject-executive-pay-plan/
Dishonesty in either could result in disaster for companies. Communication is the element that unites everything else. Employers should encourage employees to communicate either grievances or suggestions. This opportunity will result not only in better mutual understanding, but also in loyalty that arises from being valued as an employee.
4. I certainly would want to do homework on any company I enter for the first time - and particularly one where my predecessor left under a cloud. It could mean many things, which my investigation is obviously meant to reveal. It could mean that the person who left was him- or herself not honest and brought about an unsavory situation. It could also however mean that working conditions became such that the person had no other choice than to leave, even if it meant that unsavory reputations would remain. I would want to thoroughly investigate to determine what the situation…
Greenberg, Josh. (2005, Jan 24). Diversity in the Workplace: Benefits, Challenges and Solutions. http://ezinearticles.com/?Diversity-in-the-Workplace:-Benefits,-Challenges-and-Solutions&id=11053
Information Guide. (2006). Sarbanes-Oxley Act of 2002. http://www.sarbanes-oxley-101.com/sarbanes-oxley-compliance.htm
Jung, Kim Dae & Wolfensohn, James. (1999, Feb. 26). Economic Growh Requires Good Governance. International Herald Tribune. http://www.iht.com/articles/1999/02/26/edkim.t.php
corporate ethical breaches in recent times, assess whether or not you believe that the current business and regulatory environment is more conducive to ethical behavior. Provide support for your answer.
Unethical behavior has drawn the attention of the public for the few last decades in all kinds of business. Many transformations in the business environment have taken place, including immoral conducts and the tendency for corruption. Unethical accounting behavior is also included as a consequence. So the government has been forced to increase regulations and inspect actions taken in business, most especially after the Enron, Tyco, WorldCom and other unethical accounting scandals. As a result of the mentioned scandals, the government then passed the Sarbanes-Oxley Act in 2002 providing regulatory requirements for better precision in business action, accountability and assurance of ethical accounting behavior by publicly held companies and accounting firms. According to Calle (2000), the total number of boards…
Academy Of Management Learning & Education, Beenen Gerard, & Pinto Jonathan (2009). Resisting Organizational-Level Corruption: An Interview with Sherron Watkins. Academic Management Learning & Education, 8(2), 275-289.
Calle, J. (2000). Ethics in Business. Retrieved January 26, 2013, from http://www.pro2net.com
Gilman, S., Harned, P., Navran, F., & Brown, J. (2009, May 29). Ten Things You Can Do to Avoid Being the Next Enron. Retrieved January 26, 2013, from http://www.ethics.org / resource/ten-things-you-can-do-avoid-being-next-enron
Krugman, P. (2002, January 18). New York Times. System Corrupted., pp.A-23.
Many recommend use of minimally invasive techniques including SEPS to treat and address problems related to chronic venous insufficiency (Kalra & Glovisczki, 2002). Multiple studies confirm the safety and efficacy of SEPS when used early, especially resulting from its low complication rates compared with other procedures including the formerly popular Linton procedures (Kalra & Gloiscki, 2002; Lee, et al. 2003; Tenbrook, et al., 2004; Bianchi, et al. 2003).
More randomized clinical trials are necessary however to answer additional questions related to the efficacy of new procedures including SEPS, though this procedures remains important for patients with advanced CVI secondary to PVI or with patients who do not demonstrate other complications including DVT (Kalra & Gloiscki, 2002; Bianchi, et al. 2003).
Wagner-Cox (2005) also notes that it is important for nurses to be considerate, knowledgeable and compassionate toward patients with acute and chronic illnesses, especially when caring for…
Baranoski, S. & Thimsen, K. (2003, Aug). "Oasis Skin and Wound Integumentary
Assessment Items: Applying the WOCN Guidance Document." Home Healthcare Nurse, 21(8): Supplement 3-13.
Baron, H.C., Wayne, M.G., Santiago, C.A. & Grossi, R. (2004, Sep-Oct). Vasc
Endovascular Surg. 38(5): 439-42.
According to Harvard's student handbook, people who conduct the hazing practice will be held responsible for what happens even though it happens to a lot of people, which indicates it id a standard process (Preventing Hazing at Harvard).
People will argue that others want to be victims of hazing because it is apart of the educational culture and most individuals had been through it (the Hazing eader). Furthermore, some believe that it is no big deal until someone becomes seriously injured or found dead especially when they can buy their way out of trouble, which makes them sinners.
Throughout history, rich people have proven that they are sinners because they tried to stop others' religious beliefs. For example, Hitler was a powerful and rich man who created the Holocaust because he did not want people to be different from him. It is unfortunate that people are often mistreated for…
THE ENRON SCANDAL. 2000. 29 February 2008. http://studenthome.nku.edu/~elixs/pages/page3.htm
TYCO INTERNATIONAL LTD. 29 February 2008. http://fl1.findlaw.com/news.findlaw.com/hdocs/docs/tyco/tycokozlowski91202cmp.pdf
The Administrative Board Harvard University. Preventing Hazing at Harvard. 1 January 2008. Inside Hazing 18 February 2008. http://insidehazing.com/articles_view.php?id=191&category=Normal
Grasping Reality with Both Hands: Brad DeLong's Semi-Daily Journal.
In reality, entire segments of the value chains of these companies, and a core part of how they promised to deliver value, was erroneous or only partially true. After the passage of the Sarbanes-Oxley (SOX) Act and full auditing of the Enron finances it became clear that there were multiple sets of financial records, each designed for a specific audience (Petrick, Scherer, 2003). What had happened is that the undefined, ambiguous and difficult-to-audit areas of the value chain, left unchecked, began to gravitate into unethical practices and reporting to further support the unrealistic projections of profit (Petrick, Scherer, 2003). The same dynamic occurred at Tyco, MCI and others. Arthur Anderson was responsible for the auditing of the Enron financials and was guilty by association, perpetuating the fraud involved in the massive operations underway (Petrick, Scherer, 2003).
In analyzing these companies who rise and fall so quickly, key lessons can…
Petrick, J.A., & Scherer, R.F. (2003). The Enron scandal and the neglect of management integrity capacity. American Journal of Business, 18(1), 37-49.
Sherman, W.S., & Chambers, V. (2009). SOX as safeguard and signal: The impact of the Sarbanes-Oxley act of 2002 on U.S. corporations choice to list abroad. Multinational Business Review, 17(3), 163-179.
This may be a complex task requiring detailed input from all levels. He also says that the company's mission and corporate values should be clearly articulated (Drummond, 2003). He also recommends that the final plan be written down clearly so that everyone has a roadmap to help in times of change.
As Seijts (2004) says, "The true test of leadership is being able to take people in a direction where they would not go on their own." That journey will be most successful when everyone knows where they are going and why, and when they have clear guidelines, exactly what they have to do to help bring the needed cultural changes about.
Drummond, Carl N. 2003. "Strategic planning for research administration (Case Study)." Journal of Research Administration, July.
McClenahen, John S. 2005. "Restoring Credibility." Industry Week, February 1.
Seijts, Gerard H. 2004. "Walking on water or sinking without a…
Drummond, Carl N. 2003. "Strategic planning for research administration (Case Study)." Journal of Research Administration, July.
McClenahen, John S. 2005. "Restoring Credibility." Industry Week, February 1.
Seijts, Gerard H. 2004. "Walking on water or sinking without a trace? Six behaviours that describe strong crisis leaders." Ivey Business Journal Online, November.
" hile there are factors like peer pressure and authority that come into play, some research claims to have isolated significant features of an individual's character that make them more likely to commit acts of fraud, bribery and falsification in the corporate context (27, 2009). For example, those people with "high levels of ambition were more likely to transgress moral codes, competitively stab colleagues in the back and make dubious decisions relating to asset-stripping, disinvestment, and so on" (27, 2009).
Trevino's (1986) work is relevant when it comes to understanding individuals and corruption. There are a couple questions regarding moral personality that come up: first of all, whether or not a person sees an event or issue as a moral problem; the second is how they decide to act in relation to that problem. Kohlberg's theory of cognitive moral development emphasizes the cognitive or reasoning aspect of moral-decision making (604,…
Bratsis, Peter. The Construction of Corruption, or Rules of Separation and Illusions of Purity in Bourgeois Societies. Social Texts, 21(4), 9-33.
Burke, Ronald J. & Cooper, Cary L. Research Companion to Corruption in Organizations
(New Horizons in Management). Edward Elgar Publishers, 2009.
Fleming, Peter. & Zyglodopoulos, Stelios C. Charting Corporate Corruption: Agency,
Firms with what organisational patterns are more likely to acquire existing firms? In what stage of internationalisation is acquisition more likely? Such research should not assume that such decisions are always rational. It may be that irrational factors are important at times. For example, it might be that the rush to acquire businesses in Europe prior to 1992 and to acquire companies in Asia in the mid-1990s reflected a bandwagon effect with firms developing strategies to legitimise their investments after the decision has been made (McDougall, et al., 2004). Research might also give attention to a broader range of entry modes beyond exporting, licensing and FDI. Strategic alliances with local or other foreign firms may involve no transfer of funds. Alliances are another entry mode option which deliver similar strategic advantages to joint ventures but have received little attention in the literature beyond those firms whose home country is either…
Aspelund, a., and O. Moen 2001. "A Generation Perspective on Small Firms Internationalization -- From Traditional Exporters and Flexible Specialists to Born Globals," in Advances in International Marketing: Reassessing the Internationalization of the Firm, Vol. 11. Eds C.N. Axinn and P. Matthyssens. Amsterdam: Elsevier Science, JAI Press, 197-226.
Bell, J., Crick, D. And Young, S. 2004. Small Firm Internationalization and Business Strategy: An Exploratory Study of Knowledge-Intensive and Traditional Manufacturing Firms in the UK. International Small Business Journal. 22(1):23-56.
Cavusgil, S. Tamer, Knight, Gary and Riesenberger, John R. 2008. International Business: Strategy, Management, and the New Realities, New Jersey: Pearson Prentice Hall. ISBN: 0137128339. Chapter 3.
Christensen, P.R. 1997. "The Small and Medium Sized Exporters' Squeeze: Empirical Evidence and Model Reflections," Entrepreneurship and Regional Development 3, 49-65.
When considering their security needs, businesses will be faced with whether to develop an in-house, proprietary team or to outsource their security to a contractor. There are significant differences between contract security services and proprietary security, as well as costs and benefits associated with each. With proprietary services, the company can control and monitor all their security needs, change security strategies as needed, and conduct all training in-house. Security personnel are also directly reporting to the company, creating a safer and more internally cohesive security strategy. Yet few companies can afford to develop a security staff from scratch, maintain that staff through ongoing and important skills upgrades, and monitor security internally. Contract security services have become popular among businesses of all sizes for good reason, offering substantial cost savings. Moreover, security contract services can be highly effective and reliable when they ascribe to international standards for professional development in their…
The statement regulating accounting for stock-based compensations defines a fair value-based method of accounting for an employee stock option or similar equity instrument and encourages all entities to adopt that method of accounting for all of their employee stock compensation plans. However, it also allows an entity to continue to measure compensation cost for those plans using the intrinsic value-based method of accounting prescribed by APB Opinion No. 25, Accounting for Stock Issued to Employees. The fair value-based method is preferable to the Opinion 25 method for purposes of justifying a change in accounting principle under APB Opinion No. 20, Accounting Changes. Entities electing to remain with the accounting in Opinion 25 must make pro forma disclosures of net income and, if presented, earnings per share, as if the fair value-based method of accounting defined in this statement had been applied.
Stock options are the most frequently used method in…
Cadbury, Sir a. 1992. Committee on the Financial Aspects of Corporate Governance. London, Gee.
Combined Code. 2003. The combined code on Corporate Governance. London, Financial Reporting Council.
Directors' Remuneration Report Regulations. 2002. Available at http://www.opsi.gov.uk
Girma, S., Thompson, S. And Wright, P.W. 2007. Corporate governance reforms and executive compensation determination: evidence from the UK, the Manchester School, vol. 75(1): pp. 65-81.
Another expample, as Dahlin (2007) notes, WorldCom was in the heart of one of the largest accounting scandals in history. Add to this the Wal-Mart effect of business in general, with companies having to compete with Wal-Mart's low costs, made possible partially due to their low wages, failure to pay overtime, nonexistent benefits, and resistance to unionization, and a ripple effect has been cast on the waters, causing other companies to follow suit, in an effort to be competitive.
Changing Society Equals a Changing Demand for Corporate Social esponsibility:
Today's changing society has increased the demand for corporate social responsibility. The decades of ethical abuse, coupled with the recent financial soul shattering scandals, has called for businesses to renew their social contract with society (Basu & Palazzo, 2008). Society now demands that corporations take responsibility for their interactions with the world.
A generation ago, most people didn't think tobacco was…
Basu, K. & Palazzo, G. Jan 2008, "Corporate social responsibility: A process model of sensemaking," Academy of Management Review vol. 33, no. 1, pp. 122-136.
Daboub, a. & Calton, J. Dec 2002, "Stakeholder learning dialogues: How to preserve ethical responsibility in networks," Journal of Business Ethics vol. 41, no. 1/2, pp. 85-98.
Dahlin, L. 2007, "Where have all the ethics gone? Business ethics and corporate social responsibility through the years," Proceedings of the Northeast Business & Economics Association pp. 360-366.
Porter, M. & Kramer, M. Dec 2006, "Strategy & society: The link between competitive advantage and corporate social responsibility," Harvard Business Review vol. 84, no. 12, pp. 78-92.
However, because of the costliness of this requirement, many believe it is especially unfair to small businesses who are already struggling to be competitive in an increasingly hypercompetitive, globalized economy.
As such, small, public companies have been given a temporary reprieve from some of Section 404's strict and costly requirements. In addition, there have been new guidelines set forth for auditors, with a hopes of reducing the cost of compliance of the Section, for all companies (Basilio, 2007; Grumet, 2007).
Bradford and Brazel (2007) note that these costs due indeed seem to be decreasing. In research they quote from AM, organizations spent $4.5 million on compliance with the Act, in 2004. This was reduced to $3.8 million in 2005, and further decreased to $2.9 million in 2006.
However, despite these decreasing total costs of compliance, the Act is still a costly requirement for public companies. Bradford and Brazel (2007) further…
Basilo, T. (Jan 2007). Reducing Sarbanes-Oxley compliance costs. The CPA Journal, 77(1). Retrieved December 11, 2007, from ProQuest database.
Bigalke, J. & Burrill, S. (Aug 2007). Time for a second look at SOX compliance. Healthcare Financial Management, 61(8). Retrieved December 11, 2007, from Business Source Complete database.
Bradford, M. & Brazel, J. Flirting with SOX 404. Strategic Finance, 89(3). Retrieved December 11, 2007, from ProQuest database.
Bumiller, E. (31 Jul 2002). Bush signs bill aimed at fraud in corporations." New York Times. Retrieved December 11, 2007, from Business Source Complete database.
The statute of limitation for the discovery of fraud is increased to two years from discovery date and five years following the act. Criminal penalties for securities fraud was increased to 25 years, by SOX.
Each public company's CEO and CFO must certify financial statements and reports. Personal loans are banned, to executive officers and company directors, with the enactment of SOX. It is also now required to accelerate reporting of insider trading ("H.. 3763").
In addition, SOX now prohibits insider trading during pension fund blackouts. Compensation and profits for the CEO and CFO must be made public.
Auditor independence is now specifically required. and, American companies must have an internal audit function, that is certified by external auditors. Audit firms are prohibited from providing services, unrelated to their audit work, to clients. One of the most important provisions is an increased accountability, holding CEOs and directors accountable, for crimes…
Beard, D. & Wen, H. "Reducing the Threat Levels for Accounting Information Systems." The CPA Journal. May 2007. New York State Society of CPAs. December 3, 2007 http://www.nysscpa.org/cpajournal/2007/507/essentials/p34.htm .
Collins, J. "15 Key Provisions of Sarbanes-Oxley." Microsoft Dynamics. 10 Nov 2004. Microsoft. December 3, 2007 http://www.microsoft.com/dynamics/nav/product/navision_15_major_sox_provisions.mspx.
H.R. 3763. 23 Jan 2002. Government Printing Office. December 3, 2007 http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=107_cong_bills&docid=f:h3763enr.tst.pdf .
Lucci, J. "Enron - the Bankruptcy Heard Around the World and the International Riccochet of Sarbanes-Oxley." Albany Law Review 67(1) 2003: pp. 211-249. Academic Search Premier. EBSCOHost. University of Phoenix, Phoenix, AZ. December 2, 2007 http://web.ebscohost.com .
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. crushy 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…
Sense of entitlement
Jennings (2004a) identified that many corporate cultures are less concerned about their fraud because of their philanthropic endeavors. These good works seem to blind them to their culpability and cause them to both "overestimate their ability and underestimate the risk of being found out" (p. 17). This sense of entitlement constitutes two of the factors that Jennings identifies as "Wild West behaviors" (p. 13) that are common to organizations that ethically collapse; A "culture of innovation like no other" and a "culture of social responsibility" (p. 17). She notes that "the attitude develops slowly as the other factors of iconic status and high levels of success consume the individual right up to a feeling of invincibility" (p. 17). This is amply demonstrated in the behavior of Richard Scrushy, who despite all of the evidence arrayed against him continues to proclaim his innocence of any wrong doing.
Jennings (2004b) identified common red flags that would point to corporate counsel that an investigation into the accounting of the firm might be in order. She indicated that in HealthSouth's case legal counsel "fits the inaction mold" (p. 45), and "like executives at WorldCom, Enron, and Tyco, executives at HealthSouth, particularly Scrushy, lived lavish lives" (p. 46). She concludes that "the presence of many elaborate perks is a red flag all can see" (p. 46). It is these perks that, according to Neeley & Boyd (2010) "encourage[s] executives to take excessive risk with other people's money" (p. 548).
• Competitiveness in the Euro currency markets (Cayman Islands.com)
Depositors can also invest globally. There are minimal reporting requirements, and strong client confidentiality, and the Cayman Islands, being under British jurisdiction, has political and economic stability (Benefits of Cayman Offshore Banking)
ome of the Comnaonies in Cayman Islands
Famous U.. companies located on Cayman Island include:
Financial Consulting & Accounting Ltd.
Custom Accounting olutions
Xanadu Distributing Ltd. (Marketing)
Ford - Vampt Motors
Mercedes-Benz - Ultimate Imports Ltd.
Hi-Tech Electronics Inc.
Alphasoft Ltd. (telecommunications)
Others are Coca-Cola, Oracle, and Intel that all use the Islands to avoid paying taxes
"One quarter of the 100 largest contractors with the U.. federal government, including Altria Group Inc. And Tyco International Ltd. have had subsidiaries in the Caymans, according to a study by the Government Accountability Office." (Evans (May, 2009). eagate is one of these companies.
Benefits of Cayman Offshore Banking http://www.ncbcayman.com/component/content/article/38/72-benefits-of-cayman-offshore-banking )
Evans, D (May, 2009) Coca-Cola, Oracle, Intel Use Cayman Islands to Avoid U.S. Taxes Bloomberg,
Australia's Corporation Act 2004
Australia Corporations Corporation Act 2004
The purpose of this research is to investigate the Corporations Act 2004 (Cth) in relation to the protection it provides for investors of non-profit corporations. Through research of the Trade Practices Act, current case law and the Australian Investment and Securities Commission provide an overview of what has changed in the regulations for corporations in Australia in 2004 thus far.
Australian Supreme Court sated in 2003 that: "the governance of corporate entities comprehends the framework of rules, relationships, systems and processes within and by which authority is exercised and controlled in corporations." Australia has recently implemented new regulations which, enhance and harmonize corporation law.
The alignment of the regulations with elements that are known to be those of a competent and responsible board of directors in view of strategy determination, performance review, risk management, internal control regulation and reporting to shareholders…
Swire, Mary (2004) "New Australian Corporate Governance Regime Now in Force" Lowtax News Story 16 September 2004 [Online] available at http://lowtax.net/asp/story/storyaus.asp ?
04-002 ASIC Focuses on Defective Debenture Prospectuses" (2004) Australia Securities and Investments Commission - 2004 Media Release 04-002 ASIC [Online] available at http://www.asic.gov.au.asic/asic_pub.nsf/byheadline/04-004+ASIC+focuses+on+defective
04-001 ASIC Protects over $456 Million in Shareholders Funds" (2004) Australia Securities and Investments Commission - 2004 Media Release 04-001 ASIC [Online] available at http://www.asic.gov.au.asic/asic_pub.nsf/byheadline/04-004+ASIC+focuses+protects+over+$465
Parliamentary Secretary issued to Treasurer (2004) Corporation Amendment Regulations 2004: Statutory Rules 2004. [Online] available at: www.asic.com
The reality was that a company which aspired to be "the No. 1 stock on all Street" was instead steadily bleeding money while claim growth in the billions.
The pressure placed upon accountants at ordCom was reflective of the pressure facing accountants throughout the economy during this period of widely absence securities oversight. Indeed, the relationship between regulation and accounting is essential, and this diminished link would have catastrophic implications for the profession as a whole. Such is shown by the Scott text, which tells that "efficient securities market theory has major implications for financial accounting. One of these is that supplementary information in financial statement notes or elsewhere is just as useful as information in the financial statements proper. Another is that efficiency is defined relative to a stock of publicly known information. Financial reporting has a role to play in improving the amount, timing, and accuracy of this…
Kaplan, R.S. & Kiron, D. (2007). Accounting Fraud at WorldCom. Harvard Business School.
Scott, W.R. (2006). Financial Accounting Theory, 4th Ed. Pearson-Prentice Hall.
Skeel, D. (2005). Icarus in the Boardroom: The Fundamental Flaws in Corporate America and Where They Came From. Oxford University Press.
Even if he hints around in a non-direct way that his friends should sell their stock without coming out and saying it, he may be guilty of insider trading because the information on the merger has not yet been made known to the public.
This is unethical and what the corporate officer should steer the conversation in a different direction and if his friends insist on continuing to ask questions he should firmly, but politely tell them he is not allowed to discuss personal company information with them.
Likewise, an employee has a certain amount of fiduciary responsibility if he knows that there are fraudulent practices happening at the corporation. If the employee knows that there is insider trading or if he knows that the accounting practices the corporation is using are dishonest, then he has an obligation to report what he knows. Some employees, especially if they do not…
Hoffman, Drew, "Martha Stewart's Insider Trading Case: A Practical Application Rule of 2.1," The Georgetown Journal of Legal Ethics 20, no. 3, (2007): 707-717.
James, Randy, "A Brief History of Insider Trading," Time, November 9, 2009. http://www.time.com/time/business/article/0,8599,1936562,00.html (accessed August 9, 2010).
Jennings, Marianne, "The Lessons from Galleon Hedge Fund and the Insider Trading Ring," Corporate Finance Review 14, no. 5, (2010): 43-46.
Khan, Walayet A. And Asjeet S. Lamba, "The Effectiveness of Legal Sanctions in Curtailing
Priority of values should be identified so as to aid the organization avoid breaking laws by following the stipulated requirements of operation.
The top three of four values should be reviewed to help the organization determine which values currently help it fulfill its mandate. For example, in the accounting department, the organization should identify accuracy and confidentiality as the key values to the success of the department. Values needed to identify current issues should be brought to fore. This should be done by selecting a few people to interview the members of the organization in identifying key areas that require attention in the organization. Out of the issues identified, determine which ones are ethical and device ways in which the organization can solve them.
It should be noted that not all remedies can be obtained for any ethical dilemma that might arise. Emphasis should be made on dilemmas that don't…
The stock was trading on pink sheets at $0.165 per share at the end of April 2003" (8).
As noted above, one of the key factors involved in what happened at HealthSouth was the enormous pressure to perform in the increasingly competitive for-profit healthcare industry, pressure that directly affected the decisions that were made concerning the types of accounting practices that were needed to "deliver the goods," at least on paper. Although absent from the foregoing list, Scrushy's name appears time and again in the investigation that followed. According to Jennings, "Like Enron, orldCom, and Tyco, HealthSouth placed tremendous pressure on employees to 'meet the numbers.' In April 1998, CEO Richard Scrushy told analysts that HealthSouth had matched or beat earnings estimates for 47 quarters in a row" (8). The role played by Scrushy in engineering the corporate culture that would allow these estimates to be reported with a straight…
Brickey, Kathleen F. 2006. "In Enron's Wake: Corporate Executives on Trial." Journal of Criminal Law and Criminology 96(2): 397-399.
Geyman, John P. The Corporate Transformation of Health Care: Can the Public Interest Still Be
Served? New York: Springer, 2004.
Jennings, Marianne M. 2004. "Incorporating Ethics and Professionalism into Accounting
BRIBERY AS AN ETHICAL ISSUE
Bribery is fundamentally unethical because it is inherently unfair. Regardless of the situation, bribery means that someone is transferring some form of compensation that is not permitted and that necessarily undermines the fair efforts of competitors or the purpose of rules and regulation. Where bribery occurs in connection with gaining an unfair advantage over others (such as bribing a college professor for a good grade), the ethical violation is a function of the fundamental right of others competing for the same goal to achieve it through only legitimate means. The student who bribes a college professor and receives a grade for it harms the other students by lowering the grading curve for everybody. In the long run, many instances of bribery of this kind would also diminish the value of the educational degree from an institution whose reputation as lowered by unqualified graduates who perform…
Cultures of greed, corruption and misrepresentation helped to facilitate a massive transfer of wealth, substantial enough to suggest that a denial of awareness on the part of personnel at such organizations is nothing short of implausible. Therefore, we can presume that an absence or real protections for would-be whistleblowers in private enterprises would help to accommodate a wave of corruption every bit as destructive to the public as any government indiscretion such as the histleblower Protection Act was designed to address.
Beyond this, there are indications that the federal legislation lacks the proper mechanisms even to serve as a template for that which might address the failures in private regulation. The article by Fischer (1991) provides myriad examples in which exceptions and clauses relating to the histleblower Protection Act have made it essentially toothless. Specifications such as that which denotes that only certain 'covered employees' qualify for the protections afforded…
Fisher, B.D. (1991). Whistleblower Protection Act of 1989: A False Hope for Whistleblowers. Rutgers Law Review, 43(355).
Government Accountability Project (GAP). 2009). Whistleblower Protection Act & Amendments. Whistlblower.org.
U.S. Department of Labor (USDoL). (2008). The Whistleblower Protection Program. OSHA.
U.S. Securities and Exchange Commission (SEC). (1989). Whistleblower Protection Act Information. SEC.gov.
CEO's salary, bonus, and long-term compensation with respect to various organizational, financial and CEO factors such as corporate reputation, growth in employees, company size, and return on equity, CEO tenure and CEO stock ownership. In relation to the general performance of the organization
This paper utilizes the various measurement of chief executive compensation as exploited by the various detailed pieces of literature and employed as the dependent variable in a model based on multiple regression theory. It explores the extent to which the CEO's compensation package affects the overall performance of the whole firm or corporation for which he or she works for.
The purpose of this research is to determine the extent to which the CEO's remuneration a large corporation such as Coca Cola has on the general performance of the organization.
The CEO's compensation has for a long time been source of attention from various groups in…
Anderson, R.C & Bizjak, J.M. 2003) An Empirical Examination of the Role of the CEO and the Compensation Committee in Structuring Executive Pay.Journal of Banking and Finance, 27.
Baiman, S. And Verrecchia R. (1995).Earnings and price-based compensation contracts in the presence of discretionary trading and incomplete contracting. Journal of Accounting and Economics, Vol. 20:1, pp. 94-120.
Barro, J.R.; Barro, R.J. (1990) Pay, Performance and Turnover of Bank CEOs, Journal of Labor Economics, 8.
Bebchuk, L.A & Fried, J.M.( 2003) Executive Compensation as an Agency Problem. National Bureau of Economic Research Working Paper Series, No. 9813.
It is simply not reasonable for a manager to push the sale of a surplus asset back by multiple years.
However, managers can influence earnings through their choice of accounting policies. While the choice of policies is allowable under GAAP, when different companies in the same industry use different policies, this can reduce the degree of comparability between the statements, negating one of the key benefits of having the GAAP system.
Ultimately, management does hold the power to influence how the firm conducts its financial accounting. In addition to dictating the type of accounting policies the firm has, management also creates the ethical culture of the firm. Most of the cases of accounting fraud in the past decade were heavily influenced by the ethical culture that management created. The results -- notably in firms like Tyco or Enron -- have been grossly inflated earnings. However, while one does not expect…
The statement "What is worse is that it legitimizes the self-serving managerial behaviors" in the context of CEO pay. This statement I agree with as CEOs have used governance to rationalize giving themselves exceptionally large raises without accountability and governance in place. Conversely the statement "Furthermore, markets or organisational hierarchies are assumed to provide genuine alternative optimal or appropriate governance structures" in the context of the discussion at this point in the paper is inaccurate. Organisations in fact produce governance structures that are highly inefficient and lack the necessary framework and foundation to accomplish these goals. Instead there is the need for continually turning trust into an accelerator and engraining governance into companies, not legislating it from the outside. This is the fatal error of the statement shown.
This is a well-researched peer review article that has the potential to deliver entirely new governance frameworks with additional effort…
Bernoff, J., and C. Li. "Harnessing the Power of the Oh-So-Social Web. " MIT Sloan Management Review 49.3 (2008): 36.
Stephen Letza, James Kirkbride, Xiuping Sun, and Clive Smallman. "Corporate governance theorising: limits, critics and alternatives" International Journal of Law and Management 50.1 (2008): 17-31.
This mindset was made possible by their intensive investments in new technologies that made transactions inherently unauditable and untraceable by the Securities and Exchange Commission and other governance entities. Given the automation of these complex trading workflows and the inability of governance bodies to keep pace with technological advances, coupled with banker's unwillingness to assist governments in tracking increasingly intricate transactions, the bankers could literally make their own rules up as they went along. What has differentiated this global economic downturn from others is how pervasive this attitude has become of offloading risk by aggregating toxic and bad loans together, using technologies to increase speed of transactions while alleviating accountability (Corden, 2009).
An aversion to risk has been replaced by a consolidating, aggregating and re-selling of completely worthless and often called "toxic" loans, with accountability of the performance of investments left by the wayside. Bankers had the most to gain…
John C. Bogle. (2009, April 21). A Crisis of Ethic Proportions. Wall Street Journal (Eastern Edition), p. A.19.
Corden, W. (2009). The World Credit Crisis: Understanding It, and What to Do. The World Economy, 32(3), 385.
John Dobson. (2003). Why Ethics Codes Don't Work. Financial Analysts Journal, 59(6), 29-34.
Jeffrey C. Gerrish. (2002). Ten new commandments for corporate governance. American Bankers Association. ABA Banking Journal, 94(11), 16-20.
Those discretionary areas include sales and negotiating. These are open to flexibility, argument, discussion -- all within boundaries. The boundaries that fence them in are the non-discretionary functions of the business, those areas where the lines must not be crossed.
The non-discretionary areas have very firm guidelines, rules, and even laws and regulations that guide what can and cannot be done. It is when we violate those guidelines, that we cross ethical and/or moral standards whether or not we actually violate the law. There is no compromise in the non-discretionary areas. usiness ethics can be a very personal function rather than organizational (Cagle, Glasgo, & Holmes, 2008).
As an example, safety is non-discretionary. Safety procedures must be enforced and employees have to follow them. There is no negotiation or flexibility. If the company does not establish proper safety standards but no one gets hurt, is it a violation of business…
Cagle, J., Glasgo, P., & Holmes, V. (2008). Using ethics vignettes in introductory finance classes: Impact on ethical perceptions of undergraduate business students. Journal of education for business (peer-reviewed) (AN35201100), 76-83, Vol. 84, Issue 2.
Crane, A., & Matten, D. (2007). Business ethics: managing corporate citizenship and sustainability in the age of globalization - (peer-reviewed). Oxford, England: Oxford University Press.
DeGeorge, R.T. (2005, February). A history of business ethics. Retrieved June 15, 2009, from Santa Clara University: http://www.scu.edu/ethics/practicing/focusareas/business/conference/presentations/business-ethics-history.html
Harvard Law Review. (2009). Go directly to jail: White collar sentencing after the Sarbanes-Oxley act. Harvard Law Review (peer-reviewed), 1728 (21) (GALE Doc. #A198185467).
5 million annually to comply with the law. The increases in spending (resulting in less spending in marketing and administration) for many energy companies will be in "security, grid reliability, and wholesale market operations" (Gartner, 2004).
The cost of providing the Securities and Exchange Commission with "two declarations" regarding internal financial controls certainly is significant; and those dollars take away revenue from other departments of utility companies, unless, a utility expects to just absorb additional costs. PriceaterhouseCoopers' (www.pwc.com p. 4) "Sustainable From the Start" document points to a company's duty under SOX to one, "state its responsibility for creating and maintaining adequate internal controls over financial reporting"; and two, issue an independent report as to whether the auditor agrees with management's conclusion (www.pwc.com p. 9) or not. Moreover, PC asserts that for some companies SOX has "tipped the emphasis the wrong way and forced companies to get stuck in process…
Cote, Bryan. (2008). Failed Audit? Preventing Failure -- while streamlining the audit
Process. Sarbanes-Oxley Compliance Journal. Retrieved May 8, 2009, from http://www.s-ox.com/dsp_getFeaturesDetails.cfm?CID=2022 .
Gartner. (2004). Industry Research: Energy Utility Companies Weight in on Sarbanes-
Oxley and Disaster Recovery. Retrieved May 6, 2009, from http://www.sox.weblog.gartner.com.
It should not be treated as a separate exercise undertaken to meet regulatory requirements." (ICA, 29) Here is expressed a philosophical impetus that drives the focus of this research, that such compliance which will generally concern matters such as corporate accounting, the practice of internal oversight and the practice of financial transaction must be considered inextricable from other aspects of practical, procedural and legal operation in terms of its relevance and necessity.
The practice of corporate governance may perhaps best be understand from the perspective that deregulation has largely defined the processes and direction of the global economy across the two decades following the Cold ar and its inevitable opening of economic channels. This is because in practice, corporate governance is a concept which has suffered much neglect. To the point, the statistics availed by organizations such as the orld Bank and the International Monetary Fund illustrate that…
Aguilera, R.V. & Yip, G.S. (2004). Corporate Governance and Globalization:
Toward an Actor Centred Institutional Analysis. University of Illinois: College
of Business. Online at .
ASB. (1999). Reporting Financial Performance. Financial Reporting Council. Online at
Moreover, a prosecution of the core leadership of an organization under RICO charges is likely to produce revelations concerning the relationship between leadership and other members who are either guilty of racketeering or some lesser scope of individual crime. This is to say that RICO was essentially designed to push the door open on the activities of such typically obscured enterprises in order to systematically disrupt its initiatives and priorities.
Still, as this investigation finds as a recurrent theme in considered research materials, even when armed with RICO's expansive authorities, there remains a fundamental difficulty in overcoming the effectively obfuscating structure of the modern organized crime enterprise. In the case of the long-ingrained style of activity instituted by La Cosa Nostra, the protective degree to which structure is designed to insulate the activities, connections and implications relating to real decisions-makers and bosses tends to effect the ability of RICO statutes…
ACLU. (2003). How 'Patriot Act 2' Would Further Erode the Basic Checks on Government Power that Keeps America Safe and Free. American Civil Liberties Union. Online at http://www.aclu.org/SafeandFree/SafeandFree.cfm?ID=12161&c=206
Arshadi, N. (1998). Insider Trading Liability and Enforcement Strategy. Financial Management, 27(2), 70-84.
Cornell University Law School (CULS). (1970). Chapter 96-Racketeer Influences and Corrupt Organizations. U.S. Code Collection. Online at http://www.law.cornell.edu/uscode/html/uscode18/usc_sup_01_18_10_I_20_96.html
FBI. (2004). Investigative Programs: Organized Crime. Department of Justice: Federal Bureau of Investigation. Online at http://www.fbi.gov/hq/cid/orgcrime/aboutocs.htm
The treatment of the undocumented workers has legal and economic implications, but is only an issue in the political arena.
Companies that hire illegal immigrants are being socially responsible. The argument that illegals suppress wages is not based on sound evidence - the jobs illegals do would otherwise be unfilled. If anything, hiring illegals is socially responsible because it gives those people an opportunity to better themselves, something they otherwise would not have had. The notion is especially absurd given that 99% of Americans received this same opportunity at some point in their own family's history. Furthermore, mankind has an obligation to look out for our fellow man. This duty transcends any sense of duty to a state or that state's rule of law.
The only small issue with regards to illegal immigrants is that with regard to legal immigrants, those who play by the rules, sometimes to their detriment.…
Carroll, Archie B. (1991). The pyramid of corporate social responsibility. Business Horizons. Retrieved October 24, 2008 at http://findarticles.com/p/articles/mi_m1038/is_n4_v34/ai_11000639
The Bank CEO's ole in Defining Ethical Integrity
Based on a thorough review of existing literature of the role of ethics in the banking industry, the role of the CEO as the ethical leader of their organization is next discussion. Based on the concepts presented in the paper to this point as the foundation, these key points provide insights into how CEOs and senior management actively shape the ethical standards of the organizations they manage on behalf of shareholders.
isk Management Is a CEOs' Ethical esponsibility combination of forces -- changing regulatory expectations that open companies up to intense levels of examination, heightened stakeholder sensitivity to and scrutiny of corporate behavior, and the severity of punishment by financial markets for corporate missteps -- push reputation and ethics management onto the CEOs' and senior managements' agenda. The paradox CEOs face is when to risk the reputation and brand of the company…
John Bond (2007). A safety culture with justice: A way to improve financial performance. Loss Prevention Bulletin,(196), 31-39. Retrieved October 20, 2008, from ABI/INFORM Global database. (Document ID: 1333256011).
Donald R. Cassling (2008). Poehl v. Countrywide Home Loans, Inc. The Banking Law Journal, 125(9), 865. Retrieved October 21, 2008, from ABI/INFORM Global database. (Document ID: 1571291211).
Chris Churchill (2007). State targets lender ethics: Mortgage brokers must get training, undergo criminal checks starting next year. Knight Ridder Tribune Business News. Retrieved October 21, 2008, from ABI/INFORM Dateline database. (Document ID: 1335614991).
Greenberg, J. (1990). Employee theft as a reaction to underpayment inequity: The hidden cost of pay cuts. Journal of Applied Psychology, 75, 561-569.
Coombs and Holladay (2007)
Coombs and Holladay use the support of the professional literature to find an explanation to the importance stakeholders came to play in their role with the management. Their next movement is back to history, this time deeper to the times where there was no such field as public relations. They start in their investigation with the Anti-Slavery Society, formed by Arthur and Lewis Tappan in 1831. They were among the first to discover the role of using various ways of disseminating information to the public they targeted by using the printed word or by assembling in "meetings, sermons and public lectures." Coombs and Holladay (2007, p. 62). Further examples show how tools specific to the PR industry nowadays were discovered and put to use by simple people who succeeded to start major changes in society: Carry a. Nation, the first woman who made an "event" in…
Coombs, W.T and Holladay S.J. it's Not Just PR: Public Relations in Society. Blackwell Publishing. 2007
In the company it has ushered in a better accounting and the management with upgrades in technology and competence, there will be a requirement for training and upgrading managers and staff to meet the contingencies of the proposed systems and controls. The Sarbanes-Oxley section will help the companies on the other hand gain a lot of investment and support from the investors by providing a quality and timely information, with a competitive advantage. (Shanley, 2004)
For the officer and the shareholder and those dealing with the company it ensures that the financially literate directors at the helm and will have internal controls which make the company relatively safe. It is however to be noted that the act is for public companies and many companies have cut issues to escape the provisions of the act. The Auditing firms and the auditing process all have undergone vast changes in the process of…
Anderson, David R. (2006) "Modern Business Statistics"
Bullock, Jane a; Haddow, George. (2006) "Introduction to Homeland Security"
The enactment of the Sarbanes-Oxley Act has brought exponentially higher costs of operating to every organization that must comply to its requirements. As many organizations are already quite lean in terms of headcount to minimize costs, many outsource compliance and the resulting business process management (BPO) activities to outsourcing organizations. Ironically legislation meant to bring American companies into higher levels of compliance continues to be one of the most lucrative businesses globally for outsourcing companies. Business Process Outsourcing (BPO) continues to accelerate as organizations spend heavily to gain access to expertise they do not have the funds to hire or the resources to fully take advantage of. The costs of compliance and governance and the risks associated with it paradoxically create higher levels of risk for organizations the laws were meant to protect and infuse with stability. Yet for all the costs of compliance, the benefits to organizations have already…
David Antony Detomasi 2007. The Multinational Corporation and Global Governance: Modeling Global Public Policy Networks. Journal of Business Ethics 71, no. 3 (March 1): 321-334. http://www.proquest.com (Accessed January 4, 2008).
Tim V Eaton, Michael D. Akers. 2007. Whistleblowing and Good Governance. The CPA Journal 77, no. 6 (June 1): 66-71.
In the fifth hypothesis of measuring the business ethics levels of Taiwanese ITPs the Null and Alternative Hypotheses are defined as follows:
H0: In the ethical climate of independence, the business ethics level of Taiwanese ITP's is high.
H1: In the ethical climate of independence, the business ethics level of Taiwanese ITP's is low.
Results of Testing Hypothesis Five
It has been established in the fourth hypothesis that the greater the ethical climate of independence, the greater the level of ethical self-direction and ownership of ethical outcomes. This also holds true when the ethical climate of instrumental low. The adherence to self-defined ethical standards is high. When the specific variable of in this company, the employees are expected to do their job according to their personal belief of ethics is correlated against the variable of in this company, the employees can make decisions based on their personal judgment,…
In addition, the researchers found
that on three of the four dimensions, the salespeople were ethical in their
conduct, including the use of moral reasoning in the service of both
prospects and customers. The only dimension to not test statistically
significant was the information dimension, as many of the sales people in
the study did not routinely file reports with their managers. This is
fascinating analysis as it has been pointed out in many of these studies
that given the geographic isolation of sales representatives the tendency
to treat unethical behavior as an alternative and an accelerator for goal
performance. The research presented however shows that salespeople, when
given clear objectives that require a high level of activity, see ethics as
the most efficient means of qualifying, initially selling to, and growing
customers. Ethics in the context of selling is an excellent business
strategy based on the research presented; it…
Behrman, D., & Perreault, W. (1982). Measuring the performance of
industrial salespersons. Journal of Business Research, 10, 35-70.
Economist (2006) - Virtual Champions. Economist Magazine. Downloaded from
the Internet on April 23, 2007 from:
The major reason why social media plays a vital role in the recruitment process is because of the fact that applicants reveal more information about themselves via social media than during the normal hiring process.
However, while it continues to exist in the public domain, many applicants oppose the use of their social media profiles as part of the recruiting process ("Social Media's Place," n.d.). This opposition raises public debate about public vs. private life and the right to an individual's privacy. Majority of job applicants argue that social media profiles shouldn't be part of an employer's decision making process since personal life should be regarded as private life. Actually most of them consider reviewing their social media profile as a practice that is equivalent to conducting a security check. On the contrary, employers use social media to vet a candidate when they feel that this person does not portray…
Jackson, R.M. (2010, January 11). Social Media Permeate the Employment Life Cycle:
Employers Must Address their Use and Misuse Before, During and After An Employee's Tenure. Retrieved June 11, 2011, from http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202437746082&slreturn=1&hbxlogin=1
"Pre Employment Background Checks for HR -- A Much Better Choice Then Social Profiling."
(2011, May 19). Pub Articles: Better Articles Pub. Retrieved June 11, 2011, from http://www.pubarticles.com/article-pre-employment-background-checks-for-hr-a-much-better-choice-then-social-profiling -- 1305791090.html
The (In)Formality of Ethics in a Private Organization: A Case Study Lowes Foods Including ecommendations
The recent economic downturn that the world's economies underwent has lead to a period of major reexamination and reconsideration of certain trends in the word of business and finance. The ethical decisions that business organizations must contend with on a daily basis clearly have major ramifications for many partners in its industry and even potentially in the global economy at large depending on the size and positioning of the organization in question. Enough poor ethical decisions can, when added together and mixed with the right conditions can lead to major practical problems in business in addition to being generally reprehensible and directly ruinous to individual consumers and business partners.
Most companies, of course, are not actually of a size to cause complete industry-or economy-wide upheaval due even to their complete failure. That is,…
Alex Lee. (2010). Accessed 27 November 2010. http://www.alexlee.com/
Lowes Foods. (2010). Accessed 27 November 2010. http://www.lowesfoods.com/index.cfm/
Trevino, L. & Nelson, K. (2010) Managing Business Ethics. New York: Wiley.
Managerial Prerogative Has Gone Too Far?
Whenever an organization is founded and the objectives for its existence have been established, the founders and management of said organization are expected to ensure the continuity, viability, and resilience of the enterprise. This is done via the allocation of needed resources (i.e. capital, human, financial, etc.) and formulation of strategies in order to achieved set and target organizational goals. Once operational, there are other duties, responsibilities, accountabilities, rights and privileges management can and must exercise to achieve continued operational success and efficiency. One of these management principles or concepts is known as managerial prerogative, which "includes the right to organize operations and methods of working, issue detailed instructions on the circumstances in which work is performed, and take in matters relating to working hours in so far as these are not rigidly regulated by collective agreement (Eurofound, 2009)." Often, managerial prerogative is institutionalized…
Bado, J. & Logue, J. (1991). Hard hats and hard decisions: The evolving role in employee-owned firms. Employee Ownership Law and Finance, 4: 1-19. Retrieved May 13, 2011 from http://dept.kent.edu/oeoc/OEOCLibrary/Preprints/BadoLogueHardHatsAndHardDecisions1991.pdf
Ellis, A. (2008). The strain between managerial prerogative and contractual principles in English labour law. Retrieved May 13, 2011 from http://www.workplacebullying.co.uk/manperog.html
European Foundation for the Improvement of Living and Working Conditions (Eurofound). (2009, August 14). Limits to the employer's managerial prerogative. Retrieved May 13, 2011 from http://www.eurofound.europa.eu/emire/FINLAND/ANCHOR-DIREKTIOVALLANRAJATGR-Auml-NSERNAF-Ouml-RDIREKTIONSR-Auml-TT-FI.htm
Greenfield, K. (2008). Reclaiming corporate law in a new gilded age. Harvard Law & Policy Review. Retrieved May 13, 2011 from http://www.hlpronline.com/Greenfield_HLPR.pdf
transparency seems to be a huge concern for the accounting profession and that many specialists (e.g. professionals and organizations in the accountancy profession such as Tilley (2010)) see transparency as remaining the next huge issue in the next decade, particularly as businesses outsource, become more complex, and powerful.
Regulations that are in order include the arbanes-Oxley Act (2002) that came into effect due to major accounting and corporate scandals that occurred in the last century such as from WorldCom, Tyco, Peregrine ystems; Adelphia, and Enron, each of which effected share prices of numerous impacted companies and caused the public's trust in security markets to falter (Greer. & Tonge, 2006).
Importance of the OX consists in the fact that it has restored public security in American capital markets and corporate financial statements as well as making corporate accounting more accountable for its actions and strengthening its responsibility. The OX has led…
Fombrun, C. & Foss, C. 2004, 'Business ethics corporate response'. Corporate Reputation Review, 7, pp.284 -- 288
Greer, L. & Tonge, A. 2006, 'Ethical foundations: a new framework for reliable financial reporting' Business Ethics: A European Review, 15(3), pp. 259-270, Wiley Online Library [Online].
Roslender, R. & Stevenson, J. 2009 'Accounting for people: a real step forward or more a case of wishing and hoping?' Critical Perspectives on Accounting, 20 (7), pp.855-869, ScienceDirect [Online].
Tilley, C. 2010 'Beyond 2010: Accountants in the next decade.'
Organizational ehavior Trends
Increasingly two major factors are influencing corporate decisions makers. The first is a reenergized campaign for corporate ethics. The second is technology and work-related stress. This paper describes why these trends are occurring and the results on how decision makers behave. It then concludes with an assessment of whether ethics and technology pull the manager in two different directions.
The long held notion that companies will profit from unethical behavior is now being dispelled. Many research studies such as those conducted by the Institute of usiness Ethics, a promoter of corporate ethical best practice, have shown that companies with a clear commitment to ethical conduct outperform those which do not (Webley and More). The Institute of usiness Ethics carried out its research on large companies in the United Kingdom, studying those with a demonstrable commitment to ethical behavior through having a published code of business ethics, and…
Brickey, K. From Enron to WorldCom and beyond: life and crime after Sarbanes-Oxley. Washington U. School of Law Working Paper No. 03-06-01. Washington University Law Quarterly, Vol 81, 2003.
Business ethics and compliance in the Sarbanes-Oxley era. Retrieved November 21, 2004 from Deloitte Web site: http://22.214.171.124/search?q=cache:mBukAJUM4H4J:www.deloitte.com/dtt/cda/doc/content/us_assur_ethicsCompliance (1).pdf+%22business+ethics%22+and+trends+and+2004& hl=en
Dainow, S. (2001, August 10). Technology causes stress for journalism professors, report say. The Chronicle of Higher Education. Retrieved November 21, 2004 from Web site: http://chronicle.com/free/2001/08/2001081003t.htm
Dennis, M. Technology and stress in the workplace. Retrieved November 21, 2004 from CMA Web site: http://www.creditservices.org/articles/art248.shtml
In other respects, however, the evidence does not readily conform to theoretical predictions. For example, if gross job turnover is taken as a rough proxy for labor market flexibility -- and since stringent EPL reduces both hiring and firing -- it is quite surprising to find that job turnover rates are very loosely related to EPL rankings. Most remarkably, not only are the estimates for Italy and France, at 21 and 24 per cent respectively, very high in absolute terms (one in every five jobs is either created or destroyed each year), but they are also extremely close to the estimates for the United States and Canada despite the much heavier regulation of dismissals in the European labor markets." (Bertola, Boeri, & Cazes, 2000)
Once the company settled into the Canadian market they faced the new challenges regarding labor. The Canadian business philosophy continued to be pro-union. In Canada, Wal-Mart…
Bertola, Giuseppe, Boeri, Tito, & Cazes, Sandrine (2000). Employment Protection in Industrialized Countries: The Case for New Indicators. International Labour Review, Vol. 139.
Chicago Bureau Chief Weber (2002, July). The Lingering Lessons of Andersen's Fall. Business Week Online. Retrieved on January 18, 2005, at http://www.businessweek.com/magazine/content/02_26/b3789017.htm
Clements, Jonathan. "Wipe Those Bear Market Worries Away." The Wall Street Journal [New York] 6 Mar. 2001. Retrieved on January 18, 2005, from http://www.s-t.com/daily/03-01/03-11-01/b04bu056.htm .
Cutlip, Scott M. The Unseen Power: Public Relations, a History. Hillsdale, NJ: Erlbaum Associates, 1964.