...Corporate greed essay To fully understand how the business culture has acquired the greed mindset, a look at what a corporation is and defining corporate behavior becomes the starting point. First a corporation is defined as “an association of individuals, created by law and having an existence apart from that of its members as well as distinct and inherent powers and liabilities (Webster Dictionary).” Although made up of people, being separate or apart from its members also equals unaccountability. The question of “who pays when a company goes under” is at the forefront of discussions today. Corporations are developed to serve society, meet a need or provide a service. Over the years, however, the good intentioned corporation has evolved into a greed machine that has lost site of the community that it serves and the people employed who ultimately perform the work. The steady parade of top executives confessing to engage in price gouging, tax dodges, accounting shams, employee rip-offs, and other shady unacceptable acts are coming to light daily. Unethical and illegal practices are documented from the RJR Nabisco scandals in 1988 to today’s Enron, WorldCom, Merrill Lynch, Arthur Anderson, Xerox, and endless other corporations. The world realizes now that corporate greed is not about one-bad company, but large companies in general that have adopted unacceptable guidelines for corporate behavior and an overall attitude that greed is acceptable. The bottom line, insatiable need...
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...Corporate Greed Forces Change Keller Graduate School of Management HR587 - Managing Organizational Change Professor T. Downfall of the Old Boy Club Back in 2003, one of the largest healthcare company in the United States, HealthSouth was in its height of success when it experienced the largest organizational change starting from the board of directors all the way down. The CEO at the time was Richard Scrushy who was accused of directing his company employees to falsely report exaggerated company earnings in order to meet its stockholder expectations. This was a violation of the Sarbanes-Oxley Act of 2002. This act was enacted on July 2002 in response to a number of major corporate and accounting scandals such as Enron, Tyco International, and WorldCom. These scandals cost the investors billions of dollars due to the fall of stock prices. This act was implemented to hold companies accountable for falsely reporting their financial statements. The act contains eleven titles that describe specific mandates and requirements necessary for financial reporting including Corporate Responsibility, Financial Disclosures, and Corporate Fraud Accountability. In HealthSouth’s case, the entire board of directors was ultimately held accountable for falsely inflating the company earnings as much as 4700% at one point. HealthSouth was the leading provider of acute care hospitals and orthopedic clinics, employing more than 60,000 people in over 2,000 facilities. By 2006,...
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...Corporate greed, by definition, is when a company chooses to place significance on increasing profits in a way that harms employees, consumers and the environment. It occurs when making money becomes the only goal, and the other company’s social responsibility is ignored. There is some debate with companies over whether they are being greedy versus looking for the best business practice. How can one tell if a company’s practice is defined as corporate greed or if the company is just working to reduce costs in order to increase profit growth? How much social responsibility does a company have to society and the environment? An article written by Edmund Bradley, about the problem with corporate greed, gave a perspective on these questions stating that “However greedy or altruistic a business person happens to be, the institutions of the market channel his or her motivation to a social end. Business must serve society in order to thrive,” (Bradley, 2003). In order for a business to grow and expand, they need to make a positive impression on society. Especially in today’s market, with consumers focusing on what companies are doing to the environment and how to find ‘green’ products. Society want to know that the companies making millions of dollars are using their influence and power to do good things in the world around them. Another perspective, however, is that companies have to only focus on the growth and profit of the company. They should work to please shareholders...
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...HealthSouth: Fraud, Greed & Corporate Governance Marilyn J. Bordeaux HCS 5339 Rachael Kehoe HealthSouth: Fraud, Greed & Corporate Governance During the 1990s, Richard M. Scrushy, the former CEO of HealthSouth Corporation, engineered many acquisitions of rehabilitation clinics, outpatient surgical care operators, nursing homes and other health care companies. In 2003, the Securities and Exchange Commission (SEC) accused the company and Scrushy of inflating earnings to the tune of $1.4 billion since 1999. In November 2003, a federal grand jury indicted Scrushy on 85 counts including conspiracy, securities fraud, money laundering and charges related to overstating HealthSouth’s earnings by nearly $3.0 billion. According to federal investigators, the company overstated earnings to meet analysts’ earning estimates, while hiding the accounting fraud from the auditors. However, questions were raised whether the auditors failed to find or simply overlooked the fraud at HealthSouth. Central to the investigation was the issue of what role Scrushy played in “cooking the books.” However, as the case unfolded, it highlighted many other issues such as: The role of Board of Directors in corporate governance; the role of the auditors; the effect of conflict of interest between an accounting firm and its consulting arm on auditing; whether the relationship between an investment bank and a company affects the quality of the bank’s research reports on the company; whether the executive...
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...Customer Strategy Solutions (CSS), a California based developer of order-fulfillment systems, is confronted with a shakedown (Bodrock, 2005). Shortly following the company’s CEO, Pavlo Zhuk, setting up a software development center in Kiev, local officials said that CSS had not filed 5 of the 17 tax schedules as required. Furthermore, Ukrainian tax officials claim that the company owes the government tax arrears of 86, 954 “hryvnia” (Bodrock, 2005). That is close to $16,000 in U.S. dollars, by the way. Given that he and his associates had done everything accordingly, Zhuk was stunned by the accusation. Bear in mind, this isn't the first time the CEO has encountered trouble in Ukraine. For instance, in the process of getting his software center equipped, a state-owned telecommunications utility had made it difficult for Zhuk to get the phone lines CSS needed (Bodrock, 2005). The senior business manager, for example, had told Zhuk it would take 3 years to install the lines in his office. Although for a “certain” price, he had added, the lines could be operational in two weeks (Bodrock, 2005). Even as the picture of widespread bribery in Ukraine became obvious, Zhuk still did not want to disengage (Bodrock, 2005). Being of Ukrainian descent, it was his desire to help modernize the country. Such as, he paid his programmers a higher salary than that of any local company of similarity (Bodrock, 2005). He hoped to improve their living standards, by means of, affording...
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...across all financial sectors. A well functioning market economy is contingent upon the trust of all players in the field to act ethically and responsibly. The current crisis our economy faced and the numerous fraudulent financial scandals have resulted from failures in corporate responsibility and ethical behavior, not failure from the market itself or competition. This failure of corporate responsibility has led to a loss in investor confidence, resulting in the sluggish rebound of our economy from the rocky bottoms of 2008. Competition encourages efficient and innovative financial services, while the stability of every financial sector depends on the trust of every financial institution to adhere to their corporate responsibilities to act ethically and in the best interest of their shareholders. The global recession of 2008 and the collapse of Wall Street is the most indicative example of the how misrepresentative portrayal of financial investments can only deliver exponentially large returns for so long. The perfect storm of factors struck the heart of our economy all at once- the collapse of the housing market coupled with overextension of subprime mortgage loans. While the going was good, the power of greed showed its true colors. Many loan originators knew they were extending credit to homeowners that would be unable to repay their debts, however, they continued extending credit lines because incentives were high and bonuses were huge. The subprime loan market thus became...
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...Realism and Naturalism Old Grannis and Miss Baker - Necessary or Needless? June 17, 2013 In "Frank Norris' "Drama of a Broken Teacup": The Old Grannis - Miss Baker Plot in McTeague", Donna M. Campbell disagrees with the critics that have argued that the Old Grannis - Miss Baker storyline in McTeague, is out of place and unnecessary. Rather, Campbell claims that the storyline is not deserving of the abuse heaped on it, and argues the alternate, that it is essential to the plot of McTeague, helping us both with the storytelling itself, and also with advancing the naturalistic nature and style of the stories of the other two couples in McTeague, Trina and McTeague as well as Zerkow and Maria Macapa. Campbell's main argument is that based on the two types of stories in the text, naturalistic stories as well as commonplace, "local color fiction", embodied in the actions of all three couples in McTeague, Norris is able to fully examine and explore what naturalistic writing is meant to entail. Using Norris' own words in his letter to Isaac Marcosson, Norris claims that he is writing a novel of "straight naturalism with all the guts I can get into it" (P. 48). According to Campbell, "Thus each pair of lovers functions on several levels: as representatives of varying social levels and codes of manners; as unwitting victims of the world of forces; as "owners" in several senses - of money, of passions, of restraint; and finally as characters in plots suitable to the differing...
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...The standards of success and prosperity for the protagonists of Death of a Salesman and Wall Street are inflated by the media, celebrities, and their family lives. In the face of his brother’s triumph in Alaska, Willy struggles to achieve the same level of unrealistic, exaggerated success as a mere salesman in Death of a Salesman. Similarly, by working under the exaggeratedly cutthroat Gordon Gekko, Bud Fox seeks a hollow life of luxury, stolen through cheating. Both Willy and Bud try to succeed with exaggerated and unrealistic goals due to the pressure presented to them through external forces such as their mentors, society, their families, and the workplace. The pressure that Bud and Willy’s mentors place on them causes them to exaggerate their goals to unrealistic levels. As a result, Willy’s lucidity spirals into a deep depression that leaves him in a delusional mentality that refuses to let him face the reality of his present situation while Bud’s sanity becomes overcome by his hunger for power that is fed by his ego and arrogance. Ben Loman is the foil to Willy Loman’s character. He is wealthy, bold, and a ruthless business man. He is the epitome of a success story and living the American Dream. Ben is one of the fortunate few who found incredible success without much work, something which Willy recognizes and wants. Willy Loman believes that like his brother, he too can rise from humble beginnings to importance. His specific angle on this outlook is that a man succeeds...
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...Evaluating the role of ethnic identity in explaining the occurrence of contemporary civil conflicts in sub-Saharan Africa. High hopes for many newly independent states of Africa became diminished as the 1990s saw over a quarter of the continent's states facing armed insurgencies within their borders (Young, 2002: 534). Commentators often point to pathological, deep-seated hatreds in an African tribal mosaic as the bases of such conflict. The fact is, however, that the continent is awash with political grudges, ethnically-framed and otherwise, but civil wars rarely break out. Thus this essay seeks to take a more nuanced approach to understand the analytical challenge posed by such disorder. Starting out by countering the centrality of ethnic identity, it firstly seeks to demonstrate that ethnic identities do not exist primordially, but that they are constructed on weak foundations. Secondly it endeavours to show that where cleavages do exist along lines of cultural difference, simple heterogeneity is insufficient to account for the outbreak of conflict. Next, it moves to underline the fact that more important in explaining civil conflict is whether such conflict is feasible. This is understood both in terms of the perceived capacity of the state and in terms of the viability of insurgency for would-be rebels. A final conclusion will then be expounded that ethnicity is not a central factor, but that it is simply one of a number of strategies under which conflict may be framed...
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...With more than $600 million stolen from Tyco International, Dennis Kazlowski, former CEO of Tyco, and Mark Swartz, former CFO, have gotten off easy by being released on parole after only eight short years in prison. Throughout the management ranks of Tyco in the late 1990s and early 2000s, corporate greed and excess was rampant until being brought to the attention of the SEC. Dennis Kazlowski created a culture of free spending and excessive greed within the executive ranks of Tyco International. He secretly authorized the forgiveness of tens of millions of dollars of loans to dozens of executives. Without board approval 51 employees received $56 million in bonuses and $31 million more to pay the taxes on those bonuses. He used tens of millions of company money for personal spending, several items he purchased were a $17,000 travelling toilet box, a $15,000 dog umbrella stand, a $6,000 shower curtain, a $2,900 set of coat hangers, a $2,200 wastebasket, and a $1,650 notebook. Along with Kazlowski, Mark Swartz, CFO, and Mark Belnick, General Council, were found to have stolen $600 million through unapproved bonuses, loans and extravagant “company” spending, as well as selling their stock in Tyco without giving the investors of the company notice. These transactions were usually kept off the accounting books, away from the eyes of the shareholders and board members. However in June of 2002, Kozlowski was investigated for tax evasion on $13 million worth of art that was paid...
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...regulations to ensure legal business practices remain ethical. Unfortunately, rules and regulations must be made because regrettable actions from large corporations are tainted with greed and power. Corporate Governance Within the past few years headlines have told distressing stories of unethical practices from large corporations such as Merrill Lynch, Enron, Martha Stewart, Adelphia, Boeing, Rite Aid, Xerox, and many more (Arjoon, 2013). According to Arjoon (2013), the definition of corporate governance, “is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, shareholders and other stakeholders and spells out the rules and procedures for making decisions in corporate affairs. By doing this, it also provides the structure through which the company objectives are set and the means of attaining those objectives and monitoring performance.” The object of corporate governance is to ensure that a corporation is held to strict guidelines that promotes fairness, transparency and accountability, and that any action taking by a manager is of the interest of the major stakeholder groups. The key component to corporate governance is to maintain strong relationships and trust from within and outside the corporation. Because of the scandals that have taken place, many companies have facilitated...
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...presented by Mr. Neil Weinberg Mr. Neil Weinberg, Executive Editor of Forbes Magazine, wrote “Stolen Without A Gun” with co-author Walter Pavlo, using the compelling personal story of Mr. Pavlo to portray in intimate detail the pressures that white-collar professionals face every day in corporate world. Mr. Weinberg’s discussion at Rotman was extremely relevant to MBA students because of the main narrator’s background: Pavlo was a young MBA who had a promising career at MCI until he took the wrong step on a mud slide of accounting scams that ultimately cost him not only his career but also his freedom, family, reputation and self-respect. According to Weinberg’s research, white-collar criminals are not just ordinary people; they are smart, well-educated and ambitious. They often start as wide-eye fresh graduates at large corporations of which profit-driven culture infiltrates all levels within. Some of them were even chosen as CFOs of the year: Andrew Fastow (Enron) and Scott D. Sullivan (Worldcom). So why do they turn out to be the thieves stealing from the economy $2.5 trillion per year? Weinberg argues that these people, like Pavlo, do not just wake up one day and decide to commit in a greed-inspired fraud. In fact, only 7% of perpetrators have prior conviction. They operate business under the performance pressure from investors, stockholders and Wall Street professionals. They execute mega mergers which present opportunities for companies to hide flaws and falsify earnings...
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...Satyam Case Study The Satyam scandal is a case that details carelessness of fiduciary duties, total collapse of ethical standards, and a lack of corporate social responsibility. The corporate governance mechanisms at Satyam ultimately led to the downfall of the company. Two words can clearly explain this scam: greed and desire. The CEO of Satyam, Ramlinga Raju, exhibited greed that overshadowed the responsibility to meet fiduciary duties. To compound the issue, vital information was withheld from employees. Even if regulatory changes were implemented, the Raju brothers would have still committed this scam. 1. Raju felt the need to inflate numbers on the balance sheet to impress stakeholders, investors, analysts, and the stock market. The first sign of fraudulent activity began in April 1999, when the company stated that the company experienced a double-digit annual growth rate. The fraud became very prevalent when Satyam planned to acquire stake in Maytas Infrastructure Limited and in Maytas Properties. Ironically, both of these companies were real-estate firms that were owned by family members of Satyam’s founder. I inferred that Raju wanted to acquire these two firms on the balance sheet in order exaggerate their worth. On December 16th, 2008, the Satyam board, including five independent directors approved the proposal to buy stake in Maytas Infrastructure and Maytas Properties without any shareholder approval. Here lies another major problem. There were 5 independent...
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...Management Association (AMA),is “pressure from management or a Board of Directors to meet unrealistic business objectives or deadlines” (Accountingweb, 2006). If the person preparing the financial documents for a company feels their job may be in danger if certain goals are not met they may alter the documents to reflect the desired numbers. The individual preparing the statements may also feel that the appearance of success may reflect well on them personally, thus advancing their standing in the eyes of the Board of Directors. Another reason someone may behave unethically is simple greed. Stealing money that may be seen as insignificant can be a temptation to some. The idea that stealing from a corporation is somehow different than stealing from an individual may be another rationale some people use to convince themselves that the behavior is somehow less unethical. Greed may also come into play if the person preparing the documents is the owner of the company. They may want to make their company appear more desirable to potential investors, thus making their company worth more money. The reason for unethical behavior may also stem from what on the surface appears to be an honorable intention. If a company is struggling and the person preparing documents feels they may be able to help the company improve by falsifying information they may feel that it is their duty to do so. While the intentions may be benevolent, the result is still unethical. ...
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...Most boards of directors approve of such deals for disgraced CEOs on their way out, because they are usually honoring what was negotiated at the beginning prior to the CEO taking the job. It's no different from a baseball player making 25 million a year to fail 8 out 10 times on average and hit 15 homeruns out of nearly 700 plate appearances. A deal is a deal, and when it comes to CEO's such agreements are negotiated to promote CEO actions that are in the best interest of the firm and to recruit executives who are most capable of achieving desired results. Poor corporate governance may play a role in the granting of some dubious severance packages. However, as pay-disclosure rules mandated by the SEC have become stricter and the public has become more aware of the extent of executive compensation, corporate boards have begun to offer less extravagant pay packages. Within this environment, perquisites have disappeared quickly while severance pay appears to have remained, suggesting that there is a place for it within an executive’s compensation agreement. In addition, research suggests little association between the presence of ex-ante severance agreements and yardsticks commonly used to measure executive board strength, such as the fraction of outside directors, or whether an executive board staggers the elections of its board members. Furthermore, the reasons why a potential CEO negotiating from a strong position would focus negotiations upon severance pay instead of more...
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