...principles, values, and standards that guide behavior in the world of business 3. Principles: Specific boundaries for behavior that are universal and absolute Freedom of speech, civil liberties 4. Values: Used to develop socially enforced norms Integrity, accountability, trust, Norms: Accepted behaviors. Morals: Rules of right conduct: right/wrong 5. A Crisis in Business Ethics * Consumer trust of businesses is declining, No sector is exempt from ethical misconduct, Stakeholders determine what is ethical/unethical ,Investors Employees, Customers, Interest groups, Legal system, Community 6. Why Study Business Ethics? * Reports of unethical behavior are on the rise, Society’s evaluation of right or wrong affects its ability to achieve its business goals, Studying business ethics is a response to Sarbanes-Oxley, FSGO, and stakeholder demands for ethics initiatives, Individual ethics alone is not sufficient, Studying business ethics helps identify ethical issues to key stakeholders 7. A Timeline of Ethical and Socially Responsible Concerns * Environmental issue, Civil right issue, increased employee employer tension, changing work ethics and rising drug use 8. Before 1960: Ethics in Business * Theological discussions of ethics emerged Catholic social ethics included a concern for morality in business, workers’ rights and living wages * Protestants developed ethics courses in their seminaries and schools of theology The Protestant...
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...The Enron Collapse Enron, a high profile organization which ranked as the seventh largest company in the United States during the 1990’s consisted of approximately 25,000 employees worldwide and held revenues in the tune of over 100 billion dollars in 2000. Enron controlled about one quarter of the gas companies in the United States and also expanded into Myriad energy products during its years of operation. The company traded hundreds of products throughout the wider Continentals including South America, Asia, Europe, Australia and also the United States, and was considered to be very successful with their trading strategies. An excerpt from an article in the CRS Report for Congress entitled The Enron Collapse: An Overview of Financial Issues, Mark Jickling, (February 4, 2002), states that “the firm was widely regarded as one of the most innovative, fast growing, and best managed businesses in the United States.” However, despite all of Enron’s fame and glory, the company crumbled as a result of bad management and unethical practices. According to Donaldson & Werhane (2008), “The controls as designed were not rigorous enough and their implication and oversight was inadequate at both Management and Board levels,” (p. 313). The purpose of this paper is to discuss the Enron Collapse and explain how the virtuous manager would have responded to working for Enron. Also being discussed is what the virtuous manager is expected to do if confronted with these decisions. Unfolding...
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...LECTURE OUTLINE I. Stakeholders Define Ethical Issues in Business A. Stakeholders In a business context, customers, investors and shareholders, employees, suppliers, government agencies, communities, and others who have a “stake” or claim in some aspect of a company’s products, operations, markets, industry, and outcomes are known as stakeholders. 1. Stakeholders are influenced by business, but they also have the ability to affect businesses. 2. They apply their values and standards to many diverse issues—for example, working conditions, consumer rights, environmental conservation, product safety, and proper information disclosure—which may or may not directly affect an individual stakeholder’s own welfare. 3. They provide both tangible and intangible resources that are more or less critical to a firm’s long-term success. 4. Individual stakeholders that share similar expectations about desirable business conduct may choose to establish or join formal communities to advocate their values and expectations. 5. Stakeholders’ ability to withdraw—or to threaten to withdraw—valuable needed resources gives them power over businesses. B. Identifying Stakeholders 1. Stakeholders can be divided into two categories. a) Primary stakeholders are those whose continued association is absolutely necessary for a firm’s survival; these include employees, customers, investors, and stockholders, as well as the governments...
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...TOPIC: CASE QUESTIONS, Nike`s CSR Challenge Question 1, 4 and 5 Nike's CSR Challenge CASE STUDY- 1. What are the challenges regarding corporate social responsibility that companies in the apparel industry face in its supply chains around the world?. A. SOLUTION TO CASE 1: This discusses the challenges facing Nike in overcoming the stigma of poor human rights practices in their past, and how that has affected their overall business in the current decade. Social responsibility has always been an important factor to a company’s long term performance and sustainability. If you compare the stock performance of the top 50 most socially responsible companies, as published by Boston College’s Institute for Corporate Responsibility, to the S&P 500, the companies perceived as having the most ethical corporate governance consistently outperforms the competition in the long-run. This has become particularly important within the apparel industry, which has developed a stigma due its use of sweatshops over the last several decades. As many industries have become more and more automated, the apparel industry still requires an incredible amount of human capital to produce its products. Because of this, the industry has traditionally outsourced its production facilities to nations with low minimum wages and even lower working standards. There is little that can be done to avoid the nature of profit maximization and outsourcing, but companies like Nike have since realized...
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...The Impact of Sarbanes-Oxley Act of 2002 on Accounting and Finance Departments Danika Grace Brown Lakeland College Kellett School of Business – BlendEd BA 772 Advanced Industrial Accounting II Instructor Mary Diederich March 10, 2015 Table of Contents Abstract 2 Overview of the Sarbanes-Oxley Act of 2002 3 About SOX 4 Reporting and Compliance 5 Risk Assessment and Control 6 Interview at Company X 7 Standards for Corporations and Officers 8 Auditing and Financial Reporting 9 Future Impact of SOX 10 Conclusion 11 References 13 Abstract Sarbanes-Oxley is the response from Congress in regards to the financial industry collapse that happened over a decade ago. Due to unethical reporting from corporations, Sarbanes-Oxley (SOX) is a United States federal law that set new or enhanced standards for all U.S. public company boards, management and public accounting firms. As a result of SOX, top management must individually certify the accuracy of financial information. In addition, penalties for fraudulent financial activity are much more severe. Furthermore, SOX increased the oversight role of boards of directors and the independence of the outside auditors who review the accuracy of corporate financial statements. This paper will look to provide an oversight of the law and how it pertains to the standards in Accounting and Finance departments nowadays. In addition, this paper will also touch on the ongoing costs and benefits of the now standard...
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...Introduction This paper is a based on a case study of Nike. The paper will be discussing legal and ethical analysis and how the impact the operational/ ethical issues of the organization, the paper shall also be discussing the contribution factors and how the company’s corporate culture may have helped to minimize the unethical behavior or actually contributed to/caused the unethical behavior. The paper is also going to provide ethical decision factors, which are going to address or going to be considered in resolving the legal/ethical issues identified within this case. And finally the paper is going to provide an action plan for each of the legal/ethical issues along with recommendations that company can take to help prevent these issues in the future. Nike is one of the famous franchises in the world that sells sportswear for all ages. But is mostly famous for their athlete shoes and apparel and Nike is also one of the major manufacturers of sport equipment as well. The slogan for Nike is “Just Do It”. Nike was founded in January 1962 in Oregon, United States by Philip Knight and Bill Bowerman. Nike has somewhere around 700 or more retail outlets spread all over the world, and has approximately 45 offices only outside the United States. And it employs 30,000 people all over the world. Nike had a revenue excess of $16 billion in 2007. Nike’s factories are mostly located in Asian countries like Pakistan, India, Malaysia, China, Indonesia, Philippines, Taiwan, Vietnam...
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...Unethical Behavior The Price of Unethical Behavior The purpose of this paper is to evaluate unethical behavior of Tyco International executives and chairman by briefly summarizing the company’s historical scenario, the spending habits and loans made for those executives, the resulting outcome of the events, the punishment handed down from indictments and whether it was justified. In 1975 Dennis Kozlowski joined Tyco International and in 1992 was named the chairman and chief executive. Through the late 1990s, Kozlowski facilitated Tyco’s expansion. During Kozlowski’s last three years with Tyco he made at least $300 million and was noted as being one of the highest paid executives in the United States. During his tenure at Tyco Kozlowski acquired almost $500 million along with a $31 million dollar New York apartment and several rare paintings, which came under scrutiny by both federal prosecutors and the company. With Kozlowski as chief executive officer he made Tyco into a giant conglomerate mainly through acquisitions. Tyco has two major segments; fire protection systems and security systems is incorporated in Switzerland and has operational headquarters in Princeton, New Jersey. At its peak, Tyco had a market value over $100 billion. In 2002 Kozlowski left Tyco over a issue regarding the misuse of company funds and his hefty compensation package. Shortly after leaving Tyco, Kozlowski was indicted on charges of evading more than $1 million of sales taxes on six paintings...
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... The Fall of Dennis Kozlowski Many leaders work hard and strive diligently to lead companies to success and wealth in an ethical manner. In doing so, the reputation of the company is enhanced as are the benefits to the shareholders and the public. That notwithstanding, some leaders have been identified with exhibiting poor judgement and gross unethical behavior (Stephens, Vance, Pettegrew, 2012). The underlying reasons for these failures on the part of individual leaders can be traced back to a lack of moral and ethical standards. The downfall of former Tyco International CEO, Dennis Kozlowski, is just one of many examples. Background Kozlowski reputedly came from a middle-class background. His parents were public service employees and sent their son to Seton Hall University, a Catholic school. Kozlowski graduated from Seton Hall University in 1968 and gained employment in auditing. Later, in 1975, Kozlowski gained a position with Tyco and had a phenomenal rise in the company. In 1989, his was promoted to President and Chief Operating Officer and three years later, he was promoted to Chief Executive Officer, only 17 years after joining Tyco. Somewhere along the way, the good Catholic education and standards provided by his second-generation Polish-American parents went astray (biography). Undoubtedly Kozlowski excelled in his executive position raising Tyco's mergers and acquisitions to unprecedented levels and to vastly increasing revenues, up 48 % for four...
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...accounting irregularities at Toshiba, so an independent panel was put in place to investigate the watchdog’s claims. In April, Toshiba made public that it was going to restate its profit for fiscal years 2011 through 2013 by at least ¥50B (or $419M) due to accounting irregularities at three units of the company (Power System, Social Infrastructure System and Community Solutions). In July 2015, the independent panel indicated that Toshiba overstated its profits by ¥150B ($1.2B), primarily in its electric power systems business from fiscal years 2009 through fiscal year 2013, plus additional irregularities in Toshiba’s personal computer and semiconductor business. The findings forced Toshiba’s Corp. President Hisao Tanaka and several other executives to step down in July. The accounting scheme may have started around 2008 during the global financial crisis, but it is believed that it deepened after Japan’s March 2011 earthquake, tsunami and nuclear disasters because Toshiba supplied two of the reactors affected at the Fukushima Daiichi plant. After this event, Japan shut down the remainder of the nuclear operations at the site, and the demand for nuclear energy around the world was reduced. Toshiba, having a large stake of its business in the nuclear energy production, became affected by the events in 2011, so management at Toshiba set aggressive sales and profit targets across the company to offset the decline in the energy division. As a result of this decision, the rivalry across...
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...Instructor’s Manual for Fundamentals of Human Resource Management, 4th edition Chapter One: Managing Human Resources [pic] Welcome to your guide to teaching Chapter One, Managing Human Resources! This guide will provide you with a chapter summary, learning objectives, lecture outlines, solutions to in-chapter case questions, suggested use of internet exercises and self-assessments from the online learning center, video resource notes and discussion questions, and suggested uses for the PowerPoint slides contained in your Instructor Resources. Instructor’s Manual Highlights: Chapter One Roadmap We hope you find each chapter of your Instructor Manual practical and useful, but also, exciting! You can adapt the chapter text, the PowerPoint, and the video to work in an online class environment, a guided independent study environment, or a face to face or on-ground environment. ✓ When presenting Chapter One, have the students first read the chapter and encourage them to absorb the “big picture” of Human Resource Management. ✓ Use the PowerPoint for Chapter One to frame your lecture. This Instructor’s Manual will provide you with a suggested placement of the PowerPoint alongside your Lectures. ✓ Then, have your students watch the Video Case on the “Creative Corporation,” and facilitate an in-class or an on-line discussion highlighting the lessons contained in that Case. ✓ Have students read and discuss the end-of-chapter...
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...la société] ------------------------------------------------- FINAL ASSIGNMENT Business ethics Should executives have to be offered bonuses to do their job well when other employees are expected to do their job well in the absence of bonuses? Should executives have to be offered bonuses to do their job well when other employees are expected to do their job well in the absence of bonuses? Introduction Nowadays, in many companies, executives receives more and more incentives like bonuses if they do their job well. In these same companies, it’s a rare fact that workers have bonuses. Equality between executives and other employees’ compensation is often not respected, most of workers find the bonus system very unfair. That bring us to the following question: should executives have to be offered bonuses to do their job well when other employees are expected to do their job well in the absence of bonuses? In this paper we will see that executives have to be offered bonuses to do their job well only if others workers are expected to do their job well with the same advantage of bonuses as reward. Through this paper, we will see that bonuses can leads workers to be jealous of executives, we also see that bonuses improve the company performance and finally we will see that bonuses make the workers more devoted to their company. Thesis statement Executives have to be offered bonuses to do their job well only if others workers are expected to do their job well with...
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...at Accounting Biovail INTRODUCTION Operating within a complex and highly competitive pharmaceutical industry, the challenges confronting Biovail are intensifying as regulatory agencies release formal allegations of misconduct against four corporate executives and as outstanding lawsuits, widespread scrutiny, and a history of questionable accounting practices are unavoidably coming to a head. Responsible for overcoming its damaged reputation and for moving the company forward, it is imperative that management at Biovail resolve three immediate issues. 1. Establishing a worst-case scenario, what is the known liability that Biovail has incurred for deceiving its investors? 2. What does a comparative financial analysis of Biovail, Abbot Labs, and Cephalon reveal about Biovail's strategic weaknesses? 3. What principles of governance can be employed to assure investors that Biovail's past misconduct will not recur in the future? FINANCIAL ANALYSIS Liability for Fraudulent Reporting and Communications to Investors In all likelihood, a class action lawsuit against the company for aggressive and misleading accounting practices (which have had a material impact on shareholder returns) is forthcoming. Biovail must be prepared to accept responsibility for the damage experienced by investors as a result of its former actions and misrepresentations. Even though (as of February 2008) Melnyk no longer holds any affiliated role with Biovail, and although he alone is responsible for his personal...
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...business environment and strategy. 1. What external forces and industry conditions have had an impact on Disney's performance over the years? 2. How did the internal organization and culture at Disney influence its performance? 3. How has Disney strategically responded to its competitive environment and internal capabilities? You have been asked to present a five-minute overview of the root causes of Disney's governance issues. The content of this brief presentation should achieve the following goals. 4. Identify the causes and consequences of the Board of Directors' ineffectiveness. 5. Highlight other governance weaknesses that have made Disney vulnerable to managerial opportunism. To be prepared for the ensuing discussion, you'll also need to be familiar with the following items. 6. How have governance mechanisms at Disney been used in the past, and what was their effect? 7. What unprecedented maneuvers were made by Disney stakeholders to overcome internal governance weaknesses? During the discussion, you should be able to demonstrate an insightful look at Disney's situation, make recommendations for establishing effective governance practices, and support the need for governance mechanisms despite the appearance of performance success. STRATEGIC MANAGEMENT INPUTS AND ACTIONS 1. What external forces and industry conditions have had an impact on Disney's performance over the years?...
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...IIBM Institute of Business Management Corporate Governance www.iibmindia.in Chapter 1 Corporate Governance Corporate governance refers to the system by which corporations are directed and controlled. The governance structure specifies the distribution of rights and responsibilities among different participants in the corporation (such as the board of directors, managers, shareholders, crors, auditors, regulators, and other stakeholders) and specifies the rules and procedures for making decisions in corporate affairs. Governance provides the structure through which corporations set and pursue their objectives, while reflecting the context of the social, regulatory and market environment. Governance is a mechanism for monitoring the actions, policies and decisions of corporations. Governance involves the alignment of interests among the stakeholders. There has been renewed interest in the corporate governance practices of modern corporations, particularly in relation to accountability, since the high-profile collapses of a number of large corporations during 2001–2002, most of which involved accounting fraud. Corporate scandals of various forms have maintained public and political interest in the regulation of corporate governance. In the U.S., these include Enron Corporation and MCI Inc. (formerly WorldCom). Their demise is associated with the U.S. federal government passing the Sarbanes-Oxley Act in 2002, intending to restore public confidence in corporate...
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...INTRODUCTION Operating within a complex and highly competitive pharmaceutical industry, the challenges confronting Biovail are intensifying as regulatory agencies release formal allegations of misconduct against four corporate executives and as outstanding lawsuits, widespread scrutiny, and a history of questionable accounting practices are unavoidably coming to a head. Responsible for overcoming its damaged reputation and for moving the company forward, it is imperative that management at Biovail resolve three immediate issues. 1. Establishing a worst-case scenario, what is the known liability that Biovail has incurred for deceiving its investors? 2. What does a comparative financial analysis of Biovail, Abbot Labs, and Cephalon reveal about Biovail's strategic weaknesses? 3. What principles of governance can be employed to assure investors that Biovail's past misconduct will not recur in the future? FINANCIAL ANALYSIS Liability for Fraudulent Reporting and Communications to Investors In all likelihood, a class action lawsuit against the company for aggressive and misleading accounting practices (which have had a material impact on shareholder returns) is forthcoming. Biovail must be prepared to accept responsibility for the damage experienced by investors as a result of its former actions and misrepresentations. Even though (as of February 2008) Melnyk no longer holds any affiliated role with Biovail, and although he alone is responsible...
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