The Causes and Effects of Corporate Scandals
Makenzie Derby
ENG121
Lesa Hadley
July 16, 2007
The Causes and Effects of Corporate Scandal

In this day and age, there seem to be an overwhelming amount of company executives violating ethical standards. The question on many people’s minds is, “Why?” Everyone is familiar with Enron filing bankruptcy in December of 2001. The company “covered a wide array of activities, including accounting regularities, the defrauding of investors and employees, and the attempted cover-up, which involved the destruction of documents and the deletion of computer files” (Callan, 2003, p. 126). People joke around in their careers everyday, saying to other associates, “Could you imagine what would happen if I did this?” Of course, nobody ever means it. People are in shock when they hear about company scandals on the news. Who could commit such crimes and for what reason(s)? There were many companies throughout the year 2002 which were involved in scandals. “Scandals involved such US based companies as Worldcom, AOL, Tyco, and several others” (Callan, 2003, p. 126). It seems to be an international disease among large corporations. The pressure on corporations to succeed is tremendous. People care more about their own success than the affects on the people around them such as colleagues, friends, and family. Callan (2003) states, “It is not the achievement of a high status position or salary that determines career success, but rather whether the individual is able to hold onto that position and stay on track to achieve even higher level positions” (p. 126). I work for Verizon Wireless. In my own experience in working for this large corporation I find myself overwhelmed with corporate rules that change daily. We have a code of conduct that we must follow precisely. I have been with the company for over a year and, in that year, have seen 2 people lose their jobs over tedious violations of the code of conduct. Each quarter each employee is required to read and sign the code of conduct. If more large corporations were as strict as Verizon Wireless in their ethical policies and would actually follow through with punishment, many of those companies would discover a more smoothly run day-to-day operation. I have also learned that attempting to skirt around the rules is a sure way to lose a job that you depend on to live and support yourself/your family. Eventually, whether it is tomorrow or further down the road, you will get caught. People may never know what goes on behind closed corporate doors. There is a possibility that people have lost all forms of ethical standards, not just within corporations but also within themselves. Blackmail is greatly overlooked today. This could be one of the many ways that corporate officials are luring lower-end employees to go along with a scandal. It could involve the threat of the loss of a job, or just the opposite, the offer of a promotion and an increase in salary. People have a tendency to overlook ethics when it comes to dollar signs. After all, “organizations reward individuals who are able to control their emotions and their behaviors in line with a corporate culture that discourages dissent, frowns upon outspokenness, and expects a blind acceptance of senior decisions” (Callan, 2003, p. 126). Everyone would like to think that corporate corruption will come to an end the more that these large corporation’s crimes are discovered. “Even though changes have been mandated in the ways US-based corporations are governed, it is unlikely that the results-at-any-cost cultures of large capitalistic organizations will change anytime soon” (Callan, 2003, p. 126)
References
1. Callan, G. A. (2003). “What Price Career Success?” Career Development International, 8(3), 126.