MGT3073 - Corporate Ethics Case Study & Report Writing - Money Gets In The Way of Corporate Ethics - Management Assignment Help

Assignment Task

 Question 1 

CASE STUDY 

When Money Gets in the Way of Corporate Ethics 

Executives love to extol the virtues of their corporate culture, announcing to the  world how the enterprise is more than just seeking the last dollar of profits. But  several incidents in recent weeks make it clear that all too often, companies have a  hard time acting ethically when that gets in the way of making more money ... Last  week, Wells Fargo released a report detailing an investigation into the sales  practices that led employees to open bogus accounts to meet aggressive sales targets.  The report noted that the leaders of its community bank division “distorted the sales  model and performance management system, fostering an atmosphere that  prompted low quality sales and improper and unethical behaviour.” Using customer  information to open fictitious accounts would certainly seem to qualify as something  more than “low quality sales” … 

When called before the House Financial Services Committee in 2016 after the bank  settled charges by paying $185 million, Mr. Stumpf maintained that nothing was  really wrong. In a statement, he proclaimed that “wrongful sales practice behaviour  goes entirely against our values, ethics and culture,” while shifting the blame to  lower-level employees. But the new report took a less sanguine view of Mr. Stumpf’s  leadership, using the typically restrained language of corporate investigations to  note that he “failed to appreciate the seriousness of the problem and the substantial  reputational risk to Wells Fargo.” The bank will claw back an additional $75 million  in compensation from him and the former head of community banking. That sounds  like a lot of money, yet Wells Fargo’s executives were richly rewarded for years, and  the report largely exonerates current leadership. Nor did this problem suddenly  emerge. There were indications years earlier that employees were acting improperly  to meet sales targets, though nothing was ever done to address the issue until  regulators finally took action. As much as Wells Fargo might vow to change its  culture, the pressure to deliver results may be enough to prevent any real change.  Clawing back a bit of compensation from former executives is unlikely to deter this  type of misconduct in the future. It is not clear that sacking people makes a difference,  either … 

Pinning the blame for bad behaviour on others is common practice in the corporate  world. That was the explanation offered by Volkswagen’s chief executive in the  immediate aftermath of revelations that the company used defeat devices to evade  emissions standards — it was just a few rogue engineers behind the scandal. We now  know that senior management knew of Volkswagen’s cheating for years. Companies  and the Justice Department often refer to the “tone at the top” as a way to develop a  good corporate culture. Barclays Bank will need to figure out how the actions of its  chief executive, James E. Staley, will affect its culture as it deals with the revelation  last week that the British authorities are investigating him for trying to unmask the  identity of an anonymous whistle-blower. Mr. Staley’s actions raise troubling  questions about whether the bank’s leadership reflects a “do as I say, not as I do”  mentality.

A similar mentality seems to be dogging Fox News as it deals with another bout of  sexual harassment accusations. After dismissing Roger Ailes, the former Fox News  chairman, last year, 21st Century Fox must now deal with claims involving Bill  O’Reilly, the host of its top-rated program, which has seen a precipitous drop in the  number of advertisers. The company is also responding to an investigation of its  accounting for settlements paid out to former employees. Prosecutors are reported  to have offered immunity to a former financial officer. As The Times reported,  resolving the sexual harassment issues at 21st Century Fox will be “complex” because  of generational differences between Rupert Murdoch and his sons, Lachlan and  James, who control the company. So beyond the tone set by current management, it  will require those with ultimate ownership of the company to decide how its culture  will develop — and how much corporate profits will drive that decision. And, of  course, there is the recent incident on a United Airlines flight, when a passenger was  forcibly removed because his seat was needed for company employees. Several  apologies have since been offered, but the initial response of United’s chief executive  was to defend what happened, including a description of it as “re-accommodating”  the person. Subsequent corporate promises not to violently remove a paying  customer sitting in an assigned seat hardly show any significant change in United’s  attitude.

Question 1 

Based on the article above, and with reference to the relevant research literature,  critically examine the factors that contribute to the creation of a corrupt and unethical  work culture, as well as the extent to which an ethical corporate culture is determined  by the top leadership of an organisation.

Question 2 

“The art of communication is the language of leadership” – James Humes, author and  former presidential speechwriter.  

Critically discuss how leadership communication is different from usual, traditional  corporate communications, especially in the context of conflict resolution, employee  morale and motivation, and crisis management. Your discussion should also examine  what it means for a leader to serve as communication champion in the organisation  during such situations, as well as the leadership communication opportunities and  challenges afforded by digital technologies now available in the world today. 

Question 3 

In the classic The Prince, author Niccolo Machiavelli once stated that it is “better to be  feared than loved, if you cannot be both”.  

If the goal is to encourage greater integrity and ethical conduct in future business and  organisational leaders, to what extent is there still any value in promoting  Machiavellian ideas in the learning and practice of leadership? Critically discuss. 

Question 4 

Bill George (2007) asserts that “successful leadership takes conscious development  and requires being true to your life story”, and “the authentic leader brings people  together around a shared purpose and empowers them to step up and lead  authentically in order to create value for all stakeholders”. 

To what extent is it possible, or realistic, to be a truly authentic leader in an  organisation? Critically discuss.

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