As a CEO of an organization, one should be ethical and lead by example. He or she is seen as the face of the company and should constantly think what his or her actions will reflect upon the company as a whole. If the CEO is unethical or takes part in corrupt behavior, how is the rest of the organization run? When the head of the company is immoral, the rest of the employees do not have much to look up to.
One of the more recent scandals among the business world has to do with the CEO of Hewlett-Packard, Mark Hurd. In August of 2010, Hurd stepped down due to an alleged breach in the sexual harrasment policy. After some investigation, it was found that he did not break any of these rules, but Hurd did take part in "'numerous instances where the contractor received compensation and or expense reimbursement where there was not a legitimate business purpose,'" taken from an article from http://www.msn.com/.
View full article here: http://www.msnbc.msn.com/id/38597967/ns/business-consumer_news/
Other employees within Hewlett-Packard must have been aware of what was going on. Someone had to sign off on the expense reimbursements, why do you think no one came forward about this act? If you knew the CEO of the organization you work for was practicing unethical behavior, what would you do?
Posted by: Jenny Liechti
Tuesday, February 22, 2011
IBM's Bad Decision
When personal computers were first becoming manufactured in the 1980s, IBM started working with Bill Gates to refine the computers and make them better. At the time, Bill Gates had developed Microsoft and IBM started to find ways to incorporate Microsoft. The mistake, and bad decision-making, came in when IBM just paid Gates for his services, but did not have him commit to working solely with IBM in the software market. You can read about a history of the relationship between IBM and Gates here:
http://inventors.about.com/library/weekly/aa033099.htm
IBM thought that they would dominate the market in hardware and decided not to worry much about the software side of computers. Considering Gates's massive success with Microsoft, IBM missed out on a major opportunity through a partnership with Microsoft.
Surely IBM could not predict just how popular home computers would become, but should they have tried to expand their business by adding the software instead of focusing on dominating the hardware market? What could they have done differently once they discovered how popular home computers were? Could they have tried to partner with or create another software company to compete with Microsoft?
Casey Zimmerman
http://inventors.about.com/library/weekly/aa033099.htm
IBM thought that they would dominate the market in hardware and decided not to worry much about the software side of computers. Considering Gates's massive success with Microsoft, IBM missed out on a major opportunity through a partnership with Microsoft.
Surely IBM could not predict just how popular home computers would become, but should they have tried to expand their business by adding the software instead of focusing on dominating the hardware market? What could they have done differently once they discovered how popular home computers were? Could they have tried to partner with or create another software company to compete with Microsoft?
Casey Zimmerman
Monday, February 21, 2011
Rod Blagojevich - former Illinois Governor
Illinois is gaining quite a reputation for corrupt governors. Before Blagojevich there was former Governor Ryan. Now more recently Blagojevich is known as the governor of Illinois who allegedly tried to "sell" the Senate seat vacated by President Barack Obama when he entered into the Presidential election. Some reports say he tried to trade the seat for ambassadorships, money and positions within pro-union groups and even a $150,000 salary for his wife.
At a news conference, Patrick Fitzgerald, the prosecutor, said that Blagojevich had gone on a "political corruption crime spree," and that his actions had "taken us to a truly new low." You can read more about that here.
In an excerpt from the above article, "According to the affidavit, Blagojevich told an adviser last week that he might get some money 'upfront, maybe' from one of the candidates hoping to replace Obama. That person was identified only as 'Candidate 5.' In an earlier recorded conversation, prosecutors say, Blagojevich said he had been approached by an associate of Candidate 5 with an offer of $500,000 in exchange for the Senate seat." On April 2, 2009 a Federal Grand jury indicted Rod Blagojevich on 16 indictments of which included racketeering conspiracy, wire fraud, extortion conspiracy, attempted extortion, and making false statements to federal agents.
Chapter 13 in our textbook is titled "Power and Politics" which directly applies to this particular case. In the book on page 321 it talks about The Relationship Between Dependency and Power, and according to the text Blagojevich was feeling indispensable. He was feeling dependency for the scarcity of his resource and the importance of his resource. Blagojevich felt that he held all the power because people depended on his to fill this Senate seat. How do you think he should have handled the appointment of the new Senator? How do you think Blagojevich should be punished for the crimes he is accused of?
Posted By: Amy Beagles
At a news conference, Patrick Fitzgerald, the prosecutor, said that Blagojevich had gone on a "political corruption crime spree," and that his actions had "taken us to a truly new low." You can read more about that here.
In an excerpt from the above article, "According to the affidavit, Blagojevich told an adviser last week that he might get some money 'upfront, maybe' from one of the candidates hoping to replace Obama. That person was identified only as 'Candidate 5.' In an earlier recorded conversation, prosecutors say, Blagojevich said he had been approached by an associate of Candidate 5 with an offer of $500,000 in exchange for the Senate seat." On April 2, 2009 a Federal Grand jury indicted Rod Blagojevich on 16 indictments of which included racketeering conspiracy, wire fraud, extortion conspiracy, attempted extortion, and making false statements to federal agents.
Chapter 13 in our textbook is titled "Power and Politics" which directly applies to this particular case. In the book on page 321 it talks about The Relationship Between Dependency and Power, and according to the text Blagojevich was feeling indispensable. He was feeling dependency for the scarcity of his resource and the importance of his resource. Blagojevich felt that he held all the power because people depended on his to fill this Senate seat. How do you think he should have handled the appointment of the new Senator? How do you think Blagojevich should be punished for the crimes he is accused of?
Posted By: Amy Beagles
Narcissism
This article shifts from unethical leaders and companies which our blog has primarily focused on up until this point. It's primary focus is on narcissism both in school as well as in the workplace. You can read the article found below.
http://www.businessweek.com/bschools/content/sep2010/bs20100913_429948.htm
This narcissistic behavior can be related primarily back to chapter 5, dealing with motivation. Although narcissism isn't directly included into any motivation theories, it can explain a lot about an individuals motivation. If someone is working in a negative environment, and dealing with narcissistic coworkers, they are going to be much less motivated. This can also be tied into the equity theory of motivation. If a negative person is not putting in their full amount of effort, you may feel as though it is not an equal situation.
So, what do you think should be done in oder to avoid hiring narcissistic workers? Do you think it is best to screen out these types of individuals with personality tests or other factors?
-Posted by: Kelly Moran
http://www.businessweek.com/bschools/content/sep2010/bs20100913_429948.htm
This narcissistic behavior can be related primarily back to chapter 5, dealing with motivation. Although narcissism isn't directly included into any motivation theories, it can explain a lot about an individuals motivation. If someone is working in a negative environment, and dealing with narcissistic coworkers, they are going to be much less motivated. This can also be tied into the equity theory of motivation. If a negative person is not putting in their full amount of effort, you may feel as though it is not an equal situation.
So, what do you think should be done in oder to avoid hiring narcissistic workers? Do you think it is best to screen out these types of individuals with personality tests or other factors?
-Posted by: Kelly Moran
Wal-Mart's Questionable Ethics
As we all know, Wal-Mart is constantly under the pressure of being accused of unethical behavior. The most common problema we hear about is the lack of women earning higher positions within the company, or the low pay working employees receive. Something that we may not have heard about was a case involving a Wal-Mart employee working in the communication department. This particular employee came across what she believed was unethical behavior while simply copying papers. The article can be read below.
http://www.businessweek.com/bwdaily/dnflash/content/jun2007/db20070612_548611_page_2.htm
This type of ethical situation can be related to chapter 13 of our textbook, specifically page 336. The power that Williams had over Lowry is very clear. She made Lowry feel so uncomfortable that she had to find a new job. This type of power can be viewed as both legitimate as well as coercive power.
How do you think organizations can avoid or get rid of this negative power? What laws or rules and regulations should be put into place to prevent this type of unethical behavior from happening?
- Posted by: Kelly Moran
http://www.businessweek.com/bwdaily/dnflash/content/jun2007/db20070612_548611_page_2.htm
This type of ethical situation can be related to chapter 13 of our textbook, specifically page 336. The power that Williams had over Lowry is very clear. She made Lowry feel so uncomfortable that she had to find a new job. This type of power can be viewed as both legitimate as well as coercive power.
How do you think organizations can avoid or get rid of this negative power? What laws or rules and regulations should be put into place to prevent this type of unethical behavior from happening?
- Posted by: Kelly Moran
Apple Manager Accused
Corporate scandals seem to become more and more exposed in today's society. I believe it is because people are becoming less tolerant of unethical practices, especially since the debate of executive compensation is coming more heated. In August of 2010, a manager from Apple Incorporated was arrested on the charge of accepting money to sell confidential information to Apple Suppliers in other countries. Here's a link to an article about the case:
http://www.huffingtonpost.com/2010/08/17/apple-manager-arrested-fo_n_685402.html
It is said that he received over $1 million for selling this information and the Asian suppliers were then using that information to negotiate better contracts with another company. The question is how was this manager able to sell this information? How did he gain access to this information and distribute it without anyone else knowing? This information was to be a closely guarded corporate secret, so how was he able to leak it? I understand that not all of this is preventable, hindsight is 20/20, but what can the company now learn from their mistakes?
What security measures do you think the company could put into place to protect the information? What guidelines and policies should be put into place to prevent this from happening again?
Casey Zimmerman
http://www.huffingtonpost.com/2010/08/17/apple-manager-arrested-fo_n_685402.html
It is said that he received over $1 million for selling this information and the Asian suppliers were then using that information to negotiate better contracts with another company. The question is how was this manager able to sell this information? How did he gain access to this information and distribute it without anyone else knowing? This information was to be a closely guarded corporate secret, so how was he able to leak it? I understand that not all of this is preventable, hindsight is 20/20, but what can the company now learn from their mistakes?
What security measures do you think the company could put into place to protect the information? What guidelines and policies should be put into place to prevent this from happening again?
Casey Zimmerman
Wednesday, February 16, 2011
Unethical Behaviors in the Workplace
When I was in high school, I worked at a retail store that seemed like it had a revolving door when it came to store managers. Over the four years that I worked there, there were four complete changes in management personnel. Some of them quit due to personal reasons, (pregnancy, new jobs, etc.) Others, however, were fired due to unethical practices.
One manager that ended up being fired really sticks out in my mind because of a situation that I faced. This particular manager was stealing company time—and was not being very secretive about it. She would go in and revise her time card to show that she came earlier or stayed later than she really did. This manager would also take one to two hour lunch breaks but would not clock out—even though to my fellow employees and me, she would strictly enforce us to punch our during our breaks.
Since I was only sixteen at the time and relatively new to the company, I was unsure on what to do. It was blatantly obvious that she was doing something unethical but I did not know quite how to go about the situation. I ended up talking to the assistant manager, only to find out she had already brought this to our district manager’s attention. The district manager (DM) had not done anything about the problem. Since she was in charge of hiring the new store manager, she did not want to believe there was something wrong with her choice. Because our DM was only in the store once every month or so, she just pretended like it was not happening, and actually scolded the assistant manager for reporting the problem.
In the end, the store manager was fired because it was finally brought to our regional manager’s attention. I was surprised that it took so long, and more than one person to report this problem to have some kind of action made. I am sure there are other ways to go about this problem—if you were in my position, or even my assistant manager’s position, what would you have done differently?
Posted by: Jenny Liechti
Posted by: Jenny Liechti
Tuesday, February 15, 2011
Securities Fraud: Martha Stewart
In 2003 a big topic of news was the fact that The Securities and Exchange Commission filed securities fraud charges against Martha Stewart and her stockbroker at the time Peter Bacanovic.
You can read the full article by the SEC here. In an excerpt below from the article the SEC describes exactly what Martha Stewart is being charged with and what her and her former stockbroker did.
"The complaint was filed in federal court in Manhattan, alleged that Stewart committed illegal insider trading when she sold stock in a biopharmaceutical company, ImClone Systems, Inc., on Dec. 27, 2001, after receiving an unlawful tip from Bacanovic, at the time a broker with Merrill Lynch, Pierce, Fenner & Smith Incorporated. The Commission further alleges that Stewart and Bacanovic subsequently created an alibi for Stewart's ImClone sales and concealed important facts during SEC and criminal investigations into her trades. In a separate action, the United States Attorney for the Southern District of New York has obtained an indictment charging Stewart and Bacanovic criminally for their false statements concerning Stewart's ImClone trades.
The Commission seeks, among other relief, an order requiring Stewart and Bacanovic to disgorge the losses Stewart avoided through her unlawful trades, plus civil monetary penalties. The Commission also seeks an order barring Stewart from acting as a director of, and limiting her activities as an officer of, any public company. Stewart has been Chairman and Chief Executive Officer of Martha Stewart Living Omnimedia, Inc.
Stephen M. Cutler, the SEC's Director of Enforcement, said: 'It is fundamentally unfair for someone to have an edge on the market just because she has a stockbroker who is willing to break the rules and give her an illegal tip. It's worse still when the individual engaging in the insider trading is the Chairman and CEO of a public company.'"
Martha Stewart, along with her former stockbroker, both demonstrated unethical behavior. On page 277 in Chapter 11 our textbook talks about questions you could ask yourself in ethical decision making. Questions including, "Is this decision fair?" "Does this decision break any laws?" "Does this decision break any organizational rules?" I don't think that Martha Stewart or Peter Bacanovic thought about any of these questions when doing business. Peter Bacanovic should not have had his assistant make the call to Martha Stewart. Martha Stewart took the information and did what was best for her finances. I am not necessarily sure that I wouldn't have done what she did if I was in her shoes. Would you have done something differently if you were in Martha Stewart's shoes?
Posted By: Amy Beagles
You can read the full article by the SEC here. In an excerpt below from the article the SEC describes exactly what Martha Stewart is being charged with and what her and her former stockbroker did.
"The complaint was filed in federal court in Manhattan, alleged that Stewart committed illegal insider trading when she sold stock in a biopharmaceutical company, ImClone Systems, Inc., on Dec. 27, 2001, after receiving an unlawful tip from Bacanovic, at the time a broker with Merrill Lynch, Pierce, Fenner & Smith Incorporated. The Commission further alleges that Stewart and Bacanovic subsequently created an alibi for Stewart's ImClone sales and concealed important facts during SEC and criminal investigations into her trades. In a separate action, the United States Attorney for the Southern District of New York has obtained an indictment charging Stewart and Bacanovic criminally for their false statements concerning Stewart's ImClone trades.
The Commission seeks, among other relief, an order requiring Stewart and Bacanovic to disgorge the losses Stewart avoided through her unlawful trades, plus civil monetary penalties. The Commission also seeks an order barring Stewart from acting as a director of, and limiting her activities as an officer of, any public company. Stewart has been Chairman and Chief Executive Officer of Martha Stewart Living Omnimedia, Inc.
Stephen M. Cutler, the SEC's Director of Enforcement, said: 'It is fundamentally unfair for someone to have an edge on the market just because she has a stockbroker who is willing to break the rules and give her an illegal tip. It's worse still when the individual engaging in the insider trading is the Chairman and CEO of a public company.'"
Martha Stewart, along with her former stockbroker, both demonstrated unethical behavior. On page 277 in Chapter 11 our textbook talks about questions you could ask yourself in ethical decision making. Questions including, "Is this decision fair?" "Does this decision break any laws?" "Does this decision break any organizational rules?" I don't think that Martha Stewart or Peter Bacanovic thought about any of these questions when doing business. Peter Bacanovic should not have had his assistant make the call to Martha Stewart. Martha Stewart took the information and did what was best for her finances. I am not necessarily sure that I wouldn't have done what she did if I was in her shoes. Would you have done something differently if you were in Martha Stewart's shoes?
Posted By: Amy Beagles
Sunday, February 6, 2011
A Record of Failure: Rick Wagoner
For those of you who don't know Rick Wagoner is the former CEO and Chairman of the well known auto company GM. In the last few years many companies have been forced to file for Chapter 11 and have asked for government bailouts, GM was one of those companies. Rick Wagoner flew to D.C. on a private jet to ask for taxpayer money to bail out a company he had caused to lose more than $80 billion. If President Obama was going to give this company money then he had no choice but to ask (make) Rick Wagoner resign from GM.
Rick Wagoner had many failures in his years as CEO at GM. To read more about them click here. Some of his better known failures include the car lines of Saturn, Hummer, Saab, and Pontiac that now are basically nonexistent. These failures don't just hurt the company though they hurt the people who own these cars. A few months ago my sister, who owns a Saturn, had a part go out in her car that needed replaced immediately. She was told to order the part, since Saturn parts are no longer made, it would take at least 6 months. Something that for a Toyota car would only have taken a week at the most more then likely. Under Rick Wagoner GM had market share losses every year and was going billions into debt.
I am not sure if there is anything Rick Wagoner could have done to turn this around because honestly after everything I have read and heard about this it seems as if he had no knowledge whatsoever to the car industry trends. I think he had some business knowledge and had worked in the car industry but was not capable or ready to lead a company into the future. The Board of Directors should have recognized their losses though and should have seen how badly the company was doing. The Board of Directors should have spotted their inability to keep up or even pass the competition in car design and build. They should have noticed that maybe Rick Wagoner wasn't the best leader for the position and to give someone else a go at it. But they were blinded by his charm and ability to win over a room.
What are your thoughts? Should the Board of Directors noticed the decline in the company sooner and done something?
Posted by: Amy Beagles
Rick Wagoner had many failures in his years as CEO at GM. To read more about them click here. Some of his better known failures include the car lines of Saturn, Hummer, Saab, and Pontiac that now are basically nonexistent. These failures don't just hurt the company though they hurt the people who own these cars. A few months ago my sister, who owns a Saturn, had a part go out in her car that needed replaced immediately. She was told to order the part, since Saturn parts are no longer made, it would take at least 6 months. Something that for a Toyota car would only have taken a week at the most more then likely. Under Rick Wagoner GM had market share losses every year and was going billions into debt.
I am not sure if there is anything Rick Wagoner could have done to turn this around because honestly after everything I have read and heard about this it seems as if he had no knowledge whatsoever to the car industry trends. I think he had some business knowledge and had worked in the car industry but was not capable or ready to lead a company into the future. The Board of Directors should have recognized their losses though and should have seen how badly the company was doing. The Board of Directors should have spotted their inability to keep up or even pass the competition in car design and build. They should have noticed that maybe Rick Wagoner wasn't the best leader for the position and to give someone else a go at it. But they were blinded by his charm and ability to win over a room.
What are your thoughts? Should the Board of Directors noticed the decline in the company sooner and done something?
Posted by: Amy Beagles
Saturday, February 5, 2011
Michael Scott: The Epitome of a Bad Manager
Michael Scott is a great example of a poor leader. There is at least one instance in each episode that exemplifies his horrible decision-making, terrible work ethic, or unethical behavior. One episode that sticks out in my mind is from Season three when the Scranton branch is on the verge of closing. Jan asks Michael to keep this information to himself until it is time to make the actual decision. As usual, Michael overreacts. He makes an announcement to the entire office informing them they may all lose their jobs. Instead of reassuring them, he tells them he is going to solve the problem and for the employees to just stay at the office until Michael and Dwight figure it out.
Here’s a link to the beginning the episode when Michael shares the news. http://www.tbs.com/video/index.jsp?oid=211664 If you are short for time, you can skip head to minute 5:05.
Although this situation touches on many issues that are dealt with in the workplace, the main one I am going to focus on is the idea of motivation. Michael should have handled this situation in a completely different way. By telling his employees that they may not have jobs by the end of the day, he plants in their brains that some of their basic needs will not be met. According to Herzberg’s hygiene factors, in order to be motivated, they must meet some other factors first: security, salary, working conditions, etc. Everyone at the office is in fear of losing their jobs, which leads them to slacking off in their work; this will just make the situation worse. Instead of worrying everyone, Michael should have kept it to himself until a final decision was made.
What would you have done to handle things differently? Should Jan have kept it to herself until she knew what the decision would be?
In August of 2009, a scandal was discovered at Hewlett-Packard CO involving the CEO Mark Hurd and one of his employees, Jodie Fisher. The unfolding began when Fisher filed a sexual harassment claim against Hurd. The investigation of this claim then led to the findings of expense reports that had been falsified by Hurd. Here is a link to the full article:
http://www.cbsnews.com/stories/2010/08/08/tech/main6755021.shtml
Because HP is such a popular company and has usually been in good standing, this situation begs the question on how this could have been avoided. Is there anyway to prevent him from falsifying the reports? What policies can the company put into place to avoid this problem again?
Also, who was responsible for keeping Hurd accountable in his business ethics? It is apparent that he was able to hide the truth from the people that were checking the reports, but what other checkpoints could the company put into place to prevent others from writing off illegitimate expenses?
Posted by: Casey Zimmerman
http://www.cbsnews.com/stories/2010/08/08/tech/main6755021.shtml
Because HP is such a popular company and has usually been in good standing, this situation begs the question on how this could have been avoided. Is there anyway to prevent him from falsifying the reports? What policies can the company put into place to avoid this problem again?
Also, who was responsible for keeping Hurd accountable in his business ethics? It is apparent that he was able to hide the truth from the people that were checking the reports, but what other checkpoints could the company put into place to prevent others from writing off illegitimate expenses?
Posted by: Casey Zimmerman
Wednesday, February 2, 2011
One of the most recent scandalous leaders, is no other than Bernie Madoff. He committed fraud worth billions of dollars, turned his back on his followers, and essentially turned out to be one of the worst leaders the business world has ever seen. Below is a link describing the scandal, as well as who Madoff was before any of the news surfaced.
http://www.nytimes.com/2009/01/25/business/25bernie.html?scp=2&sq=bernie%20madoff&st=cse
This brings up several different questions. What can we do about these types of situations? Were there any warning signs? Why did the scandal take so long to surface? Should limits be set on how much one certain individual gets to control in a company?
In this case, there were plenty of warning signs. Madoff had been under a careful eye for many years, and problems were known. I believe that this is largely do to the SEC's lack of investigation. With proper and through investigation, there is no way this could have gone undetected.
So, why do you think it took so long, and what do you think could have been done to avoid this from happening?
Posted by: Kelly Moran
http://www.nytimes.com/2009/01/25/business/25bernie.html?scp=2&sq=bernie%20madoff&st=cse
This brings up several different questions. What can we do about these types of situations? Were there any warning signs? Why did the scandal take so long to surface? Should limits be set on how much one certain individual gets to control in a company?
In this case, there were plenty of warning signs. Madoff had been under a careful eye for many years, and problems were known. I believe that this is largely do to the SEC's lack of investigation. With proper and through investigation, there is no way this could have gone undetected.
So, why do you think it took so long, and what do you think could have been done to avoid this from happening?
Posted by: Kelly Moran