Ethics and Business

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Mind Map on Ethics and Business, created by robinson.heather on 06/11/2013.
robinson.heather
Mind Map by robinson.heather, updated more than 1 year ago
robinson.heather
Created by robinson.heather over 11 years ago
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Resource summary

Ethics and Business
  1. Johnson & Johnson
    1. Tylenol capsules laced with cyanide kill seven people
      1. Customer safety ahead of profit as the company recalls $100 million US worth of product and offers reward for information leading to arrest
        1. "Gold Standard" for corporate crisis management
          1. Market share lost due to scare is regained within one year
    2. Bre-X
      1. Gold deposit scandal leads to biggest corporate fraud in Canadian history
        1. Stocks become worthless
      2. Livent Inc.
        1. Co-founders misappropriate $4.6 million and are convicted in absentia
          1. Lawsuit pending against auditors Deloitte & Touche for failure to protect creditors and other stakeholders
            1. Creditors and shareholders lose millions
        2. Enron
          1. Accounting fraud inflates assets and revenues
            1. Shareholders Deceived
            2. Possibly the most well-known example of willful corporate corruption and fraud
              1. The impetus behind enacting the Sarbanes-Oxley Act of 2002 in United States
            3. SNC Lavalin Group Inc.
              1. Multiple allegations of bribing officials millions of dollars in Libya and Bangladesh in order to secure contracts
                1. World Bank cancels $6.2 billion dollar loan needed for Padma bridge project in Bangladesh and banned from receiving further development loans for ten years
                  1. Stock values plummet
              2. Why do companies engage in ethical behaviour?
                1. 1. Companies engage in ethical behaviour in order to build and maintain strong relationships with suppliers, customers and shareholders that are characterized by trust and goodwill. It is difficult to maintain long term business success without the goodwill of these key stakeholders
                  1. 2. Companies engage in ethical behaviour to avoid the penalties associated with acting unethically such as fines and sanctions.
                2. Why do companies engage in unethical behaviour?
                  1. 1. Companies engage in unethical behaviour in order to "protect" the business and "buy more time" as when financial statements are misreported to maintain stock prices even though the business may be in trouble.
                    1. 2. Companies engage in unethical behaviour such as bribing international officials in order to secure contracts and compete on the world stage.
                      1. 3. Management of companies engage in unethical behaviour for personal gain as when company funds are misappropriated by individuals.
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