Ethical Behavior - Essay Example

The case of Enron is famous in the history for the corporate fraud and unethical behavior. Corporate sometime try to make strategies for the betterment of their investors and stakeholders but in doing so they ignore some things unintentionally that have negative impact. So, corporate try to do better but sometimes they are misguided, as the case refers to HP organization scenario. In that particular case no one was stealing from the investors still there was mismanagement at board of director’s end.

The HP case does not involve money laundering, defective products or something like that it just includes invading privacy of certain individuals. The organization apologized for their misconduct and rectified its actions. Although it comes with a cost and company’s reputation is at stake by accepting its misconduct but in the long run the customers will trust the company more as it is able to stand for its misconduct. Other then board of directors the legal advisors would be held responsible as well for misguided legal advice.

Enron is proved to be most fraudulent and malicious company from the past few years. World com and Adelphia are two other companies that fall into the same category. But these are not all, with every passing year more and more companies came to face the worst ethical disasters in history. The major act that was broken by the companies is Sarbanes-Oxley Act where companies are not adopting the transparent systems and do not encourage the auditing. (O. C. Ferrell, 2009) As the accounting procedures and auditing processes are not very cost friendly organizations were not acting upon SOX which have brought bad results for them.

The corporations were of the view that finance is not an area that you expect them to self regulate them but this is against corporate governance and ethics. (Bennett, 2002) It has been seen that people who have high organizational commitment. Feel very related to corporations and feel that they are indebted they are often found to get involved in the unethical practices. An example can be of Tylenol by Johnson and Johnson when their product was tampered. People believe that organization is selling the defective product to earn huge profits which totally against the stake holders perspective.

But when it was investigated it was revealed that the external factors were playing with the reputation of the company and trust of its consumers. (Bennett, 2002) Company here could have taken two steps either they would have ignored it or they would have bear the cost to prove for once and all that they are highly ethical and care about the society and its well being. The company in this scenario had called for all the stock that was placed on shelves in multiple stores in order to discard it.

This has cost them a lot and loss was more then billion of dollars. After that they apologized publically and explained the actual situation people trusted company more than they ever have. If the company had not apologized and stood up for the unethical behavior it would have been liquidated by now and you would not know that Johnson and Johnson have existed ever. (O. C. Ferrell, 2009) Bibliography Bennett, C. (2002). Ethics in Business. South-Western. O. C. Ferrell, J. F. (2009). Business Ethics: Ethical Decision Making and Cases.

South-Western College Pub.