Evaluating the CIMIC Groups Ethical Standards - Case Study Example

SUSTАINАBLЕ INTЕRNАTIОNАL BUSINЕSS Student’s Name Course Professor’s Name University City Date Sustainable International Business Introduction Ethical standards help in defining the values and principles that an organization should portray. Organizational management is supposed to operate all the firms’ practices and activities using an ethical framework. Consequently, corruption and bribery portray a negative image of the firm. This paper would focus on evaluating the ethical standard of an Australian firm CIMIC Group, the possible ethical action the CIMIC Group should take to restore its reputation and finally the Australian anti-corruption law and multinational corporation ethical responsibilities. Therefore, the study focuses on the ethical standards in an organization and how it contributes in fighting corruption and bribery practices. Evaluating the CIMIC Group’s Ethical Standards Bachelard and McKenzie (2016) article reveals the corruption culture that has developed over a period of years and the cover-up scheme to launder the millions from the company. Corruption history in the organization has persisted even after changing the firm’s management. Widespread of corruption within the top management officials has made the firm to have a great background of corruption culture. Commissioning of different projects and contracts with the intention to obtain huge among of the money has been presented with evidence. This shows that the ethical standard of the firm has been violated as the top ranking management are dishonest and untrustworthy (Hoy, 2014, para 7). According to the article, the Leighton Offshore management was engaged in the huge payments to the Iraq officials that led to laundering $5.6 million for paying bribes (Bachelard, and McKenzie, 2016, para. 4). Furthermore, in the covering up the issue, they decided to backdate the invoice. In addition, corruption, bribing and backdating invoices are some of the practices that show the company lack ethical standards. Ethical standard ensures moral and ethical practices guide the management in undertaking the firm's operations. The cover up of the bribing, corruption and backdating the financial records to achieve personal interest shows a lack of moral values and good managerial, cultural practices. The company experienced the transition of the management and changing its identity from Leighton Offshore to CIMIC Group. Change of the management and the brand name did not influence the culture of the firm. Corruption and bribery culture persisted even with the new management. Ghost contracts such as paying $15 million to be guaranteed of the steel supply to the Indian company that laundered the Iraq money. Furthermore, no steel was delivered, and the money had already been paid out for the supply. In another instance, the $6.8 billion coal deal by the Thiess company subsidiary of Leighton was initiated (Bachelard, and McKenzie, 2016, para. 5). The company management focused on paying $16 million bribes to in the tender (Bachelard, and McKenzie, 2016, para. 6). The series of events shows that the management of the CIMIC Group lacked moral values and ethical standards concerning their leadership skills and qualities. The whistleblower who inquired about the corruption and bribery issues in the organization was sacked after burying the inquiry (Knight, 2016, para. 2). This shows the top management was not willing to deal with the issue of the corruption and bribery as it would show their unprofessional conduct. Furthermore, the managers focused on eliminating the whistleblower to reveal the actual situation in the organization performance. As the new management under the CIMIC Group not responding the issues happened under the Leighton management, it indicates that the corruption culture and covering of the culprit are still going on. Therefore, the ethical standard in both former and current management does not work in revealing the actual state of the firm as far as corruption and bribery are concerned. Therefore, the violation of the values and attributes of the firm shows a lack of ethical standards governing the CIMIC Group. The Possible Actions that CIMIC Group need to take in Restoring Reputation and Performance as Ethical Corporate Player Ethical standard helps to define the values and attributes essential for describing the reputation and ethical performance of the firm. Basing on the sustainable international business theories, the new trade theory explains why the multinational corporations engage in business operations. Ethical standards helps in relating the multinational corporation engaging through an ethical ground without bribing to obtain tenders and contracts. The national competitive advantage is another international business theory that helps in addressing the interaction between the firms. The competitive advantage theory ensures the firms engage on ethical operations and performances. Furthermore, the competitive advantage theory, formulated on the ethical basis ensures issues such as corruption and bribery are eliminated completely. CIMIC Group has faced corruption and bribery practices, and hence the management should focus on different values to restore the firm’s reputation and performance at a local and international corporate player. The issues that CIMIC Group management should consider include; Honesty; the CIMIC Group executive are supposed to show their ethical standard through being honest and truthful when undertaking the firm’s dealings practices. They are not supposed to take part in deliberate misleading and deceiving the stakeholders through misrepresentations, backdating invoice statement and selective omission (Cheng & Wang, 2015, p. 647). The honesty attribute ensures the CIMIC Group management provide the collect information regarding the firm’s situation. Integrity; the CIMIC Group executive is supposed to show and demonstrate integrity through having the courage to do what is right. Integrity and value helps to demonstrate personal strength through doing what is right, even if the pressure requires one to do the contrary. This indicates that CIMIC Group management is supposed to be principled, honorable and remaining upright in fighting for the company’s position in the organizational ethical culture (Groves & LaRocca, 2011, p. 514). The CIMIC Group management is supposed to focus on the right actions regarding the firm’s situation and ensuring the relevant actions are taken. In regaining the corporate reputation, the CIMIC Group management should to ensure the organizational principles are not violated at all cost. The corruption and bribery issues are supposed to be eliminated completely and involved personnel meeting the wrath of the law. This would help in attracting the stakeholders to have confidence with the CIMIC Group management (Bandsuch, Pate, & Thies, 2008, p. 104). Demonstration of the integrity would also show the integrity of the management and hence improve the ethical standard. Therefore, the CIMIC Group management has to consider focusing on the organizational values and principles irrespective of the pressure from the economic, political and environmental factors. Accountability; the CIMIC Group management ought to acknowledge and focus on the personal accountability depending on the position ranking in the organization. In ensuring ethical quality, the managers are supposed to accept personal accountability depending on the decisions and policies made. Decisions and omissions are some of the factors that help in defining the accountability value of the managers. Accountability approach would also contribute to eliminating the corruption and bribery as the managers involved would be fully responsible for their actions (Mendonca, 2001, p. 266). The accountability approach would contribute to the stakeholders gaining confidence with the CIMIC Group management. Therefore, the firm is supposed to consider an accountability approach as a means of restoring its reputation to general public. Law abiding; the CIMIC Group executive should abide by laws and organizational rules and regulations. All the organizational activities and practices are supposed to be formulated in compliance with the law and organizational rules and regulations (Gray, 2014, p. 598). The CIMIC Group management should allow the law, rules, and regulation to take part in the organization in smoking out the corrupt and scrupulous managers. Relevant authorities essential in enforcing the law are supposed to be used to deal with the corrupt individual in the organization. Prosecution and recovery of the corrupted and bribed firm’s resources would help the CIMIC Group to regain its reputation. Therefore, the CIMIC Group management should focus on ensuring the law and the rules and regulations governing the institutions are fully maintained. Australian Anti-corruption Law and MNCs Ethical Compliant and Responsibility The Australian anti-corruption law has clearly indicated the code of conduct focusing on the bribery and corruption in Australia. Code of conduct shows that any local and Multinational Corporations are supposed to focus on the appropriate channel in performing their business in Australia (Goel, Budak, & Rajh, l2015, p. 760). The Australian anti-corruption law has well-elaborated mechanisms to fight with corruptions and bribery cases. The government of Australia has well functioning independent and transparent judiciary that provides with the regulatory climate to ensure corruption is eliminated. It is important to acknowledge corruption risk threaten the mining industry as well as foreign bribery in Australia. Criminal code has categorically elaborated on the domestic and foreign firms are supposed to be accountable and responsible for their practices (Odrakiewicz & Odrakiewicz, 2014, p. 74). The Anti-corruption Law is supposed to be tight in ensuring an individual or the company engaging in corruption or bribery faces the full force of the law. Therefore, the Australian government is supposed to equip all the relevant authorities and departments dealing with the corruption and bribery proper machinery and support to fight corruption. Multinational corporations should develop an ethical culture that complies with the Anti-corruption practices. The cultural values are developed by the organizational principles and values that determine the objectives and goals of the firm. CIMIC Group management is supposed to ensure the manager takes full responsibility for their decision and omission practices. This would help in ensuring the management meets the ethical standards and following the firm’s values and principles while undertaking their responsibilities (Keong, 2015, p. 130). Multinational Corporation’s management should engage the Australian Anti-corruption Law to understand the rules and regulations to include the organizational values and principles. Accountability and responsibilities in the organization focus more on the organizational cultural value. The anti-corruption approach should be engaged to ensure the organizational personnel maintain the values and principles of the organization. Management is supposed to ensure all the firm’s activities are undertaken on a clear platform that is open to all players (Baboš, 2015, p. 115). Stakeholders of the company have the right to understand the situation of the firm relating to performance and productivity. This would help the general public to have a new look and view of the firm's managerial change in performance and productivity. Honesty would help the firm to start the process of regaining and restoring the good reputation to their stakeholders. As a business institution, the CIMIC Group has to focus on the corporate law that provides guidelines for the local and international business operations. Practices and transactions are supposed to follow the articulated procedure for tender payments. Furthermore, the loopholes for corruption and bribery are supposed to be subjected to the law and the rules and regulations governing the organization (Kim, 2014, p. 387). If the multinational corporation meets the ethical standards required by the anti-corruption law, then the firm would operate transparently. Therefore, the Australian anti-corruption law is required to relate to the multinational corporations to ensure ethical standards are achieved. Conclusion In brief, ethical standard helps in designing framework under the values and principles essential for governing the organizational operation and practices. The management ought to relate the ethical values and principles of the firm to the general interest of the stakeholders and abide by the rule of law. Adoption of the anti-corruption law provides the organization with the basic approach in fighting corruption and bribery in the institutions. In addition, the administration should ensure relevant authorities take charge against the corrupt individuals in the organization irrespective of the ranking position. 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