Corporate Culture and Ethical values - Research Paper Example

Cape Fox Corporation: Ethical Failures And Business Failures [ID Introduction The Cape Fox Corporations' double-dealing and fraud exposed an all-too-common phenomenon in business these days: Weak organizational structures that expose companies to risk, fraud, embezzlement and mismanagement (Grabell, 2010). The Cape Fox Corporations' woes are not exclusively its own, however: “Revenues of Alaska Native Corporations that are major federal contractors have grown much faster than profits and dividends they have paid to native shareholders” (LaFleur and Grabell, 2010).

The fraud seems to have stemmed from a longer-standing set of problems: A small group of parasites within the Native American community who have forgotten the purpose of ANCs, or American Native Corporations, to return money to the community. Forgetting one's community obligations is perhaps the greatest lapse of ethical and cultural problems in an organization, and it characterized the behavior of the Cape Fox Corporations' leadership, structure and culture. OT Analysis Purpose Statement To determine the truth or falsehood of the hypothesis that Cape Fox's ethical lapses stemmed from a lack of community concern, involvement, transparency and duty.

OT Hypotheses Inexperienced leadership with too little of a concern for and ties to the organic community emphasized the failure at a leadership level. Structures that didn't properly involve a cross-section of community interests and involvement and emphasized profit over people to excess characterized the failure at the structural level. A company culture that emphasized ambition, innovation, profit-seeking and power over community obligation sealed the fate of the company. Methodology An interview was conducted by a member with a close connection to the corporation.

This is methodologically valid. Statistical analyses, while sometimes valuable in organizational studies, rarely are able to arrive at the full array of factors, and are unlikely to quantify the perceptions of people within the organization. The most salient analysis looks at organizational forms and analyzes how they operate using organizational theory. Additional statistics were gathered from available research, including financial statements and reportage on the topic. Theoretical Background Culture and performance norms are inextricably linked to the way a company performs.

A company that rewards producing profit even when that profit is being siphoned out of the community is going to see that behavior occur. If a company rewards internal whistleblowing and punishes ethical transgressions, it'll see those ethical transgressions start to fade; if it turns a blind eye or rewards them, it will obviously produce them. OT Analysis Questions See attached. Results Fig. 1: Work Process Diagram As the above diagram shows, the structure of the Fox Corporation was predictably failure-prone.

“Cape Fox's experience shows how outsiders can easily co-opt the privileges afforded to ANCs, siphoning off large sums from taxpayer-funded contracts for themselves. The Natives had almost no involvement or oversight of the companies. And when they went to regulators seeking help, they were turned away, told that the law didn't allow the agencies to intervene” (Grabell, 2010). Government moneys went to the natives in a tangential sense but mostly with large consultants, who would then have the lion's share of influence over projects that benefited the government, which had no way of stopping the corruption occurring at the consultant level.

A tiny cadre of people at the top of the Fox company, largely businessmen instead of native advocates, made out with the vast majority of money. “[E]veryone seemed to benefit from the Alaska native contracts except the Tlingit natives”. Is it surprising given this context that fraud occurred? The structure of the organization, according to our review of the literature, predictably created incentives for government to continue running money through Cape Fox, getting benefits, while natives got nothing.

The natural check, natives seeking recourse, was shut down by factors ostensibly designed to help natives! The culture produced businessmen like the California businessman who “amassed a portfolio of construction companies in the names of relatives and friends and reaped hundreds of millions of dollars in contracts, charging Cape Fox with $16 million in consulting fees”. And the leadership, mostly the same consultants, were too inexperienced to deal with obvious fraud and too rewarded by the fraud to stop it.

Ultimately, short-term benefit is eclipsed by long-term costs, and someone will pay the piper. References Anchorage Daily News. (2010). ProPublica alleges fraud from Native corporation's 8(a) contracts Grabell, M. (2010). Rampant Fraud, Self-Dealing Alleged in Alaska Native Corporation. ProPublica. LaFleur, J. and Grabell, M. (2010). Revenues for ANCs Skyrocket, but Not Payouts to Natives. ProPublica.