Arthur Anderson' Management - Case Study Example

In Arthur Anderson, the main legal issue was compliance with accounting rules and regulations influenced the company. The company organized its activities taking into account accounting standards and norms of reporting accepted by the state and federal agencies. (Arthur Andersen 2007). To operate without major disruptions, Arthur Anderson was in compliance with legal requirements, international, federal, state, and local. It developed, established, implemented, and policed a code of ethical and moral conduct for all members of its organization.

The ethical issue involved fair treatment of clients and employees. On the corporate level, Arthur Anderson accepted policies and regulations determining decent incomes and working conditions. In the legal area the objective were simply to obey the law. If the company considers the law unfair, then it should make efforts to get the law modified or repealed, or it should attempt to get relief from certain sections of the law (Friedman 1970). If none of these options is available and the law is too restrictive, then the company must evaluate the possibility of changing its way of doing business or of moving to a new location where the law does not exist.

This need for continuous top management and other levels of management participation and support in such programs is reinforced by four separate studies on establishing and implementing social responsibility programs (Ringle, 2002). For Arthur Anderson, establishing and implementing a program was not a simple process and required continued top management involvement (Friedman, 1970).Arthur Anderson stated that the stockholders deserved a reasonable return on their investments; the business had to stay competitive; and the community expected some form of support from the business.

This was a balancing act that each business must evaluate for itself as a part of its total social responsibility commitment. Because many people perceived right and wrong from different angles, the objective of the company in the area of ethical and moral standards were to establish what it would and would not tolerate. Since not detecting or overlooking violations weakened the fear of punishment, a system of inspection was implemented and strict levels of punishment enforced for violation of the code.

Great care was exercised in all of these areas (Ringle, 2002). Expenses for implementation and control could not get out of hand, and policing and enforcement could not be done in a way that adversely affected the attitudes or the creativity of the employees. In the area of philanthropic activity, where there was considerably more latitude of operations in how, when, where, and even if the company or division wanted to contribute money or other resources to "worthy causes," the firm deliberated about and resolved many questions prior to establishing fair and workable guidelines.

When the course of action was decided upon, then detailed plans for necessary management activities were developed, such as basic tactics, sequences, and timing; organization; allocation of resources; staffing; directing and controlling; evaluation; and, if appropriate, provisions for recycling the project. The planning process was used to accomplish accounting initiatives, and any other stand-alone action with its