02. Aaron Beam and the HealthSouth Fraud
Running head: ETHICS AND ORGANIZATIONS 1
Ethics and Organizations
Case Study 1
Vernon Tilly Jr.
University of Central Oklahoma
ETHICS AND ORGANIZATIONS 2
In reference to the Aaron Beam and the HealthSouth Fraud case in our text Velasquez
(2012), the following questions from the text and my answers to these questions are provided as
requested.
1. Which of the "obstacles to moral behavior do you see at work in Aaron Beam's behavior and thinking? In Scrushy's?
The obstacles I see in Aaron Beam's behavior are "Rationalizing Our Actions and
Displacement of Responsibility". Rationalizing his actions is supported by comments he made
in reference to the actions he had or was about to take in supporting his employer. Aaron Beam
stated in Velasquez (2012), "He described the move to himself as aggressive accounting but
definitely not fraudulent" (p 68). In the continual cooking of the books, each time Beam was
press or directed by Scrushy to do so. Aaron Beam possibly considers that to be his get out of
jail free card, by pointing the finger back at his employer, as displacement of his responsibility.
We see clearly what he was thinking in Velasquez (2012), as he "felt it was technically
within the bounds of accounting rules and investors would be sophisticated enough to understand
what was happening" (page 68). This would relate to "Biased Theories about Others", as he
believed this group of investors was sophisticated. You cannot help but think he also felt
secretly an investor(s) would question their actions and bring them to account for their actions
considering the situation he was in with his employer.
The obstacles I see in Richard Scrushy's behavior are "Disregarding or Distorting Harm,
Euphemistic Labeling, and Rationalizing Our Actions". In reference to "Disregarding or
Distorting Harm" based on the belief he was doing a good thing by providing rehabilitation
therapy to patients at lower costs than regular
Ethics and Organizations
Case Study 1
Vernon Tilly Jr.
University of Central Oklahoma
ETHICS AND ORGANIZATIONS 2
In reference to the Aaron Beam and the HealthSouth Fraud case in our text Velasquez
(2012), the following questions from the text and my answers to these questions are provided as
requested.
1. Which of the "obstacles to moral behavior do you see at work in Aaron Beam's behavior and thinking? In Scrushy's?
The obstacles I see in Aaron Beam's behavior are "Rationalizing Our Actions and
Displacement of Responsibility". Rationalizing his actions is supported by comments he made
in reference to the actions he had or was about to take in supporting his employer. Aaron Beam
stated in Velasquez (2012), "He described the move to himself as aggressive accounting but
definitely not fraudulent" (p 68). In the continual cooking of the books, each time Beam was
press or directed by Scrushy to do so. Aaron Beam possibly considers that to be his get out of
jail free card, by pointing the finger back at his employer, as displacement of his responsibility.
We see clearly what he was thinking in Velasquez (2012), as he "felt it was technically
within the bounds of accounting rules and investors would be sophisticated enough to understand
what was happening" (page 68). This would relate to "Biased Theories about Others", as he
believed this group of investors was sophisticated. You cannot help but think he also felt
secretly an investor(s) would question their actions and bring them to account for their actions
considering the situation he was in with his employer.
The obstacles I see in Richard Scrushy's behavior are "Disregarding or Distorting Harm,
Euphemistic Labeling, and Rationalizing Our Actions". In reference to "Disregarding or
Distorting Harm" based on the belief he was doing a good thing by providing rehabilitation
therapy to patients at lower costs than regular