Corporate Ethics

Topics: Ethics, Business ethics, Morality Pages: 9 (3168 words) Published: July 7, 2012
Ethics, Management, and

the Corporation’s Reputation

Kristi Sims

SGT, Inc

Turnitin Originality Score: 8%

Ethics and ethical standards are very important to an organization’s way of life. If something goes wrong and its standards are broken, it can be very detrimental to the company’s reputation among investors, customers, employees, and competitors. It is the duties of management to make sure an organization’s ethical standards are being met and that the reputation of the organization is preserved.

The case, “The CEO’s Private Investigation” by Joseph Finder, is a fictional look at a new CEO coming into a company and realizing that rumors she heard at her previous employer may be true. She struggles with deciding whether to follow her gut and start an investigation into the previous CEO and his dealings or to sit quietly and not affect the image of the corporation. On Cheryl Tobin’s first day as the new CEO of Hammond Aerospace, she confronts several top –level employees about rumors she heard at Boeing. Hammond’s sales team was extremely successful at landing foreign contracts and rumor was they were offering incentives, bribes, to land these contracts. After confronting several employees, Cheryl noticed that these employees never denied the rumor. They had just tried to change the subject.

The employees noted that if Cheryl proceeded with an investigation, it would severely damage the company’s image. The company could lose millions of dollars, share price would decline, and customers would flock to competitors for their needs. In the end, Cheryl decides to hold her own investigation with a private, outside law firm. This raises the question of how ethical behavior among management affects an organization’s image and how can a tarnished image be rebuilt.

In the case, Cheryl was the new top-level manager who wanted to follow her instincts on rumors she had heard about the previous CEO and his team. She did not want to damage her reputation within the company or the company’s organization as a whole. As the new CEO, she wanted to change the way things were done at Hammond to reduce the threat of the scheme becoming bigger and hurting the company’s image even more if the bribery went on for a longer period of time before becoming public knowledge. After employees told her how damaging a public investigation would be to the company’s reputation, Cheryl stayed with her instincts and made the call. Even though the case ends with the call, management’s ethical behavior previously and currently can affect a company’s image in a good or bad way.

Five executives from four different companies studied the case and gave their opinion on what Cheryl should do about her situation and what, if any, consequences could arise from her actions. All of the executives who studied this case believe that Cheryl is not being smart by thinking she can investigate her beliefs while keeping it quiet. Christopher E. Kubasik and James B. Coney of Lockheed Martin believe that Cheryl needs more evidence of a scandal before moving forward. Also, if she does go forward with her investigation, the two executives offer that Cheryl’s management team will react in different ways which will allow Cheryl to determine who is right for her team and who should move on (56).

Mark Sheffert (2001) states in “The High Cost of Low Ethics,” that too often management focuses on tangible assets, such as money, and focuses less on the company’s reputation, which he says should be the most important asset to a company (p. 57). In most ethics scandals, the managers behind the scandal are not thinking of the reputation of the company, but how they can grow faster, make more money, and essentially be the best among their competitors. This may have been what the previous CEO and his sales team were trying to do at Hammond. By bribing foreign contractors with incentives off the...

References: Finder, J. (2007).The CEO’s private investigation. Harvard Business Review, 85(10),
Sheffert, M.W. (2001). The high costs of low ethics. Financial Executive, 17(6), 56-58.
Weaver, G.R. & Trevino, L.K. (1999). Compliance and values oriented ethics programs:
Influences on employees attitudes and behavior
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