Why does financial scandal
happens all the time, especially involving large multinational companies that
has already been listed in stock exchanges with good reputation. Has greed took over all the rationality when
making a decision? In relation to
business ethics, we look at Olympus scandal which happened in the year
2012.
Olympus is founded in Japan
in 1919, and has become a leading manufacturer of innovative optical and
digital equipment for the healthcare and consumer electronics sectors. Olympus are committed to develop new
technologies, products and services to increase safety, security, quality and
productivity. But however, due to
misleading accounting scandal have led Olympus to lose the share value. It
happened when Michael Woodford that the company staggered 1 billion USD of
shareholder value moving 678 million USD accounted as an agent fee to a British
company called Gyrus. When Woodford
found out about this, he was quickly dismissed by the board chairman, Tsuyoshi
Kikukawa. Because Kikukawa moved the
loss to Gyrus, investments made by the company suffers a loss as well, leading
to devaluation of shareholders.
Following the case where
Kikukawa tried to cover the loss from investments by transferring almost 1.2 billion
USD to Gyrus. And the accounting book
has shown Woodford that the company is covering the loss and overstating the
profits-an action Woodford portrayed as a whistle-blower to ask
PricawaterhouseCoopers (PWC) to audit Olympus’ account.
But the question is, was it
ethical for Woodford bring down Olympus’ image?
Was it ethical for Kikukawa to alter the account books? Besides these two questions, is there any
other way for Woodford to solve this problem?
However, in my opinion, Woodford may have done the right thing because
he is no longer a staff in Olympus, and it was not fair for him that Olympus
dismisses him because he was questioning the accounts of the company.
Let me know what you think
of Woodford’s action and what would you have done if you were to be in such
situation!
What do you think about the Volkswagen scandal?
ReplyDeleteAs business ethics is really important to the company, i think companies should not gamble with the reputation they have built. Embedding software that is used to cheat emission test means breaching the regulations. Thus, in my opinion, i really think it is very unethical of VW to do such thing.
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