Business and society
Table of Contents
- The Sarbanes –Oxley Act of 2002 has introduced sweeping changes in the name of enforcing corporate ethics. Is it really a “fair” piece of legislation? Explain your answer.
Sarbanes-Oxley Act was introduced on the wake of Enron scandal which had strongly influenced the economic strength of USA. This act was aimed at providing a safeguarded from such incidents in future and to protect the investors from misstatements, financial irregularities and to strengthened the role of internal audit. (Elisabeth, 2002)
It is often said that this law has introduced drastic steps in the world of business in the name of ethics and created a monopoly of board constituted under the law to regulate, inspect, and discipline the role of auditors. But I found it a fair piece of legislation on following counts:
- It ensures auditor’s independence as it provides mode to select auditors, their rotation, reporting requirements and appointment of audit partners. On the other hand, it has restricted the role of auditors to assurance services only by excluding consulting services from their preview.
- It ensured that CEO has taking ownership of financial statements by signing and verifying it.
- It introduced criminal penalties for manipulation, alteration and destruction of financial record for both auditors and executives.
- Corporate frauds are listed in criminal offences now.
Therefore, despite of the criticism, this law is a fair one, especially when in its absence; a number of public companies had played with the fortune of their shareholders.
- How would you feel if you found out that someone halfway around the world from your doctor’s office was reading your CAT scan?
– Would your opinion change if you knew the cost savings from outsourcing were putting American radiologists out of a job?
– What if they were being read this way because there was a shortage of qualified medical personnel here? Would that change your opinion?
-Should your doctor be obligated to tell you where your tests are being read? Why or why not?
Sharing of client’s information without his consent is against the norms of professional ethics. However, discussion and seeking help without disclosing the identity of the client is allowed in both legal and medical professions. It would be unacceptable for me to accept the sharing of my CAT scan by any person other than my physician, if it is not covered under above given discussion. But it would be fine to seek help in diagnosis and treatment without disclosing my identity.
My opinion would not change, knowing that CAT scan was sent to a radiologist for opinion as a measure of outsourcing that renders an American radiologist out of a job. Outsourcing is a global phenomenon and in a competitive world it is seen as advantage. Similarly, in absence of technical personnel available in the country, they may be hired or the function may be outsourced without compromising the business ethics.
Doctor is obliged to tell me about the location of test in the instances where he has made commitment or has given an indication of quality and standard he is going to ensure.
- Do you think global businesses would be willing to subscribe to a global code of conduct? Explain your answer.
Would it be easier to just follow the business practices and customs of the country in which you’re doing business? Why or why not?
With the shrinking borders of the world, Global code of conduct is one of the prime needs of new business world. New technology and advancement of Internet have evolved the world into a small village interconnected with all of its corners and there is a challenge to fashion a humane village to mew heights. Businesses have realized this reality, too.
The question as to willingness of businesses to subscribe to a global code of conduct is a tale of past. Deliberate efforts are seen on part of business community to realize an agreed code because in twenty-first century corporate environment it is a necessity. State laws or private international law will not be able to secure its utility in coming days.
It is sometimes proposed that country law may easily be followed in this case, but it must be kept in mind that there are only a few businesses which can be termed truly local or can be carried out in isolation in a long run. Sooner or later all business will be in a competitive global market and state laws would be in conflict with the pace of change. Therefore, to me global conduct code is a reality of near future (Williams, C.S.C, 2000).
- When you go shopping, do you feel consumers pay attention to how transparent the company is in its business practices? (I.e. do consumers really care if a company is ethical and moral ?) Why or why not?
At the time of shopping, consumer pays attention to a number of factors like quality, price, and standards of service and to some extent to the business ethics followed by the business or service provider. It may be argued that business ethics may be important for business but consumer is concerned with the product or the service he requires, but in most of the circumstances it is found that customer is also keen about the company he is dealing with.
There are multiple reasons for such a behavior. Firstly, businesses are not working in isolation but in a complex environment of interaction with a variety of stakeholders including public at large and consumer in particular. Secondly, when a consumer purchases a product, he being a citizen of global world finds it a duty to check and discourage those businesses which are causing harm to his hometown and the world in general. Thirdly, if a business is not sharing its mandatory requirements of financial reporting and exploiting the money of shareholders it must not be allowed to do so and any fraudulent activity on its part should bar that business from qualifying for consumers’ expectations. (Creyer, 1997)
- Discuss both positive and the negative views of whistle blowers in the media. How do you view whistle blowers? What factors can make a whistle blower lose legitimacy in the eyes of viewers?
Whistle blowers are sometimes seen as selfless martyrs, who are pursuing public interests for a collective good. On the other hand, people also consider them ‘tattle tale’ or ‘snitches’ having a personal agenda of fame and glory. (Faunce T.A, 2003)
In my opinion, whistle blower has a duty to disclose all illegal and unethical business or activities carrying on in an organization.but there must be a geniuine desire to have correction in the system and it must not be a baseless or punitive activity on part of that whistle blower. This information may be passed on to the governmant or to the auditor even through internet without disclosing one’s identity. However, on the same time, he must be protected by law for his bonafied servies to public and community, where he might face sever aftermath of an act of whistle blowing.
Factors which can affect credibility of a whistle blower are:
- Personal grudge.
- Ulterior motives to destory the business.
- Personal goal of glory and fame.
- Blackmailing to the executive.
- His previous conduct of providing baseless information, etc.
- Bumiller, Elisabeth (2002-07-31). “Bush Signs Bill Aimed at Fraud in Corporations”. The New York Times http://query.nytimes.com/gst/fullpage.html?res=9C01E0D91E38F932A05754C0 A9649C8B6
- Elizabeth H. Creyer, 1997, The Influnce of Firm Behavior On Purchase Intention: Do Customer Really Care About Business Ethic?, Journel Of Consumer Marketing, Vol, 14, Pg, 421-432
- Faunce T.A, 2003, Developing and Teaching thof Healthcare Whistle Blowing, Monash Bioethics Review 2004; vol. 23(4): pg: 41-55
- Oliver F. Williams, C.S.C, 2000, Global Codes of Conduct: An Idea Whose Time Has Come” University of Notre Dame Press.
- The Sarbanes –Oxley Act of 2002 H. R. 3763
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