Assignment Number-1: “WorldCom’s Whistleblower”

What does WorldCom’s experience teach us about corporate wrongdoing?

The CFO Scott Sullivan along with WorldCom’s Controller David Mayer & Auditor Arthur Anderson
was involved in this corporate fraudulence of showing inflated profit by unfair accounting adjustments.
This case provides important learning about corporate wrongdoing-
All the processes of the organization should be very transparent in order to avoid any kind of wrongdoing.

A secret auditing team should be appointed time to time by government or by the company itself in order
to avoid unfair accounting adjustments.

The members of the team should not be permanent. The team should be formed on short-term basis in
order to avoid formation of any relationship with the employees.

The name of the whistle-blower or the person who dictates the fraud should remain confidential.

Proper protection of the whistle-blower has to be made sure if society wants to keep the tradition of
whistle-blowing live, which is very much essential to the maintenance of honesty and morality at large.

What does Cynthia Cooper’s experience teach us about courage?

A whistleblower is a person who raises a concern about wrongdoing occurring in an organization.

Usually this person would be from that same organization. Here the whistleblower was Cynthia Cooper,
head of internal audit department WorldCom who found out the fraud in WorldCom. There is no doubt
about the courage of Mrs. Cynthia Cooper. Majority of the people try to be ‘diplomatic’ while dealing
with any of such malpractices listed above. They take care of themselves not being harmed, but at the
same time avoid direct clashes with the wrong doers. In worldly sense such people are called ‘wise’ and
‘diplomatic’. But Mrs. Cooper doesn’t fall in this category. WorldCom’s shareholders lost $3 billion;
17000 workers lost their jobs. Many of them today misbehave with Cynthia Cooper which make her cry
sometimes. It was very risky to raise voice against such wrongdoing and she was able to do that. But if
this fraud was not discovered then there might have some more losses occurred in future. Thereby every
manager must be courageous enough to raise voice against any kind of crime or fraudulence; not only for
the sake of the organization, but also for the sake of society at large.

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Assignment Number-2: “Was National Semi-conductor Morally
Responsible?”
Who is right in this dispute National Semi-conductor or the Department of Defense? Explain
your answer. According to me, National Semi-conductor was right in this argument. Because every
organization is a result of collective effort of all its employees. Even legally, the owner of a company &
the company itself are two different entities. Any external entity cannot blame any single employee or
group of employees for any kind of fraud or default. If any kind of fraudulence has occurred in the
organization, then it’s the responsibility of the organization as a whole, not of any group individual
employees. The organization should take further steps to find out because of what this has happened &
can take further legal actions after proper investigation. Any external organization directly cannot blame
any employee individually for the crime. Also it is the duty of the higher authority to see whether their
employees are getting harmed by the others or not. Any National employee will be supported by the
company. I feel it's a company responsibility, a matter of ethics. Therefore, it can be concluded that
National Semi-conductor was right in this regard.

 What are the practical consequences of accepting the position of the Department of Defense? Of
accepting the position of National Semi-conductor? In light of these practical consequences, which
position do you think society should adopt?

Consequences of accepting the position of Department of defense are mentioned below-

1. The employees who were directly related to fraudulence can be pointed out at the primitive stage.
As it is a matter of national security, it is very important to assure that individual perpetrators of
the fraud are no longer in positions within the company where they might repeat the same testing
short-cuts and falsification of documents. 2. The Department had to know the individuals
responsible for the fraud and where those people were in order to determine whether National
could now serve further as a reliable supplier or not. If only few employees were involved in this
crime, then taking proper legal actions against them the matter could have been controlled. But if
the organization as a whole was involved in this crime then further question arises regarding the
reliability of the organization.
2.
Consequences of accepting the position of Department of defense are mentioned below-

1. If the higher authority was involved in this fraudulence then they might not divulge the name of
any individual involved in the crime & ultimately society would have suffered. 2. Also it is the
duty of the higher authority to see whether their employees are getting harmed by the others or
not. Any National employee will be supported by the company. I feel it's a company
responsibility, a matter of ethics. So by not disclosing the names, national Semi-conductors could
have save the ethical interest of the company. In light of these practical consequences, society
should adopt the position of Department of Defense. Because by taking direct actions against the
individuals involved with the crime, the society as well as the whole nation can be saved from
further danger at the primitive stage.

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Assignment Number-3: “Slavery in the Chocolate Industry”

 What are the systemic, corporate and individual ethical issues raised by this case?

Systemic ethical issues: The systemic ethical issues raised by this case are as follows:
As in this case, children are kidnapped by the farmers of Ghana and Ivory Coast and these kidnapped
children used to do difficult work like clearing the field, harvesting the beans and drying them in the sun.

In 2000, True vision a British television company took video of these slave boys and publicized all these
events. But there was no effect of this publication.

Whole system including African government, African farmers, American chocolate Companies,
Distributers, Consumers and most importantly Chocolate manufacturer association knew these things. But
they didn’t take any major steps. So we can say that whole system was the part of this ethical issue.

Corporate ethical issues: Not only the Systemic but also the corporate ethical issues are in this case.
All the chocolate making companies knew that these cocoa are made by the slaves. Like Hershey Foods
corp, Mars, Inc. (maker of M & Ms ,Mars, Dove and milky ways),Nestle USA and craft foods.

Not only Chocolate making companies but also the distributers who are intermediaries between these
were also involved like Archer Daniels Midland co. Barry Callebaut and Cargill .

Individual Ethical issues: According to the law of prohibition for the elimination of the worse forms of
child labor, child should not be kidnapped and worked forcefully. But these notorious farmers of Ghana
and Ivory coast kidnapped them and they were worked forcefully.
These farmers use whippings, beating and starvation to force the boys to do the hot, difficult work of
clearing the field, harvesting the beans and and drying them in the sun.

 In your view is the kind of child slavery discussed in this case absolutely wrong no matter what,
or is it only relatively wrong ,i.e., if one happens to live in a society (like ours) that disapproves of
slavery?

I think in this case, the points that are discussed shows that kind of child slavery is not relatively wrong
but the absolutely wrong. This is totally unlawful and against the society. To abduct the children and do
the work forcefully is totally not tolerable.

 Who shares in the moral responsibility for the slavery occurring in the chocolate industry;
African farmers? African government? American chocolate companies like Hershey, Mars, Nestley
and Kraft foods? Distributers like Archer Daniels Midland Co., Barry Callebaut and Cargill Inc?
Consumers like you and I who know about the situation but continue to purchase tainted
chocolate?

I think it is the responsibility of everybody to erase these types of shameful activity. It is not
limited to individual like African farmers, African government, and American chocolate co.,
Distributers, Consumers and me. Everyone is aware of these situations but still they are
continuing. We all should take major steps, so that we can remove these children from slavery
and make them happy.

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Assignment Number-4: “Rank Electronics ltd.”
 Was Tiwari justified in placing the order on the pretext that prices could go up?

No, Tiwari was not at all justified in placing such an order which involved so much money. This decision
of Tiwari shows that there were certain loopholes in the management of the company.
Tiwari should have consulted his superior before placing the order

The inventory management should be taken special care of

Although Tiwari was the purchase director, but before placing such huge order he should also have
consulted the finance department as the fund involved is huge and it has left the company with very little
bank balance.

Tiwari should also have consulted Gautam, the Managing Director of the company

He was not right in placing the order in Gautam’s absence

 What action should be taken so that such problems do not recur? What action, if any, should be
taken against Tiwari?

The following steps or action can be taken so that the problems do not recur:
The management control system should be made more centralized

Finance department should be given the responsibility to manage the fund and see that it is used properly

The inventory control should be made more efficient

Cross departmental communication should be encouraged so that before taking any bold decision the
experts from various functions can give their opinion

Tiwari should be reprimanded for the mistake that he has made as the company has got into deep
trouble because of him. He should be removed from the position that he was holding and the
action taken against him should set an example for other employees too so that the same mistake
is not repeated.

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