Ethics, broadly defined, is the a set of values or principles established by society for its betterment. Many of these values and principles are incorporated into culture and law. Organizations today integrate ethics into the foundation of their businesses in order to augment the professional value and trustworthiness of the their enterprise. Both public and private companies are expected to uphold certain ideals and internal controls for the benefit of their stakeholders. Operating with high virtues dictates an enterprise’s true value. Corporations like Enron, Volkswagen, and Mattel once ventures of firm principle and ethics created a rift in the business world. Consequently, these organizations and their lack facilitated the advancement of
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They claimed over $111 billion in revenues in 2001. However, there were many issues that led to Enron’s demise. The falsely reported financial condition was planned and executed by Enron management and partners at Arthur Anderson, a former public accounting firm. This was the beginning to widespread calls for the reform of corporate diligence, ethics and controls.¹ The Sarbanes-Oxley Act of 2002 was put in law due to the lack of integrity and transparency that was occurring throughout the public company sector. The unethical decision by both parties during this scandal caused great unrest for the public. It wasn’t just the failure of laws and regulations, but also the failures of corporate leaders and attorneys that were supposed to foster an ethical self-policing practice. Enron was the example to many other businesses at the time that exploited large payoffs to accounting firms in return for misrepresented …show more content…
In an attempt to slash costs Mattel outsourced most of its production overseas to Chinese manufacturers. In doing so Mattel failed to keep a close eye on what their manufacturers and subcontractors were doing. It directly led to toys filled with 180 times the legal amount of lead paint, and other toys containing small, easily detachable, magnets that if swallowed could seriously injure or kill a small child. Whereas much of the lead paint came from Mattel’s suppliers, their own lack of adherence to manufacturing and design quality led to the dangerous failing magnets. The company felt the impact immediately. Mattel would lose countless hours, and large sums of cash in the recalls. In fact Mattel would spend over 50,000 labor hours and $40 million dollars on product recall activities. Gross profits at the end of 2007 were estimated to have been reduced in total by $71 million. However the damage was deeper than spreadsheet numbers, public trust was lost and the intergenerational brand name was severely damaged. Unlike several other companies who fail at maintaining their ethical actions, Mattel took extensive steps in rebuilding their
They claimed over $111 billion in revenues in 2001. However, there were many issues that led to Enron’s demise. The falsely reported financial condition was planned and executed by Enron management and partners at Arthur Anderson, a former public accounting firm. This was the beginning to widespread calls for the reform of corporate diligence, ethics and controls.¹ The Sarbanes-Oxley Act of 2002 was put in law due to the lack of integrity and transparency that was occurring throughout the public company sector. The unethical decision by both parties during this scandal caused great unrest for the public. It wasn’t just the failure of laws and regulations, but also the failures of corporate leaders and attorneys that were supposed to foster an ethical self-policing practice. Enron was the example to many other businesses at the time that exploited large payoffs to accounting firms in return for misrepresented …show more content…
In an attempt to slash costs Mattel outsourced most of its production overseas to Chinese manufacturers. In doing so Mattel failed to keep a close eye on what their manufacturers and subcontractors were doing. It directly led to toys filled with 180 times the legal amount of lead paint, and other toys containing small, easily detachable, magnets that if swallowed could seriously injure or kill a small child. Whereas much of the lead paint came from Mattel’s suppliers, their own lack of adherence to manufacturing and design quality led to the dangerous failing magnets. The company felt the impact immediately. Mattel would lose countless hours, and large sums of cash in the recalls. In fact Mattel would spend over 50,000 labor hours and $40 million dollars on product recall activities. Gross profits at the end of 2007 were estimated to have been reduced in total by $71 million. However the damage was deeper than spreadsheet numbers, public trust was lost and the intergenerational brand name was severely damaged. Unlike several other companies who fail at maintaining their ethical actions, Mattel took extensive steps in rebuilding their