Sustainable International Business Futures Essay Example

SUSTАINАBLЕ INTЕRNАTIОNАL BUSINЕSS

SUSTАINАBLЕ INTЕRNАTIОNАL BUSINЕSS FUTURЕS

Introduction

The organization codes of ethics are guides and principles that an organization is supposed to abide by. Additionally, the organization code of ethics revolves around the organization’s decisions, programs and policies. Organizations are required to conduct their bottom line business based on their code of ethics. This clearly shows the importance of the organization code of ethics in organizations and how it fosters their reputation. This paper therefore aims to look into the importance of organization code of ethics through reviewing various examples and cases studies.

1. Evaluation of CIMIC Group’s ethical standards 

CIMIC Group, formerly known as Leighton Holdings is involved in an entrenched culture of corruption and cover up involving the entire organization’s management. In this case, the article questions why the Company despite of its formidable reputation and success that has earned it a position in the top 100 listed Companies responds to corruption allegation by changing its name (Bachelard and McKenzie 2017, n.d). According to the article, this out rightly appears as a plot by the organization to disguise its initial identity which is associated to the unethical corruption accusations. Evidently, the company seemingly does not tackle these accusations head on by carrying out investigations and firing the involved parties or even suing them for bridging the organizations ethical code of conduct. Rather the company appears to be quick to cover up these accusations by changing its name and changing the managerial team. On the other hand, this move by CIMIC Group appears as a plot to fool the public by making the accusation stories go away as fast as possible by changing the organization identity. Further, changing the managerial team was a hoodwink tactic meant to make the public believe that it has taken up measures to clean up the rot evident in the organization leadership
(Das 2016, p.101). However, the seriousness the organization has taken in acting upon this accusation suggest that it was initially fully aware of what was going on and in order to remain sustainable and guarantee its future it has to save its image and hence acted on the unethical behaviour reported extensively.

However, the company’s inability to legal charge its managerial team accused of corruption leaves more questions than answers. Besides, the organization did not halting Stewarts’ managerial tenure in the organization or taking up investigation of the management team thus leading to a conflict of interest having that the people to be investigated still held managerial positions in the company even after the allegations (Bachelard and McKenzie 2016, n.d). Hence, changing of the name and its managerial did not solve any problem but rather cover it up, in most cases organizations that fall into such situations hardly admit any wrong doing but rather employ strong public relation teams, a clear indication that they are only interested in sustaining their businesses and remaining viable in the foreseeable future (Crane and Matten 2016, n.d). In addition to this, the organization is also not seemingly concerned with publicly addressing this matter as it should be in many cases but rather it is focused on upholding their moral code of conduct to the public as well as to their esteemed customers and shareholders. This is indication that the organization is blind to the multiple unethical activities taking place and only the future matters to them (Chen 2010, pp.3-24). On the other hand, this also shows the rampant cognitive biases within the organization which could be the main cause of poor decision making in the organizations.

Reports that two of Leighton Offshore bosses, Russell Waugh and Peter Cox were aware that they were commissioning varying amount of funds from Unaoil through huge payments of Iraqi officials is further proof of the organization sanctioning individuals with unethical behaviors within the organization. The principle of motivated blindness and lack of a moral identity is at play here, when it comes to unethical behavior within the organization (Liu 2014. p.11- 14). This relates to the extreme ends that the company undertook when it was being accused of money laundering which is an outright felony as its management team was accused of backdating cheques a prohibited practice in the business environment. Thus, the accused parties openly deny these accusations whereas the company whose reputation is at stake remains silent to these matters which relatively carry a lot of magnitude on the sustainability and attractiveness of the business to the stakeholders (Garavan and McGuire 2010, p 487-507).

The evident company blindness to unethical behavior can be blamed on gradual erosion of the organization’s overall ethical stand. In this case, the organization appears to find the early unethical accusation of Peter Gregg making these infractions seem ‘minor’ and acceptable. Thus, in the wake of much greater infractions the company seems more likely to remain quiet and blind to these unethical as long as the company is still in business and making profits (Thomas 2015, n.d). However, it is evident that these unethical violations by the organization’s management team are increasingly becoming serious than the preceding one thus, forcing the company to cover for these corruption and ethical accusation since they were blind to them from the start. From the case it is evident that CIMIC group does not have a strong ethical standard and as such, their imminent fall or lack of sustainable business is almost certain if they continue with this habits, organizations have rebranded themselves before but failed to reinvent themselves.

1. Possible actions to restore its reputation

In the wake of corruption and bridge of ethical standards accusations, CIMIC Group should be keen to tackle this problem head on and also ensure that the tackling of this issue is prioritized and made the company’s main objective. As pointed earlier, being complacent and sloppy in tackling this scandal gives the organization a bad image as it showcases the company’s approval on wrongful doings more so when it involves its management team. In this case, the CIMIC Group should mount an investigation of the parties mentioned in these scandals and also halt their involvement with the organization by giving them an indefinite leave in order to distance itself with the unethical and corrupt activities of these management team
(Ng, Qian and Dix, 2008, p.101- 104). Thus, the slowness of the organization to react to these scandals and accusation of its management teams has created the perception that either this company is involved in their unethical and corrupt activities or it is covering up for its managerial team mentioned in this scandal. In this case, dismissing this managerial team accused of these corruption or unethical activities would be symbolic that the company is ready to cleanse the organization and maintain a high ethical moral ground that will guarantee it is sustainability.

This also ensures that the company does not fallout with the general public and customers by seemingly appearing to harbor unethical and corrupt individuals within its workforce. Moreover, CIMIC Group could also come up with an independent committee comprising of external auditors from Deloitte or price water house coopers to investigate on these accusations in an effort to set the record straight, this will be in line with the Company acting fast in addressing this matter before the public, and its customers start questioning its stand in the midst of these accusations and its willingness to uphold an ethical code of conduct of being truthful and open to both its customers and the general public (Kolk and Tulder 2010, p.119-125).

Further, the organization’s response to this corruption allegations that its managerial team has been linked with, should be proportionate to the circumstances at hand and be reasonable. In this case, the organization action should be far more urgent, detailed and significant as opposed to when dealing with a minor breach of anti-corruption controls (Knight 2016, n.d). In line with this, it is ideal for this company to embrace common decency and discretion in its responses to this scandal. The company should ensure that the chosen members of this investigatory committee are not in any way involved in this matter and most importantly, they will be able to act and implement the recommendations of the report (Carroll 2004, p.114-120). The company should also ensure that members of this committee are given the necessary authority, access and resources to conduct conclusive investigations void of interferences. On the other hand, the company should also ensure that all necessary facts and evidences are collected in order to ensure that the investigation is conclusive as well as ensuring that all considerations of all relevant factors are made. Hence, the company should ensure that the investigatory committee is aware that there is an inherent risk in action taking in regards to its responses to this corruption scandal and it should be ready for any consequences
(Montera 2016, p.57-70). This will ensure that the organization is able to instill its reputation both locally and internationally through being thorough and vigilant in finding the exact wrong doings of this managerial team and seek to rectify them if they are to remain sustainable and ensure future operations.

On the other hand, the company should also seek legal advice regarding its position under both international and local laws in regards to the investigation results. Legal advice in this case with ensure that the organization is able to handle this scandal within the legal frameworks and in the right manner considering its sensitivity due to the defamation suits risk that it poses to the company more so from those that will have been wrongly accused. Besides, the action by the company to seek legal advice will also enable it to come up with the best solution to remedy this corruption problem facing the company without self-incrimination. In regards to this, the organization could restore its reputation by withdrawing from the procurement process of the supply contract as well as any other resultant contract where the conducted investigation revealed that the contracts had been awarded to the company through corruption means (Chen 2010, p.3-24). On the other hand, in order for the company to continue performing as an ethical corporate player both locally and internationally it should repay any benefits accrued from this dealings by the mentioned organization parties. Consequently, in order for the organization to restore its reputation the company should also be keen to take up the appropriate disciplinary action against the company’s employees who are found to have engaged in corrupt activities during their employment course (Cetric 2017, n.d). In this case, disciplinary actions could range from warnings for minor offenses and dismissal and suing for the serious offences.

1. Should Australia overhaul its anti-corruption law

I think that Australia need to overhaul its anti-corruption laws in order to ensure that Multinational Corporations are more ethically compliant and responsible. Since the year 2015 Australia’s leading lawyers have been questioning the ability of Australia’s anti-corruption laws to try Multinational Corporations and called for the revamp of Australian anti-corruption laws (Cetric 2017, n.d). In this case, they claim that change in needed in Australian anti-corruption laws in order for them to be effective in battling corporate crime as well as complex financial cases such as foreign bribery
(Knight 2016, n.d). The International Bar Association (IBA) seconded this suggestion by these leading lawyers in Australia by arguing that the Australian anti-corruption laws have a quite poor record of enforcement therefore meaning that they were quite ineffective. The author of this submission Robert Wyld claims that the Australian anti-corruption laws have been existent for 15 years and in this period which is exactly a decade and half the number of Multinational Corporation anti-corruption and foreign bribery investigation cases have been 28. Conversely, 21 of these cases were later dropped with the number of criminal prosecution cases amounting to only two cases (Ng, Qian and Dix, 2008, p.101- 104). Additionally, Wyld stresses that the Australian anti-corruption system is seemingly not working. He claims that these laws could only be effective if the public witnesses imprisonment as the ultimate and real penalty for this law.

Australia is a quite ‘reactive country’ which is rather sensitive to external criticism and this is evident through the frequency at which its forced to budget for better resources only when pushed to do so (Thomas 2015, n.d). additionally, the less impact of the Australian anti-corruption laws is evident in the popularized scandal ten years ago where the Australian Wheat Board was dragged into a kickback scandal that could have been a straight forward prosecution case however it later on turned out to be a no criminal prosecution case. The poor effects of the Australian anti-corruption laws are evident through the statistics revealed by World Bank in the year 2012 were it was stated that corruption costs Australia an estimated $US1 trillion annually hence a need for adjustment of these laws to give the various authorities in Australia the power to prosecute and recover assets (Crane and Matten 2016, n.d). This amount is relatively higher than those of other developed countries a clear indication of how weak the Australian anti-corruption laws actually are. Nonetheless, the weaknesses of the Australian anti-corruption laws could be blamed on the fact that this country has seemingly no liability on parent companies in regards to their conduct of intermediaries and subsidiaries. Thus, payment of bribes and other corruption related activities are common since these Multinational Corporation only set up subsidiaries and ensure that they are used an isolated structure in regards to management of the parent company (Das 2016, p.101). This evidence therefore shows how weak the Australian anti-corruption laws are and the need for these laws to be upgraded in order for them to be more effective in ensuring that Multinational Corporations are more ethically compliant and responsible as well as preventing cases of corruption and foreign bribery among these Multinational Corporations (Chen 2010, p.3-24).

Conclusion

Corruption and foreign bribery are quite rampant among Multinational Corporations today as it enables them to operate smoothly in foreign soils. The effect of corruption and foreign bribery is evident in the reviewed case study of CIMIC Group’s formerly known as Leighton Holdings and how it affects business sustainability. Thus, evidence of weakened anti-corruption laws in Australia has been attributed to the unethical behaviours experienced among MNCs operating there. Therefore, there is need for countries to strengthen their anti-corruption laws in order to prevent this menace from scaling further. On the other hand, business need to understand the importance of conducting businesses void of malpractices in order retain stakeholder confidence and guarantee a sustainable future.

References

Bachelard, M. and McKenzie, N. 2016. Leighton: an entrenched culture of corruption?. [online] The Sydney Morning Herald. Available at: http://www.smh.com.au/business/leighton-an-entrenched-culture-of-corruption-20160406-gnzstl.html [Accessed 18 May 2017].

Carroll, A.B., 2004. Managing ethically with global stakeholders: A present and future challenge. The Academy of Management Executive, 18(2), pp.114-120.

Cetric, W. 2017. Australia ‘failing’ to tackle bribery by multinationals. [online] ABC News. Available at: http://www.abc.net.au/news/2014-01-06/australia-accused-of-failing-to-tackle-bribery-among-multinatio/5187070 [Accessed 18 May 2017].

Chen, N. 2010. Securities Laws, Control of Corruption, and Corporate Liquidity: International Evidence. Corporate Governance: An International Review, 191, pp.3-24.

Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

Das, N. 2016. Corruption and Corporate Corruption. Anveshana: search for Knowledge, 62, p.101.

Garavan, T.N. and McGuire, D., 2010. Human resource development and society: Human resource development’s role in embedding corporate social responsibility, sustainability, and ethics in organizations. Advances in Developing Human Resources, 12(5), pp.487-507.

Knight, E. 2016. Business News, Economy, Finance & ASX Market News. [online] The Sydney Morning Herald. Available at: http://www.smh.com.au/business/comment-and-analysis/major-concerns-over-australian [Accessed 18 May 2017].

Kolk, A. and Van Tulder, R., 2010. International business, corporate social responsibility and sustainable development. International business review, 19(2), pp.119-125.

Liu, X. 2014. Corruption Culture and Corporate Misconduct. SSRN Electronic Journal. p.11- 14

Montera, R., 2016. Sustainable Internationalization of Multinational Corporations: Myth or Reality?. L’industria, 37(1), pp.51-70.

Ng, D., Qian, K. and Dix, A. 2008. CORRUPTION AND CORPORATE GOVERNANCE: A CROSS-NATIONAL STUDY. Corporate Ownership and Control, 53. p.101- 104

Thomas, J. 2015. Australia’s foreign bribery laws and enforcement ‘woeful’. [online] ABC News. Available at: http://www.abc.net.au/news/2015-09-06/lawyers-call-for-changes-to-foreign-bribery-laws,-enforcement/6751160 [Accessed 18 May 2017].