Olympus Scandal & Ethics!

Welcome back to my page followers. Have we been keeping up to date with the unethical companies out there? Even the companies we adore? Are they working towards an ethical strategy? Let's just say not all companies are ethical! Today I will be bringing you a company that has behaved unethically. To find out more read on... 

International optics manufacturer Olympus became a target or major suspicion towards the end of 2011, after a suddenly shift in management. Michael Woodford president of Olympus corporation that removed himself from the high office of the company disclosed that his removal stemmed from no fault of his own, rather he was asking questions. Fingers started pointing towards Olympus. It was discovered that the case was a tobashi scheme. Third party was helping Olympus, by illegally organizing their portfolios in a manner company where losses would be hidden. Is this ethically right? How would you feel if you were a shareholder of this company? Would you feel valued? 

FAKE accounts were developed to hide this money, and to allow their account to look successful! Olympus acquired three smaller Japanese companies. A year after the acquisition, the assets were recorded at a value of $721 million less than the acquisition value. As such, they avoided huge tax expenses in the activity. From what I have told you so far we can completely see how unethical Olympus was!

Now let's talk more about the ethical/unethical side of things.

Based upon these concepts, individualism is viewed as egoism. Can we say this was seen as selfishness? From a individualist point of view Olympus was seen to be making a large profit, even if they were doing so unethically. Before the scandal Olympus was seen to be a success. Potential investors saw their huge profits and lack of mistakes or large expenses financially. Profits were there, the management was just greedy. Once you start unethical and even illegal practices, it now seems more decent to do it again. Am I right?

Utilitarianism combines the ideas from egoism. A utilitarian would argue that Olympus actions were intended to emit happiness in all involved. What do you all think? They were putting their reputations on the line, for them to feel happy, for stockholders to feel happy, and for customers to feel happy. I think this completely ruining the loyalty they have with their customers and stockholders as surely they knew a lie will always be revealed? Costs included distrust in the performance of the business following the scandal. Stockholders had difficulty trusting their dividends would be paid out. Clearly, the greatest number of society did not get the greatest good in this case.

I believe that Olympus acted for a specific purpose and reason, as selfish as it may have been. Agree? With false audits, reports, and records Olympus was lying to its investors, many of whom ended up losing a great deal of money following the scandal. Virtue theory I believe can come into this case. In business, philosophers use four main virtues. They are courage, honesty, temperance and justice. Olympus is a great example of one extreme end of the spectrum, the one business attempt to avoid. It begins with courage, which involves taking risks and standing up for the right ideas and actions. Clearly, the right ideas and actions were not supported by Olympus, because they themselves did not even practice them. Honesty is possible the most obvious, because they admitted to filing false audits! The next is temperance, which was not demonstrated by Olympus because they did not have reasonable expectations of their potential profit, both short-term and long-term. Lastly, part of justice includes fair practices, which once again was a large part of the scandal.

Overall, I think the company have affected the reputation , goodwill, loyalty and trust of the company. I also feel like Olympus has created false economic standing. Investors were essentially lied to, and they are people that trusted the company with their investments. This untruthfulness hurts the company, stockholders, and its reputation with customers. I do agree that they created "feelings of happiness" for these stakeholder groups, but it is only imaginative and not backed by real figures! Until next time...

Hit me up with your comments below!

It's a wrap!

RS.