Business Ethics in Toshiba Corporation
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Added on 2020-01-23
Business Ethics in Toshiba Corporation
Added on 2020-01-23
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Title of Work :A CRITICAL DISCUSSION AND EVALUATION OF BUSINESSETHICS IN TOSHIBA CORPORATIONINDEXContentsPage No.1
Essay (4 Paragraphs)3-5Paragraph 1 : Introduction & HistoryParagraph 2 : CultureParagraph 3 : TheoriesParagraph 4 : Breaking NewsReferences5-8For the present study, I have chosen Toshiba Corporation. It is a conglomerate company,founded in 1875. It provide best quality products and services such as, consumer electronics,communication equipment, electrical appliances, household appliances, elevators, office gadgetsnuclear power systems, industrial and social infrastructure systems etc (Toshiba Corporation, 2014).However, from the Olympus scandal, it has been identified that almost $1.7bn losses are sufferedby entity. Toshiba has dishonored country with corporate misgovernance by exaggerating itsoperating revenue by $1.22bn; 151.8bn yen since several years (Penman, 2015). In the 140 years ofthe history of company, it was the most disgraceful incident. It lead to severe impact on thereputation of organization. The Securities and Exchange Surveillance Commission (SESC) of Japanset up the enquiry after obtaining a information from an unidentified whistle-blower (Chhabara,2
2015. Prior to the detection of this fraud, Toshiba was considered among the reputed organizationand as corporate governance leader in Japan. The enquiry by (SESC) impelled the Hisao Tanaka,the organizations president, vice chairman and adviser and more than half of board members quittheir post. Therefore, the news of scandal spread like, fire in the forest leading to the reduction inthe share value of Toshiba by 30% (Inagaki, 2015). The establishment appointed the board chairmanas interim chief executive with a 90% cut in his salary (BBC Business News, 2015).It is argued that lack of communication among executives and members is prime reason for the incident happened in Toshiba. The most usually practices Social Contract in country is stimulateindividuals to remain life time loyal to the organization where they are employed (Hashimoto, 1996). it is the main reason due to which, whistleblowing does not match the social system of Japan. Considering, the case of the "Olympus" scandal, the whistleblower, Michael Woodford, the chief executive of Toshiba was a British national. The board of directors of company, subsequently sacked him for funding the $2bn of crafty payments (Greenfeld, 2012). It has been identified from the news article showcased on BBC that culture of Toshiba is one dominated by the senior personnel. Therefore, the junior employees are not in position to question and oppose their superiors. Accordingly, when superior personnels bestowed any challenges, departmental heads, line managers and personnels beneath them constantly, performed wrong accounting practices to accomplish the commands of superiors. This represents that the culture within the entity had turnedinto an dishonourable combination of role and power cultures (Handy, 1976; 1993 & Harrison, 1972). The superior personnels had totally forgotten the "Care Ethics" by paying less attention on the low-level employees (Gilligan, 1982). Therefore, it can be stated that due to lack of freedom provided to lower level employees and ineffective communication, the mistake on the part of top most authority could not be identified. Hence, it can be learnt from the case of Toshiba that, It is important for organizations to encourage a speak-up culture so that employees can represent their views, ideas, issues and discuss on other business matters (Balthazard et al., 2006). According to theviews of Lawrence Repeta, a law professor at Meiji University, Toshiba also suffered from legal issue in addition to the cultural confusion as company had to deal with improper use of accounting practices(Kitanaka & Reynolds, 2015). The scam of company can be compared to that of Enron, USA which reveals that the big entities providing support to voluntary organization or charities arenot necessarily ethical. This can be proven from the incident that, prior to disclosure of this scandal, Toshiba had donated ¥7mn to the victims of Nepal earthquake (Toshiba Corporation, 2015). It showcase that, the management played with the figures to make more wealth by luring the3
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