Management Ethics - Westpac Case Study

Running head: MANAGEMENT ETHICS
Management Ethics: Westpac Case Study
Name of the Student
Name of the University
Author’s Note:

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Table of Contents
1. Introduction..................................................................................................................................2
2. Discussion....................................................................................................................................2
2.1 Brief Description of the Case Study......................................................................................2
2.2 Identification of the Key Ethical Issues in the Case Study with the help of Ethical Theories
.....................................................................................................................................................3
2.3 Proposal and Justification of Recommendations and Strategies for addressing the
Identified Ethical Problems.........................................................................................................7
3. Conclusion...................................................................................................................................7
References........................................................................................................................................9

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1. Introduction
Management ethics could be referred to as the set of various principles and rules, which
are being dictated by the upper management for defining right or wrong aspects in a company
(Fernando and Moore 2015). This type of ethics is the guidelines, which becomes helpful for
directing the decisions of lower manager within the scope of his or her job, as soon as a conflict
of values is being presented. Management ethics is the core discipline for dealing with what is
good or bad or with obligation and moral duties. It is the major behavioral standard, which
provides guidance to the individual managers within their respective work (Sison, Beabout and
Ferrero 2017). This type of ethics is the set of few moral principles, which can easily govern the
activities of a group or an individual.
Business ethics can be stated as the subsequent solicitation of various ethical values to the
business relations as well as activities. As soon as managers assume social responsibilities, it is
being believed that they would do it ethically for understanding the correct or incorrect aspects
(De Los Reyes Jr, Kim and Weaver 2017). The most significant goal or objective of a manager is
to make the organization effective and also ensure profit maximization of the business by
identifying the central goals. This report will be outlining a brief description on the case scenario
of Westpac CEO being pushed out for child exploitation scandal with ethical approaches.
2. Discussion
2.1 Brief Description of the Case Study
The Chief Executive Officer of Westpac, Brian Hartzer became the first casualty of child
exploitation and money laundering scandal, which has taken a popular bank. The CEO was being
pushed out as Westpac has been battling a major investigation by the financial intelligence

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agency in Australia for money laundering as well as child exploitation. Hartzer resigned from his
post after he was accused for the scandal. Westpac became a failure in passing on information
regarding the origin of international funds transfer and keeping records as per requirement. They
even became a failure in introducing proper detection scenarios for detecting the typologies of
child exploitation to understand the risk assessments. There was an exploitation of 500000
dollars from customers in the South East Asia and Philippines.
2.2 Identification of the Key Ethical Issues in the Case Study with the help of Ethical
Theories
The organization of Westpac is one of the most popular and significant banking
corporations in all over Australia (Mastracchio Jr, Jiménez-Angueira and Toth 2015). They had
been doing business for more than 200 years and have been gaining major success in their work.
However, the scandal of child exploitation and money laundering has brought down the fame
and popularity of this particular organization. Ethical issues mainly take place when a given
action, scenario as well as a decision eventually ensures a major conflict with the subsequent
moral principles of this particular society. Individuals and businesses could be included in such
conflicts as any of the activities might be put into question from the ethical standpoints (Crane et
al. 2019). As a result, the ethical issues are required to be identified on top priority for dealing
with all types of complicated and difficult situations under every circumstance.
There are some of the most important and significant ethical theories and approaches,
which can help to analyze a specific situation (Trevino and Nelson 2016). The conflicts are
extremely dangerous as few of the options are present for solving them, however they often
breach the laws and regulations. In the case study of Westpac, the CEO was responsible for
money laundering and child exploitation (Werhane 2019). As a result, he had to leave the

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organization, after proven guilty. The major ethical issues in this particular case study are given
below:
i) Laundering Money of Customers: The first as well as the foremost important and
noteworthy ethical issue that is eventually highlighted in the respective case study of Westpac is
that they have been laundering money of their customers (MacIntyre 2016). There had been a
subsequent scandal of millions of dollars and as a result, they had been facing issues related to
ethical standpoint. The CEO, Brian Hartzer was responsible for such situation and he had
supported such unethical deeds to his organization. Money laundering is the major procedure to
make illegally gained proceeds appearing legal (Quinlan et al. 2019). There are three steps in this
process, which include placement, layering and integration. As a result, the most significant
issues associated to satisfaction of customers and trust is highlighted.
ii) Breaching Laws for Hindering Criminal Money Laundering: The second vital and
distinct ethical issue that is eventually highlighted in the respective case scenario of Westpac is
that they have been breaching laws for hindering criminal money laundering (Barry 2016).
Criminal proceedings are being considered in the case study and hence it proved to be highly
unethical. There exists a social contract between different parties and hence in this particular
case scenario of Westpac, there was a legal contract between the bank’s management and
customers (Belle 2017). Major ethical issues are being found in such situation and the
organization of Westpac was in major ethical dilemma related to criminal money laundering.
iv) Financing Terrorism: Another distinct and vital ethical issue that is eventually
identified in the respective case scenario of Westpac is that they were financing terrorism
(Pearson 2017). The organization of Westpac supported terrorism by providing finances to them
and hence supporting country’s terrorist acts. As a result, the legal and ethical aspects of the

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country were highlighted in the case study, it was referred to as unethical to both to the country
and the organizational members and customers (Wallace and Sheldon 2015).
v) Child Exploitation Funds: The fifth distinct and noteworthy ethical issue that is
identified in the respective case study of Westpac is that the organization was taking funds from
child exploitation (Abend 2016). This type of exploitation is the subsequent utilization of
children for someone else’s benefits, profits and gratification; hence resulting in any type of
harmful, cruel and unjustified treatment of children. Such distinct activities are to the detriment
of the mental or physical health of children, social emotional and moral development (Duska,
Duska and Kury 2018). Brian Hartzer has hence supported illegal and unethical means of funds
from child exploitation.
Some of the most significant and noteworthy ethical theories and approaches that can be
effective for understanding the entire case scenario and key ethical issues are provided below:
i) Utilitarianism Theory: The first and the foremost ethical theory that would be effective
for describing the case scenario of Westpac is utilitarianism theory (Kolk 2016). It is a moral
theory, which advocates different actions for promoting utility to the situation and also reject
different actions, causing harm or unhappiness. It is the part of consequentialism that promotes
actions to ensure well being or effectiveness for the affected individuals. Various varieties of
utilitarianism theory eventually admit that different features are present for maximization of
utility. It tends to produce advantages, good aspects and happiness as well as ethical constraints
to the situation or case study (Fernando and Moore 2015). Different consequences of a situation
are also being considered for understanding the utility of the situation. In this particular case
study of Westpac, the CEO, Brian Hartzer has not provided any type of utility to the
organizational members; on the other hand, they have been laundering money from child

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exploitation and their customers for financing terrorism. As a result, the case study could be
referred to as unethical in terms of utilitarianism theory.
ii) Deontology Theory: The next vital and distinct ethical theory, which will be effective
for describing the case study of Westpac would be deontology theory (Sison, Beabout and
Ferrero 2017). Deontological ethics would be the normative ethical theory that states that the
morality of any specific action or activity should be on the basis of whether that particular action
is right or wrong under the series of rules or on the basis of various consequences of actions.
Deontological ethics is also referred to as the duty obligation or rule based ethics. A moral
obligation is being noted in the situation and it could eventually arise from the internal or
external source, for identifying a set of rules inherent to the universe (De Los Reyes Jr, Kim and
Weaver 2017). In this particular case study of Westpac, the CEO, Brian Hartzer has not provided
any morality to the action, taken by him related to money laundering for financing terrorism and
child exploitation. Due to the lack of morality, this particular case study can be stated as
unethical, in terms of deontology theory.
iii) Virtue Ethics: The third important and significant ethical theory that would be
effective for describing the case study of Westpac would be virtue ethics. It is a major and vital
approach to ethics, which subsequently focuses on the individual’s character as the main element
of ethical thinking and not only considering different rules regarding the activities to be
identified (Mastracchio Jr, Jiménez-Angueira and Toth 2015). Moreover, the consequences are
also emphasized on top priority. This type of virtue ethical approach proves that the case study
should contain integrity, honesty, generosity, self control, compassion and many more. In this
particular case study of Westpac, there was lack of virtue ethics, since the individual character of
Brian Hartzer was unethical and he was responsible for child exploitation, financing terrorism

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and money laundering (Trevino and Nelson 2016). Therefore, this case scenario could be
referred to as highly unethical, in terms of virtue ethics; since the CEO had an unethical
behavior.
2.3 Proposal and Justification of Recommendations and Strategies for addressing the
Identified Ethical Problems
Some of the most significant and important recommendations and strategies to address
these identified ethical problems in this particular case scenario of Westpac are provided below:
i) Ensuring Leaders exhibiting Proper Behavior: The first as well as the foremost
recommendation and strategy to address these identified ethical problems in this particular case
study of Westpac is to ensure that the organizational leaders are exhibiting proper behaviors
(Crane et al. 2019). The CEO Brian Hartzer was identified as the unethical person in this
particular case study and hence it was needed to ensure that he himself is following ethical
standards and approach in the work. However, he did not follow ethical approach and the
organization faced major losses and defame due to such issue. As a result, a high standard of
ethics would be successfully prevailed without much complexity and issue (Belle 2017). This
specific recommendation would be responsible for identifying the unethical individuals within
the business.
ii) Development of Ethical Standards: The second important and significant
recommendation and strategy to address these identified ethical problems in this particular case
study of Westpac would be developing different ethical standards within the business (Wallace
and Sheldon 2015). This is the core ethical and integral step for formalization of the expectations
of different individuals and hence ensuring that the respective business is following ethical steps
under every circumstance. Westpac should have created a code of ethics section for their

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business for outlining the best business conduct and also eliminating unethical practices, such as
child exploitation and money laundering.
3. Conclusion
Hence, a conclusion could be drawn that management ethics is one of the most important
and significant requirements in any specific requirements in an organization for better
management of ethical approach and organizational processes in the most effective and efficient
manner. There are various types of management ethics present for an organization, which
include immoral management, moral management and amoral management. The major
approaches to managerial ethics include utilitarian, moral rights and social justice approaches.
There exists a major requirement for business ethics for some of the most significant and
important reasons within the business, which are responsible for enhancing the chance for better
effectiveness in the business. Several approaches and techniques are present for management
ethics and these can easily provide scope for turning the business into an ethical one. The above
provided report has clearly described about the case study of Westpac CEO with distinct steps.

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References
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