Corruption and Fraudulence in Business in Globalisation

This memo discusses the corruption and fraudulence in business during the period of globalisation, focusing on two specific cases: the emission scandal in Volkswagen and the unethical business practices of HSBC. It explores the impact of these practices on the environment, customers, and society, highlighting the need for ethical leadership and corporate social performance.

Running Head: Memo assessment
Memo
To:
From:
Date:
Re: Corruption and fraudulence in business in globalisation
Introduction
Corruption in business organisations is considered to be a great threat during the period
of globalisation where the power of the business organisations has become more intense than the
power of nation or country. From the lecture we learned about the role of the organisation and its
ethical consideration while doing business positively. The board of directors and the partnership
with the shareholders are playing significantly in order to restrain the malpractices in business
properly. In this regard, the documentaries of Netflix tried to reveal the corporate corruptions
that were deliberate in order maximise own profit. This memo tries to deal with two specific
episodes that are highlighting the corruptions and issues within the organisation.
Environmental issues
The documentary of Alex Gibney featured the emission scandal in Volkswagen, one of
the leading auto manufacturing company alleged to damage environment with its worse
automobile mechanism. Gibney tried to make contacts with the former executives of
Volkswagen and willing to figure out the historical pathway that VW follows that guided
towards the emission scandal. It was in the year 2015 when the Environmental protection
Agency (EPA) found out some glitches in the emission reducing device of VW1. It helped the
VW cars to earn more profit by convincing customers that the cars were eco-friendly and
featured with less emission. As a matter of fact, the promotions and advertisements were
designed in such a manner that seemed the TDI turbo-charged clean diesel engines were really
performed well and restricted diesel led pollutions to a great extent2. However, in reality, the
defeat device was seemed like a sophisticated piece of kit that easily falsified the emission data
in labs. VW makes enough profit in the US market than elsewhere. From lecture, we
1 Hotten, Russell. "Volkswagen: The Scandal Explained". BBC News, 2015, https://www.bbc.com/news/business-
34324772.
2 Siano, Alfonso, et al. "“More than words”: Expanding the taxonomy of greenwashing after the Volkswagen
scandal." Journal of Business Research 71 (2017): 27-37.

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acknowledged the facts of ethical leadership practice and concept of corporate social
performance. Our lecture also discussed about omnipotence as an unethical practice. In respect
this, VW also felt omnipotence where the organisation felt over the rules of the government. This
powerful stance made VW to do unethical business practice.
Unethical business practice
Unethical business practice was seen in HSBC when the company was alleged with
financing terrorists and drug cartels. The Netflix documentary revealed the escalating profit of
HSBC at a rapid scale due to some of its shadow accounts. Through the documentary it is cleared
that the Mexican and Colombian drug cartels were using HSBC accounts for own business and
the government failed to indict the bank because of national financial loss3. In fact, the director
Kristi Jacobson argued that one of great reasons for the HSBC’s success was its unethical
business practices with the criminals and terrorists. For example, the Mexican Sinaloa Cartel was
featured to be one of the primary contributors of HSBC4. Our lecture on the ethical business
practice pointed out as justified neglect that often business organisations were practiced. For
HSBC, the success of the organisation was sky rising so that the organisation did not take
concern about cross checking accounts of the customers. As a result of that, the role of the HSBC
became a hub for the terrorist camps and drug cartels to exploit the security of HSBC effectively.
.
Cheating the customers
In both the episodes, it is clearly projected that both HSBC and Volkswagen cheated its
loyal customers who believed in the company but now feel a major contributor in the
malpractices of those companies5. Those companies assured customers with best product and
services but in reality the mean mentality of high profit earning made those companies the most
notorious criminals in the history of trade and commerce6. From out learning materials it is
clearly known that corruption and fraudulency can also be related to the blind spot in
government initiatives that make a vulnerable situation for the society and environment.
Conclusion
The above discussion tries to deliver a clear perception regarding corruption and
laundering within the corporate environment. In this regard, the learning materials and tutorials
are helps to understand the unethical business practice and the type of behaviour that the big
3 White, Lawrence. "HSBC Draws Line Under Mexican Cartel Case After Five Years On...". In.Reuters.Com, 2017,
https://in.reuters.com/article/hsbc-usa/hsbc-draws-line-under-mexican-cartel-case-after-five-years-on-probation-
idINKBN1E50OP.
4 Cassano, Simone. Money laundering: a case study about the HSBC Mexico scandal and its relevance to Malta. BS
thesis. University of Malta, 2017.
5 Lord, Nicholas, and Rose Broad. "Corporate failures to prevent serious and organised crimes: Foregrounding the
‘Organisational’component." European Review of Organised Crime 4.3 (2018): 27-52.
6 Krall, Jenna R., and Roger D. Peng. "The Volkswagen scandal: Deception, driving and deaths." Significance 12.6
(2015): 12-15.

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business companies follow unethically. As a result of that the corruptions in international
business are clearly defined and evaluated throughout the discussion.

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Reference
Cassano, Simone. Money laundering: a case study about the HSBC Mexico scandal and its
relevance to Malta. BS thesis. University of Malta, 2017.
Hotten, Russell. "Volkswagen: The Scandal Explained". BBC News, 2015,
https://www.bbc.com/news/business-34324772.
Krall, Jenna R., and Roger D. Peng. "The Volkswagen scandal: Deception, driving and
deaths." Significance 12.6 (2015): 12-15.
Lord, Nicholas, and Rose Broad. "Corporate failures to prevent serious and organised crimes:
Foregrounding the ‘Organisational’component." European Review of Organised Crime 4.3
(2018): 27-52.
Siano, Alfonso, et al. "“More than words”: Expanding the taxonomy of greenwashing after the
Volkswagen scandal." Journal of Business Research 71 (2017): 27-37.
White, Lawrence. "HSBC Draws Line Under Mexican Cartel Case After Five Years
On...". In.Reuters.Com, 2017, https://in.reuters.com/article/hsbc-usa/hsbc-draws-line-under-
mexican-cartel-case-after-five-years-on-probation-idINKBN1E50OP.