BSB111 Report on Business Law and Ethics

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QUEENSLAND UNIVERSITY OF TECHNOLOGYQUT Business SchoolSchool of AccountancyBSB111 Business Law and EthicsSEMESTER TWO 2016ETHICS CASE STUDYINDIVIDUAL REPORT(Weighting Total25%)Due:24 August 2016Time:5pmSubmission:via Turnitin through Blackboard by 5pm on 24August 2016Type:IndividualLength:Maximum of 1250 words (no +10%)This assessment item assesses the following unit objectives and learning outcomes:Professional Communication (PC)3.1 Use information literacy skills, and communicate effectively and professionally in written formsand using media appropriate for diverse purposes and contextsSocial, Ethical and Global Understanding (SE)5.1 Demonstrate and apply knowledge of ethical and legal principles and practices in analysingand responding to business issuesThe purpose of this assignment is to encourage you to explore some of the principal theories in ethics,consider how these can be applied to real world business issues and communicate this knowledgeeffectively.BSB111 – Ethics Case Study Assignment, p.1
Case 1: The ‘diesel dupe’Adapted from “Volkswagen: The Scandal Explained”, BBC News, 10 December 2015 (http://www.bbc.com/news/business-34324772)It's been dubbed the "diesel dupe". In September 2015,the Environmental Protection Agency (EPA)foundthat many Volkswagen cars being sold in America had a "defeat device" - or software - in dieselengines that could detect when they were being tested, changing the performance accordingly to improveresults. The German car giant has since admitted cheating emissions tests in the US.... the EPA has said that the engines had computer software that could sense test scenarios by monitoringspeed, engine operation, air pressure and even the position of the steering wheel.When the cars were operating under controlled laboratory conditions - which typically involve puttingthem on a stationary test rig - the device appears to have put the vehicle into a sort of safety mode inwhich the engine ran below normal power and performance. Once on the road, the engines switched outof this test mode.The result? The engines emitted nitrogen oxide pollutants up to 40 times above what is allowed in the US.The EPA's findings cover 482,000 cars in the US only ... But VW has admitted that about 11 million carsworldwide, including eight million in Europe, are fitted with the so-called "defeat device".Imagine that you are a manager at Volkswagen before the EPA discovered the ‘defeat device’.Determine whether installing the device in diesel engines is a moral action, using:(a)autilitariananalysis(10 marks)(b)aKantian deontologicalanalysis(8 marks)(Total = 18 marks)BSB111 – Ethics Case Study Assignment, p.2
Case 2: The man who blew the whistle on CBAAdapted from “The man who blew the whistle on CBA”, Australian Financial Review, 28 June 2014 (http://www.afr.com/business/banking-and-finance/financial-services/the-man-who-blew-the-whistle-on-cba-20140627-je1mp)Jeff Morris first blew the whistle on misconduct in the Commonwealth Bank of Australia’s financialplanning arm in 2008, but the wounds from the experience are still raw. After spending “a couple ofthousand hours" and six years building a case against his former employer, Morris was vindicated by aSenate inquiry this week, which delivered a scathing verdict on the bank’s and corporate regulator’shandling of the systemic mis-selling of financial products to clients who lost millions.But it is clear the process has taken a big toll. As he describes the impact that taking on CBA has had on hisfamily life, Morris pauses to wipe away tears welling in his eyes. “My family paid a price as a result of mydecision, and in many ways, I had no right to expect my family to pay that price," he told AFR Weekend onFriday. “But just for myself, I didn’t feel I had any choice. I couldn’t have lived with myself if I hadn’t donewhat I did."In October 2008, Morris and other bank employees sent an anonymous fax to the Australian Securitiesand Investments Commission citing fraud at Commonwealth Financial Planning and alleging a “high level"cover-up within CBA. The culmination of that action was a damning report from the Senate economicscommittee. It sensationally found that the bank repeatedly sought to keep the regulator and the public inthe dark, and its credibility was so tarnished that only a royal commission or judicial inquiry could get tothe bottom of what really went on.For Morris, who has spent 30 years in financial services, the image of everyday people falling victim to badfinancial advice is all too common. “It’s almost like there’s this elephant in the room that nobody wants totalk about, which is that these ordinary people keep turning up on the TV, and they’ve had their livesruined by financial planning," he says.Morris told the committee that the financial planner at the centre of the scandal, Don Nguyen, and othernon-compliant advisers benefited from an “incredibly loose, non-compliant culture" at CFP. He describedan “aggressive sales-based culture wherein advisers pushed clients into inappropriately high-risk productsboth to earn bonuses and ‘avoid getting the sack’," the report said.In September 2008, as the global financial crisis revealed the extent of Nguyen’s bad advice, he wassuspended. But the following month, he returned to work and was promoted to the position of seniorplanner. Two weeks later, on October 30, 2008, Morris and the other whistleblowers alleged in ananonymous fax to ASIC that Nguyen’s promotion was part of a management conspiracy to avoid payingclient compensation.“Nguyen just gave everybody more or less the same risk profile," Morris told the committee in April. “Hegot to the point where he just photocopied them. [CBA] found this in 2008, and he should have beendismissed at that point. But they brought him back for two reasons: one was to hose down the clientcomplaints, the other was to sanitise his files. They gave him a second assistant to help sanitise the files. Isaw him there, day after day, with ‘liquid paper’ going through changing things in the fact files."Morris and the other whistleblowers alleged that while the compliance team at CFP had recommendedthat Nguyen be sacked for his misconduct, “the team had evidently been warned to ‘back off’ by CFP/CBABSB111 – Ethics Case Study Assignment, p.3
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