MGT3001 Governance and Business Ethics: Whistleblowing Case Study

This report examines the Apple trade secret whistleblowing case, focusing on the actions of Paul Devine, Apple's GSM, and the involvement of Jin Li Mould. It details how Devine leaked confidential information, including product prices, specifications, and targets, to suppliers in Asia for financial gain. The report analyzes the ethical implications of these actions, referencing Herbert Simon's theory on corporate conduct and Snyder's theory of corruption. It highlights the consequences of whistleblowing, emphasizing the need for strict business conduct policies and tough actions against trade secret leaks. The case study provides a comprehensive overview of the events, the ethical breaches, and the resulting legal and financial repercussions, concluding with recommendations for preventing similar incidents through robust corporate governance and ethical decision-making frameworks.

INTRODUCTION TO trade secret
 Whistleblowing is the act of leaking private
information.
 This can be in the political, social or economic
scene.
 It is the most common unethical practice carried out
by huge corporations..
 Various organizations and countries have suffered
from whistleblowing

INTRODUCTION TO trade secret
 They include the United States of America and
Apple
 Edward Snowden leaked private information from
the NSA
 Paul Devine leaked confidential details from Apple.

Jlj company partners with apple
 It was registered on March 2008 with Chua as the
Executive Chairman
 It acquired Emold, Emold Plastics and Jin Li Mould
 Jin Li Mould had a supply contract with Apple from
2001
 Jin Li Mould growth was in tandem with Apple’s
success.

APPLE’S WHISTLEBLOWER
 It was publicized on April 2010.
 It was masterminded by Paul Devine, Apple’s GSM.
 It involved Jin Li Mould’s assistant manager,
Andrew Ang.
 Paul leaked confidential details to Andrew and the
other suppliers in Asia.

APPLE’S WHISTLEBLOWER is
caught
 Paul received over $ 1 million as payments for the
leaks (González-Cruz and Cruz-Ros 2016)
 Apple files a civil suit against Paul Devine
 The FBI and IRS also launched investigations
 Andrew Ang disappeared and Chua Kim Guan
resigned
 Paul was fined $2 million and sentenced to 20 years
in prison

Trade secrets involved
 It involved Apple products such as iPhone and iPod
earphones
 The product prices, forecasts, specifications and
targets
 They were given to Jin Li Mould and three suppliers
in Asia
 The secrets were to give these supplier an advantage
 Devine was to receive payments for the trade secrets

Payment for the trade secrets
 Payments were to be paid to Paul Devine
 The accounts were spread across three countries
 No payment was to be made above $10,000
 By June, JLJ owed Paul $310,000 cash
 This was after a $90,000 payment by Chua
 He had raised over $2 million during his arrest

Ethical decision making
approach and theories
 Herbert Simon argues in his theory
 Corporations should have a code of conduct policy
 This will guide employees in making any decision
 The implementation of the policy should be
followed strictly (Cvijanović, Dasgupta and
Zachariadis 2016)
 Apple filed a civil suit against Paul Devine
 He did not abide by the ‘Business Conduct Policy’

Ethical DECISION MAKING
APPROACH AND THEORIES
 Snyder’s Theory of corruption becomes popular
after World War II
 He argues that decision making should be dynamic
 This means that all the sectors and stakeholders
should be considered
 JLJ Company ignored this and experienced huge
financial setbacks (Bendtsen et al. 2016).

Conclusion
 Whistleblowing has social, political and economic
consequences
 The USA experienced the biggest whistleblowing
incident in history
 Organizations should implement strict ‘Business
Conduct Policy’
 The policy should have tough actions against
leaking trade secrets.

References
 Bendtsen, L., Ashina, S., Moore, A. and Steiner, T.
(2016). Muscles and their role in episodic tension‐
type headache: implications for treatment.
European Journal of Pain, 20(2), pp.166-175.
 Cvijanović, D., Dasgupta, A. and Zachariadis, K.
(2016). Ties that bind: How business connections
affect mutual fund activism. The Journal of
Finance, 71(6), pp.2933-2966.
 González-Cruz, T. and Cruz-Ros, S. (2016). When
does family involvement produce superior
performance in SME family business?. Journal of
Business Research, 69(4), pp.1452-1457.