ABC Learning Case Study: Ethical Issues and Stakeholder Analysis

This report examines the ABC Learning case, a major childcare organization that faced bankruptcy due to unethical practices. The report analyzes the stakeholders, including managers, investors, and clients, and identifies key ethical issues such as financial mismanagement, lack of transparency, and conflicts of interest. It explores the responsibilities of individuals like CEO Eddy Groves and board members, and how their decisions impacted the brand's reputation. The report also discusses the importance of proper risk management and ethical governance in preventing such failures. It concludes by suggesting measures to prevent similar situations, emphasizing the significance of ethical business practices and financial transparency for long-term success. The report is based on research and analysis of the ABC Learning case, providing insights into corporate ethics and social responsibility.

Running Head: COMPARATIVE BUSINESS ETHICS & SOCIAL RESPONSIBILITY
ABC learning
Comparative business ethics & social Responsibility
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COMPARATIVE BUSINESS ETHICS & SOCIAL RESPONSIBILITY
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Introduction
ABC learning case is about the unethical practices done one of in this giant childcare
organization. This event is centering to the unquestionable situation of on ABC learning centers
which nearly entered into bankruptcy afterward trying to form a trustable relation with the
association of bank that has been owed overhead $1 billion. Nearly 12,000 childcare hubs had
been shaped by ABC in Australia along with offers healthcare services to almost 110,000
youngsters, facing collective economic complications. The firm’s stocks – that have clear-droped
below 70% this time – endure adjourned as the firm’s inspectors, Ernst & Young, exertion to
lighten a volume of problems with the firm’s financial records (Sumsion and Goodfellow, 2009).
With the help of mediators ABC was reshaping loan agreement with various investors, operating
by Commonwealth Bank that was fictional to be unsettled extra sum around $500 million.
According to the study, banking board had excluded the proposal offered by panel of ABC
learning.
ABC Learning Centers succeeded very faster inside the time frame of 20 years that it was
honestly extraordinary. There were frequent inner miscalculations within the business which
were the key explanations for collapse of ABC extraordinary organization (Cusack and
O'Donoghue, 2012).
Ethical issue
This event focuses on the mishandling of financial records and burdens in the accounting of this
organization that was not figured out correctly. It appears that here is an enormous variance that
is being exhibited in the revenue, profit and loss account of ABC learning centers (Sumsion,
2012). Plentiful possessions took to be nil esteemed, along with irresolute of pre‐tax revenues.
Mr. Eddy Groves CEO of this organization was exposed in nominating Queensland Maintenance
Services (QMS) rights to Frank Zullo his preceding brother in law for holding whole thing at
Hubs of ABC. A complete $74 million sum was specified for concern matter. Transactions of
ABC learning had linked to discharge recompenses with 123 Global Collection of trades. 123
Global land might have acquisition by ABC learning, construct hubs, operate ABC to unforeseen
level and finally have acquisition the hub at much great worth from 123 Global (Francis and
Zheng, 2010). Proper hazard management did not stood comprehensive concerning about

COMPARATIVE BUSINESS ETHICS & SOCIAL RESPONSIBILITY
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speeding worldwide developments so producing a tremendously levered corporate known as
ABC Learning. For enlargement, ABC Learning corporate has gone from side to side unions and
attainments, by creating inspiration in the open market on the redeems of many corporations.
Occupational function of ABC learning hub was not looked thoroughly (Newberry and Brennan,
2013). Absence of clearness can be seen around occupation of many hubs along with the price
functioning in ABC operatives.
Stakeholder
ABC learning corporates key stakeholders were manager executives, panel participants, Bank
associations, Assessors, the client which are getting facilities along with
administration/government that deed as the backup big support for such corporate.
Responsible people and their behavioural impact on ABC learning center
The Ethical concerns associated with corporate supremacy of this corporate was abundant
shareholders has funded money in this corporate and were thinking about resolutions that needed
to be done on a sensible occupational groundwork, although in this event, decision related with
accolade contracts was never based on offering the premium services in best price, fair arranged
to linked revelries, abundant of them were owned or most of them apprehended under the control
of Mr. groves. It seem that overlook the action of the board was not morally correct as per
corporate supremacy (Wallace and Neroli, 2015). Key moral matter is uncomplicated worth at
this time is disregarding instructions of the individuals who have occupied exactly to
approximation the position of business and yield compulsory action for safeguard. It can be
possible that Groves was following his individual morals related to honorable values in his
selections, but overall overriding of this organization, requirement take supplementary
necessities to deliberation another man (Wang and Calvano, 2015). The main principled matter is
that elementary worth here is disregarding by instructions of the individuals who have occupied
exactly to approximation the position of the company and take essential action for its defense.
From ABC's initial periods, participation into service of child care distribution provide red flags
adequately for everybody trying to involve in this service. Inconveniently, enthusiasm, fortified
from Australian's novel magnetic boy spectacle (ABC's Eddie Groves) ran an allowed market

COMPARATIVE BUSINESS ETHICS & SOCIAL RESPONSIBILITY
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mergers-and-acquisition interruption into services of child health care. Exhortation of cheer-
bests drowned-out the doubters (Yawar and Seuring, 2017). No-one obligatory to be trademarked
as a non- enthusiast. Abundant high-growth matters that widen by union and gaining, they are
intensely leveraged spumes. Lastly, bubbles outbreak on borderline noises. ABC Learning,
spreading over frequent continents, one-sided and the state of Australian, which provide
considerable supports to benefaction corporate image boy, Eddie Groves, was a harbor to
optimal up the wreckages with assuring announcement package.
It is the accountability of any organization to exhibition their monetary position connected to the
current condition in obverse of both investors as well as a stockholder because of their entire
dependence on the situation of the organization (Schaltegger and Burritt, 2018). But here the
administration didn`t exhibit the really monetary situation of ABC learning centers in front of
key associates. Unprincipled to oversee the presentation of the organization since of individual
family member since it is the presentation that will definite upcoming of the corporate but
without its relative's support which was done by CEO of this organization. Also, boards
members are also responsible for not maintain the clear direction of this company and handed
over all the responsibility to the CEO (Aguilera, Judge and Terjesen, 2018). It is also the
responsibility of the board panel associates of ABC learning corporate to uphold the spotless
picture in the community in which they are operating which they completely miscarried by
displaying such unprincipled activities in their occupational process.
Nearly three auditors had checked this corporate. KPMG which is one of the giant audit
organizations was not ingenious to search any evasion in their account activities on two
substantially different estimations offered by dissimilar auditors. A deadly situation was
evaluated by these inspectors but they overlooked it as current conditions (Şahin, 2018). While
the two selected outside checkers. Unreserved opinion was provided by Ernst and Young and
persisted motionless along with estimation. It seems to be experiential in which unreserved
estimation related to monetary declaration of this organization has stirred this commercial
company near monetary disaster and lastly into evasion disgrace.

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What to do in this situation
In such situations, the management of ABC learning company must not go on obtaining small
associated business deprived of seeing about price, although the corporate is developing. There
must be submission of a breakeven point anywhere in the business procedure. For any
occupation a huge amount of price is depleted on workforces and therefore workforce’s price
might be appropriately explored. This organization might give significance to firms monetary
declaration for their definite upcoming/future offered to this corporate (ElGammal, El-Kassar,
and Canaan Messarra, 2018). In ABC case monetary declaration was overlooked and
consequence is with everybody. Appropriate accounting might be prepared along appropriate
reviewing structure. Achievement of any corporate, repetition of ethical business governance
displays great significant part since it chooses arrangement on the benchmark of quality of
excellence and price of the corporations’ procedure that loving is successful to be assumed in its
place of personal relatives. Also, the management of the organization must control the
behavioural pattern of all the members associated with the organization so that it may not impact
the image of the company in the market (Chen, Gotti, Kang and Wolfe, 2018). It takes years of
time for any organization/company to form their unique image in the market and if this image is
impacted it can also impact the minds of the customer and investors which are associated with
this company., especially when the financial condition of the company is not at all good and are
moving towards decline phase of the industry life cycle process.
Conclusion
The workforce is seen as one of the most significant portions of childcare occupation which
promises the incessant evolution of the corporate. At several centers, workforce is satisfied with
the brilliance of care distributed. At a certain place, workforce articulated a type of qualms
particularly when the monetary situation of the corporation is not good. This event is connected
with number of general difficulties related to distribution of finest excellence maintenance at
learning centers of ABC such as unique track rational along with abandoning ethical business
governance that eventually wedged entire operating construction of the corporation. Bank
connotation uniformly moves far in relations of compromise relate to the contract. Expenditure
great amount of cash in obtaining minor functioning companies kept as one big drive in attention

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that organizations cannot attitude in front of the company in childcare facilities that has moved
corporate towards insolvency. Corporation must not oversee organization monetary declarations
no matter what might be the condition at given period since it can direct the organization towards
collapse stage as the amount in return will not be even near to the amount of investment.
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