Ethics and Governance: Analysis of a Corporate Case Study

This case study delves into the ethical failings within a corporation, focusing on the behaviors of key figures like Mr. Goodrich and Arnold. It examines the application of ethical theories such as egoism, utilitarianism, and deontology to analyze their decision-making processes. The assignment assesses Mr. Goodrich's leadership style, particularly his 'whatever it takes' approach, and its impact on subordinates. It scrutinizes Arnold's inaccurate financial reporting and its consequences for stakeholders. The analysis incorporates ethical decision-making models, including the AAA model, to evaluate the ethical dilemmas and recommend appropriate actions. The case study also applies the APES 110 code of ethics to advise Arnold on proper conduct. The paper highlights the importance of ethical leadership, the consequences of unethical practices, and the need for robust ethical frameworks to ensure responsible corporate behavior. This case study provides insights into the complexities of ethical decision-making and the importance of upholding ethical standards within organizations.

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ETHICS AND GOVERNANCE
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Executive Summary
Management serves imperative role in inculcating workplace ethics in workplace. Top
management necessitates inaugurating proper instances for their dependents. Management
requires to acts as a foundation of stimulus and enthusiasm for the workforces. It is normally
perceived that team managers, frontrunners or top hierarchical leaders tend to guide their
underlings to unlimited point. Superiors strictly necessitate obeying to rules and regulations
of the organization in provision of their workforces to follow the same. It has noted that the
opinion that as corporations progresses or advances their external operations, intend to
decentralize their business functions and empower their workforce, it is vital for the top
management level to progress ethical practices which proposition the essential training and
mechanisms to promise that their employees can make ethical decisions. The following paper
have analysed the case of an organization where ethical situation regarding top hierarchical
leaders have deteriorated strictly resulting to unethical decision making practices with the
organization.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................4
Implementation of ethical theories.........................................................................................4
Analysis of Mr. Goodrich’s behaviour using theory of egoism.............................................4
Analysis of Mr. Goodrich’s behaviour using theory of Utilitarianism..................................5
Analysis of Arnold’s behaviour using theory of Utilitarianism.............................................6
Analysis of Arnold’s behaviour using theory of Deontology................................................6
Understanding Ethical decision-making model.....................................................................7
Using APES 110 to Advice Arnold’s Appropriate Actions...................................................8
Conclusion................................................................................................................................12
References................................................................................................................................13

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Introduction
Management plays decisive role in inculcating workplace ethics in workplace. Top
management requires establishing proper examples for their subordinates. Management
requires to acts as a source of inspiration and enthusiasm for the employees. It is typically
observed that team managers, leaders or top hierarchical leaders tend to influence their
subordinates to great degree. Superiors strictly require adhering to rules and regulations of
the organization in support of their employees to pursue the same. Shin et al. (2015) are of
the opinion that as companies develop or improve their overseas operations, intend to
decentralize their business functions and empower their workforce, it is essential for the top
management level to develop ethical practices which offer the essential training and
mechanisms to guarantee that their employees can make ethical decisions. Such strategies
will decrease organization’s vulnerability to misconduct and the harm it might cause to
revenue making, profitability, company image and management focus. However, Melé,
Rosanas and Fontrodona (2017) have claimed that while CEOs, COOs or top hierarchical
business leaders tend to establish an ethical workplace culture, forming proper foundation
provides correct direction and employees must show the accountability to follow it. The
following paper will analyse the case of an organization where ethical situation concerning
top hierarchical leaders have deteriorated severely resulting to unethical decision making
practices with the organization.

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Discussion
Implementation of ethical theories
Analysis of Mr. Goodrich’s behaviour using theory of egoism
One management ethics theoretical issue can be explained as the difference between
two alternate theoretical perspectives namely managerial moral monism and managerial
limited moral pluralism (Mill, 2016). Chan et al. (2016) have noted that moral monism
upholds that managerial moral performance is assured by the reliable and influential
understanding of a single management theory with a single ethics theory. For example, top
hierarchical leaders exhibiting ethical egoism depending on balanced goal management
theory tend to suggest that optimal managerial moral performance must be determined by the
extent which will eventually upsurge his individual success and wealth. Moreover, lack of
sufficiency related to theoretical deliberation of other management theories in addition to the
roles of moral constraint, character as well as perspective related to leaders’ decision-making
show a tendency to incentivize egoistic managers in order to continue to using unlawful
approaches and strategies to obtain individualistic accomplishments. By means of such
procedure, egoistic organizational leaders raised viciousness within the organizational culture
instead of following integration and commitment further creating corrupted culture which
propagates utmost insatiability and self-indulgence. However, drawing insights from the case
of ethical decision making, Mr. Goodrich’s behavioural approach towards his subordinates
did not exhibit any advocacy of selfishness or harming others. Furthermore, his ‘whatever it
takes guys’ approach aided his company to meet crucial targets and acquire reputation of a
successful achiever. Thus, considering ethical egoism in the case of Mr. Goodrich, there can
be found several underlying factors to suppose that showing stringency to subordinates
results to enduring self-interest (Bell, Dyck & Neubert, 2017). Consequently, such egoist

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leaders as per theoretical explanation of ethical egoism show tendency to act diligently for
acquiring organizational aims rather than posing self-harm. Schminke, Arnaud and Taylor
(2015). have claimed that ethical egoism aligns with principles of rational morality related to
deference, morality, and benevolence. Drawing relevance to theoretical understanding of
egoism it can be asserted that Mr. Goodrich organizational decision-making abilities may
outlawed acts of self-regard in highly blameworthy sense, it has resulted his subordinates to
attain motivational focus in order to establish on individualistic interests or organizational
benefit.
Analysis of Mr. Goodrich’s behaviour using theory of Utilitarianism
Comprehensive studies have explained that management’s best result is not
necessarily driven towards the greatest good for the greatest number (Vitell & Hunt, 2015). It
primarily focuses on products delivering on return of investment. Thus, considering Mr.
Goodrich decision making approach has principally shed light on the very contradiction of
the Happiness Principle. Schminke, Arnaud and Taylor (2015) have mentioned that
utilitarianism as a moral theory considers that only thing relevant to determine an action to be
right or wrong must be determined from the outcome of the action. Thus, outcomes of actions
show great decisiveness while analysing leadership skills of top hierarchical leaders.
Considering the approach of Mr. Goodrich, it can be asserted that his decision making
strategies and leadership abilities exhibit showed robust connotation towards
consequentialism outcomes. His strategic decisions focused on side-tracking the motives of
his actions and essentially focused on the outcome. Drawing relevance to these factors, it can
be noted that Goodrich’s management strategies aligned greatly to consequentialism rather
than utilitarianism. According to Zeni and Griffith (2016), as consequentialism management
measures results rather than shedding light on intentions and moral motives related to the
action derived from Kantian theory of ethics. Moreover, managerial dimensions often fail to

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be constructively associated with the Happiness Principle. Consequently, most management
ethics of Goodrich do not align to considerations of consequentialism or utilitarianism.
Analysis of Arnold’s behaviour using theory of Utilitarianism
Contemporary businesses require applying utilitarianism to distinguish rightness or
wrongness of actions being executed (Dörr & Hollnbuchner, 2017). Considering case study,
it has been noted that Arnold serving the role of management accountant showed utmost
incompetence in providing accurate financial report to Mr. Goodrich. Schminke, Arnaud and
Taylor (2015) have mentioned that inaccurate financial reporting tends to be the result of lack
of diligence, misinterpretation and dishonesty. Drawing insights from the case study, it has
been noted that Arnold faulty financial reporting has posed threats to the company’s
stakeholders and further impacted company’s credibility with the COO and investors. At this
juncture, Arnold failed to draw relevance to welfarism is the understanding that inequality or
correctness of operations mainly relies on conceptions of benefits. As per the study of Zeni
and Griffith (2016), welfarism principally aims at capitalizing on services and benefits of
every individual. While, the challenge that utilitarianism poses to other interpretations
depends on the probability of the consequences of disrupting the moral rules and regulations.
Analysis of Arnold’s behaviour using theory of Deontology
Ethics is regarded as the study of morality and the way to reliably practice impeccable
character formation and behaviour. Theory of deontology implies on the way individuals
judge the morality of others on the basis of set of principles and rules. Meanwhile, in the
domain of economics, deontology is understood as the foundation of any decision taken by
the employee and is considered as the fundament of any organizational milieu. Similarly,
drawing relevance to the insights gathered from the case of Arnold, engaged to the role of
management accountant, it has been observed that employees must balance ‘the means of an

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end’ with the vital ‘moral duty’ and accomplish the said duty. According to authors,
employees engaged in any domain of economy have shown certain degree of susceptibility to
deontological dilemma. Considering the case of Arnold, he encountered deontological
dilemma during decision-making situation of making financial reporting. Furthermore, as per
the view of Schminke, Arnaud and Taylor (2015), any employee associated with an economic
process tends to admit that on any particular decision-making in which he has been involved
in front of a deontological dilemma by unalloyed reflex, without considering roles and
responsibilities expected from him as well as relevant consequences.
Understanding Ethical decision-making model
Decision-making models provide systematic framework in order to attain most
effective course of action. Zeni and Griffith (2016) have noted that decision to increase or not
to elevate production to perfectly align to organizations’ demand acts as a critical decision,
yet has been considerably routine as well as structured. Considering Mr. Goodrich showing
interest in Arnold’s financial report and aiming to derive most effective outcome from it, he
must apply AAA decision making model which will enable him to take ongoing ethical issues
in the company into consideration. According to authors, many business decisions have
ethical factors attached to them. It is typically due to the impacts of those decisions and the
fact that effects show potential to impact stakeholders in various ways and will articulate
varied ethical values and perceptions. Analysing the case study, it can be understood that Mr.
Goodrich can undergo 7 step-process of AAA model to generate most effective outcome for
his organization. At the first juncture, while evaluating Arnold’s financial report, COO
Goodrich must determine the facts related to past financial position of the company and
investments. It can be noted as there is less ambiguity in the first step of AAA model;
Goodrich can be responsive to Arnold’s report and then scrutinize the data and figures of the
particular financial reporting. This is the 2nd step of the AAA model where ethical issues are

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principally been distinguished. While, analysing the case study, it has been found that Arnold
tried to explain his COO about paying factory workers from inaccurate staff award for last
two years. Furthermore, COO Goodrich should evaluate fact whether Arnold was involved in
any illegal monetary transaction (Curtis et al., 2017). The third step of AAA model is related
to an identification of norms, values and standards of the case. At this juncture, COO
Goodrich must place his decision in utmost professional context by upholding ethical norms
of company. Considering Goodrich’s aggressive response to Arnold’s report could have been
mitigated to maintain basic professional behaviour context of the company. As the report
contained assets, liabilities, investment, income, and expense of the company, these should
have been taken as relevant determinant to consider in such scenario.
Furthermore, Mr. Goodrich must propose alternative action to Arnold if he has been
indulged in any acceptance of bribe. Moreover, to generate best outcome for his company
COO Goodrich must update Arnold about severe consequences of acceptance of bribe where
he encounter risk of both legal and professional issues. Joshi and Li (2016) have mentioned
that the fundamental aim of AAA model is to mention the implications of each outcome in
explicit manner in order to produce comprehensive decision with proper acknowledgement of
each employee. By implementing AAA decision making model, COO might consider
shifting responsibilities to evade Arnold from becoming entrenched in his position.
Furthermore, he should focus on provide legal clauses all staffs who have fiduciary
accountability of protecting the company from any form of employee theft.
Using APES 110 to Advice Arnold’s Appropriate Actions
APES 110 the Accounting Professional and Ethical Standards Board (APESB) has
issued Code of Ethics for Professional Accountants (Code). APESB is known as an
autonomous entity established in 2006 as an initiative of CPA Australia and Chartered
Accountants in Australia and New Zealand. Considering the case study if Arnold is assumed

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to be member of CPA Australia, he must comply with the Codes unless he is prevented from
complying so by relevant laws or regulations. By adhering to paragraph 100.1, Arnold must
understand that his fundamental accountability as a financial accountant must rely on public
interest.
The official website mentions that Paragraph 100.1 of the Code explains that a
distinctive mark of the accountancy profession depends on its recognition of the
responsibility to serve for public interest (CPAAustralia.com.au, 2019). As a result, Arnold’s
major accountability responsibility is not simply to contend any specific client or employer
but to the public as a whole.
Furthermore, 100.5 paragraph of APES code highlights importance of integrity,
objectivity, professional ability, professional behaviour and confidentiality. While adhering to
this code, Arnold must uphold his professional knowledge and competences as member of
CPA Australia in order to ensure that his organization receives capable professional services
on the basis of ongoing developments in practice, legislation, methods and techniques and
must serve with utmost diligence and in compliance with relevant technical as well as
professional standards. Furthermore, as per the principles of APES 110, employees must
defer to the discretion of information obtained as outcome of professional and business
associations. Taking into Arnold’s case as being member of CPA Australia, Arnold must
conceal any data or information from any third party entity unless there can be seen any
obligation or professional duty to reveal information. He should further take into account that
Arnold as CPA member must not use the information for individual benefit.
In addition to this, APES 110 offers conceptual framework (100.6 to 100.11), which
will help CPA members to use their professional judgement. Considering Arnold as member
of CPA, he must utilize professional decision making strategies to proficiently identify any
risks to compliance with major principles, assess the value of recognized threats and further

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implement safety measures in order to remove or mitigate threats considerably. Authors have
noted that members of CPA in these cases must focus on lessening or suspend professional
service when required. APES 110 Code is primarily based on a conceptual framework that
necessitates dynamic deliberation of problems based on the fundamental principles. The
framework can be functional to contradictory circumstances and be dependent on on
professional judgement rather than on particular rules.
APES 110 Conceptual Framework
Source: (CPAAustralia.com.au, 2019).
However, any accountant professional might encounter threats in his professional
career which could be avoided if they comply with fundamental principles of APES 110.
Paragraph 100.12 of APES 110 Code clearly points out that risks might fall into the realm
of self-interest, self-evaluation, advocacy, intimidation or knowledge. Considering Arnold’s
role as CPA member, it can be observed that Arnold in his profession of financial accountant

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might sometimes fail to review financial results with utmost accuracy or investments made
by the employer. Furthermore, often members tend to encounter threats owing to distant or
intimate association with client. However, drawing insights from these categories of threat,
Arnold might experience close association with any of his clients, which can further give rise
to ethical dilemma while offering current service (CPAAustralia.com.au, 2019).
Furthermore, as per the principle of APES 110 in 100.3, safeguard as actions or
measures can be seen as effective which may be eliminate risks or to some extent in
acceptable level. Arnold must take into consideration safeguard measures to avoid any type
of financial threats during his services at an acceptable threat. An acceptable level is
considered as the level where considerable as well as informed third party entity would be
likely to conclude, considering all particular facts and conditions obtainable to the associate
at that time that compliance with the important principles is not cooperated or negotiated.
However, if threats fail to be abolished or abridged to a satisfactory level as the pressures
show great degree of severity or there is lack of precautions or cannot be applied to report the
coercions, in these cases, the context or relationship producing the threats must be
circumvented. Considering Arnold’s role in these circumstances is obligatory to decline or
suspend the professional service and if required a member in public practice is required to
quit from the assignation. In other cases, member in business is required to leave from the
employing organisation.
Meanwhile, taking into consideration the relevant factors of 100.17 to 100.22, CPA
member must determine the appropriate development of action, evaluating the significances
of each likely progression of business operations action and whether any other individuals
and those accused of governance must be referred. However, in compliance with the
fundamental principles of APES 110, Arnold should consider attaining professional
suggestions from appropriate professional entity or any recognized legal consultative further

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guaranteeing that the fundamental principle of privacy must be lawfully maintained. At this
juncture, Arnold being member of CPA Australia must discuss the problem or legal
opportunity with legal counsellor. Members engaged in employment services in Australia
must comply with the APES 110 Code unless they have been restricted from performing such
actions by relevant regulations or law (CPAAustralia.com.au, 2019).
Conclusion
Therefore, from the above discussion it can be concluded that complying with the
essential requirements outlined in the Code, members involved in financial management must
be guided not only by words, but with proper documented Code. Thus, Arnold involved in
roles of financial management must provide competent, accurate and judicious information to
company. While analysing the case of Mr. Goodrich and Arnold, it can be noted that top
management must show ethical accountability for safeguarding the confidence of the
organization within the boundaries of law and regulations. Financial managers must identify
fiduciary obligations in guaranteeing effective internal control systems in addition to a
controlled environment essential to safeguard those possessions and resources employed by
or delegated to financial manager. On the other hand, Mr. Goodrich must use AAA model of
decision making to generate most effective outcome for his company rather than exhibiting
unlawful or destructive approach to his subordinates.

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References
Bell, G. G., Dyck, B., & Neubert, M. J. (2017). Ethical Leadership, Virtue Theory, And
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Chan, K. C., Fung, A., Fung, H. G., & Yau, J. (2016). A citation analysis of business ethics
research: A global perspective. Journal of Business Ethics, 136(3), 557-573.
CPAAustralia.com.au (2019). APES 110 CODE OF ETHICS FOR PROFESSIONAL
ACCOUNTANTS. Retrieved from:
https://www.cpaaustralia.com.au/professional-resources/accounting-professional-and-ethical-
standards/apes-110-code-of-ethics-for-professional-accountants
Curtis, M. B., Vinson, J. M., Conover, T. L., Lucianetti, L., & Battista, V. (2017). National
culture and ethical judgment: A social contract approach to the contrast of ethical decision
making by accounting professionals and students from the US and Italy. Journal of
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Dörr, K. N., & Hollnbuchner, K. (2017). Ethical challenges of algorithmic journalism. Digital
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Melé, D., Rosanas, J. M., & Fontrodona, J. (2017). Ethics in finance and accounting:
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Business Ethics, 129(1), 43-57.

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Vitell, S. J., & Hunt, S. D. (2015). The general theory of marketing ethics: the consumer
ethics and intentions issues. Handbook on ethics and marketing, 15-37.
Zeni, T. A., & Griffith, J. A. (2016). Business ethics and the bottom line: Financial impacts of
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