SHR011-3 Developing HRM Practice: Analyzing the Olympus Scandal

This report examines the Olympus scandal, where the CEO sued company directors for accounting fraud. It discusses business ethics, emphasizing the need for companies to comply with policies and laws. Ethical theories are explored, highlighting the importance of ethical practices and organizational culture. The report analyzes the Olympus case, detailing how unethical practices and hidden losses led to significant consequences. It also addresses inclusive and diverse practices for change management, stressing the importance of valuing employees and fostering a positive work environment. The analysis underscores the necessity for ethical behavior and transparency in business operations to maintain trust and avoid legal repercussions. Desklib provides students access to similar solved assignments and study resources.

DEVELOPING
PROFESSIONAL HRM
PRACTICES

Executive summary
The report is based on the case study of the Olympus scandal in which the CEO of the company
filed for suing the directors of the company regarding the accounting fraud. The concept about
the business ethics has discussed that states that it is necessary for the company to comply with
the policies and protocol of the company. The importance of law has also discussed and need to
follow these rules which can helps in effectively operating the business. The importance of
ethical theories has been stated in the report. It is important fr the organisation to improve its
organisational culture for success in the future.

Table of Contents
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
ASSESSMENT-1.............................................................................................................................4
Ethical theories ............................................................................................................................4
Inclusive practices for change management................................................................................7
Diverse and professional
practices for improving change management.............................................................................7
RECOMMENDATION...................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The organization consist of various departments and each department performs its
functions and contributes in achievement of the goals and objectives of the company. They
coordinate with their superiors in case of any issue that arise within internal operation of the
company (Menant, and et.al, 2021). Human resource department is considered as one of the
major department that assist in restructuring the business and by recruiting fresh and new talent
within the company. There are various practices which is conducted by the human resource
department such as security of the employees, selecting and hiring right people at right place ,
building an effective teams , reward the employees as per their performance within the
company(Liao, and et.al, 2020) . They also focus on enhancing their performance by organising
training sessions which helps in improving their skills and knowledge. The report is based on the
case study of Olympus Fraud scandal , ethical theories, effectiveness of laws , inclusive and
diverse professional practices for improving the change management
MAIN BODY
ASSESSMENT-1
Ethical theories
Business ethics is associated with the various policies and procedures regarding nay
controversial projects , and on various laws such as bribery , discrimination etc. The law
highlights various provisions and guidelines related to the business ethics and companies have to
comply with those provisions(Ermasova, 2021). The concept of business ethics was developed
in 1960s as many f companies became more aware about the rights of consumers and focused on
the betterment of the society. The company that follow the positive ethical approaches in its
business operations tends to maintain competitive advantage over all other businesses in the
market . As a result of which it helps in ensuring certain amount of trust between the companies
and customers.
The company uses various ethical practices which helps to promote integrity among the
employees and also gain trust from the stakeholders that includes investors and customers in the
market(Sroka, and Szántó, 2018). It is necessary for all the companies to operate within their

ethical standards as it helps to avoid various legal and regulatory issues that can result into heavy
penalties to the company which can also result in decrease in the brand image of the company
affecting its operations and sales . It has been observed in many companies that they reward the
employees for their performance in order to attract and retain the employees as a result of which
it helps to build trust between the employees and the organisation. All this also help in
maintaining positive working environment in the company(Nelson, and Stout, 2022). The
companies that are engaged in corporate social responsibility practices help in contributing
towards preserving the environment and also ensure positive working environment at
workplace . These business ethics is formulated by the management that is based on various
principles that helps in avoiding the exploitation of the consumers. The companies should avoid
the unlawful activities and comply with the provisions of employment act and avoid
discrimination at workplace.
As per the case study Olympus is a Japanese company that deals in cameras and medical
imaging equipments. In this case , the CEO and president of the company filed a suit against the
executives and 18 past as well as present officials for conducting accounting fraud in the
company. In 1980, the company faced decline in their income due to sharp appreciation of Yen.
It was discovered that although there was lossless in various business transaction, the directors
and executives continue to make investments and hide their losses(Dieleman, and Koning,
2020). Further investigation revealed that the top management hide the losses from 20 years and
the auditors leaked due diligence while auditing and failed to uncover the losses related to the
false business transactions . It is observed that the company follow the unethical practices and
intentionally hidden their losses.
Ethics id defined as the branch of philosophy that includes the systematizing the
concepts of right or wrong . Business ethics is related to the policies and protocols f the company
that is they are bound to follow in order to avoid various legal fine(Köseoglu, and et.al, , 2018) .
In order to operates any business , the company should be aware about all the laws hat can be
applied while framing policies of the company, and they holds keep notice that these regulations
hound be complied with in order to survive in the competitive environment. Various ethical
theories are :
 The Utilitarian theory: This theory is based on the morality that advocates action that
results into happiness and pleasures and oppose those actions which brings unhappiness

or harm. If the theory is looked from the social perspective than it aims for the betterment
of the society. This theory is based on the principles which means that happiness is the
only things that has much value and every people happiness is counted equally. In the
given case study , the directors of the company was involved in the fraudulent
transactions and was guilty of hiding the losses(Dierksmeier, and Seele, 2020). If the
management has conducted an act that is unlawful then the consequences of such act will
also be negative and every person involved in such act will be held liable for such actions
. Is is said if the company follows the positive ethical practices will help to achieve
higher benefits the those complying with unethical practices. The trust of the consumers
are built for those companies which has positive approach towards their employees and
have strong ethical values at workplace.
 Deontological theory: This theory is derived from the Greek word and is associated to
the one of the kinds of normative theories related to the choices that are required,
forbidden and permitted. It depends upon the types of actions done by the companies that
can be right and wrong and the consequences depend upon the types of act committed by
the companies . In the given case study , the management of the company that is the
executives and past and present director of the company was involve in hiding the loses
of the company and also the negligence of the auditor to uncover the losses which
resulted in the negative consequences the company suffered(Cho, 2020). The company
committed wrongful practices that was unethical and also forbidden by the regulation
under the act.
Law is defined as the set of rules and regulations that is enacted by the parliament and
every citizen and every industry is bound to follow these rules . The act aloes contains various
provisions which defines the act that is forbidden under the law and also the provision relate to
the violation that specifies the penalty in case of contravention. In the given case study, the
company violated the rules an protocols that was mentioned under the act and also prohibited
under the respective act(Stanton-Ife, 2022). The directors of the company was involved in
hiding the losses and was also involved in investing further which resulted in much amount of
loses the company suffered. The CEO of the Olympus company filed suit against the 19 past
and resent directors and executives for committing this act which resulted into negative
consequences suffered by the company. The management of the company was considered

ineffective and inefficient as it was involved in performing unlawful transaction and worked for
their own interest rather than focusing on organisational interest which resulted into losses. On
the other hand, the organizational was also involved in following unethical practices which
resulted into negative impact on the company. After when the CEO raised the voice about the
wrongful conduct was dismissed from their position. The former CEO also wrote a book
describing the experience. After the scandal took place the company faced de listing if shares but
the firm was not de listed but paid fine. The company sued the President and 18 other officials
form the company.
Inclusive practices for change management
It is necessary for the company to understand and value the employees as they are
valuable assets of the company and also contribute in the achieving the objectives of the
company. This help the company to know about their culture and lifestyle as they come form
different backgrounds(Shore, and et.al, 2018) . According to the employment law , the employer
should focus on building the favourable environment and treat every person equally and
understand their issues and problems which help in better communication between the employer
and employee and promotes harmony in the company. While implementing changes, various
times situation arise that many employees resist changes in the company. It is the responsibility
of the managers to convey the benefits of such changes in the organizations that can easily adopt
the changes within the management and perform accordingly.
On the other hand, the firm after implementing such change , provide necessary training
to the employees so that they can perform the assigned task accordingly. As per the case study ,
the company was involved in falsification of the accounting records and conducting fraud by
hiding the loses of the company(Zimon, and et.al, 2020). Along with this the directors and
executives was following the unethical approaches in the company and was committing an act in
their own interest. The CEO of the company who tried to report for this act was dismissed for
filing complaint against the directors of the company.
Diverse and professional
practices for improving change management
The company involves various employees which comes form different backgrounds and
culture. It is the responsibility of the employer to create favourable working environment in the
company and understand the issues and problems of the employees in order to create effective

organisational culture in the organisation . It is not only the sole responsibility of the employer
but the employees should also cooperates and accomplish their the assigned task in order to
achieve the goals and objectives of the company. After analysing the various factors of the
environment, the management of the company involved in making various strategies in order to
promote diversity in their workplace(Tabrizi, and et.al, 2019). It helps in improving the
organisational culture and promotes favourable working environment at the workplace. These
not only helps in enhancing the communication skills but also enable the company to overcome
the challenges in the future . Building a diversified culture in the company help the company to
meet their goals and objectives effectively with the help of new strategies and us of advanced
technologies. The plans and strategies introduced so as to maintain the financial performance of
the company.
In the given case study, the executives and directors committed fraud in the company by
concealing the loses of the company .The company did not maintain the proper financial
accounts in order to hide their losses. The business ethics is associated with the complying the
rules and regulations of the company in order to fulfil its objectives in a positive way and also to
better serve the society. The ethical approaches adopted by the company help the organisation to
improve its brand image in the company which finally reflects their sales. In the case , the
company was involved in the fraud and falsification of the accounts which resulted into decline
in the image of the company in the market(Singer, 2018). On the other hand the directors and
President was dismissed for their position by the company. With the application of various
positive ethical approaches helps in employee retention as the employees prefer working in the
organisational culture where there values and efforts are valued. These theories states about the
consequences of the act done by the company. If the reputation of the company is good in the
market it helps to retain the employees whereas in the case study as the company was found
guilty of fraud and was involve in hiding the losses. In this case the employees turnover can be
high in such companies which is involved in lawsuits. The HR department helps in recruiting
fresh talent within the organisation and also helps in the development of the existing employees
which is helps in their personal development. Every department has its own importance and
contributes in accomplishing the goals and objectives of the company.
In the given case study the company did not follow the proper rules and protocols of the
company. On the other hand the company also committed an act that is prohibited under the law

and provisions regarding the violation id also mentioned such as fine etc. The company also
faced various challenges after the happening of the scandal which effected their reputation and
profitability in the market . The directors of the company was in fault for concealing the losses of
the company and maintained false transaction in the accounts of business transactions . The
theories of the ethics reflects upon the various upon the act that is done by the management and
its consequences. If the company wants to maintain its position in the market has to comply with
the positive ethical practices which helps in achieving the goals of the company.
RECOMMENDATION
In order to maintain its brand image in the market it is necessary for the company to set a
clear objective. The company should comply with the laws and regulation of the laws which
helps In avoiding the legal issues for the company. It is necessary for the organisation to
maintain favourable working environment as it helps in enhancing better communication among
the employer and employee(Conrad, 2018) . It is also suggested that the company should
organise open and group discussions so that the managers can understand the views and pinions
of the employees which can be helpful in achieving the objectives of the company. The company
should use the relevant ethical approach in the management of the company which helps to build
its brand image of the company and gain competitive advantage over other business. In the case
study the managers are committed an act which was unlawful which has effected the overall
image of the company. It is mandatory for the mangers not to to focus on on their personal
interest but rather work on achieving the objectives of the company.

CONCLUSION
From the above report, it can be concluded that in order to maintain its position in the
market , the company has to follow the positive ethical approaches which will help the
organisation to focus on the preferences of the customers but also to improve its position in the
market. It is important for the organisation to make modifications in the organizational culture of
the company which helps in better communication among in the workplace. The report is based
on the case study about the Olympus scandal in which the CEO of the company filed a suit
against the executive and 18 directors of the company who was found guilty of falsification of
the accounts and also concealing the losses of the company. The report also discussed about the
various ethical theories and each has its own importance. The importance of law is also discussed
and states that it is necessary for the company to comply with the rules and regulations in order
to avoid any legal problems in the future.

REFERENCES
Books and journals
Cho, S., 2020. Business ethics in marketing communication. International Journal of
Entrepreneurship. 24(1). pp.1-8.
Conrad, C.A., 2018. Business ethics-a philosophical and behavioral approach. Springer.
Dieleman, M. and Koning, J., 2020. Articulating values through identity work: Advancing family
business ethics research. Journal of Business Ethics. 163(4). pp.675-687.
Dierksmeier, C. and Seele, P., 2020. Blockchain and business ethics. Business Ethics: A
European Review. 29(2). pp.348-359.
Ermasova, N., 2021. Cross-cultural issues in business ethics: A review and research
agenda. International Journal of Cross Cultural Management. 21(1). pp.95-121.
Köseoglu, and et.al, , 2018. Authorship trends and collaboration patterns in business ethics
literature. Business Ethics: A European Review. 27(2). pp.164-177.
Liao, and et.al, 2020. The implementation of human resource management information
system. Management. 8(2). pp.116-120.
Menant, and et.al, 2021. The application of acceptance models to human resource information
systems: a literature review. Frontiers in Psychology. 12.
Nelson, J.S. and Stout, L.A., 2022. Business Ethics: What Everyone Needs to Know. Oxford
University Press.
Shore, and et.al, 2018. Inclusive workplaces: A review and model. Human Resource
Management Review. 28(2). pp.176-189.
Singer, A., 2018. Justice failure: Efficiency and equality in business ethics. Journal of Business
Ethics. 149(1). pp.97-115.
Sroka, W. and Szántó, R., 2018. Corporate social responsibility and business ethics in
controversial sectors: Analysis of research results. Journal of Entrepreneurship,
Management and Innovation. 14(3). pp.111-126.
Stanton-Ife, J., 2022. The limits of law.
Tabrizi, and et.al, 2019. Digital transformation is not about technology. Harvard business
review, 13(March), pp.1-6.

Zimon, and et.al, 2020. Drivers of sustainable supply chain management: Practices to alignment
with un sustainable development goals. International Journal for Quality
Research. 14(1).