University Report: Ethical Analysis of Westpac Scandal (BMA735)
VerifiedAdded on 2022/08/26
|9
|2179
|20
Report
AI Summary
This report examines the Westpac scandal, focusing on the ethical issues that arose from the money laundering and child exploitation allegations. The report identifies key ethical breaches, including the CEO's actions, lack of transparency, and the bank's prioritization of profit over ethical conduct. It explores ethical theories to analyze the issues and proposes recommendations for improvement, such as enhanced employee training, stricter adherence to ethical codes, and greater transparency with stakeholders. The report also considers the role of the board of directors and the need for a culture of ethical responsibility within the bank. The analysis draws upon various academic sources to support its arguments and recommendations, aiming to provide a comprehensive understanding of the ethical failures and suggest strategies for preventing similar incidents in the future.
Contribute Materials
Your contribution can guide someone’s learning journey. Share your
documents today.

Running head: MANAGEMENT ETHICS
MANAGEMENT ETHICS
Name of the Student:
Name of the University:
Author Note:
MANAGEMENT ETHICS
Name of the Student:
Name of the University:
Author Note:
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.

1Management Ethics
Table of Contents
1.1 Introduction...........................................................................................................................2
1.2 Discussion..................................................................................................................................2
1.2.1 Key ethical issues...............................................................................................................2
1.2.2 Ethical theories to support the listed ethical issues............................................................3
1.2.3 Recommendations and strategies proposed........................................................................4
1.2.4 Ethical theories to support the recommendations and strategies proposed........................5
1.3 Conclusion.................................................................................................................................6
Table of Contents
1.1 Introduction...........................................................................................................................2
1.2 Discussion..................................................................................................................................2
1.2.1 Key ethical issues...............................................................................................................2
1.2.2 Ethical theories to support the listed ethical issues............................................................3
1.2.3 Recommendations and strategies proposed........................................................................4
1.2.4 Ethical theories to support the recommendations and strategies proposed........................5
1.3 Conclusion.................................................................................................................................6

2Management Ethics
1.1 Introduction
In the case study of Westpac the analysis of the key ethical issues will be developed
along with this supportive ethical theories will also be discussed in detail. This case study
contains the information regarding the scandal during 2019 when Mr. Brian Hartzer, the Chief
Executive Officer of Westpac was stepped down by AUSTRAC and the case was for Child
exploitation and money laundering. At the final stage the management and the board will be
changes due to the betterment of the bank and customers. However, in one news report it was
stated that Brian asked for help from the senior leaders of Westpac by misguiding them as this
scandal was playing a high street issue. AUSTRAC in their investigation bidding stated that less
than $500,000 was paid to Philippines and South East Asia for the purpose of child exploitations.
This money laundering act by Westpac was considered to be a horrendous crime under the law.
1.2 Discussion
1.2.1 Key ethical issues
As per the case study there are many ethical issues which can be identified like the
horrendous types which is related to the money laundering. According to the case study, Westpac
used to do money laundering to hide their monetary transactions that are illegal and those
transactions comes under the criminal activities. Public Condemnation was also a type of ethical
issue which was attempted by the bank Westpac (SUPER and ACTU 2018). According to this
issue, the bank have violated the culture and beliefs of banks and the banking industry. Due to
profit making purpose, Westpac shifted the customer’s service to secondary goal. There was no
transparency in the bank which led to another ethical issue which means that the total figure was
not clearly shown to the customers and the shareholders. Lobbying was another kind of issue
1.1 Introduction
In the case study of Westpac the analysis of the key ethical issues will be developed
along with this supportive ethical theories will also be discussed in detail. This case study
contains the information regarding the scandal during 2019 when Mr. Brian Hartzer, the Chief
Executive Officer of Westpac was stepped down by AUSTRAC and the case was for Child
exploitation and money laundering. At the final stage the management and the board will be
changes due to the betterment of the bank and customers. However, in one news report it was
stated that Brian asked for help from the senior leaders of Westpac by misguiding them as this
scandal was playing a high street issue. AUSTRAC in their investigation bidding stated that less
than $500,000 was paid to Philippines and South East Asia for the purpose of child exploitations.
This money laundering act by Westpac was considered to be a horrendous crime under the law.
1.2 Discussion
1.2.1 Key ethical issues
As per the case study there are many ethical issues which can be identified like the
horrendous types which is related to the money laundering. According to the case study, Westpac
used to do money laundering to hide their monetary transactions that are illegal and those
transactions comes under the criminal activities. Public Condemnation was also a type of ethical
issue which was attempted by the bank Westpac (SUPER and ACTU 2018). According to this
issue, the bank have violated the culture and beliefs of banks and the banking industry. Due to
profit making purpose, Westpac shifted the customer’s service to secondary goal. There was no
transparency in the bank which led to another ethical issue which means that the total figure was
not clearly shown to the customers and the shareholders. Lobbying was another kind of issue

3Management Ethics
found in this case study because the bank did not clearly stated how the shareholders was used
and for what purpose which was the right of shareholders to know (Crane et al. 2019). These
hidden information was never disclosed until AUSTRAC found that there was some criminal
activities going on inside this banking organization where people trust and invest their money
due to the market reputation.
1.2.2 Ethical theories to support the listed ethical issues
As per Ali Yidawi in 2005, there are code of ethics for the banks which needs to be
followed by every bank and maintained by the board of directors along with the lowest level
worker in bank. When any bank follows the ethical code of conduct and their reputation then it
shows their professionalism and responsibility towards the society. Each and every employee
bank should be well-aware of the bank policies regarding the ethics and they must know which
activity would be called as unethical and whom to report regarding the unethical activities.
According to Oghojafor et al. in 2010, they stated that a bank of every sector plays the
most vital role in the society because they are the intermediary of finances between the surplus
units and deficit units. With this process of intermediary, every bank earns profit in terms of
interest and then they pays salary to every employee and return for every savers. It is the duty of
banks to inform each of the savers and loan takers where their money is being employed without
hiding any of the detail because they trust their bank (Reyns 2013).
As per B. Sayali Patil in 2010, the employees of banking sector should also follow some
business ethics like morality & ethics. Here the researcher have defined that the bank much
follow and maintain the morality of the society as well as of the banks and for this the employee
have to clearly understand the morality and cultural belief of that area. Norms, values and beliefs
should be included in the handbook provided to each and every employee of the bank. These
found in this case study because the bank did not clearly stated how the shareholders was used
and for what purpose which was the right of shareholders to know (Crane et al. 2019). These
hidden information was never disclosed until AUSTRAC found that there was some criminal
activities going on inside this banking organization where people trust and invest their money
due to the market reputation.
1.2.2 Ethical theories to support the listed ethical issues
As per Ali Yidawi in 2005, there are code of ethics for the banks which needs to be
followed by every bank and maintained by the board of directors along with the lowest level
worker in bank. When any bank follows the ethical code of conduct and their reputation then it
shows their professionalism and responsibility towards the society. Each and every employee
bank should be well-aware of the bank policies regarding the ethics and they must know which
activity would be called as unethical and whom to report regarding the unethical activities.
According to Oghojafor et al. in 2010, they stated that a bank of every sector plays the
most vital role in the society because they are the intermediary of finances between the surplus
units and deficit units. With this process of intermediary, every bank earns profit in terms of
interest and then they pays salary to every employee and return for every savers. It is the duty of
banks to inform each of the savers and loan takers where their money is being employed without
hiding any of the detail because they trust their bank (Reyns 2013).
As per B. Sayali Patil in 2010, the employees of banking sector should also follow some
business ethics like morality & ethics. Here the researcher have defined that the bank much
follow and maintain the morality of the society as well as of the banks and for this the employee
have to clearly understand the morality and cultural belief of that area. Norms, values and beliefs
should be included in the handbook provided to each and every employee of the bank. These
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.

4Management Ethics
ethics clarifies the principles of what is right and what is wrong in the situation of any fraud
inside the banking culture (Fargher 2019).
As per Haslinda et al. in 2009, business ethics is nothing but a study of some business
decisions, activities and situations. In this theory the researcher have specified that the banking
ethics must be applied to every business in a commercial context basis to serve the customers
first and then make profit after that. Professionalism is required from each and every employee to
properly function their duties and responsibilities. To improve the professionalism, every
employee must be provided with required training and development program at a frequent
interval so that they deliver a productive and efficient work to the customers (Tanzer,
Commissioner and Tanzer 2016).
1.2.3 Recommendations and strategies proposed
After considering the case study it can be recommended that the employees should have
followed the banking ethics and informed the stakeholders and the senior leaders regarding the
money laundering and child exploitation cases. It was the duty of employees to stay attentive and
report any kind of criminal activities because hiding any such wrong activities is also one type
crime. The main culprit here was the Chief Executive Officer of Westpac, Mr. Brian Hartzer
who have violated a lot of business and banking ethics and misused their goodwill and reputation
is market (Leukfeldt and Yar 2016). The bank should have applied some strategies to minimize
or rather eliminate the horrendous activities. AUSTRAC have filed a case against Westpac and
rather asking for help from senior leaders of Westpac for bad activities, Brian should have
apologized for the same because he have already violated enormous business and basic ethics.
The next Chief Executive Mr. Peter King must keep in mind not to repeat the same mistakes like
Brian and responsibly execute his duty towards the bank and the society. Peter have shown a
ethics clarifies the principles of what is right and what is wrong in the situation of any fraud
inside the banking culture (Fargher 2019).
As per Haslinda et al. in 2009, business ethics is nothing but a study of some business
decisions, activities and situations. In this theory the researcher have specified that the banking
ethics must be applied to every business in a commercial context basis to serve the customers
first and then make profit after that. Professionalism is required from each and every employee to
properly function their duties and responsibilities. To improve the professionalism, every
employee must be provided with required training and development program at a frequent
interval so that they deliver a productive and efficient work to the customers (Tanzer,
Commissioner and Tanzer 2016).
1.2.3 Recommendations and strategies proposed
After considering the case study it can be recommended that the employees should have
followed the banking ethics and informed the stakeholders and the senior leaders regarding the
money laundering and child exploitation cases. It was the duty of employees to stay attentive and
report any kind of criminal activities because hiding any such wrong activities is also one type
crime. The main culprit here was the Chief Executive Officer of Westpac, Mr. Brian Hartzer
who have violated a lot of business and banking ethics and misused their goodwill and reputation
is market (Leukfeldt and Yar 2016). The bank should have applied some strategies to minimize
or rather eliminate the horrendous activities. AUSTRAC have filed a case against Westpac and
rather asking for help from senior leaders of Westpac for bad activities, Brian should have
apologized for the same because he have already violated enormous business and basic ethics.
The next Chief Executive Mr. Peter King must keep in mind not to repeat the same mistakes like
Brian and responsibly execute his duty towards the bank and the society. Peter have shown a

5Management Ethics
stability and direction to the bank while he was CFO of the bank and hence he have to act the
same being CEO of the bank (Tsalikis and Fritzsche 2013).
1.2.4 Ethical theories to support the recommendations and strategies proposed
As per Ozkan-Gunay during 2004, the unethical and unprofessional behavior has become
a part of every business and banking culture which definitely needs to be eliminated. This kind
of attitude have led the bank Westpac into this trouble. The Code of ethics and professionalism
was absent in this bank. Hence, it is must needed for the next appointed CEO to eliminate the
usage of those activities. As the banking business is more complex, so it recommended by the
researcher that the CEO or Peter should introduce new set of regulations and ethics in the bank
which should be followed by every level of employees (Felson 2017). There should be a proper
border between public service and business for profit and this needs to be followed by every
employee of the bank.
According to Freckle and Lurie in 2003, it is still not clear that what kind of ethics and
regulations needs to be maintained by the employees inside the bank and hence each and very
bank sets their own kind customized regulations (Felson 2013). This is a recommendation for
Peter to take a note on that he can set up new business ethics and regulations which needs to be
followed by each and every existing employee of the bank. However, it is specially clarified by
the researchers that the set of ethics and rules must be legal and should not support any criminal
activity (Tourani, Adams and Serebrenik 2017, February).
As per Atuahene during 2017, it is common that banks may adopt some unethical
practices in the banking activities due to heavy rush for meeting the capital base which was
applied by Brian. Researcher here recommends that banks could help the capital market for
raising extra capital funds to help the minimum requirements for merger, takeovers and
stability and direction to the bank while he was CFO of the bank and hence he have to act the
same being CEO of the bank (Tsalikis and Fritzsche 2013).
1.2.4 Ethical theories to support the recommendations and strategies proposed
As per Ozkan-Gunay during 2004, the unethical and unprofessional behavior has become
a part of every business and banking culture which definitely needs to be eliminated. This kind
of attitude have led the bank Westpac into this trouble. The Code of ethics and professionalism
was absent in this bank. Hence, it is must needed for the next appointed CEO to eliminate the
usage of those activities. As the banking business is more complex, so it recommended by the
researcher that the CEO or Peter should introduce new set of regulations and ethics in the bank
which should be followed by every level of employees (Felson 2017). There should be a proper
border between public service and business for profit and this needs to be followed by every
employee of the bank.
According to Freckle and Lurie in 2003, it is still not clear that what kind of ethics and
regulations needs to be maintained by the employees inside the bank and hence each and very
bank sets their own kind customized regulations (Felson 2013). This is a recommendation for
Peter to take a note on that he can set up new business ethics and regulations which needs to be
followed by each and every existing employee of the bank. However, it is specially clarified by
the researchers that the set of ethics and rules must be legal and should not support any criminal
activity (Tourani, Adams and Serebrenik 2017, February).
As per Atuahene during 2017, it is common that banks may adopt some unethical
practices in the banking activities due to heavy rush for meeting the capital base which was
applied by Brian. Researcher here recommends that banks could help the capital market for
raising extra capital funds to help the minimum requirements for merger, takeovers and

6Management Ethics
acquisitions. This will help the leading companies to help some small companies to establish in
the market and help the society as well as economy to grow (Eck and Weisburd 2015). Banks are
the major regulator of finance in society hence it is the duty of every bank to take care of this
matter (Brown, Napier and Smith 2020).
1.3 Conclusion
From the above discussion over the case study on Scandal of Westpac, it can be clearly
concluded that Brian had managed to earn so much profit with criminal activities and this needs
to be stopped. AUSTRAC filed a case against Westpac regarding money laundering and child
exploitation and it was found to be because Westpac used to hide their transaction form areas
which are related to child exploitation and money laundering. After Brian apologized and the
management decided to put Brian down, Peter was appointed as next CEO of Westpac for the
time being because he was a trustworthy and loyal CFO in that bank. Many recommendations are
provided to Peter using ethical theories for supporting the idea of improving the bank’s
reputation again and work for the public welfare. Supporting the recommendations with some
ethical theories, it was concluded that it is important for the bank to improve their reputation and
the definition of banking service to the customers.
acquisitions. This will help the leading companies to help some small companies to establish in
the market and help the society as well as economy to grow (Eck and Weisburd 2015). Banks are
the major regulator of finance in society hence it is the duty of every bank to take care of this
matter (Brown, Napier and Smith 2020).
1.3 Conclusion
From the above discussion over the case study on Scandal of Westpac, it can be clearly
concluded that Brian had managed to earn so much profit with criminal activities and this needs
to be stopped. AUSTRAC filed a case against Westpac regarding money laundering and child
exploitation and it was found to be because Westpac used to hide their transaction form areas
which are related to child exploitation and money laundering. After Brian apologized and the
management decided to put Brian down, Peter was appointed as next CEO of Westpac for the
time being because he was a trustworthy and loyal CFO in that bank. Many recommendations are
provided to Peter using ethical theories for supporting the idea of improving the bank’s
reputation again and work for the public welfare. Supporting the recommendations with some
ethical theories, it was concluded that it is important for the bank to improve their reputation and
the definition of banking service to the customers.
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser

7Management Ethics
References:
Brown, R., Napier, S. and Smith, R.G., 2020. Australians who view live streaming of child
sexual abuse: An analysis of financial transactions. Trends & Issues in Crime & Criminal
Justice, (589).
Buchanan, J., Shen, Y. and Smith, T., To Launder or not to Launder: Are there Positive Effects
for the Economies of Countries who Launder Money?.
Crane, A., Matten, D., Glozer, S. and Spence, L., 2019. Business ethics: Managing corporate
citizenship and sustainability in the age of globalization. Oxford University Press, USA.
Durner, T. and Shetret, L., 2015. Understanding bank de-risking and its effects on financial
inclusion: an exploratory study.
Eck, J. and Weisburd, D.L., 2015. Crime places in crime theory. Crime and place: Crime
prevention studies, 4.
Fargher, I.K., 2019. How Westpac is alleged to have broken anti-money laundering laws 23
million times.
Felson, M., 2013. Routine activity approach. In Environmental criminology and crime analysis
(pp. 92-99). Willan.
Felson, M., 2017. Linking criminal choices, routine activities, informal control, and criminal
outcomes. In The reasoning criminal (pp. 119-128). Routledge.
Leukfeldt, E.R. and Yar, M., 2016. Applying routine activity theory to cybercrime: A theoretical
and empirical analysis. Deviant Behavior, 37(3), pp.263-280.
McIlroy, J., 2019. Westpac scandal underlines coalition's hypocrisy on banks, unions. Green Left
Weekly, (1247), p.7.
References:
Brown, R., Napier, S. and Smith, R.G., 2020. Australians who view live streaming of child
sexual abuse: An analysis of financial transactions. Trends & Issues in Crime & Criminal
Justice, (589).
Buchanan, J., Shen, Y. and Smith, T., To Launder or not to Launder: Are there Positive Effects
for the Economies of Countries who Launder Money?.
Crane, A., Matten, D., Glozer, S. and Spence, L., 2019. Business ethics: Managing corporate
citizenship and sustainability in the age of globalization. Oxford University Press, USA.
Durner, T. and Shetret, L., 2015. Understanding bank de-risking and its effects on financial
inclusion: an exploratory study.
Eck, J. and Weisburd, D.L., 2015. Crime places in crime theory. Crime and place: Crime
prevention studies, 4.
Fargher, I.K., 2019. How Westpac is alleged to have broken anti-money laundering laws 23
million times.
Felson, M., 2013. Routine activity approach. In Environmental criminology and crime analysis
(pp. 92-99). Willan.
Felson, M., 2017. Linking criminal choices, routine activities, informal control, and criminal
outcomes. In The reasoning criminal (pp. 119-128). Routledge.
Leukfeldt, E.R. and Yar, M., 2016. Applying routine activity theory to cybercrime: A theoretical
and empirical analysis. Deviant Behavior, 37(3), pp.263-280.
McIlroy, J., 2019. Westpac scandal underlines coalition's hypocrisy on banks, unions. Green Left
Weekly, (1247), p.7.

8Management Ethics
Reyns, B.W., 2013. Online routines and identity theft victimization: Further expanding routine
activity theory beyond direct-contact offenses. Journal of Research in Crime and Delinquency,
50(2), pp.216-238.
SUPER, B.B.F. and ACTU, S., 2018. Ruined by the banks. LAMP, p.19.
Tanzer, G., Commissioner, A.S.I.C. and Tanzer, D.M., 2016. BANKING IN AUSTRALIA:
UNREGULATED & UNPROTECTED-PART 4.
Tourani, P., Adams, B. and Serebrenik, A., 2017, February. Code of conduct in open source
projects. In 2017 IEEE 24th International Conference on Software Analysis, Evolution and
Reengineering (SANER) (pp. 24-33). IEEE.
Tsalikis, J. and Fritzsche, D.J., 2013. Business ethics: A literature review with a focus on
marketing ethics. In Citation Classics from the Journal of Business Ethics (pp. 337-404).
Springer, Dordrecht.
Reyns, B.W., 2013. Online routines and identity theft victimization: Further expanding routine
activity theory beyond direct-contact offenses. Journal of Research in Crime and Delinquency,
50(2), pp.216-238.
SUPER, B.B.F. and ACTU, S., 2018. Ruined by the banks. LAMP, p.19.
Tanzer, G., Commissioner, A.S.I.C. and Tanzer, D.M., 2016. BANKING IN AUSTRALIA:
UNREGULATED & UNPROTECTED-PART 4.
Tourani, P., Adams, B. and Serebrenik, A., 2017, February. Code of conduct in open source
projects. In 2017 IEEE 24th International Conference on Software Analysis, Evolution and
Reengineering (SANER) (pp. 24-33). IEEE.
Tsalikis, J. and Fritzsche, D.J., 2013. Business ethics: A literature review with a focus on
marketing ethics. In Citation Classics from the Journal of Business Ethics (pp. 337-404).
Springer, Dordrecht.
1 out of 9
Related Documents

Your All-in-One AI-Powered Toolkit for Academic Success.
+13062052269
info@desklib.com
Available 24*7 on WhatsApp / Email
Unlock your academic potential
© 2024 | Zucol Services PVT LTD | All rights reserved.