Tag Archives: scandal

Case Study on Bre-X

The Bre-X case study tells the story of one of Canada’s most famous stock market scandals. From its beginning as a junior gold mining stock, by 1996 and early 1997 Bre-X was one of the most successful listings on the Toronto Stock Exchange. In a shocking turn of events, in May 1997 it was confirmed that the allegedly fabulous gold deposits were non-existent. Investors, securities dealers and many professionals were deceived in a huge hoax.

This case study is intended for students of Business Ethics. Issues related to management ethics, regulators, investor protection, and the securities industry in Canada are highlighted. The case is written from the perspective of a TSE regulator who is required to assess the TSE’s role in the scandal, and to make recommendations as to how future occurrences of this kind can be prevented. Click here to read more…

Register to mark your Comments

Case Studies of Organisational Failures and Trust Repair

Case Studies about Organisational Failures and Trust Repair

Introduction: Trust is a fundamental building block to any successful organisation. Yet trust is at a premium for many contemporary organisations. Surveys point to a persistent and debilitating scepticism among customers, investors and other stakeholders in the trustworthiness of the business world. The Edelman Trust Barometer, conducted on a global basis, found that trust in business plummeted across the globe after the 2007-08 financial crisis. In 2011, under half of the general population said they trust corporations.

Building an organisation’s reputation for trustworthiness can take a long time and requires considerable effort and investment. But what happens when a crisis or scandal hits an organisation and its reputation for trustworthiness comes under sustained threat? Recent examples include BP, News International, Castlebeck Care Homes, several banks (HBoS, Royal Bank of Scotland, UBS, Goldman Sachs) and Foxconn. The process of trust repair and the recovery of reputation can be arduous, but it is achievable. keep reading..

Case Studies of Organisational Failures and Trust Repair

Case Studies about Organisational Failures and Trust Repair

Introduction: Trust is a fundamental building block to any successful organisation. Yet trust is at a premium for many contemporary organisations. Surveys point to a persistent and debilitating scepticism among customers, investors and other stakeholders in the trustworthiness of the business world. The Edelman Trust Barometer, conducted on a global basis, found that trust in business plummeted across the globe after the 2007-08 financial crisis.





Building an organisation’s reputation for trustworthiness can take a long time and requires considerable effort and investment. But what happens when a crisis or scandal hits an organisation and its reputation for trustworthiness comes under sustained threat? Recent examples include BP, News International, Castlebeck Care Homes, several banks and Foxconn. The process of trust repair and the recovery of reputation can be arduous, but it is achievable.

Click here to read more on Organisational Failures and Trust Repair


A Case Study on Framework for Organisational Control Principles

A Case Study about Framework for Organisational Control Principles

Abstract: Just as organisations have goals describing their primary business objectives, they also have goals with respect to controlling how these objectives are met. These are the control goals of an organisation which are enforced through a system of internal control. Such a system enables them to adhere to external laws and internal regulations, prevent and detect fraud and continuously enhance the overall quality of the business. Independent of the type of organisation, these internal control systems use common underlying principles to establish and achieve control over business activities.





Introduction: Error and fraud can lead to losses of any kind. Identifying, establishing and maintaining the appropriate controls can help to prevent and detect such errors and fraud. When Nick Leeson brought down Barings Bank after running up losses of £862 million on unauthorised trading in derivatives, a lack of control became painfully obvious. However, at least in the financial area little seems to have been done, as is documented in the case of John Rusnak, alleged to be responsible for a £500 million fraud when trading currencies at an US subsidiary of Allied Irish Bank in early 2002. When interviewed about Rusnak’s case, Mr. Leeson said that the deals at Allied Irish Banks’ US subsidiary showed similarities to his own 1995 scandal in Singapore.

Click here to read more on Framework for Organisational Control Principles


Case Study on Ethical Breaches at News of the World

The case discusses the questionable practices which were common at the tabloid and which eventually led to its fall. The newspaper resorted to hacking phones and bribing police officers in order to publish juicy news. The public backlash over the phone hacking scandal led to a dip in its advertising revenues and ultimately paved the way for the shutdown of the media giant.

News Corp. and its senior management came under severe criticism following this scandal. Though News Corp. had released a code of ethics in July 2011 and distributed it to all the employees, experts opined that the real challenge before Rupert Murdoch and the senior management was how to enforce this code. This case is aimed at MBA level students as part of the Business Ethics and Corporate Governance curriculum. Click here to read more…

Register to mark your Comments

A Case Study on Boeing Company Derivative Class Action

Let’s just say the 21st century didn’t launch smoothly for the financial markets. To be sure, in the wake of Enron and WorldCom, the public was dizzied and disenchanted with each new story of corporate misconduct. That dismay was particularly severe when news broke about the procurement scandal involving the Boeing Company. One of the largest manufacturing and defense contractors in the world, Boeing was entrusted with some of the most significant and sensitive government contracts. It was a darling of US enterprise, a poster child of industrial ingenuity. Nevertheless, in 2006, the company paid $615 million to settle government investigations into allegations that the company’s top leadership had failed to properly oversee operations. Click here to read more…



Register to mark your Comments

WorldCom: from Benchmark to Bankruptcy

[youtube]http://www.youtube.com/watch?v=7g_d-phoUrU[/youtube]Verizon Communications acquired MCI/WorldCom and SBC Communications acquired AT&T Corporation, which had been in business since the 19th Century. The acquisition of MCI/WorldCom was the direct result of the behavior of WorldCom’s senior managers as documented above. While it can be argued that the demise of AT&T Corp. was not wholly attributable to WorldCom’s behavior, AT&T Corp.’s decimation certainly was facilitated by the events surrounding WorldCom, since WorldCom was the benchmark long distance telephone and Internet communications service provider. Indeed, the ripple effect of WorldCom’s demise goes far beyond one company and several senior managers. It had a profound effect on an entire industry. Read more…

Register to mark your comments

Register to mark your comments