Ethical Standards in CIMIC Group - Case Study Example

ETHICAL STANDARDS IN CIMIC GROUP (Student Name) (Course No.) (Lecturer) (University) (Date) INTRODUCTION The ethical practice has become an integral component in the activities and daily practices of every organization. The modern society is quite attentive to observe the dealings which normally happen within and outside such companies, business, and organization. The ethical codes of conduct are usually put in place to govern the individual activities of the members of the organizations and also to regulate the activities of the general organization within others within the global market. Many modern companies and organizations have been compelled to strictly abide by ethical standards as one of the requirements for prosperity and success (Bowie 2017). For example, the production companies have been forced by the ethical needs to ensure that they observe their immediate environment and the social environment to ensure that they have a positive impact and also to gain the confidence of the clients and customers. Many countries have therefore come up with laws and regulations to enforce and regulate ethical standards within companies and businesses. One of such legal bodies is referred to as the International Anti-bribery Convention which helps in regulating and preventing corruption as an unethical practice in the modern organizations. Signatories to such bodies are mandated to prevent and report any unethical practices within their countries so as to help corruption practices in the local and international companies domiciled within their borders. This paper seeks to investigate the unethical and ethical practices of immense corruption cases in CIMIC Group which has been one of the alarming issues in the recent years. Several reports have indicated major corruption cases among members of the management of this company among many other unethical practices. This study therefore seeks to evaluate such cases and recommend better ways through which the company may improve its reputation from the scandals. Ethical standards at CIMIC Group CIMIC Group, formerly known as Leighton Holding is one of the leading and well-known internal contractors. The company which operates in Australia has an active contracting role in several industries such as engineering, telecommunications, building and property, infrastructure and in mining industries. It also has operational bases in New Zealand, Middle East and in South East Asia. The company has been successful over the issues due to its immense success in its activities and the ability of the management to position the company in a more stable operational niche. This has made it earn high accolades both in the Australian and internal markets (Velasquez et al. 2002). Despite its excellence in some operations, CIMIC Group has continually suffered from immense ethical accusations and questions. The company has set out various codes of practices and ethical regulations which are meant to guide the members and the company towards better operations. For example, the company envisages the principle of integrity and honesty as paramount within its codes of conduct. Further, the group has consistently indicated a commitment to quality performance, honesty to information and the clients as well as suppliers and integrity at all these levels. However, all these have been under suppression in the recent years. Several reports have emerged which link the company to an array of unethical practices. The reputation has therefore been faded especially in regards to the expectation and the former image built and expected of the company by the immediate society (Bachelard &McKenzie 2016). One of the issues challenging the ethical standards of CIMIC Group and which has immensely affected the reputation of the company regards the issue of corruption. The manners in which the management and the stakeholders of the company have been handling resources have attracted public attention. Several media reports have been advanced towards addressing these issues. The Australian government has since received several allegations implicating CIMIC Group to matters of corruption. However, critics argue that little has been done to address the matter despite public uproar. The concern started in 2013 when media reports cited the then acting CEO of the company known as David Stewart made a revelation of corruption scandal by the members of the executives. The reports indicated that the executive members in Iraq had mad fraudulent and corrupt dealings with a company known as Unaoil. The dealings occurred in 2010 when Russell Waugh and Peter Cox wh9o were top executives I the company made fraudulent payment to a tune of $5.6 million to the bosses in Iraq. The other major scandal pitched the then executive of the company known as Peter Gregg who allegedly made fraudulent payment of $15million to the same firm in Iraq for the supply of steel. No single supply was made, and the money was therefore lost in the middle of this scandal. The other scandal involved one of the subsidiaries of the company referred to as Thiess which had to bribe and receive a tender with a whopping bribe of $16 million to will the coal supply tender of $6.8 million (Braithwaite 2013). All these unethical practices happened within the auspices of the regulatory authority of Australia. Several media reports ran on these issues. Concerns were made, and the various stakeholders of this company have been seeking on better ways to redeem their investments. Therefore, CIMIC Group has suffered immense corruption scandals, and this has brought about damage to its reputations. The suppliers and the customers have consequently shown less interest in dealing with the company due to its unethical dealings. Besides, the position of the company in the internal market has dropped due to these allegations that have a great reputation to the image and the reputation of the company. The media reports about CIMIC Group have promoted the public awareness created and built on the dealings of the company. For example, Fairfax press in Australia has been forefront in reporting some of the inside dealings which are corrupt and damaging to the reputation of the company. Most of these revelations came from the press and other media houses. One of such regards the investigation that was being carried out of the company’s executive known as Gregg after making an offshore payment of about $15million. The allegation concerned the fraudulent payment mad to one of the leading Asian firms known as Asian Global Projects and Trading back in the year 2011. All these reports have drawn ethical concerns to the activities which occur in the company. Many people such as the stakeholders and even the immediate society have been highly concerned with the need to continue trading with the company in the sight of all these corruption scandals. Several researchers have argued that the corruption cases have highly contributed to the reduction in performance currently witnessed in the holding company. Many customers have opted for alternate service and product providers as opposed to remaining loyal to the corrupt dealings of CIMIC Group (Trevino & Nelson 2010). Case examples Ethics has been one of the matters of concern for a long period. However, the modern society seems to be much concerned and greatly influenced by the ethical standards observed by an organization before actual trading and relations are done. Some of the ethical concerns raised include the need to protect and conserve the environment, limiting or reducing wastages, avoiding high costs of items and protecting the social culture of the community. Others include giving back to the society through social responsibility practices studies reveal that the companies and the business which consistently engage in these practices have been highly preferred by the customers and other stakeholders as opposed to those who have little or no regard to ethical standards. One of such cases involves that the Patagonia company which started as a young and juvenile venture seeking to maximize its returns in the clothing industry. The clothing business is one of the highly competitive in the world and therefore attracts and sustains players with the ability to go through all the requirements within this industry. The company had maintained fewer returns and lower performance for a period close to twenty years. During this time, the company had not found out the reason behind the decimal performance (Beauchamp et al. 2004). It was until their changed their ethical standards and practices that they began to observe successful activities and positive returns. The society initially complained of high wastages by the company, cases of pollution and less concern to the environment and lack of social responsibility by the company. This made the company to engage and inculcate all these ethical concerns to its daily practices. The returns posted and the levels of productivity increased exponentially since the society and the stakeholders at large accepted the ethical practices bringing an impact to the overall performance in the company. Some of the successful companies in the modern retail and manufacturing industries such as Wal-Mart had to make, and a turn-around on their ethical activates. In the year 2008, Wal-Mart embraced the environment concerns which had usually been one of the pivotal issues in the immediate society. Many people argued that the retailer had less concern towards the natural environment by not controlling pollution and doing little to concern and protect the environment. In fact, the reputation of Wal-Mart was put to question on this basic. Therefore the organization embraced policies and activities aimed at embracing the need to conserve and protect the natural environment. The reduction of pollution and going green became top priorities in the organization. Actions that need to be taken by CIMIC Group to remain an ethical player The main unethical plague which is affecting the company at this moment regards the cases of corruption in its management. In the recent years, the company has sought to change the face of its management. In fact, it has brought in a new breed of managers so as to signal the efforts to fight the scandals and bring back the positive image that the company had. However, studies reveal that this has had little effect on the reputation concerns. The former managers and executives continue to be followed be these cases despite their move to go to other employers. One of the ways through which CIMIC Group need to redeem its reputation is by inculcating strict measures against corruption including commencing legal suits against the executives alleged to have engaged in these practices. The legal provision needs to extend to the former companies who are sitting pretty in the officers of other employers after defrauding the money of the company. The policies need to be put and enshrined into the codes of practices and every staff be made aware of these changes (Christensen et al. 2007). This will help restrain any employee or even senior members of the organization who would have wished to engage in corrupt dealings. The modern society usually needs to see action done rather than rhetoric and mere paperwork. The CIMIC Group need to commence legal suit against the former executives who have been reported to have engaged ion massive looting and corruption to defraud the company. The public would be interested to see the legal steps taken by the company itself and not by concerned parties such as concerned citizens. This entails forwarding such cases to the Federal Police so that cases may be commenced against these fraudsters. This action will help redeem the public image of the company and also signal to the public on genuine efforts by the management to get rid of any corrupt member of the company (Crane & Matten, 2016). Besides, CIMIC Group needs to continue promoting some of the ethical practices within and outside the company. Many people are usually concerned with how the companies engage in their activities given other ethical considerations. For example, CIMIC Group needs to inculcate better and more robust ways of build societal confidence through engaging in social responsibility activities. These entail the need give back by assisting the members of the community and also promoting endeavors such as supporting education for the needy. The other area is through promoting environmental awareness and conservation practices. For example, the concept of environmentalism has become common in the modern businesses and organization. Every player seeks to integrate the green effect in its practices. Therefore, CIMIC Group needs to go green on the kind of its services and products so as to signal on its efforts to remain compliant with the need to protect and conserve the environment. The management of the company needs to offer a change in its structure so as to allow for better policy implementation and action regarding the conduct of the executives. Most of the unethical considerations which have been reported in the company were generated by people sitting at the helm of the company. Therefore, it would be a product to advance the kind of policies and the kind of checks done at the managerial level. For example, better accounting systems and structures need to be introduced to allow for regulated authorizations, spending, and usage of resources in the company (Ferrell & Fraedrich 2015). The management needs not to have a single hand in allowing the use of money in all cases such as allowing and authorizing the expenditure. All these need to pass through an intensive system and process to allow other levels of authority to scrutinize and make recommendations on the need to allow for expenditure. This would help reduce the cases involving the manager or a member of thee executive using the company’s money to facilitate and promote fraudulent payment. Besides, it will also help in promoting checks and balances in the manner of resource use and consumption (Hoy 2014). Need of Australia to overhaul its Anti-Corruption Law There are a legal structure and existing laws in Australia regarding the anti-corruption cases and activities. Most of the companies domiciled and resident in the country are aware of the implication of various snippets of the Anti-Corruption Law. For example, most of the local companies in Australia have been successfully regulated by these laws. However, the concern is one the Multi-National Companies which have been registering unethical practices in the country. Most of these companies shave their branches and head offices in other countries and are therefore less bound by the laws in Australia. This paper recommends a great overhaul on the existing Anti-Corruption Law in Australia so s to enforce ethics, especially in the MNCs. Recent cases have pitched most of the MNCs as less bound by these laws since most of them are regulated by their codes of conduct and laws of their host countries. Therefore, a lot of unethical practices have been promoted in Australia in the recent years due to t the existing legal framework. Overhauling these laws will give Australia much power to enforce adherence and observance of Australian laws by the MNCs. Conclusion Ethics have been used to guide on the right and moral practices expected of individual and organizations within the society. The current society is quite aware of the need to be ethically positive so as to be successful in the society. Therefore, most companies, businesses, and organizations have sought to be relevant and maintain their ethical considerations so as to be ethically responsible (Joyner & Payne 2002). This paper sought to establish the ethics standards prevailing in CIMIC Group. The corruption cases have stood out in the recent past as the issues affecting the reputation and success of the company. This paper, therefore, sought to evaluate these concerns and further develop recommendations for improvements. References Bachelard, M. and McKenzie, N. (2016). Leighton: an entrenched culture of corruption?, The Sydney Morning Herald, 6 April (Available at http://www.smh.com.au/business/leighton-an-entrenched-culture-of-corruption-20160406-gnzstl.html)  Beauchamp, T. L., Bowie, N. E., & Arnold, D. G. (Eds.). (2004). Ethical theory and business. Bowie, N. E. (2017). Business ethics: A Kantian perspective. Cambridge University Press. Braithwaite, J. (2013). Corporate Crime in the Pharmaceutical Industry (Routledge Revivals). routledge. Christensen, L. J., Peirce, E., Hartman, L. P., Hoffman, W. M., & Carrier, J. (2007). Ethics, CSR, and sustainability education in the Financial Times top 50 global business schools: Baseline data and future research directions. Journal of Business Ethics, 73(4), 347-368. Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press. Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases. Nelson Education. Hoy, G. (2014). Australia ‘failing’to tackle bribery by multinational companies: OECD. ABD News. Joyner, B. E., & Payne, D. (2002). Evolution and implementation: A study of values, business ethics and corporate social responsibility. Journal of Business Ethics, 41(4), 297-311. Trevino, L. K., & Nelson, K. A. (2010). Managing business ethics. John Wiley & Sons. Velasquez, M. G., & Velazquez, M. (2002). Business ethics: Concepts and cases (Vol. 111). Upper Saddle River, NJ: Prentice Hall. Read More