1. Describe the situation at BAE from an ethics perspective. Whats your opinion of what happened here?

In the view of ethics perspective on the situation at BAE, what the organization did was considered as unethical. Although admitting their fault is the right thing to do, BAE is still considered as an unethical organization for concealing the unethical behaviour for 20 years and the crime that they did is obviously unethical. urthermore, as an ethical organization, BAE should be protecting the rights of all the shareholders and not manipulating the business trade and abuse the power that they have by placing their own interest above others or wor! in the interest of only some of the sta!eholders. "hus, in the view of an ethical perspective, BAE is clearly functioning in an unethical way.

"he crime done by BAE may happen due to numerous reason and the factors that determine ethical and unethical behaviour of the managers may play a significant role in the situation. #tarting with the stage of moral development, the BAE e$ecutives might not be in the highest level of moral development to actually uphold the ethical values of the BAE but is more tempted to react on his self interest by acting unethically.

"here are also other four factors that play important roles in causing the managers to react ethically or unethically. "he four factors are individual characteristics, issue intensity, structural behaviour and organizational culture. After what BAE had done, it can be concluded that the managers of BAE during the situation may have high ego strength as their characteristic, seeing the ethical dilemma as less intense than what other perceive. BAE organization probably has structural designs that was not too stringent and still have the loophole for the employees to conduct unethically. "hough the culture in the BAE organization holds the values of practicing ethical behaviours%proved by the presence of the whistleblower&, the culture may not be as strong to influence the ethical values to their employees. "hese are the four factors that determine the managers' upon ma!ing an ethical decision or vice versa.

2. What was the culture at BAE li e? !ow did this culture contribute to the companys role in this episode? "here are many main factors that determine organization culture. Even though this culture won't to be e$plicitly said or written, it has obvious effect on organization ethical behaviour. (aving a god, strong ethical culture in an organization can help to aid the limitation and the vagueness that the law provides. )ules and regulation does help to

guide a company to act unethically, but as time passes by, more changes will bring new ethical dilemma for the managers to resolve and the law may become vogue because the rules cannot be applied on the ethical dilemma. (owever, if the culture of the company is strong in ethical behaviours, the employees will !now at least have the gist of which is the most ethical solution out of all the possible alternatives. BAE'# culture emerges from its view for its social responsibility. BAE's adopts classical view of social responsibility, which says that manageress's only social responsibility is to ma$imize organization's profit. *rganization's focus on financial profit has driven the firm to be in +uestionable ethically situations. ,oreover, according to what has mentioned in this case, the firm has stepped farther unethically and used intermediaries and shell entities to conceal payments to advisors who were assisting in the deal.

". What role did BAEs e#ecutives play in the corruption alle$ations? Were they bein$ responsible and ethical? Discuss.

"op managers play significant role in their organization's ethical or unethical behaviours. In fact, top managers are the ones who are responsible for whole organization ethical issue for certain reasons. irst, they are the one who promote the good values and organization culture. #econd, they are a role model for organization employee in terms of what they say and what they do In BAE's case, the e$ecutive by that time was -ohn .eston who upheld organization's concentration on ma$imizing profit rather than paying much attention to ethic values. "hat's where most suspicious deals ta!e place in his management period. ,oreover, -ohn .eston himself travelled along with Evans, )ichard /apthorne and his successor ,i!e "urner, who is current 0E* of BAE, to Bermuda to sign the Al 1amamah contract with #audi Arabia, which is the most ethically suspicious contract BAE has signed. /ater in 2020,when ,i!e "urner too! over as 0E* for the organization, the organization ta!e their social obligation and agreed to lesser charges of false accounting and ma!ing misleading statement. As top managers are the models for their employees in terms of professionalism and credibility at their wor! ,all wrongdoing and unethical behaviour has sent a negative message to the employees. as a result the transparency and trust in the organization would be 3eopardize .moreover employees themselves would got the implicitly principal that ethical behaviour has less priority than it shown when it comes to practical field . ,ore importantly , these actions will turn over time to be the culture of the organization . #ince one of the factors that contribute to organization culture is from the action of the top management, the unethical behaviours will if not much then a bit will impact the culture of the BAE towards unethical behaviours as well.

%. &ould anythin$ have been done differently at BAE to prevent what happen? E#plain. All BAE's problems could be prevented by enhancing and encouraging ethical behaviour for the organization. In chapter 4 there are si$ mechanisms that manager can apply in order to improve and encourage ethical behaviour among an organization's employees. "he mechanism are hiring employee with high ethical standards ,establishing code of ethic ,which is a statement of an organization's values and the ethical rules it e$pects employees to follow , setting up comprehensive ethic programs , having leadership that enhance and encourage ethical behaviour ,avoiding unrealistic goals ,providing ethic training ,hiring independent social audit, and setting a protective mechanism for ethical dilemmas. 0hoosing the proper mechanisms BAE could encourage ethical behaviour and prevent what had happened. *ne of the mechanism BAE's manager could apply to enhance ethical behaviour is by creating a more stringent code of ethics, which e$plicitly draws clear lines for values and ethical rules which organization's employees are e$pected to follow. #uch a statement would give a clearer view for employees for what is acceptable and unacceptable ethically in ambiguous situations. In fact, even when BAE's employee try to follow the organization view of ma$imizing organization profit, they would consider the ethical code of the company to limit any unethical action. ran!ly spea!ing, there is no single methodology that can be used in every situation that arise, different situation should be tac!le differently and sometimes the law given might not be unusable in the situation. (owever, by providing a more specific rules and guidelines, it might help to provide the direction and criteria that can aid the decision ma!ing to be more reasonable and responsible. Another way that could sustain organization ethic is through the nomination of leaders who have high ethical responsibility ."op managers plays a great roles and their decision and actions effect heavily on organization culture. If BAE's managers behave ethically as a role model in terms of their words and actions, it would send a positive signal to the employees and it will be very hard for any employee to thin! about corruption as a way to ma$imize organization profit. 5nfortunately top managers in this case were in a +uestionable ethically situation. "hird mechanism that could change BAE situation is by setting reasonable and achievable goals, for unrealistic and unreasonable goals could create a lot of pressure

on employees and drive them to neglect ethical behaviour to achieve what is e$pected from them. #etting up seminars, wor!shops and ethic training program also would help improving BAE's employee's ethic awareness. Although some may argue that it is pointless to do so because people already develop their value system when they are young, seminars and wor!shops on ethical training can help to provide e$tra !nowledge and awareness on the ethical conduct in business dealings that the employees might not be e$posed to before. ,oreover, BAE could also hire independent social audits to help them monitor and evaluate their ethical performance. "he fear of being caught is very successful method to prevent people from wrongdoing and motivate them to monitor their behaviour ."his mechanism wor!s well with having code of ethics. It may act as a tool to guarantee that ethical code is applied and are always in the employees' consideration as actions and not 3ust a written protocol.

'. Why do you thin we still see these types of situations? (s it reasonable to e#pect business to act ethically?

6espite the public outrage on Enron misdeeds, the number of regulation and act implemented to improve ethics in business transaction %eg7 #arbanes8*$ley act& and the numerous campaign that stressed on the importance of acting ethically, the issue of unethical practices made by managers at all levels in all !inds of organizations still made to the newspaper headlines from time to time. "he issue unethical practices by organization still arise for a number of reasons, either they did it intentionally, unintentionally, or caused by the determinants that parta e in ethical and unethical behaviour.

Even though the managers are well e+uipped with the !nowledge on ethics, we should not underestimate the possibility of immoral choices and ethical behaviour they may chose. A manager can simply choose to do somethin$ unethical regardless of the !nowledge they have on of ethics. "his behaviour may come from the drive of $reed and fear of the individual.

,ost of the organizations got themselves dirty in unethical conducts due to the benefit that they e$pect to gain from the unethical trade. "hough a company may start as an ethical organization that and is concern with the social responsibility towards its sta!eholders, at some point a company will face a dilemma where it need to choose between standing steadfast with its ethical principles or earned a lot more benefits through an unethical trade. If the agent of the organization which is the manager got

carried away with profit8ma!ing, greed will start to build up and be a strong force for the manager to choose profit over principle. "he severity of greed as the ground of unethical approach was what made the introduction on the #arbanes8*$ley act in the first place and is hope to be the antidote to the problem. ear may also trigger a manager to act unethically, and it can come from various reasons. or e$ample, the fear of losing bountiful profits, the fear of failing to achieve the organization goals or the fear of missing career advancement may lead the managers to resort in unethical manners. #ometimes, a manager chose to behave unethically because it is easier to do the wrong thing rather than go through all the trouble to act otherwise. "here are many ways where responsible decision ma!ing can go wrong and people fail to act in accordance with the ethical 3udgments that they have made. )here are times where well*intentioned people fail to choose ethically due to some stumblin$ bloc s to a responsible decision ma in$ and behaviour . It is also due to this reasons that issues on ethical behaviour !eep resurface even though countless effort are doe to eliminate it.

*ne of the stumbling bloc!s that can account for a bad ethical choice is ignorance. "he i$norance of company policies and ethical conducts may result in unethical behaviour from the employee without them !nowing it. or e$ample, ta$ law, regulations about insider trading and similar arcane rule boo!s can be easily misunderstood and ine$perienced accountants or business people may engage in unethical behaviour without their awareness2. (owever, ignorance can also be wilful and intentional. "he manager sometimes deliberately stays ignorant to escape responsibility.

Another reason that may lead managers to ma!e unethical decision unintentionally is by only considerin$ limited alternatives. 5sually, when managers face an ethical dilemma, few clear solutions on how to solve the issue are already on his mind and it may include ethical and unethical alternatives. or instance, let say when faced with a situation, there are two clear alternatives resolutions for the problem. Instead of e$ploring additional methods to tac!le the situation, managers will often consider only these two alternatives on solving the problem and missed the possibility of having other alternative solutions.

A well8intention manager may also fail to choose ethically when they utilize the simplified decision rule, where managers 3ust simply follow one rule. or e$ample, a manager is at a place where he had to do some layoff in order to cut cost and there is no other possible alternative than to fire some employees. "he manager chooses to follow

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the <first8hired, last8fired= rule by firing the last wor!er he hired 2. Even though some may argue that the layoff of an employee should be based on something more concrete li!e the 3ob performance of the employee as the base of deciding who to terminate, the rule of thumb relieve the manager from the accountability of that decision.

,anagers might also choose the satisficin$ decision ma!ing method on deciding which course of action to follow. #atisficing is when a manager made a decision by selecting the alternative that satisfies minimum decision criteria even when it might not be the best option available. As long as the minimal re+uirement for the decision was achieved, then it is accepted as the most reasonable decision instead of loo!ing for other available option that that can ma$imise the outcome. Although satisficing did have the minimum re+uirement for the decision, it can lead to the behaviour of ethical behaviour without the manager's intention because the responsible way of ma!ing a decision is by ta!ing into account all the possible choice and pic! the one that can ma$imise the result.

*ther than managers being intentional or unintentional towards ma!ing the ethical decision, the determinants that influence mana$ers ethical and unethical behaviour also plays a big role in the occurrence of unethical behaviour done by the managers. "he first factor that influences the manager's ethical and unethical behaviour is the manager's sta$e of moral development. If the manager is only at the stage of pre8conventional in his stage of moral development, he is only motivated to do the right thing if the behaviour will benefit his immediate interest or avoid him from punishment. "hus, his perceptions when facing ethical dilemma is highly influence by his current stage of moral development and directly affect the ethical decision he is going to ma!e. "he higher the stage of moral development of the manager, the more incline he is to ethical behaviour. It can be said that the reason why unethical behaviour issue still happens despite the Enron uproar and #arbanes *$ley act may relate to the low stage of moral development among managers.

Apart from that, another variable that may also influence the ethical and unethical behaviour of the managers is the perception of the managers on the issue intensity. A manager have a high tendency of committing an unethical behaviour if only minority of people find the action is wrong, the manager find there is a less probability of harm from the action, if the harm won't be felt immediately, if less people are harmed, if the manager finds the concentration of effect to low and if the manager is not close to the victims. 6ifferent individual has different values and attitude, and this contribute to the differences of perception in the intensity of issue which in turn leads to the difference of perception on the decision being made.
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+tructural variable also plays as a moderator in manager's decision to behave ethically or unethically. If the design of the organization itself %eg7 goals, performance appraisal systems, and reward allocation resources& is high in ambiguity and uncertainty with few rules and regulations, it will gives the impression to the employees that the organization does not value ethics in doing business that highly. ,oreover, if the or$ani,ations culture does not instil the high ethical standards, it is unli!ely for its employees to do so. *n the contrary, even if the organization promotes a culture that encourage high ethical standards, but the culture in the organization is wea!, the problem of the employees to behave unethically is still there. Both of these factors may encourage employees to ta!e ethical behaviour lightly and increase the tendency of the employees to ma!e an unethical decision.

urthermore, another relating factor of why this ethical behaviour still happens is due to the differences in values and culture. "his problem ta!es place in the multinational corporation when business deals are done in numerous countries. or some countries an issue li!e bribe is seen as unethical and is not acceptable, however in certain countries bribe is acceptable that it has become a norm and is seen as a tool of doing a more efficient business. According to the "ransparency International@s 202> Alobal 0orruption Barometer, 6enmar!, inland, -apan and Australia are the countries which are tide as a bribe8ridden country while )ussia, Albania and Brazil are well !nown for the corruption problems>. "herefore, it can be predicted that if the countries that has different culture and values on bribery may have some conflict when doing business together. 6espite of numerous reasons for an unethical behaviour to still doing it appearance, the support for all business to act in ethical behaviour is not a lost cause. (t is still reasonable to e#pect businesses to act ethically. All it need is an organization with its citizen with high stage of moral development, the right plays of the determinants that influences the view of ethical behaviour, e+uipped with vast !nowledge of ethics and a high drive of reaching the highest ethical standards. "his might seem a lot to do and progress might be very slow but it is still achievable if the right strategy is used to tac!le the situation.

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