Awb Scandal - Bad Apples or Bad Barrels?

5663 Words Mar 29th, 2008 23 Pages
Executive Summary

Organisational factors or ÔÇÿbad barrelsÔÇÖ are said to have instigated many occurrences of corporate corruption and deviant behaviour (Wharton 2002, p 2), involving large numbers of active or passive participants; these are ÔÇÿrarely the result of a few bad applesÔÇÖ (Murphy 2007, p 7). The AWB case is a clear example of corporate culture and other systemic failures influencing and defining an organisationÔÇÖs decision making and its ethical posture.

This report addresses the underlying organisational causes of the AWB scandal, whereby AWB paid kickbacks to Iraq in defiance of the rules of the Oil-for-Food programme, instituted by the United Nations (Cole 2006) In so doing, it will consider the evidence and
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Analysis of the AWB case in this report, in conjunction with an ethical frame of reference, utilitarianism, looks to the pervasive organisational factors of culture and governance mechanisms to explain the scandal.
To bribe or not to bribe? That was the AWBÔÇÖs $300 million ethical question.

4. Framing the AWB case
4.1 Utilitarianism
This report examines the overwhelming impact of organisational and systemic failures on the ethical behaviour of those agents involved in the AWB scandal. As business ethics concerns how business agents ÔÇÿoughtÔÇÖ to act (Micewski & Troy 2007, p. 18), it is useful to have an ethical frame of reference when analysing the actions and outcomes in the AWB case. Utilitarian ethics is used as this reference point in the report, as it is recognised as underpinning much economic literature and government decision-making (Pickens 2005, pp.16-17).
Utilitarianism is an ethical approach that in its simplest form promotes the greatest good for the greatest number, or seeks to maximise the benefits over the costs. It is consequential in its focus, concentrating on what is considered a good outcome of an action relative to the groupÔÇÖs notion of good and bad - the outcome determines the ethical appropriateness of an activity. Within this framework, a business should seek to maximise its profitability, market power or other benefit to the least detriment of others. Self-interest is dominant, with something being done for a…

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