Culture : Weston Smith And The Ceo Of The Healthsouth Organization Sat Richard Scrushy

In the case that was presented in this week’s case study, the focus was placed on St. Michael’s Health Centre, the CEO of 7 years, Kevin Cowan, and the transformative culture due to a change of leadership styles. Prior to Cowan’s reign as CEO the work environment was hostile, unproductive and combative. The efficiency was at an all-time low and was hemorrhaging money at an accelerated rate. During Cowan’s time at St. Michael’s Health Centre (SMHC), he was able to encourage the repair of broken relationships, raise morale and transformed the business into a working and successful one. The stakeholders involved covers a wide range; the most obvious being the employees of St. Michael’s Health Centre and the customers they serve, but it also influenced the health care unions, Chinook Health Region (CHR) employees, the media and the family and friends of patients being cared by SMHC. With the increase of employee morale, one can also argue that those affected would also reach the family and friends of SMHC’s employees and the community as a whole.

Namaste had great values for their company culture. They were dedicated to creating and collaborating equitable culture by open-book management, democratic decision-making, and a meritocratic system where the employees assumed responsibility based on demonstrated knowledge. They were driven to create a work place that well balanced, continuously learn, laugh, have fun and love what they do. Unfortunately, Namaste failed to execute good company strategy as it relates to their mission by not caring for the company and themselves both financially and relating

One of the main defenses E&Y took during the early stages of the HealthSouth suit was the fact that the SEC had no well-defined rules with regards to audit-related practices. Another defense was the mere fact that E&Y never faced a criminal indictment for the HealthSouth fraud. This was mainly due to the statute of limitations placed on securities fraud. It sets it at the earlier of (a) 2 years after the discovery of the facts constituting the violation or (2) 5 years after such violation. Thus, the DOJ was unable to file criminal charges against the firm because the partner on the audit (G. Marcus Neas) was “unaware” of the fraud in 1993.

Organizational misconduct is the chief cause behind corporate accounting scandals. The trusted executives of the corporation participation in actions during a scandal are corrupt and illegal. In the United States, the Securities and Exchange Commission (SEC) is typically the government agency that investigates such scandals. One of the most notorious corporate accounting scandals in the United States is the HealthSouth Corporation scandal of 2003. HealthSouth Corporation is one of the United States largest health care providers with locations nationwide. A deeper inspection of the HealthSouth scandal is needed to understand how it transpired by assessing how it was executed, the accounting issues and root of the issue, how it was exposed, the results to the company and its officers, and warranted ramifications as an outcome of the scandal.

Richard Scrushy defrauded, stakeholders, stockholders, and the community out of millions of dollars. His deceptive, unethical, and commanding behavior was the stone that caused the biggest misappropriation avalanche of all time. We must consider this question, how is corporate cheating happening and who is heading the deception? Behind every crime, there is a ringleader or a group of individuals "calling the shots." In this case, Scrushy was the one who told his "family meeting members" to "fix" financial records, so HealthSouth to meet or exceed the business financial goals. A person from the beginning may have the objective to cheat; others get sucked into the whirlpool of white-collar crime.

Were there any early warning signs that may have predicted this type of behavior in Mr. Scrushy? “Perhaps what we need is a scale for measuring the moral development or character of the officers to whom the financial status and reports of the company are entrusted” (Jennings, 2005, p. 44-45).

This case analysis is based on the events that occurred on March 13, 2001 and the days that followed at Cerner Corporation. On that day the Chief Executive Officer of Cerner Corporation, Neal Patterson, sent a memo to the company’s managers via e-mail. In the message he advised the managers of his disgust with their disregard of punctuality and work ethic which he felt was as a result of the managers’ lack of leadership skills. The e-mail message was later obtainable for viewing on the Yahoo website to the public, including existing and potential investors and stock market analysts.

This now bankrupt company, misappropriated investments, pension funds, stock options and saving plans after deregulation and little oversight by the federal government. However, with deregulation an increasing competitive culture emerged as the CEO Jeffry Skilling motto to his organization was to “do it right, do it now, and do it better” this was the rally cried that pushed ambitious employees to engage in unethical behavior as Enron use deceptive “accounting methods to maintain its investment grade status” (Sims, & Brinkmann, 2003, pp.244-245). As Enron continued to flourish and received accolades from the business community this recognition drove executives to continue the façade of bending ethical guidelines before their public fall from

HealthSouth Corporation was one of the largest publicly traded owners of rehabilitative hospitals within the Untied States and paved the way for its industry. However, prior to 2003 the company had a very dark secret: fraud. In 2003 HealthSouth was accused of making $2.7 billion in false journal entries in the company’s system (Helios, 2013). These false entries allowed the corporation to inflate its earnings and revenue. While the corporation was dabbling in a fraudulent, aggressive account system, auditors were unable to detect the extent of the fraud occurring. If not for Michael Vines and Weston Smith, HealthSouth Corporation might have continued its false entries and continued deceiving shareholders and even Wall Street itself. HealthSouth serves as a historical example of how corporate culture can use fraud and deception schemes to not only rationalize what it is doing, which is an element of the fraud triangle, but also encourage fraudulent financial statements.

Employees at HealthSouth were afraid of losing their jobs, and most of them rationalized the fraud as it is an only small adjustment, it will be okay. Weston Smith, the Chief Financial Officer at the time, was a willing participant in "cooking the books." He rationalized the adjustments as a one-time thing; that was not to happen again. However, his deceitful behavior continued. In the end, his conscious got the best of him and by early 2000s he went to the feds with a personal account of the

What are the pressures that lead executives and managers to “cook the books?” There are several factors that can come into play. For WorldCom, it started with the deterioration of the industry in 2000. This was due to overcapacity, heightened competition, the economic recession, the dot-com bubble collapse, and a reduced demand for telecommunications services. All of these factors put extra pressure on WorldCom’s most important performance indicator, the expense-to-revenue ratio. The company was so concerned about keeping it above 42% that they were willing to do anything, even commit fraud. Bernie Ebbers told the senior staff that they would lose everything if the company did not improve its performance.

HealthSouth executives were like family that had loyalty to each other which made it easier to deceive and hurt a nameless mass of investors than the other members of their internal group. Scrushy created an environment and culture that every executive was to participate and remain quiet. He made it very clear to them that if one went down then all would go

On March 19 of the year 2003, Securities and Exchange Commission brought the trading of HealthSouth to an end on the New York stock exchange, charging the company for inflating its earnings by more than 10 percent and overstated its profits by more than $2.5 billion between 1999 and 2002. HealthSouth’s trading reached to $30.81 in the year 1998, but ever since the trading of the company has been put to an end it reached to $3.91 per share. One week later, Owens pleaded guilty to changing and editing the company’s financial statements.

From the time of WorldCom’s inception there always seemed to be a tradition in management as if the company was only 100 or so employees. There was a “good old boys” mentality among the limited few running the company and if you were outside that circle then were told only what they wanted you to hear. An unspoken rule among employees was to do what you were told without questions or risk the consequences. One example of this situation occurred when senior management member Gene Morse told an employee “If you show those damn numbers to the f****ing auditors, I’ll throw you out the window” (Kaplan, R.S., & Kiron, D., 2007, p. 3).WorldCom showed no concern regarding an employee’s need and obligation to voice concerns on matters related

Corporate culture involves how authority and work are organized; it also refers to how individuals are controlled and rewarded for their exemplary work, as well as social rituals, heroes and customers (Schein, 2010). Culture development is based on three elements of architecture. A significant example is Organo Gold. Organo is a well-known investment company that manages investors’ portfolio. The company suggested to its clients to purchase coffee, though, internally, economists knew that the stock decreased in price. They did not support the selling of the stock. Their ethical violation and deceit triggered shockwaves in the investment sector thus forcing the management to put up measures that curb any disaster. Organo Gold had developed a culture of mistrust, and deceit among some of its most trusted clients. It therefore seems that Organo Gold lacked one leg of architecture; the