Monday, August 07, 2006


What’s common between Exxon-Mobil, Wal-Mart and GE besides being the only three to have ever occupied the top spot on Fortune 500 list of top global corporations? Well, they have all been booked during the course of their glittery past for ‘unethical’ acts! And there are many more names to add to the gang of unethical practitioners! The latest is Microsoft , which was fined $357 million on July 12, 2006 by EU for its unethical, monopolistic act of ‘non-code sharing’? Microsoft , of course, is an instance o fl outing norms to protect market leadership. More shameful have been stock market frauds for petty personal gains.

The twenty major frauds since 2002 eroded a cyclopean $236 billion from shareholders’ wealth’! The biggest losses ever, due to corporate frauds were in Tyco ($84.2 bil billion), Lucent ($55.5 billion), WorldCom ($26.9 billion), Enron ($25 billion) and Xerox ($9.8 billion). Most astonishingly, according to a Price Water house Coopers’ Global Economic Crime Survey 2005, 62% of larger companies have been victims of frauds, as compared to 36% among smaller fi rms. Other famously infamous instances of fl outing norms are Hyundai Chairman Chung Moong Koo’s arrest for bribery, Samsung’s fixing of chip prices globally, Toyota selling SUVs that failed regulatory standards and Wal- Mart engaging in unethical pricing.

Rudy Hoskens, Director, Dispute Analysis and Investigation, PwC Belgium puts it thus, “It will probably not be possible to rule out economic crime, but a company can at least create an environment where ethical behaviour is discouraged.” But then, why are we so hard on the companies? They face gargantuan pressures to perform, and have to strive to create shareholder value. The Devil’s Advocate forever beckons the corporate bigwigs to bend the rules here and there, be it to protect market share, drive down costs or make some quick dough. And they do tend to succumb every now and then to the temptation. It’s up to the law of the land to protect the people.

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Source:- IIPM-
Business and Economy, Editor:- Prof. Arindam Chaudhuri - 2006

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