CHAPTER 5 | MANAGING SOCIAL RESPONSIBILITY AND ETHICS CASE APPLICATION ee Meee ones ee Reece) ean eee confidence that threw fina eee ac Seen cs ete a ee Perc in the stories of Enron, WorldCom, and others. In a report released Sete ee ee eee) Cee enanes for actions that led to the firm's collapse. He said, “Lehman feat ee ec ee ea pees ees Perce eee rents eee Cte ee ee er) 5 structure Excessive risk taking by employees was openly lauded and | ofics and handed out markers to ete ae en] Bar eenaonnetieuen nig Ce Ee ae un Ta ad bapa eleraprthidall eal Perera questioned decisions was often ignored or overruled, For instance, 0 Eee ee et efor preparing the firm's puble fn ee cea ee oS ee ee Cee She eet Sy ee oat. : Cee ecto Pee een reed Ree ee i ee Ce ered ee ee ea ee blems worse by ther conduct, which ranged from “serious but nonculpable errors of business judgment to See ee at eee cee ete ret nes at least grossly negligent in causing Lehman to fle misleading periodic reports.” These reports were part eee eee iter ant eT er ee eee a purpose or motive for Repo 105 transactions was reduction in the balance sheet, adding that there substance to the transactions.” Lehman's auditor was aware of the use of Repo 105 but did not challen De ee eee eae ees Ce te eee ae 147148 paRTTWO | INTEGRATIVE MANAGERIAL ISSUES Printed by Rob Pe Se ee eee a ne een eae ‘spokesperson from Ernst & Young (the auditor) sald that, “Lehman's bankruptcy was the result of a series of un- pee ee ee DUR 1. Deseribe the situation at Lehman Brothers from an ethics perspective, What's your Cea Ree rd What vas the culture at Lehman Brothers like? How did this culture contribute to the ees PEt ea Co een ee eT) Cee eee ed Could anything have been done ditferently at Lehman Brothers to prevent what aoe Afterall the public uproar over Enron and then the passage of the Sarbanes-Oxley Act to protect shareholders, why do you think we still cortinue to see these types of situations? Is it unreasonable to expect that businesses can and ehould act ethically? CASE APPLICATION than 8,400 stores globally, Walmart moves massive amounts of products and uses massive erounts of Pee eager eee en ee that’s seen as environmentally friendly. That's why the company’s announcement that it would cut comme 20 milion mettic tons of greenhouse gas emissions from its supply chain—the equivalent of removing more than 43.8 millon cars from the road for a year— got widespread attention. This announcament came a few months after Te eee eae een eee netics The first part of Walmarts three-phase plan was getting information from its more than 100,000 suppliers Using a 15-question survey about their greenhouse gas emissions, water and solid waste reduction efforts, ‘and other details about business practices. That information was received by October 2009, and the ‘second-phase process of entering it into a massive database began. The third phase involves getting all that {data eventually condensed into an easily understood universal rating system, similar to a nutrition fabel but focused on details about environmental and Social sustainability. However, it's likely that this effort won't be cre company that you'd think of as going green. As the world's largest retaller with more Coe Ee This isn't the company’s frst push toward being green. Walmart has started many environmental initiatives in recent years including improving the efficiency of its truck fleet and working with 20th Century Fox Home Entertainment, which produces DVDs, to cut greenhouse gas emissions by eliminating the plastic knob in the Ce ee en eee ee eee ria) ‘spend the time and money tracking and lessening thelr environmental impact. Essentially, suppliers are being asked to “examine the éarbon lifecycle of their products, from the raw materials used in manufacturing all the \way through to the recycling phase.” Although supplier participation was not mandatory, Walmart made it clear that it was interested in doing business only with suppliers that shared its goals. The company is also Cee eee Scr ee ee net eee) Sustainability Centerat the University of Arkansas, and the Carbon Disclosure Project. These groups will advise Ree eee ee eee