- May 7, 2014
- Posted by: essay
- Category: Term paper writing
In the result of Scrushy’s frauds shareholders lost billions of dollars, while the losses of investors exceeded $2,5 billion. In this regard, it is important to take into consideration that, from the ethical point of view, Scrushy was responsible for the stable performance of the company and shareholders trusted him because, as the Chairman of the Board of the company he was supposed to take care of the well-being of the company above all. However, in actuality, he just neglected the company for the sake of personal benefits and profits. Therefore, Scrushy’s actions were absolutely unethical in relation to the company’s shareholders. In fact, he focused on his personal interests solely as he pursued maximum profits for himself, neglecting interests of shareholders. In such a way, he ignored pointblank his ethical responsibility in face of shareholders.
Furthermore, crimes committed by Scrushy were eventually uncovered and they resulted in the ruin of the HealthSouth. In this regard, employees of the company suffered from the criminal activities of Scrushy. At this point, it is worth mentioning the fact that his criminal actions ignored interests of employees as he ignored interests of shareholders. Scrushy did not care about employees, although he was obviously conscious of consequences of his actions. The investigation and the further accusation of Scrushy were not the only reasons why the company failed. At this point, it is important to place emphasis on the fact that consciously or not but Scrushy led the company to the dead-end, while the downfall of the company would mean the loss of jobs for employees. His criminal activities aimed at hiding the actual financial position of the company. Scrushy attempted to attract new investors to enhance the financial position of the company and he used bribes to take office in the executive power to protect interests of his company. However, such actions could not bring positive outcomes in a long-run perspective because Scrushy failed to introduce any changes that could have improved the performance of the company. Instead, he used frauds, accounting schemes and bribery to persuade investors and the public in the stable position of the company in the market.
Obviously, Scrushy led the company to the dead-end but he failed and he did not really want to provide employees with effective compensation plans. His only goals were his personal benefits and profits. Therefore, he violated his ethical responsibility in face of his subordinates, whom he neglected and ignored pointblank. As the leader of the company, he was supposed to conduct responsible policies and take care of his subordinates. Instead, he led the company to the ruin, while employees to the unemployment (Bartlett, 2005). Obviously, such outcomes of his work were disastrous for employees and undermined fundamental moral values of the company as well as employees because employees traditionally expect that the company provides them with jobs at the least, while the HealthSouth was ruined because of the ineffective policies conducted by Scrushy and his fraudulent activities and corruption.
In addition, other companies were also affected by the HealthSouth scandal. In fact, the HealthSouth was a reliable company and its unexpected ruin affected consistently the market because the downfall of the company provoked panic in the financial market, which though did not become large scale. Otherwise consequences of the ruin of the HealthSouth would be disastrous for the national economy. Nevertheless, the ruin of the company provoked instability in the financial market and naturally huge financial losses of shareholders of the company (Jennings, 2006). Scrushy was unable to prevent the downfall, while his criminal activities aggravated the downfall of the company. Other companies were affected by the deterioration of the situation in the financial market.