2.7 A short history of the corporation  (Page 6/7)

Exercise two: how to punish arthur andersen

Watch the documentary, "the smartest guys in the room," paying special attention to the role played in the enron fiasco by the accounting firm, arthur andersen. then answer the following questions.

• How important should AA's former, excellent reputation have been in determining how to punish it in the role it played in the Enron case? Explain your answer.
• Enron was only the last of a series of ethics scandals that AA had fallen into. How should it have adjusted to prior scandals? (Are the Federal Sentencing Guidelines of any help here?)
• Consider that Sarbanes-Oxley was passed largely in response to Enron. Do its provisions go far enough to prevent future Enrons? Do they go too far?.
• Using the table that summarizes punishment options provided by French and Fisse, how would you construct a punishment for Arthur Andersen? Who should be targeted? Should the company's black box be left alone? Is it better to attack financial or non-financial values? Should Arthur Andersen and other corporate offenders be encouraged to reform themselves or should those reforms be designed and directed from the outside?

Exercise three: group cid structure

Corporate internal decision structures

CID Structure licenses (permits) a re-description of a human action as a corporate action if it can be directly related to all elements of the corporation’s Internal Decision Structure.

Thus x (an action performed by an individual) can be re-described as y (a corporate action) if…

1. It carries out a corporate policy as outlined in the charter, mission statement, or values statement
2. Takes place in accordance with a decision recognition rule
3. Is performed as a part of carrying out a corporate role
4. And this role has a clear and designated location in the corporate flow chart

Your challenge

• Outline your group’s Internal Decision Structure
• Create a Group Internal Decision Structure

Answer these questions

• What are your group goals ? What have you do so far to realize these?
• What rules help us to recognize a decision as belonging to your group? Procedure for realizing value of justice
• What group role(s) are you playing? Leader, spokesperson, mediator, secretary/documentor, devil’s advocate, motivator, conscience.
• What is your organizational flow-chart ?Horizontally or vertically organized?
• How are your roles coordinated and synthesized? What procedures subordinate your individual actions under group intentions?

Review and update your preliminary group self-evaluation for ethics of teamwork

• Goals : What are your value goals for the semester?
• Recognition rules and procedures : What rules and procedures signal when you are acting for your group? (When are you subordinating individual interest to group interest?)
• Roles : Leader, spokesperson, mediator, secretary/ documentor, devil’s advocate, motivator, conscience
• Flow chart or management system : How do you coordinate different individuals and their roles?