Table of Contents
Introduction
Board of executives at Olympus Enterprises was made up mostly of members who were terrified of voicing up against top directors of the organization. The culture at Olympus corporation, like many Japanese ventures, values loyalty. Olympus venture had a moral of maintaining mute and not rocking the boat. In April 2011, Michael Woodford became the first non-Japanese CEO and COO of Olympus association, and he was fired six months later on October 14, 2011. (Morgan, & Burnside, 2014, p.182).
Describing the Issue
In July of 2011, after Woodford was in the office for about three months, that Michael obtained an e-mail directing his awareness to an article in a Japanese Magazine (Facta) that indicted Olympus of monetary analysis fraud. Questions to Kikukawa, who was the chairman of the board of directors of Olympus, about the accusation against the corporation were not resolved absolutely. In early August, Woodford studied that others in the organization were obligated by Kikukawa not to convey him about the report in Facta. Kikukawa and other administration of the company began handling him hostile.
Therefore, in a series of letters to the councils, Woodford asked for data concerning the accounting transactions in question; he received no straightforward answer and was afterward discharged by the Board. Noticing that the likelihood of fiscal statement extortion was massive, Woodford blew the whistle on the management, uncovering the suspect businesses.
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Meanwhile, according to the 2012 communique to the Nations broadcast by the Association of Certified Fraud Investigators, financial analysis fraud is a scheme “in which a worker deliberately causes a misstatement or breach of material detail in the corporation’s fiscal reports. For instance, documenting fabricated revenues, underrating reported expenses, or insincerely inflating conveyed assets.” (Morgan & Burnside, 2014, p.175).
Identifying the Root
The communique declares that Tsuyoshi Kikukawa, former CEO and Chairman of the Council, along with a small group of the directors at Olympus, allured banks to aid them to obscure billions of dollars in losses, it is traditional in Japan for boards to be formed of individuals who have risen through the company ranks. The Olympus Corporation had been misrepresenting the value of the firm acquired and ha not accurately recorded losses collaborated to the acquisitions.
Cultural Factors of the Situation
Olympus Organization had a custom of preserving solemn and not challenging the status quo. Michael Woodford started a month after he was named president of the venture. It is the tradition in Japan for boards to be comprised of humankind who possess risen through the corporate ranks. The ethnic at Olympus enterprise, like many Japanese ventures, values adherence. Japanese culture places attention on composure and conformity. More emphasis is implanted on serenity than on integrity. However, the Japanese do not consider it a crime to deception if being truthful will cause agitation to others.
Japanese executives have been known to reverse against foreign directors who tend to have wronged them or are amateurish. A corporate moral that affirm profits and stock prices initiates a habitat in which managers feel tensed to manufacture supportive fiscal analysis. A collective ethnic of privacies integrated control, and a lack of clarity can offer the chance for extortion to be veiled. A developmental element that provides the CEO too much lead allows them the opportunity to conceal the fraud. (Morgan & Burnside, 2014).
Consequently, corruption is a universal occurrence, comprehensible only in its communal context. It can expatiate as anti-social character deliberating improper advantages contradictory to lawful and moral measures, and which impairs the jurisdictions’ capacity to protect the wellbeing of all citizens. For instance, based on my country (Nigeria) cultural history, even before independence. Zik as chief of Eastern Nigeria had been uncovered by the Foster Sutton Tribunal of Enquiry of 1956 into African Continental Bank (ACB) to have misused his position as head of authority to divert massive sum of Eastern Nigeran government funds into his bank, the ACB, thus tackling the bank’s issue of severe shortage of functioning capital and in the procedure considerably enhancing himself.
Furthermore, in the same area, the GBA Coker Commission of Inquiry of 1962 into six Western Nigerian Public Ventures admit numerous ingenious and audacious devices by which Awolowo and his assistants in the headship of the Action Team Institute of Western Nigeria enriched themselves and their party incredibly at the expense of the accumulated funds of the cocoa trading board, property of the whole civilians of Western Nigeria. (Osoba, 1996, p. 375).
Yes! The country aids the whistleblowing in that the informant has become more popular and part of Nigeria’s history, especially against corruption and fraudulent practices. Meanwhile, whistleblowing, the act of informing or leaking malpractices, is broadly proven to possess a morally needed mechanism in battling exploitation in the public and private sectors. Within the boundary of the blabbermouth scheme, the disclosure of corrupt practices is mainly acceptable only on the ground that the action is absolutely connected towards securing the interest of the public.
For instance, the Ministry of Foreign Affairs illegally removed an executive from work for exposing a monetary fraud of N 70.6 million (Naira) in the Directorate of Technical Cooperation in Africa (DTCA). The cash was drawn from the Nigerian Technical Cooperation Finance abode with the African Growth Bank (AFDB). The officials withdrew the money under the pretense of commemorating the 10th anniversary of the Nigerian Technical Cooperation Finance (NTCF), which was budgeted $36,852.00, and monitoring of different plans being implemented from the Trust Fund across Africa. (Ifejika, 2018, p.6).
References
- Ifejika, S.I. (2018). The other side of Whistleblowing Practice: Experiences from Nigeria. ROLACC. https://www.qscience.com/docserver/fulltext/rolacc/2018/1/rolacc.2018.4.pdf?expires=1583163138&id=id&accname=guest&checksum=D96C7FFA155B705FD99E351980CE57D0.
- Morgan, A. R. & Burnside, C. (2014). Olympus Corporation Financial Statement Fraud Case Study: The Role That National Culture Plays on Detecting and Deterring Fraud. Journal of Business Case Studies, 10(2), 175-184. Retrieved from: https://my.uopeople.edu/pluginfile.php/643193/mod_book/chapter/217632/U6%20Olympus%20Financial%20Fraud.pdf.
- Osoba, S.O. (1996). Corruption in Nigeria: Historical Perspectives. Review of African Political Economy, 23(69), 371-386. Retrieved March 2, 2020, from www.jstor.org/stable/4006378.
