FIFA Corruption Scandal
In their article “The 5 Biggest Corporate Scandals of 2015” Fortune, Matthews and Gandel (2015) argue that the FBI’s indictment of FIFA officials for racketeering, fraud, and other offenses is one of the major corruption scandals of recent years. They opine that the corruption part was the least remarkable aspect of the news, as FIFA officials had long been suspected of taking bribes in exchange for granting broadcasting rights for games and hosting rights for events like the World Cup.
The news is that the FBI also indicted five sports marketing executives at the same time including some of America’s largest corporations, including Coca-Cola and McDonald’s‑top FIFA sponsors.
This confirms the feeling that ethical decisions more than ever before, are now much more difficult to make. With globalization and an intermarriage of cultures brought about by the ease of travel and the internet, ethical decision making is now taking place in a more complex business environment than it had ever been.
It is, therefore, imperative that ethics need to be into integrated into important strategic business decisions in order to minimize the damage done by poor ethical decisions in business organizations.
The integration of ethics into strategic business decisions is so crucial and if FIFA had done this they might have avoided the ethical failure that has now stained their brand.
Turing Pharmaceuticals and Martin Shkreli
Matthews and Gandel also mentioned Martin Shkreli. He is the guy (via his company Turing) that bought the rights of a 62-year-old drug that treated HIV patients (and other immunocompromised patients) and increased the price by 5,000% to $750 a pill thereby earning himself the reputation of ‘the bad boy of the drug industry’. However, that was not the focus of Matthews and Gandel, it is what he did before that, that could land him in jail. They opine that in mid-December 2015, the United States government arrested Shkreli on charges of stock fraud related to his activities while at Retrophin, the drug company he ran before Turing.
They opine that in mid-December 2015, the United States government arrested Shkreli on charges of stock fraud related to his activities while at Retrophin, the drug company he ran before Turing. His offense is that as a former hedge fund manager, he used shares of Retrophin to pay off investors who had lost money with a hedge fund he ran in the past. His alleged behavior was described by the United States government as similar to a Ponzi scheme.
Shkreli, who maintains he is innocent and has been defiant on Twitter about the allegations against him, says there is little evidence of fraud because his investors didn’t lose money.
But effective leadership isn’t always about ‘not losing money’, however, it is always about leading an organization that is built on a foundation of solid character, progressive and positive ethical framework. Doing the right thing and making the right leadership decisions in an organization is ultimately based on a leader’s character. This appears to be the major ethical deficiency on the part of Shkreli.
In essence, ethical failures in 21st organizations are becoming more complex and damaging to the corporate sector as well as the international business environment since most of the involved corporates are also global organizations like FIFA and Volkswagen.
As discussed in an earlier article, “Ethical Dilemmas of Right vs Right”, most people do not have an effective process for making decisions, hence they dilly-dally when they find themselves in a situation of ethical dilemma.
Perhaps adapting aspects of Christian ethics into organizational theory and business ethics might develop the ethical template that might be able to address the growing number of ethical failures in 21st-century organizations.
