ORGANIZATIONAL BEHAVIOUR
MGT 430
INDIVIDUAL ASSIGNMENT 2
CHAPTER REVIEW
Title:
CASE STUDY OF SNC-LAVALIN GROUP INC. AND HY
DAIRIES, INC.
Student’s name: NUR FAZLIN ADIBA BT ZULKIFLI
ID Number: 2019326023
Group: AC220 5A
Lecturer’s name: NUR AZREEN FARIHAH BT AHMAD
Date of Submission: 20th MAY 2020
CASE STUDY: SNC-LAVALIN GROUP INC.
1. Using MARS Model to discuss the main direct predictors of wrongdoings at SNCLavalin.
The MARS model consists of four factors that directly influence employee behavior and the
resulting performance, namely motivation, ability, role perceptions, and situational factors.
MOTIVATION
Based on the case study of SNC-Lavalin Group, motivation is one of the strong predictors led
to wrongdoings. Motivation represents encouragement or forces within a person who has
power that affects employee’s direction, intensity and persistence. The persons or employees
deemed to be motivated when they have set their own goals on what to achieve and when
people push themselves to complete a task.
Motivations affects the directions of the staff when they have their own goals on what to
achieve. This can clearly be seen when the government staff acts according to SNCL
directions by giving them the contracts in Africa and Asia in order to obtains money promised
by SNCL. The bribe given by SNCL has become the causes government staff to act according
to their direction. Furthermore, the executive of SNCL has pocketed some of the bribery
funds to Saadi Gaddafi to wins 5 major’s contracts in Libya and to receive performances
bonuses for those contracts. The goals to wins the contract and receive bonus has affect the
acts of the staff by giving bribe to Saadi Gaddafi.
Other than that, the workers motivated to act when they are pushed or forced to complete the
task. This can clearly be seen when the one of contract engineer are forced to use his personal
funds to pay a Nigerian Officials when been instruct by their boss as he can’t guarantee his
securities when he was sent to remote area in Nigeria. The forces from the boss on the
engineer affecting the direction, intensity, and persistence of the engineer behaviour. In
addition, the second executives said that he was under pressure to engaged in those illogical
activities because the superior give the orders to follow and satisfied their expectations. He
was forced to follow the superior instruction although he did the activity that he didn’t like.
ABILITY
Based on the case study, the employees of SNCL seen to has the abilities in terms of skill and
knowledge which can differentiated the task performance to bad or good outcome. The skill
and knowledge of SNCL’s employees help them to perform the specific task better. The
greats skill and knowledge of SNCL’s workers can be seen when the SNCL’s staff able to
wire a huge amount of money through off shores bank accounts, through agent fees and
through expense line called Project consultant Cost (PPC) as bribes without being detected by
the related entities. The agent fees used in intentions of bribes are transfers in Swiss Bank
account are controlled by the SNCL Vice president over 10 years. Not only that, the top brass
(below top level) already has knowledge how funds are use and the actions of unethical
activities has been taken. However, no actions are taken by SNCL’s board when they
acknowledge the bribery activities saying that the letter received has no credibility.
ROLES PERCEPTIONS
Role perceptions are required to ensure the employees perform their jobs well and understand
the job duties given. The employees of SNCL tend to understand the task and job assign
when one of the engineers used his own funds to pay Nigeria officials for a soils investigation
when been asked by the company to do so. Other than that, when the SNCL’s CEO detect
there’s involvement of unethical activities happen he use his power by taking the legal actions
on the executives who’s convicted fraud in Switzerland for embezzlement and recovery of the
funds. Furthermore, the chief financial officer and head of international division perform their
job well and was using his reasonable assurance when they opposed the undocumented
payment to unknown agents, knowing that there’s somethings are not right. However, the
SNCL’s board do not exercised their jobs well when the acknowledge there’s the bribery
activities at the first place but did not take any actions by saying they cannot prevent
something they not aware.
SITUATIONAL FACTORS
Sometimes, the employees’ behavior and performance also depend on how much the situation
interferes with their task goals which happens beyond the employee’s control. In the case of
SNCL-Lavalin Group, some behaviour of the employees depends on the external
environment. In order to secure their jobs, the engineer of SNCL did not take any action
when they have the knowledge that none of the PPC expense is legitimate and the fact the
PPC is for bribes. Not only that, the engineer in Nigeria tend to follow the superior
instructions to bribes the Nigeria officials after being forced by them. Either he liked or not,
he must fulfil the task required by them to ensure his safeness in remote area of Nigeria. In
addition, the second executive was under pressure when he engaged with illegal activities
because the top executive has forced them to follow their orders. In fact, a few SNCL
executives have tried to sue the company for wrongful dismissal but they failed to do so in
order to keep their job in that company.
2. How moral sensitivity and moral intensity apply to the unethical behaviour among
SNCL executives and other staff.
MORAL SENSITIVITY
Moral sensitivity is an ability to identify the existing ethical problems and understands ethical
consequences of the decisions made. In this case, moral sensitivity among the employees was
seen to be moderate as they knew that the bribery and contract fixing were wrong, illegal and
unethical practices but still carried on. This is seen when the senior executives and employees
of SNC-Lavalin had to hide the bribery using terms such as project consultancy cost and
commercial cost (PPC). The employees for instance, felt that they were under pressure to take
part in bribery and corruption since they feared the consequences from the senior staff if they
failed to do so. Senior executives however, felt that although bribery was unethical it was
necessary in order to keep and maintain the success of the company. The pressure to achieve
performance which is the main role of any executive blinded them from paying attention even
if they knew it was illegal and wrong. The storing unethical culture may have made their
actions seem legitimate.
MORAL INTENSITY
Moral intensity is influenced by the surroundings which lead to an action that occurs. Moral
intensity of an action is often linked to the seriousness of the harm that could result from the
actions and the urgency response. When there is a low degree of moral intensity, this typically
increases a person’s moral sensitivity resulting in decisions to engage in unethical behavior.
In this case, the moral intensity was high as bribery was illegal and violated the law of the
country. But as said before, the strong unethical culture of the organizational has forced the
employees to perceive that task which has to be carried out to ensure the success and been
accepted as a norms and part of their culture. Although bribery was unethical, senior
executives felt that it must be done in order to keep and maintain the grows of the company
by gains a lot of contracts. The bribery became a norm and a part of their culture because they
were been pressure to achieve performance even if they knew it was illegal and wrong. This
consequence reduced the perceived moral intensity of their actions.
3. Steps SNCL and other companies should take to minimize the corporate
wrongdoings.
The companies should can take proper measures in order to prevent the unethical activities
from continuing by:
1. Implements Internal Controls
Internal controls are implemented to control and safeguard the company’s assets. The controls
are to ensure the quality of its financial information, and to detect if fraud and theft happened.
The internal controls work by restricting access to financial account data and performing an
overview of audit logs to ensure the honesty of financial report. Distributes the roles and
duties also an important component of internal control which can reduce the risk of fraud
from occurs. Internal control programs can be monitored and revised on a consistent basis to
ensure they are effective, free from errors and fraud.
2. Make employees aware of the existing of fraud
To ensure the success when it comes to organization ethics, employees must see and hear
what is going on as well as feel comfortable to stand up and speak out if they detect
something happen out of norms. Since many employees are worried to report incidents to
their employers, employees can report the unethical activity by using a tip hotline or through
a website which help them keep their identity safe. Those who are planning to commit fraud
will know that management is watching, and they will afraid to commit fraud. The employees
will also be aware if there’s sign of possible fraud or theft.
3. Consider ethics when hiring
Heavily weighing candidate’s ethical background and beliefs during the hiring process is the
best way to ensure that the company is on-board for helping to enforce an ethical culture. It
can be done by seeking reviews from former employers or co-workers can help to reflects a
true picture of the candidate’s beliefs as well as questioning them on specific scenarios. If the
company does not have effective measures in place to enforce ethical behaviour, it means
nothing.
CASE STUDY: HY DAIRIES, INC.
1. Apply the knowledge of stereotyping and social identity theory to explain what was
wrong.
Stereotyping is the traits that assigns to people based on social category memberships which
influenced from the prediction of others behaviour and by the supports self-identity. Social
identity reinforces stereotyping through category group of people, similar traits within a
group and assign negative perceptions of others.
Looking at the case study, it shows like Rochelle Beauport has socially identify herself as a
woman and do not have priority in managements positions. This likely to be occurs because
she has been told by her previous employer that women or people of dark skin are not
suitable to work in top managements. She ended up being transfer in technical support
positions in lower managements. Based on her experience, she believes that Syd Gilman and
Hy Dairies were follows the same game plan of her previous employees which only allows
mans in management positions. Not only that, Syd Gilman also has social identify Beauport,
thought that the response give by Beauport was positive ones upon hearings his career
opportunity same as what he’s feels previous years ago. He felt by offering the new position
to her, would help Beauport enhance her career and benefit her as well. However, Beauport
wasn’t aware that the new position had been given with positive implications that she’d
advance in the company the same way Mr. Gilman did as well.
Furthermore, it was clear that Rochelle Beauport has develop a stereotype against the
managers in top management. Beauport assumes she been transfer to new position because
her gender and skin colors not fix to be in that positions. She assumes her current positions is
more challenging and had a greater affected on the organization’s profits than the new
position, market resource coordinator, without knowing that the positions offers is better and
will be route to her to top managements position same as Syd Gilman. Because of her
stereotypes against the management and her social identity, Beauport believes she is being
sidelined into a technical support position She thought that the position was a downgrade and
not qualified to get promoted because of her skin colour or even her gender.
2. Others perceptual errors apparent in this case study
The other perceptual error that apparent from the case study is False Consensus Effect. The
false-consensus effect is when a person overestimates other will have similar beliefs or traits
like him or her. He or she estimates that the persons will act or thinking like they do as they
shared the same behavior. Based on the case study, Gilman perception of offering Beauport
the marketing research coordinator position was the completely opposite of Beauport’s
opinion. Gilman expected Beauport will give a positive response with the new position offer
and will readily accept the position, but she seen to be surprise with the news. Gilman
assumes Beauport surprise reactions as a positive response towards being considered for the
new position offers. The marketing research coordinator had helped him in his career
pathway by expanding his marketing experience and boosting his career. Gilman assumed
that Beauport are happy and delighted like he was when was offered the role.
The next perceptual effect is Halo effect. Halo Effect is when a person immediately forms an
impression on someone just from one of their traits or behavior. It’s hard for the people to
recognize other’s traits of person since they are blind or focus only on one trait. As stated in
case study. When Gilman offered her the new position, she immediately believes he was
trying to downgrade her because the market resource coordinator was known to be a sideline
job. Rochelle felt that she was sidelined and was set aside because of her differences as well
as her social identity and she thought Gilman didn’t want her to reach top management so he
gave her market resource coordinator, a “back room job” trying to make her think she was
getting a promotion.
3. Action taken by organizations to minimize misperceptions in that types of situations.
The action can be taken by the organizations to reduce the misperceptions and avoid
misunderstanding are by:
a) Understand the messages.
A message cannot be successfully delivered to the receivers if they do not pay full attention to
what the speaker says. In this case, Rochelle Beauport should pay close attention to what Syd
Gilman saying. If Beauport is unsure with the messages, she should ask Mr Gilman to
discuss, or repeat anything that is unclear. Mr. Gilman will misunderstand that he understands
Rochelle very well, but the fact this create a confusion to Beauport. Beauport should have
come straight out and informed Mr. Gilman about what bother her when she been giving the
opportunity for the new position.
b) Know the employee very well.
The employer must know their employees well in order to avoid the misunderstanding
although it sounds impossible to employer to know all their workers When people always
interact and communicate with each other they become less prejudiced against each other.
Having socializing events or activities will allow employees to get to know each other and be
more comfortable as well. In the case study Beauport felt she was not able to communicate
her concerns at the performance review because she barely knew Gillman. is. It was thought
that Rochelle Beauport did not know and trust her boss well enough to share her thoughts and
feelings. This could be one of the main reasons why she was not able to express her
perspective about the new position.
APPENDIX
Case study of SNC-Lavalin Group (Page 1)
Case study of SNC-Lavalin Group (Page 1)
Case study of Hy Dairies, Inc