Leslie Burgy
Brook Grzadzinski
October 23rd, 2012
DEFINITION OF ETHICS:
• The study of moral obligation or of separating right from wrong.
• The accepted guidelines of behavior for groups or institutions.
• Edwin H. Locke, a goal theorist states that “ethics is the center of
leadership because the goal of a rational leader is to merge the
interests of all parties so that everyone benefits and the
organization prospers.”
Dubrin, A. J. (2010). Leadership. Research Findings, Practice, and Skills. Mason, OH:
Jack Calhoun,p.167.
CHUNG MONG-KOO
Current Demographics:
Age: 74
Residence: Seoul, South Korea
Education: Bachelor of Art/Science Hanyang University
Occupation: Chairman and CEO of Hyundai-KIA automotive group
Net worth: 6.6 Billion
Recognition: July 2012 named the best CEO of an automobile company in Asia by US
Weekly Automotive News
EVIDENCE OF UNETHICAL BEHAVIOR AND
CONSEQUENCES
•
On April 28th, 2006, Chung Mong-Koo was arrested for embezzlement and
breach of trust (Onishi, 2006). Chung Mong-Koo had set up a $105 million dollar
slush fund to bribe government officials and politicians. Prosecutors also accused
Chung Mong-Koo of illegally transferring assets to his son Chung Eui-Sun who is
president of KIA Motors (Fackler, 2006, para. 11).
•
Chung Mong-Koo was convicted of embezzlement and breach of trust in February
2007 and sentenced to three years in jail but Chung Mong-Koo did not serve any
time. (Onishi, 2006)
•
On September 6th, 2007, the Chief judge Lee-Jae Hong ruled to suspend the
sentence due to the huge economic impact of imprisonment and instead ordered
Chung Mong-Koo to perform community service and to donate $1.1 billion dollars
of his personal asset to charity (Onishi, 2006).
•
On August 15th, 2008, Chung Mong-Koo received a full pardon from South
Korean president, Lee Myung-Bak ("Amnesty Clears The Way," 2009).
MARTHA STEWART
Current Demographics:
Age: 71
Residence: New York and Maine
Education: Bachelor of Art and Architectural History
Occupation: Chairman of Martha Stewart Living Omnimedia
Net worth: estimated $650 million
Recognition: Inducted into New Jersey Hall of Fall 2011
EVIDENCE OF UNETHICAL BEHAVIOR AND
CONSEQUENCES
•
•
•
•
•
•
Dec. 27, 2001: Martha Stewart sells all 3,928 shares of ImClone that she owns.
Prosecutors later contend she was tipped.
June 4, 2003: Stewart is indicted on nine federal counts. Stewart resigns as
chairwoman and CEO of her company but remains chief creative officer and a board
member.
Jan. 27, 2004: Prosecutor claims in opening statements that Stewart sold ImClone
stock based on a "secret tip," then lied to cover it up (Grigoriadis, 2012, para. 2).
Feb. 27: Judge throws out securities fraud count against Stewart.
March 5: Stewart convicted for lying to investigators
March 15: Stewart resigns from board of Martha Stewart Living Omnimedia Inc. but
retains the title of founding editorial director ("Academy of Achievement," 2010,
para. 5).
•
July 16: Martha Stewart sentenced to five months in prison and five months of home
confinement for lying about a stock sale (Grigoriadis, 2012, para. 3).
PATRICIA DUNN
Current Demographics:
Age: 58, deceased December 2011
Residence: Orinda, California
Occupation: Chairwoman of Hewlett-Packard in 2005
Education: B.A. in Journalism
Net Worth: n/a
Recognition: Financial Woman of the Year award 2001
EVIDENCE OF UNETHICAL BEHAVIOR AND
CONSEQUENCES
•
2005: Dunn was accused of hiring five investigators to spy on fellow directors and
journalists by illegally obtaining their personal phone records using false
identities.
•
Sept. 22, 2006: Dunn resigns her chair position at the request of the board.
•
Oct. 4, 2006: Dunn was charged with four felony counts, fraudulent use of wire
transmissions, using computer data without authorization, identity theft and
conspiracy. Also was diagnosed with reoccurrence of ovarian cancer and
metastasis to the liver.
•
Mar. 14, 2007: The judge in the case dropped all criminal charges against her.
“Her dismissal was much more on the merits than it was on her health” (Richtel,
2007, para. 13).
•
Dec. 4, 2011: Dunn passed away in her home from ovarian cancer.
STEVE JOBS
Current Demographics:
Age: 56, deceased October 2011
Residence: Palo Alto, California
Occupation: Co-founder, chairman, and CEO of Apple Inc.
Education: Attended one semester at Reed College then dropped out.
Net Worth: $11 Billion
Recognition: National Medal of Technology
Entrepreneur of the Decade
World’s Most Powerful People
EVIDENCE OF UNETHICAL BEHAVIOR AND
CONSEQUENCES
•
2001: Jobs was involved with allegations of accounting fraud by improperly
backdating stock options and “the neglect from the financial chief and general
counsel to report the expense to the Securities & Exchange Commission and
stockholders” (Modine, 2009).
•
Jobs was facing a number of criminal charges and civil penalties related to the
incident.
•
Dec. 29, 2006: Jobs was found not guilty as he was not involved directly with the
accounting and backdating of the options. It was also in Jobs favor that he didn’t
receive the financial gain when the fraud was first brought to light.
•
Jobs continued his work in Apple, but on and off throughout the remaining years
due to being diagnosed with pancreatic cancer.
•
Jobs resigned his CEO position in August 2011 and passed away from his
complications with cancer in October 2011.
CONCLUSION
The four leaders described underwent intensive investigations due to
their unethical behaviors. While most would think that such personal
leadership scandals would affect the companies it was found that they
really all did end up successfully. Even Martha Stewart ended up
successful and she served time in prison. Apparently providing a
material service goes a long way in society as their unethical behaviors
were overlooked. For these leaders it was more about the product then
the integrity of the leader.
REFERENCES
Amnesty clears the way for Lee’s comeback to Samsung top job. (2009, December 30). Korea Herald. Retrieved from
view.koreaherald.com/kh/view.php?ud=200912300000J1&cpv=0
Darlin, D. (2011, December 5). Patricia C. Dunn dies at 58; led H.P. during spying case. New York Times. Retrieved from
http://www.nytimes.com/2011/12/06/business/patricia-c-dunn-dies-at-58-led-hewlett-packard-during-spying-case.html?_r=0
Dubrin, A. J. (2010). Leadership. Research Findings, Practice, and Skills. Mason, OH: Jack
Calhoun.
Fackler, M. (2006, May 17). Chairman of Hyundai is charged with theft. The New York Times. Retrieved from
www.nytimes.com/2006/05/17/business/worldbusiness/17 hyundai.html?
Grigoriadis, V. (2012, April). I just want to focus on my salad: Insider trading-not a good thing. New York Magazine. Retrieved from
nymag.com/news/features/scandals/martha-stewart/2012-4
Martha Stewart biography. (2010). Retrieved from www.achievement.org/autodoc/page/ste0bio-1
Modine, A. (2009, April 24). Steve Jobs: I wanted respect, not backdated options. Financial News. Retrieved from
http://www.theregister.co.uk/2009/04/24/jobs_sec_backdating_interview/
Onishi, N. (2006, April 29). Hyundai chairman accused of embezzling. The New York Times. Retrieved from
http://wwwnytimes.com/2006/04/29/business/worldbusiness/29hyundai.html
Reuters (2007, May 31). Settlement for Martha Stewart Investos. The New York Times. Retrieved from
http://www.nytimes.com/2007/05/31/business/media/31martha.html
Richtel, M. (2007, March 15). Charges dismissed in Hewlett-Packard spying case. The New York Times. Retrieved from
http://www.nytimes.com/2007/03/15/technology/15dunn.html?adxnnl=1&ref=patriciacdunn&adxnnlx=1349825611pzhimLwslf7eo6HkhuPoEA