Ethical Analysis of Salt Lake City, the Olympics, and Bribery
Prepared for
Management and Board
Prepared by
Roberto Rios
Evelyn Rivera
Kristi Roberts
Sergio Rojas
April 23, 2013
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Contents
PAGE
Memo…………………………………………………………………………………………………………………………………….3
Summary...…………………………………………………………………………………………………………………………..4-5
Ethical Analysis …………………………………………………………………………………………………………………….5-6
Laura Nash Test………………………………………………………………………………………………………………………5
Front of Newspaper Test……………………………………………………………………………………………………......8
Blanchard of Peale………………………………………………………………………………………………………………....9
Wall Street Journal………………………………………………………………………………………………………………….10
Primum Nocere Test……………………………………………………………………………………………………………….11
Recommendations to Management…………………………………………………………………………………...11-13
General..……………………………………………………………………………………………………………………………..12
Reporting Bribery………………………………………………………………………………………………………….......12
Accounting Requirements, External Audit and Internal Controls, Ethics and Compliance……12
Good practice “ethics” manual for employees..………………………………………………………………...…13
Training…………………………………………………………………………………………………………………………..……13
Conclusion……………………………………………………………………………………………………………………………….14
Works Cited…………………………………………………………………………………………………………………………..…15
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MEMO
To: Management and Board
From: Roberto Rios, Evelyn Rivera, Kristi Roberts, Sergio Rojas
Date: April 23, 2013
Subject: Ethical Analysis of Salt Lake City Olympics Case
Here is the report you requested on March 19 on an analysis of the ethical dilemmas present in the case
study on Salt Lake City, the Olympics, and Bribery. To analyze this case we used many ethical tests.
Some of the ones used are the Laura Nash twelve question model, the Front page of the Newspaper
test, and the Blanchard and Peale test. Included in this report are a brief summary and some
recommendations we believe would have helped in avoiding the scandal that occurred. We divided this
report into nine sections.
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Summary
The “Salt Lake City, the Olympics, and Bribery” case study became an international issue with the
involvement of the Salt Lake City Olympic Committee (SLCOC) and members from the International
Olympic Committee (IOC). Mr. Welch was head of the SLCOC and was one of the key players in the
scandal. Since 1966, the SLCOC had been trying to win the bid to be the next site for the Winter
Olympics but kept failing. In 1989, when Salt Lake City leaders had traveled to Rome, they noticed other
cities giving gifts to the IOC members. This same year, concerned that their lack of gifts was the reason
they were failing, they gave letter openers to IOC members (Jennings 344).
After this, the only expenses the SLCOC had related to the IOC were travel expenses that some IOC
members incurred when they traveled to Salt Lake City. These expenses were properly accounted for.
When 1991 came around and it was time to start planning for the 2002 Winter Olympics bid, members
of the SLCOC were single-minded in doing whatever it took to win the bid and using all their money to
get votes (Jennings 345). The ethical dilemma present in this situation is “buying influence or engaging in
conflict of interest and taking unfair advantage.” The SLCOC wanted to buy their votes by paying IOC
members. This would give Salt Lake City an unfair advantage over the other cities and countries that did
not want to buy their votes or did not have the money to do so.
Some members of the IOC were selling their votes to cities and countries that wanted the Winter
Olympics to be held in their cities (Jennings 344.) IOC members were prohibited from accepting gifts
valued over $150,but many were accepting gifts from the SLCOC that were over this dollar amount
(Jennings 345-346). From 1991 to 1995, the SLCOC gave an estimated $1.2 million to IOC members and
their families. Of this amount, $100,000 was in scholarships that went to children of IOC members.
Children of IOC members would also stop by the SLCOC offices to pick up checks for themselves ranging
from $250 to $590 (Jennings 345). The SLCOC was rationalizing this dilemma away by saying they were
doing what everyone else was doing and if they didn’t do it someone else will, and it’s the way it has
always been done.
The scholarship dilemma was uncovered by Ernst & Young, who in 1995 audited SLCOC records.
According to the auditors they spoke with SLCOC members about the scholarship program, the amount
and purpose, but the SLCOC denied that they were ever informed about the issue. Mr. Ken Bullock,
member of the SLCOC Board of Trustees talked to the Governor and members of Salt Lake City council
about this but they believed him to be “a little out there.” When a reporter, Mr. Rod Decker, questioned
Mr. Johnson, a member of the SLCOC, about the scholarship, he accepted Mr. Johnson’s explanation
that there were no scholarships given, that the children of IOC members had simply toured the campus.
During this time the law firm that was housing the records of SLCOC meetings ordered the destruction
of firm documents (Jennings 346). The ethical dilemma present here is hiding or divulging information.
The scandal became public when a staff member from the SLCOC sent an anonymous letter describing
the scholarship payments. Once this story became public, the SLCOC was under investigation along with
the IOC; due to this Mr. Welch resigned from his position as head of the SLCOC. An ethics investigation
by Gordon R. Hall concluded no criminal activity but that there were ethical issues and violations of
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trust. David Simmons was charged with tax evasion because he had set up a sham job for John Kim, son
of Yong Kim an IOC member from Korea. John Kim was charged with lying to the FBI about his job and
having a green card. These charges were later dropped because he refused to testify against Mr.
Johnson and Mr. Welch. The company at which Mr. Simmons had set the job up had been reimbursed
by the SLCOC (Jennings 347).
Mr. Johnson and Mr. Welch were both charged with RICO violations (Jennings 347. Their trial was
scheduled to begin on July 16, 2001 but the charges were dropped because Utah had declined to
prosecute. The Tenth Circuit Court of Appeals held that the men could be tried for RICO violations under
federal law. The bribery case against them went to trail in October 2003 were they were acquitted of
fifteen felony counts because of lack of evidence. The evidence was weak because key witnesses refused
to return to the United States to testify (Jennings 348). The IOC conducted an internal investigation and
expelled six IOC members. They adopted a new code of ethics and had revisions in rules on choosing an
Olympic site. Philip Coles of Australia, who was one of the expelled IOC members, resigned from his
position on the Sydney Olympics Board. This scandal resulted in the final years of IOC President Juan
Antonio Samaranch to be hard. It also resulted in many corporate sponsors withdrawing their
sponsorships from the Sydney Summer Olympics of 2000 (Jennings 347).
Even though this was a big public scandal, Salt Lake City was allowed to hold the 2002 Winter Olympics.
It did have trouble getting corporate sponsorships and raising funds but when Mitt Romney became
head of the SLCOC everything changed. He was able to get corporate sponsorships and finished with a
surplus of funds (Jennings 347-348).
Ethical Analysis
The Salt Lake City Olympics case involved many stakeholders throughout a ranged time frame that
began from 1966 till October 2003. It involved IOC members, their families and respective nations, the
SLCOC members which included Mr. Welch, Mr. Johnson, Mr. Bullock, and Mr. Romney, Mr. Decker a TV
reporter and his station, Salt Lake City’s officials, residents and businesses, other states, the Olympics
their participants and the rest of the world who had an interest of hosting future Olympic Games.
The two key organizational stakeholders in the scandal were the IOC and the SLCOC and are where our
ethical dilemmas take place. Within the SLCOC, Mr. Welch and Mr. Johnson were prominent members
that adopted a culture of “wining no matter what” after losing several Olympic bids and re-examining
the reasons to the lost bids. During the unsuccessful 1998 Olympic bid, Mr. Johnson had an encounter
with Prince Albert of Monaco, a member of the IOC, who gracefully decline any lavishes Mr. Johnson
had to offer during his visit (Jennings 435.) Prince Albert’s visit proved that wining over IOC members by
simply the use of excessive money or gifts was an unnecessary practice but this revelation failed to
make its way when planning for the 2002 Olympic Games. Mr. Johnson instead adopted a mental model
that he described as “doing what everyone else was doing.”(Jennings 345) Should Mr. Johnson have
taken a step back and asked Laura’s Nash question “What is your intention in making this decision?” he
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could of probably come to the conclusion that offering monetary gifts was simply using warm language
to rationalize the bribery dilemma away.
The case was a bit lacking on information when it came to the IOC and its members. Information I would
like to have known would have been their complete code of ethics and whether or not it was enforced,
practiced and known to its members including those of the SLCOC. Assuming both sides knew about the
code of ethics ,and implementing the National Enquirer Test would help clarify whether the choice of
offering to sell one’s vote or accepting monetary gifts that the IOC prohibited from exceeding $150,
could be interpreted by an outsider as bribery. The dilemma in question then can be a headline is “The
IOC’s Un-Olympic Way of Getting Ahead.” This probable headline could have helped in getting the IOC to
reevaluate its decision to uphold a trust by those who respect and admire what the Olympics truly stand
for.
Laura Nash Test:
A test used to evaluate the ethical dilemmas in this case is the Laura Nash twelve questions model. The
first question in this model is “Have you defined the problem accurately?” The question the Salt Lake
City Olympic Committee (SLCOC) should have asked is, “Is there a way other than bribery to convince
IOC members to vote for the Winter Olympics to take place in Salt Lake City.” This would of help them
notice that the ethical dilemmas they were facing involved the purchasing of influence, engaging in
conflict of interest, and taking unfair advantage.
The second question to this model is “How would you define the problem if you stood on the other side
of the fence?” This question would be asking the officials of the SLCOC to live by the same rules that
they apply to others and it forces them to look at their standards in a more universal way. If the problem
was defined by someone not in the SLCOC this would be thought of as unethical and illegal since it
involved bribing/gifting IOC members with money that did not belong to them. People who had given
money to this cause would not be happy to know that the money they had given was used as bribing.
“How did this situation occur in the first place?” is the third question in this model. This situation
occurred because the SLCOC had been trying to win the IOC’s favor in their decision to hold the Winter
Olympics in Salt Lake City since 1966. Officials of the SLCOC kept trying to win over the IOC, but believed
they had no success because they had a small budget. Giving gifts to IOC members began in 1989 when
some SLCOC members traveled to Greece and noticed that other cities were gifting IOC members
(Jennings 344). When 1991 came around and it was time to start planning for the 2002 Winter Olympics
bid, members of the SLCOC were single-minded in doing whatever it took to win the bid and using all
their money to get votes (Jennings 345). They were rationalizing the dilemma away with, “If we don’t do
it someone else will, and “This is the way it has always been done.”
The fourth question in this test is “To whom and what do you give your loyalties to as a person and as a
member of the corporation?” The members of the SLCOC seemed to give their loyalties to IOC members
because they were giving members, along with their families, gifts. The staff member from the SLCOC
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who sent in the anonymous letter gave her loyalties to the SLCOC committee. The reporter Mr. Rod
Decker, who received this letter and went on to question Mr. Johnson about the scholarship program
gave his loyalties to the SLCOC because, he accepted Mr. Johnson’s explanation (Jennings 347).
Members of the SLCOC seemed to value the notion of wining no matter what by playing like everyone
else. Instead of upholding fair play something the Olympics’ stands for they decided that money would
solve everything and as such the unethical behaviors by both members of the SLCOC and IOC members
and their respected families.
“What is your intention in making this decision?” is the fifth question to this model. The SLCOC
mentioned that their intention for paying the IOC members travel expenses was so that they would visit
Salt Lake City and see for themselves that holding the Winter Olympics in Salt Lake City was their best
choice. They also said that the intention of their scholarship program was not to give IOC members
children scholarships but were expenses for tours at the University of Utah and not scholarships
(Jennings 346). The SLCOC real intention in giving gifts to IOC members was to persuade them to vote
Salt Lake City as the next site for the Winter Games. This was their one true intention because they had
been trying to win votes for quite some time. They believed that the lack of gifts was the reason for
losing the Olympic bids.
The sixth question to this model is “How does this intention compare with the likely results?” and ties in
with the fifth question. Giving gifts and cash reimbursements might help persuade IOC members to vote
for the city, but it is not a guarantee. Salt Lake City did win the bid, but they had a very hard time
getting sponsorships and funds. It also caused a scandal and brought many charges to members involved
in it.
“Whom could your decision or action hurt?” is the seventh question. The members of the SLCOC could
all be hurt with this unethical action because even if they had no idea about the bribing, they would still
be questioned and investigated individually. They could be charged with bribery or racketeering and
lead to trials. Other sites that also were trying to get the Olympics in their city/country would also be
affected because they were not given a fair chance with the votes. Those who sponsor the Olympics are
also affected because they now have to be careful of who they are going to sponsor because a scandal
can also affect their company. The IOC itself would be affected by the decision because they would also
be brought under investigation and it would tarnish the organizations reputation. Salt Lake City is also
affected because the city’s economy would be relying on fans visiting the city to watch the games, but a
scandal could result in lost confidence in the games also affecting fans. This decision could also hurt the
players and countries competing in the Winter Games.
The next question is “Can you engage the affected parties in a discussion of the problem before you
make your decision?” This helps to identify if the decision about to be made is unethical. The fact that it
could be hard to explain or not want to be discussed at all also helps prove that the decision crosses an
ethical boundary. If the SLCOC members and IOC members who participated in the bribery scandal had
thought about how this problem would affect them and sat down to discuss the decision with every
affected person, the decision to gift IOC members would not have been made.
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“Are you confident that your position will be valid over a long period of time as it seems now?” is the
ninth question of the test. This question asks SLCOC officials to think about the decision they are about
to make over a long period of time. A question the SLCOC members they should have asked themselves
is, Will this decision affect me later in life, even when I am no longer a part of this organization? Will this
come and affect the life I have created for myself and harm my credibility? Will this decision affect my
family?
The tenth question of the Laura Nash model is “Could you disclose without qualms your decision or
action to your boss, your CEO, the board of directors, your family, or society as a whole? This question
asks for members of the SLCOC and the IOC who were making decisions of giving gifts and receiving
them, to look at their conduct as if they were to others as if they were in charge. Mr. Welch and Mr.
Johnson would not be able to talk about their decision to bribe and gift members of the IOC for votes to
the United States Olympic Committee because bribery is illegal and if they discussed this with them it
would show that they had engaged in unethical and illegal activities. It would also cause them to lose
their positions. They would also not be able to discuss this decision with members of their family
because they would feel ashamed and could even cause them to lose their trust.
“What is the symbolic potential of your action if understood or if misunderstood?” is the eleventh
question to this model. The symbolic potential of this action on the part of the SLCOC if understood
would be that the SLCOC had done everything they could to win the bid and had won it for the city. The
public would believe there was finally a committee made up of members who were able to do what the
SLCOC had been trying to do for so long. If this action was misunderstood it would symbolize that all
Olympic committees were made up of liars and criminals who broke rules. The IOC would be viewed as
made up of members who were there to receive gifts and could be easily bought with gifts and money.
The last question in this model is “Under what conditions would you allow exceptions to your stand?”
An exception that they could have to this decision would have been giving the gifts and money to
society or non-profits instead of the IOC using them for personal gain.
Front of the Newspaper Test:
One of the first tests the SLCOC should have used before deciding to offer gifts to the IOC was the front
of the newspaper test. In this test, there is one specific question that members of the committee
needed to ask themselves, “How would my decision or action appear on the front page of our local or
national newspaper if a scandal broke out?” If they were to ask themselves this prior to offering gifts
and bribes to IOC members, they likely would have decided not to partake in this unethical act. If each
member could have envisioned what the possible news headline would have been, it definitely would
have been easier for them to decline in bribery and just try and win over the committee in a traditional
way. They also could have taken into consideration how their actions would look to their friends,
children, and spouses. Realizing how disappointed their loved ones would have been would have a great
effect on their decision making as well. A headline that could be used is, “The IOC’s Un-Olympic Way of
Getting Ahead.”
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Blanchard and Peale:
Another test the SLCOC could have done before offering gifts to the IOC was the Blanchard and Peale
test. In this test, the SLCOC members would have asked them self three different questions consisting of
“Is it legal? Is it balanced? How does it make me feel?” When asking if this act was legal, they should
have realized right then that they were in wrong. Although the SLCOC was not charged with criminal
activity, there were definitely ethical issues and violations of trust taking place. One major ethical issue
displayed was that IOC members were not supposed to accept gifts over $150, however, the SLCOC had
given over 1.2 million dollars to IOC members and their families. Another area of illegal and unethical
behavior was when the SLCOC ordered the law firm to destroy their files and documents that provided
evidence of their meetings (Jennings 345-346). The SLCOC should have realized that they were
continuing to find themselves making more and more unethical decisions as they started to become
investigated.
The next question in the test they should have asked themselves was, Is it balanced? In this case, Mr.
Welch and other high up members of the SLCOC should have taken a step back and tried to view the
decisions they were making from other perspectives. If they were to have done this, they would have
realized immediately that they were beginning to make very unethical decisions that were only going to
get them into more trouble if they continued to take on this unethical approach of giving gifts and
bribery. They would have seen that not all members in the SLCOC would have wanted to give bribes, but
since it was a majority of higher ranked members that favored these decisions, they ultimately were
making a decision for all of the members. They also would have been able to see from the perspective of
the Salt Lake City community and realized they would be very disappointed that the only way they
would have been able to have the Olympics in their city was if they bribed IOC members. Taking a look
from outside perspectives could have strongly influenced the decisions the SLCOC members were
making.
The last question they SLCOC members should have asked themselves about their decisions was, how
does this make me feel? If any of the SLCOC members had felt any sense of uneasiness or guilt while
offering bribes, they would have immediately known that this was obviously not the right thing to do.
Each of the members, especially Mr. Welch, should have self-examined themselves to see how
comfortable each of them actually was when making these decisions. When they realized what their
actual feelings were about this scenario, they should have immediately stopped. However, since their
approach was completely single-minded, they were only focused on the ultimate goal at the end rather
than taking any other factors into consideration. If the SLCOC would have used the Blanchard and Peale
test to evaluate the legality, the balance of the situation, and the emotional characteristics of the whole
situation, they would have realized they were being very unethical and could have stopped themselves
from continuing to make unethical decisions until eventually a scandal broke out.
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Wall Street Journal:
Another ethical model they could have used to decide whether their actions were ethical or not was the
Wall Street Journal test. In this test, there are three particular questions they needed to ask themselves
including: Am I in compliance with the law?, What contribution does this choice of action make to the
company, the shareholders, the community, and others?, and lastly, What are the short and long-term
consequences of these decisions?
When examining the first question, Am I in compliance with the law?, they would have realized
immediately that their decisions to partake in bribery and giving gifts was unethical. As explained earlier
in the Blanchard and Peale test, offering gifts of a total value over 1.2 million dollars as well as
destroying legal documents were both illegal and the decisions to continue with this unethical method
should have been stopped immediately (Jennings 345-346). Any type of illegal acts should be an
immediate red flag, for this is the most obvious way anyone should be able to figure out that they are
partaking in unethical acts.
When taking a look at the second question in the Wall Street Journal test, the SLCOC would taken a
broader look at how their decisions are not only affecting the committee itself, but all of those involved
in their decision making such as the company, shareholders, the community, etc. The SLCOC probably
thought that they were only making these types of decisions so that they could essentially help all of
those involved. Being able to host the Olympics would have boosted the economy and helped out a lot
of local businesses as well as brought significant popularity to Salt Lake City in general. However, what
they really were doing was harming the chance of any of this of happening, for if a scandal were to
break out Salt Lake City would have been viewed as unethical and fraudulent. The SLCOC was taking a
huge risk at harming their cities reputation and chance at ever being able to host the Olympics all
because of their extremely single-minded approach in trying to get the IOC to pick Salt Lake City as the
next site for the 2002 Winter Olympics.
The last question in this model they needed to examine was what are the short and long-term
consequences of this decision? If the SLCOC would have decided to stop at take a look at what the
consequences of their actions were going to be, they would have probably realized they weren’t in a
positive situation. In the short term, they were risking being caught but the auditing committee and
possibly losing their chance to host the 2002 Olympics. However, as discussed earlier the long-term
consequences would have been much worse. Salt Lake City’s reputation as a city could have had the
possibility of always being viewed as unethical and fraudulent. Even if they were to eventually be able to
host the Olympics people might not even have came and supported the event with this image in mind.
The SLCOC was very fortunate they were able to keep the 2002 Winter Olympics and that this scandal
didn’t get too out of hand.
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Primum Nocere Test:
The primum non nocere is another ethical test we used to evaluate the ethical dilemmas present in this
case. Primum non nocere means “above all, do no harm.” If the SLCOC had used this test before they
had made the decision to give gifts they would not have been in the situation they got themselves into.
Because of what they did, the Salt Lake City Bribery Scandal harmed the Olympics itself and helped
tarnish the reputation of the entire IOC, even if all its members were not accepting the gifts. It also
harmed the reputation of the Olympics itself, with corporations wanting to withdrawing their funds,
even from the Summer Olympics in Sydney, which had nothing to do with the scandal (Jennings 347348).
Recommendations to Management
Considering all of the above analysis, including the ethical problem-solving model analysis, we have put
together a template of specific risk management recommendations that we believe would aid the Salt
Lake City Olympic Committee better understand and resolve ethical dilemmas. We understand all
countries (and parties involved) share a responsibility to combat bribery in all international business
transactions. These recommendations are for SLCOC to take into consideration. Under our analysis we
were able to understand that SLCOC did breach ethical dilemmas, but more importantly, we were able
to understand that the procedures to get an Olympic bid was a flawed system in its own, and that itself
would take a separate set of recommendations in itself.
The following recommendations are to continue taking effective measures to deter, prevent and combat
the bribery of foreign public officials. We wanted to allow SLCOC’s employees room for self-correction,
or self-regulations. According to the regulatory cycle (figure 1), business want to attach ethical
problems during the latency phase. This allows more time and more solution options for the specific
company. The following recommendations will allow SLCOC to early detect ethical problems and to
solve them efficiently. There recommendations are broken into the following categories: general, how
to report bribery, accounting requirements, external audit, and internal controls, ethics and compliance,
a good practice manual for employees, and training. We believe that by implementing the following
recommendations, SLCOC should see a drastic improvement in ethical breaches and overall employee
knowledge on ethical business problems and how to resolve them.
Figure 1: Regulatory Cycle
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General
We are recommending an awareness raising initiative and or campaign for SLCOC. We believe the
implementation of this type of campaign would be beneficial to inform employees of the issue. We want
to successfully inform people of the problem and how ethics are important in business today.
Going on with the recommendations, we want to provide provisions and measures to ensure proper
reporting of foreign bribery. We will go more in detail of this recommendation in the internal controls
and audit section later on.
One of our more important recommendations for SLCOC is transparency. We are confident that by
proving a system where transparency is encouraged, SLCOC will see less ethical breaches. This
transparency recommendation goes with ensuring that adequate records will be kept and made
available for inspection and investigations. SLCOC will do this by ensuring that banks and other financial
institutions will have access to these records. SLCOC will keep all of their financial information public.
Since SLCOC is a non-profit organization all of their financial documents are available to the public. An
individual can easily go online and look up the organization’s 990 form statement and see how the
organization is performing. This transparency will limit the ability for ethical misconduct.
Next, we want to encourage SLCOC to prohibit or discourage the use of small facilitation payments in
internal company controls, ethics and compliance programs, recognizing that such payments are
generally illegal in the countries where they are made, and must in all cases be accurately accounted for
in such companies’ books and financial records.
Reporting bribery
Throughout our analysis of SLCOC we were able to identify that SLCOC’s ethical breach could have been
easily reported in its latency phase, if there were accessible channels in place for employees to report
such activity.
We are recommending easily accessible channels to be in place for the reporting of suspected acts of
bribery of foreign public officials in international business transactions and/or other ethical breaches to
law enforcement authorities, in accordance with their legal principles.
A recommendation is also given to set up appropriate measures in order to protect discriminatory or
disciplinary action to both public and private sector employees who report in good faith and on
reasonable grounds. We want to make sure that these individuals are protected. Installing a system like
this at SLCOC will beneficial as a way to ensure that officials will not commit ethical breaches in the
future.
Accounting Requirements, External Audit, and Internal Controls, Ethics and Compliance
SLCOC should require the external auditor who discovers indications of a suspected act of an ethical
breach, such as bribery, to report this discovery to management and to other head officers as
appropriately. They should also consider requiring the external auditor to report suspected illegal acts to
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competent authorities independent of the company, such as law enforcement or regulatory authorities,
and to ensure that auditors making such reports reasonably and in good faith are protected from legal
action. This recommendation deals again with the transparency of the organization, which is one of our
main recommendations. Through our analysis we discovered that where some destruction of
documents and misrepresentation of expenditures. These are extremely serious actions and there
needs to be a system in place where this will not occur again. A system of financial and accounting
procedures, including a system of internal controls, reasonably designed to ensure the maintenance of
fair and accurate books, records, and accounts, to ensure that they cannot be used for the purpose of
foreign bribery or hiding such bribery.
We also feel that SLCOC should develop and adopt adequate internal controls, ethics and compliance
programs for the purpose of preventing and detecting foreign bribery. SLCOC will then publically display
these internal reports in their annual reports for shareholders to read. We want to educate employees
and inform shareholders that SLCOC is an ethical company.
Lastly, we believe that if SLCOC created a set of monitoring bodies, independent of management, such
as audit committees of boards of directors or of supervisory boards less ethical breaches would occur.
When more than one person oversees a decision that a company will make, it ensures that everyone
must be in favor. If a decision is being made, such as bribing the IOC board, and there was a monitoring
body in place that SLCOC had to go through, SLCOC would not have made that decision in the first place.
Good practice “ethics” manual for employees
As a method to educate employees, we are recommending for the creation of an ethics manual where
employees can understand how to deal with such ethical dilemmas. This will become a tool for SLCOC to
use. It will establish and ensure the effectiveness of internal controls, ethics, and compliance programs
to prevent and detect ethical breaches such as bribery.
It will cover the following areas: gifts, hospitality, entertainment and expenses, customer travel, political
contributions, charitable donations and sponsorships, facilitation payments, and solicitation and
extortion.
Training
Lastly we are recommending both employee and management training. Training will be designed to
ensure periodic communication, and documented training for all levels of the company, on the
company’s ethics and compliance programs. We want to make sure that this training and other tools are
readily available to everyone and that they are being implemented and used.
Training should be conducted by SMEs (subject matter experts) within the company or at least play an
essential role in the implementation and/or creation.
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Conclusion
How can we change a company where the system that the company is in is truly flawed? Giving bribes or
gifts to the IOC was a common practice and if you did not do this you would clearly be at a disadvantage.
This was SLCOC’s mentality. The true flaw was the short term mentality that SLCOC had. They were
thinking in the short term, where they should have been focusing on the long term. Suppose that such a
company enunciates its policy clearly and publicly calls attention to the corrupt practices of its
competitors. While this would probably be counterproductive in the short run, the result may be to
build up good will among the forces in the country that are fighting against corruption. SLCOC should
have wanted to represent itself as the ideal candidate, but it did not.
Sometimes a company has to start from a certain point and go forward from there. They have to accept
the past and simply make changes for the future. And that is exactly what SLCOC can do now. By
focusing on business transparency and educating management and employees it can do this. The key to
preventing these problems is to begin preparing for them while still in the latency stage and not allowing
these ethical dilemmas to arise to the public eye.
This may have high costs initially, but it will be an investment in preventing future financial burdens that
come from unethical behavior. Each stakeholder, whether great or small, will be impacted by this
reform. It is all about doing honest business. People will recognize and this and will ultimately reward
you for it. Focus on long term care not on short term solutions.
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Bibliography
Jennings, Moody Marianne. Business: It’s Legal, Ethical, and Global Environment Arizona State
University. Mason: Cengage Learning, 2012. Print.
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