Vishvesh Soni

MBA 5600

1. Was Aaron Beam morally responsible for engaging in the “aggressive accounting” methods he

used? Explain. Was his responsibility mitigated in any way? Explain. Was he morally

responsible for changing the clinic reports to increase the company’s earnings? Was his

responsibility for this mitigated ? Explain. Were those who cooperated in his actions morally

responsible for those actions? Was their responsibility mitigated? Do you think Richard Scrushy

was morally responsible for the accounting fraud? Explain.

- “Aggressive accounting” is a new explanation to Aaron told himself to justify the fictional

entries he did, which he believed is not fraudulent. Scrushy pushed him every time to do this

aggressive accounting but he could and should have prevented them but he didn’t, which makes

him morally responsible for his action because he was fully aware of his consequences and

damages to his actions of stating increased earnings. “The Family” is the group of people which

was involved in this fraud and each person in that group were morally responsible for it but the

burden of the moral responsibility get higher with the time as they have known enough and

remain silent as they could or should have done the right thing. Scrushy has the highest

percentage of accountability for this fraud as he was at the top in command and known the result

of each action taken by him for his personal interest, which indicated by the lavish lifestyle he

had created by justifying the best interest of the company in the face of fraud.
2. If you were the CEO or manager, how would you have handled or decided the case?

- If I were the CEO after I have screwd up, I could have included some of the best financial

executives of the company in the FAMILY to make these fictional income statements real and

try to figure out how to manage these fictional entries can do minimal damage. I would have

tried to make things right by taking action in favor of the company and shareholders because

they all believed in me and the idea. Collatral damage is a choice to make and I would have

chosen to lose money and some of the reputations if my employees get minimal damage or no

damage as I should take responsibility of any course of actions and in this case, I had initiated

the series of fictional entires which can harm many people in many ways but rehabilitation

centers were fulfilling their purpose by serving patients which is why I believe company can

recover from the damage of money and reputation. If my plan does not work then I could have a

step back from my position and choose somebody who can lead the company better than me and

control the damage and also help me to save my self from fraud case as I have took major

responsibility for the fraud and didn’t include any employees in decision making area for it

which may save them. I understand that I am being entirely ethical and not thinking about my

personal damage but I think I can bear this with my preparation to the situation before putting

my self into it.

3. Which of the “obstacles” to moral behavior do you see at work in Aaron Beam’s behavior and

thinking? In Scrushy’s?

- Scrushy has mainly two obstacles, rationalizing the action, Euphemistic Labeling and

displacement of responsibility, which means he believed that he has reasons to justify the

decisions by euphemistic labeling and not taking any responsibility for actions as he believed

that he was not doing it by himself. Aaron beam also had euphemistic labeling obstacles while he

was also trying to rationalize action taken by him and defusing the responsibility of them.

4. Explain how Aaron Beam might have used the “loyal agent’s argument” to defend his actions.

Do you think that in Aaron Beam’s situation, the “loyal agent’s argument” might have been

valid? Explain.

- Aaron Beam's barrier would be that Scrushy had requested him to control the bookkeeping

records or all the more explicitly the general records. He was viewed as hesitant to go along.

However, he was forced by Scrushy and somewhat threatened by him to the point now and again

of dread.

- From the earliest starting point, Scrushy and Beam both realized the organization needed to

seem productive to fulfill investors and to later prevail with regards to selling organization stock.

In this manner, Beam needed to know Scrushy would ask or requesting him to get it going.

Because of Beam's reluctance, it could be contended he realized that this generally would not be

right however, he did it in any case.

5. In terms of Kohlberg’s views on moral development, at what stage of moral development would

you place Aaron Beam? Explain. At what stage would you place Richard Scrushy?
- In terms of Kohlberg’s views, Aaron Beam’s moral development would be a level two stage

three. He knows good and bad and also, what the law says. He shows this by his hesitance to

help Scrushy's choice to control the general records. He additionally has an impressive image of

Scruchy and seems to need to impress him.

- Scruchy’s moral development was at level one stage two as he has narcissist behavior and his

own employee stated him as a dictator or cult figure, which makes him self centered and do

anything to get what he wanted.