Activity 1

1. Do you think the company’s reaction to reports of hazardous ingredients hurt its reputation for honesty and
ethical behavior?
The way Honest Co. have responded to the report about its product containing chemicals which it pledged to
avoid is one to focus unto. Denying such issues is not enough to prove the innocence of the corporation from doing such
harmful mistakes. The actions that should be taken is the one that proves that all its ingredient that has been included in
the formulation of its product is truly ecofriendly and sourced properly. Honest Co. should not underestimate the report
and call it as “junk science”, instead they should have done some proper illustration of the content of its product to clear
issues and make sure that it won’t cause anything to the consumers.
2. Do you think the company’s missteps caused Unilever to shy away from acquiring the company?
It is a common reaction of a new investors to change their mind regarding acquisition of a company that have an
issue to settle. The report and the negative publicity around the Honest Co. impact the Unilever for not making an offer to
them but instead acquired its biggest rival. Since the reason of the investors to choose the Honest company is its concept
which is ecofriendly then they failed to maintain its principles then there is a big possibility of refusal from new investors.
Leaving the accusation hanging and just denying it without active actions would be a reason for any buyer to walk away.
3. Do you take the stance that Alba's entertainment background played a part in the press going after the company?

Yes, I do believe the Jessica Alba's background in the entertainment industry became somewhat of a factor to the
issues and concerns being thrown into the company since it became a headline. Jessica Alba initially became a well-
known figure not because she partakes as a co-founder of one of the leading healthcare product-selling company in the
modern world but it is due to the glamour stirred by her acting and modeling career ever since she was a child.

Her name in the limelight of entertainment industry might have nothing to do with the success of Honest Co.
however, it became a detail that people - both the media and the consumers, used to point fingers at her to blame for all
the inconvenience that the products had brought into the market, also supporting claims that Jessica Alba might be
unknowledgeable to run a business of her own and that all doubts raised unto her might be facts after all. In addition to
this, an individual can also spot how the media always addresses the issue with her name as the person or entity in
question, despite that it was Honest Co. who is under fire, people would associate the news to her name because of the
stereotype that she is an actress and she might not be competent enough for her job as CEO of a business company.

4. If you were an advisor to the new CEO, what suggestions would you give him for getting the company back on
track, especially when it comes to corporate social responsibility?

As we all know the Corporate Social Responsibility is an important part of business ethics. A business is
responsible not only for treating its employees and customers well, but also for keeping up its end of the bargain with
society at large.

If I were be the Advisor of the New CEO of The Honest Company, in order for the company to get back on track,
I would highly suggest to invest their resources on its research and development for their products, as well as
implementing programs about environment.

As they are business which is popularly known that sells nontoxic, eco-friendly items, they must not move to the
two mistakes they have done in the past. Challenges are what makes the company strong. The best way to solve their
problem is to get back the full loyalty of their customers and the community, by creating programs with regards to health
and environments as well as proper formulation of the product. Programs of environment such as clean and green project
and environmental awareness and others.

This would create an impression for the customers and community that despite of the company's mistakes, they
are still concern with the ethical approach to making products that are not only good for people but also good for the
environment.
 Activity 2

Bernard J. Ebbers, WorldCom CEO—GUILTY ON ALL COUNTS

Bernard J. Ebbers, CEO of WorldCom Inc. was found guilty on all counts as the alleged mastermind of
an $11 billion accounting scandal. The prosecutors said that Ebbers had the motive of protecting his personal
assets which consisted mostly of WorldCom stock so the decline in its value would not be favorable to him, as
well as, the $400 million loan to Ebbers. Despite his efforts of pleading innocence, he was eventually charged
of conspiracy, securities fraud and seven counts of filing false financials facing 85 years in prison, or at most,
the rest of his life.
The ethical violations of Ebbers and others, includes the fraudulent reporting, and falsified books and
records, and internal control provisions. For instance, to conceal the continuous worsening of the company’s
financial performance, numerous false million-dollar adjustments and entries were made to manipulate the
financial results. This resulted to an overstatement of their income amounting up to $9 billion in totality. Aside
from that, they have deceived the public by reporting false and misleading public statements about their
financial condition. Their scheme is a strict violation of the integrity, transparency, and disclosure principles of
governance. After all, companies, especially the publicly-listed ones, have the responsibility to report accurate
financial statements and to be transparent through compliance of the disclosure requirements.
This scandal has caused significant losses to WorldCom shareholders and has made history as being the
largest bankruptcy in US history. Thus, in response to widespread corporate fraud and failures, the Sarbanes-
Oxley Act was signed into law making corporate chiefs criminally responsible for false regulatory filings
among other provisions.

Scrushy found GUILTY

The HealthSouth scandal is unique in that the prosecution concentrated its efforts on criminal prosecution of the
staff and the company itself was very secondary. In other health care frauds it has been the companies that have
paid large settlements and the executives responsible have walked away with their profits. This change was
probably due to the recently enacted Sarbanes-Oxley laws. These held executives personally responsible. The
Scrushy trial was the first test of this new law and the prosecution seemed to have an open and closed case.
The prosecution were inept in electing to charge Scrushy in his home town of Birmingham and in their public
grandstanding. They probably rubbed the judges up the wrong way and made a number of other errors. Scrushy
was very resourceful and had the money to buy the best. He also knew his home town and the black population
there well. He was able to align himself with them and get the support of the black clergy. He claimed that he
had been set up and had not known what was happening.
There was no clear paper trail and the case depended on the testimony of multiple witnesses from HealthSouth
who testified to Scrushy's involvement. The defence attacked their credibility and ultimately the jury refused to
believe them and acquitted Scrushy of all charges. Many critics and analysts believe that there was a
miscarriage of justice.
The interest in this case is what it tells us about Richard Scrushy and the legal system in the USA - a fascinating
glimpse into middle America. It gives an indication of what happened or did not happen at HealthSouth.
 Activity 3

I agree to the view of PETA with regards to the animals who are suffering to the human hands. Specially to the
animals use for entertainments and goods like clothes, bags and other items that use animal skins. I am strictly
against that because as our technology improves there is a variety of ways to produce those things like
accessories but greedy people still keeps on hunting and killing animals that may lead to their extinction. Also
animals should live free in the wild not caged just to entertain people. Those animals suffer extreme treatment
for them to be trained well. Those activities should stop. The only thing I don’t agree with is about animals
becoming food. I know I don’t see the suffering of those animals while their being killed because I only see the
finish products. But one of the primary source of our food is meat that came from the animals.
I think those who manufacture fur clothing had no justification for their actions. They are blinded by their greed
of selling those fancy clothes. We all know that those goods made from animals fetch a high price in the market
and those people mercilessly kill animals just to get those large profit. I personally don’t like to work with those
company. Someday they would realize when all those animal the kill for fashion will no longer be seen because
of extinction. I hope that before that happen is that we stop supporting those companies and save the suffering
of those animals.