MINI CASE STUDY:

GROUP 2

NAME MATRIC NO

POH GUAN JIE PBS20201179

LALITHPRASAD RENGANATHAN PBS20201170

NURAZMIN FARZANA AZUDEN PBS20201159

INTRODUCTION

● SNC-Lavalin (SNCL), one of largest construction firms in Canada

● Alleged CAD $118 million as bribes to secure contracts in Libya
● Charged over multiple bribings to win contracts in Asia and Africa
● ‘Project Consultancy Cost’ expense line and ‘agent fees’ to settle
illegal transactions and avoid criminal litigations
● Top executives faced criminal charges; firm banned from bidding
World Bank-funded projects for a decade
● Common corporate culture to use bribery to win contracts and settle
transactions; executives pocketed portion of the bribes and earned
performance bonus
1. Use MARS model to discuss the main predictor of wrongdoing in
SNC-Lavalin

● MARS model : Motivation, Ability, Role Perception, Situation

● Role Perception is the main predictor of SNCL conduct
● Employees understand that they are expected to obtain contract
● Bribing is the perceived normal way to do it
● Performance and rewards based on winning contract
● Management board and senior executive perceive it is
reasonable to make payments to avoid litigation
2. Explain how moral sensitivity and moral intensity apply to the unethical
behaviour among several SNC-Lavalin executives and other staff.

● Moral sensitivity is the ability to detect a moral dilemma and

determine the relative importance
● Executives at SNCL has low ethical and moral sensitivity as they
practice against the code of ethics
● SNCL’s CEO authorized undocumented payments despite being
opposed by CFO and the Head of the International Division; leading
the CEO to resign after these actions revealed to the board
● The executives did not use their expertise or knowledge of prescriptive
norms and rules; also, it can be said that the staff at SNC-Lavalin lacked
in their moral character
2. Explain how moral sensitivity and moral intensity apply to the unethical
behaviour among several SNC-Lavalin executives and other staff.

● When someone has high moral sensitivity, they can quickly and
accurately estimate the moral intensity of an issue
● Moral intensity is the degree to which an issue demands the
application of ethical principles; decisions with high moral intensity
tend to have strong ethical implications which would affect many
people
● The decision maker needs to carefully apply ethical principles to
make the right decision so that unethical behaviours can be avoided
3. What steps should SNC-Lavalin and other companies in this
situation take to minimize these types of corporate wrongdoing

● Implement organization’s code of ethical conduct

● Outline the ethical expectations clearly to employees especially
newcomers
● Improve and raise awareness of ethical conduct among employees
● Restructure the top management and replace it with a new
management that will focus on creating an ethical culture in the
organization
● Create ethics committee that will be in charge with the audit of
employees’ ethical and moral behaviours to ensure it’s compliant
with the organization’s code of conduct