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CASE STUDY ANALYSIS
Question 1
(1100 words) [30 Marks]
Work through the case study (following page) using just ONE of the following models of your choice to
reach and justify a responsible and ethical judgment in relation to the case study:
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Model #1: Langenderfer and Rockness Model also known as The American Accounting
Association (AAA) Model
Model #2: The Moral Intervision Model
Clearly identify the decision-making model you are using and then use the subheadings appropriate to
the chosen model to structure your response. There is space to write your response after the case
study.
As you apply your chosen model, ensure your response demonstrates your knowledge of the following
unit learning outcomes:
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1 Apply ethical theories, principles and decision-making models in arriving at reasoned
and responsible judgements for professional ethical issues in accounting, financial and
corporate settings.
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2 Apply relevant codes of ethics for accounting/financial professionals in the local and
global contexts.
Mark Allocation will be based on the application of the chosen model as follows:
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•
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Understanding facts (3.75 marks)
Stakeholders and key ethical issue(s) (7.5 marks)
Ethical norms, values, and principles (7.5 marks)
Courses of action and their ethical basis (7.5 marks)
Chosen and justified course of action (3.75 marks)
Question 2
(400 words) [10 Marks]
Mark Allocation will be based on two corporate governance issues presented in this company and
propose recommendations to address the limitations (10 Marks)
CASE STUDY
Since joining the university, Haukea has worked as a part-time intern in the Accounting and Finance
Department for Modern Battery Electronics (MBE). MBE is a listed company with subsidiaries in
several countries. About six months ago, Haukea was offered a job as a director for its Pacific Islands
subsidiary.
“We don’t usually offer this opportunity to someone who has only been with the company for a few
years,” said Willow, Haukea’s supervisor. “But in the short time you’ve been with the firm, we feel
you’ve shown a lot of management potential. We also see from your CV you spent a trimester abroad
in the Pacific Islands as part of your work-integrated program. This makes you a better fit than other
candidates since you are more familiar with the culture.” Haukea saw this promotion as a
steppingstone to a much higher position within the company. He agreed to the promotion and arrived
in the Pacific Islands a few months later.
Haukea found the transition in dealing with another culture challenging but rewarding. He especially
appreciated his assistant manager, Tram, who helped him learn the ropes and communicate with the
employees. MBE gave Haukea free rein in running the subsidiary. Its primary performance measure
is the bottom line, and employees are aware of this fact.
A few weeks ago, Haukea noticed something odd about the subsidiary’s waste disposal procedures
of sulfuric acid byproducts. Company procedures stated this waste had to be disposed of safely. The
problem was the missing paperwork employees were required to submit and file with corporate
detailing how they performed the procedure. Haukea could not find any records of any paperwork
ever being filed.
Haukea approached Tram about the issue. “The paperwork is more of a formality,” Tram replied.
“Nobody seems to follow up on it here in the Pacific Islands.” “That’s beside the point,” Haukea said.
“We need to have these systems in place to ensure we dispose of waste properly.”
After more questions, Tram finally confessed that while they usually tried to dispose of the waste
properly, the entire process took too long in a time crunch. This resulted in employees sometimes
dumping the waste in the waterway after paying a small reasonable fee to the local council.
Haukea was shocked. The local waterway is small, and many of the inhabitants in the area use it for
drinking water. “But this is a toxic industrial chemical! How long has this been going on?” Haukea
asked. “Several years now,” Tram stated. He then continued “However, the previous subsidiary
manager, now the CEO of MBE, told us not to worry. He said the sulfuric acid byproduct loses its
effectiveness when mixed with water. You would need to consume a lot for it to be harmful.”
Haukea immediately took action. He ordered a halt to the operations to investigate the matter
further. He called the subsidiary employees together and stated that from then on, they would follow
all procedures for properly disposing of waste. He also reported the situation to his supervisor,
Willow, back home and told her about the previous subsidiary manager’s knowledge and
noncompliance with proper waste disposal.
When Haukea called Willow, he detailed all the changes he made and planned to make. Willow
congratulated him on detecting and immediately stopping the improper disposal practices. Then
Haukea started to discuss how the company should report the situation to the Pacific Islands
authorities and discuss cleanup methods.
Willow was quiet for a while. “Look, Haukea, you must understand that in the Pacific Islands, water
contamination and improper disposal of waste is more accepted than it is here. I’m not sure we
should be worried about cleaning up the waterway, particularly as other companies in the area likely
use the waterway to get rid of waste. We are not the only firm around there, after all.”
“But Willow, people who use the waterway for drinking water might get sick,” Haukea replied. Willow
then responded “I don’t know, Haukea. A cleanup would cost millions of dollars, and we’d probably
be cleaning up the mess of other firms in the area. Additionally, we would probably be given heavy
fines since we’re a foreign company. Besides, you said that people would have to consume a lot of
this sulfuric acid byproduct before they get sick.” Haukea hung up the phone, more confused than
ever. He thought perhaps Willow was right.
Maybe he was overreacting. However, later that day, some reports he requested showed up. The
reports stated that local fishing in the area had decreased dramatically in the past few years, and
some fish importers from Australia have cancelled numerous orders due to water pollution concerns.
Haukea is faced with a difficult dilemma with a range of issues.
Question 1
(1100 words) [30 Marks]
How would you advise Haukea to navigate through the ethical dilemma? Clearly identify the decisionmaking model you have decided to use and then use the subheadings appropriate to the chosen
model to structure your response.
ANSWER HERE
Question 2
(400 words) [10 Marks]
With reference to corporate governance best practice principles, critically evaluate two corporate
governance issues presented in this company and propose recommendations to address the
limitations.
ANSWER HERE
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