Corporate scandals have been sadly rampant over the last 15 years. In 2001 and 2002
alone: AOL inflated
sales figures and exaggerated revenue by as much as $49 million in 2002 to secure
its purchase of Time Warner. Arthur Andersen was convicted of shredding
documents containing information about the Enron audit in 2001. Enron falsified its levels of profits
and debts and also bribed government officials in other countries in order to
win international contracts in 2001. Halliburton booked $100 million in construction costs before
clients had agreed to the cost in 2001. Tyco’s former CEO was indicted for tax evasion in 2002. Xerox falsified five years of accounting, which resulted in
showing an additional $1.5 billion of non-existent income. I won't even get into the more recent banking and loan scandals that caused the housing bubble to burst.
The impact of these publicized ethical lapses is diverse.
First, employees who already struggle to uphold ethical standards may be
inclined to try and copy-cat others. On the other hand, the attention paid to
the harsh punishments and devastating effects of ethical breaches may encourage
employees who are on the fence to choose the more honorable path. Most
importantly, when corporate ethical lapses are publicized, it allows other
companies the opportunity to learn from the mistakes of others. For example,
Enron had a well-written ethics policy, but did not have a corporate culture
that promoted ethical behavior. By analyzing the factors that contributed to
the ethical lapses, companies can take a proactive approach to encouraging
employees to act ethically. Incorporating ethics into company culture and
creating incentive programs that reward ethical behavior are just two examples.
So, how can the recruitment team be a resource that help
an organization avoid the fate of the
companies mentioned in the opening paragraph? Recruiters are the
gatekeepers of company culture. They should be viewed as essential to the
current and future success of the company. Recruiters can only gain an in-depth
knowledge of the company’s future goals by participating in planning meetings
with senior management. When recruiters understand the future needs of the organization,
they can hire candidates who will perform well and fit in with or enhance the
corporate culture. Recruiters who are participants in strategic planning
sessions can support and expedite the execution of managements’ business
strategy and contribute to increasing company profits. Additionally, recruiters
who understand the company’s future plans can hire not only for the company’s
current needs, but also for the company’s future needs.
References
Neuborne,
E. (2003). Incentive ethics under fire. Potentials, 36(3), 5.
Patsuris, P. (2002,
August 26). The Corporate Scandal Sheet. Retrieved from Forbes.com:
http://www.forbes.com/2002/07/25/accountingtracker.html
Phillips, J., &
Gully, S. (2012). Strategic staffing (2nd ed.). Upper Saddle River, NJ:
Pearson.
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