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Business and Society 9th Edition by Archie Carroll,Ann Buchholtz
Edition 9ISBN: 978-1285734293Business and Society 9th Edition by Archie Carroll,Ann Buchholtz
Edition 9ISBN: 978-1285734293 Exercise 2
Cheating Consultants: Helping Factories to Pass Audits
A new group of consulting firms in China now advertise that they can help Chinese factories pass labor audits being conducted by Western companies. These firms claim they can help generate two sets of books-real ones and fake ones. These consultants are part of a growing cottage industry in China that help factories "appear" to pass the increasingly stringent audits being used to help clean up sweat shops and labor abuses in that country.
Auditors of working conditions in low wage plants have also said they have found documents that might have been used in factories to prep workers with the answers the factory wanted the auditors to hear, this according to the Fair Labor Association (FLA) which conducted an investigation.
The director of the Ethical Trading Initiative, a London-based group, has said that audit fraud is a serious problem. Fake payroll books have become so common that auditors now assume there are at least two sets of books. China Labor Watch, a New York based advocacy group, alleged that one toy factory in China may have bribed its auditor in addition to forging employee time sheets and salary records.
One Chinese consulting firm even advertised on the Internet that it has software available to generate fake factory books. The software also allows the factories to adjust their employee data to present the type of profile the auditors are expecting. The demand for the services of these consulting firms seems to be rising as factories seek to pass the sometimes difficult audit standards.
In their defense, some factory owners in China say it's impossible to meet the MNC's demands for better working conditions while also keeping prices low.
1. Is it ethical to operate a consulting firm that helps factories to lie, cheat, and deceive auditors seeking to monitor working conditions? Could you imagine firms such as this succeeding in your country?
2. What are the implications for the business system in countries that permit this to occur? What happens to the business and society relationship?
3. Should the MNCs striving to create ethical supply chains attempt to interact with and lobby the Chinese government to outlaw consulting firms such as these?
4. Is it possible that we have now reached the point that working conditions cannot be improved while keeping prices low? If so, what comes next?
A new group of consulting firms in China now advertise that they can help Chinese factories pass labor audits being conducted by Western companies. These firms claim they can help generate two sets of books-real ones and fake ones. These consultants are part of a growing cottage industry in China that help factories "appear" to pass the increasingly stringent audits being used to help clean up sweat shops and labor abuses in that country.
Auditors of working conditions in low wage plants have also said they have found documents that might have been used in factories to prep workers with the answers the factory wanted the auditors to hear, this according to the Fair Labor Association (FLA) which conducted an investigation.
The director of the Ethical Trading Initiative, a London-based group, has said that audit fraud is a serious problem. Fake payroll books have become so common that auditors now assume there are at least two sets of books. China Labor Watch, a New York based advocacy group, alleged that one toy factory in China may have bribed its auditor in addition to forging employee time sheets and salary records.
One Chinese consulting firm even advertised on the Internet that it has software available to generate fake factory books. The software also allows the factories to adjust their employee data to present the type of profile the auditors are expecting. The demand for the services of these consulting firms seems to be rising as factories seek to pass the sometimes difficult audit standards.
In their defense, some factory owners in China say it's impossible to meet the MNC's demands for better working conditions while also keeping prices low.
1. Is it ethical to operate a consulting firm that helps factories to lie, cheat, and deceive auditors seeking to monitor working conditions? Could you imagine firms such as this succeeding in your country?
2. What are the implications for the business system in countries that permit this to occur? What happens to the business and society relationship?
3. Should the MNCs striving to create ethical supply chains attempt to interact with and lobby the Chinese government to outlaw consulting firms such as these?
4. Is it possible that we have now reached the point that working conditions cannot be improved while keeping prices low? If so, what comes next?
Explanation
Verified
Verified
1.
It is unethical to lie to auditors be...
Business and Society 9th Edition by Archie Carroll,Ann Buchholtz
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