Australian Wheat Board Study
Introduction
A United Nations report on October 27, 2005 found that the Australian Wheat Board (AWB) had paid $US221.7million in kickbacks to the Iraqi government under the United Nations Oil-for-Food program (Whitton 2007). Acting in such a manner they cheated their shareholders out of those monies as well as damaging Australia's trade reputation. This paper will examine the environments the organization was operating in, the managerial ethical issues and corporate social responsibility. The academic theories behind each managerial issue will be identified and other relevant cases will be introduced as well in an attempt to understand the situation in greater depth and what led to such decisions being made.
Part A: The environment
A.1 External
Four main groups make up the specific external environment (Robbins et al, 2006), customers, suppliers, competitors and public pressure groups. "Each has a direct and immediate influence on managers' decisions and actions and is directly relevant to the achievement of the organization's goals". In this case factors in the external environment encouraged the organization to behave in an unethical way.
A.1.1 Customers
In an unusual twist, it was the customer that was asking AWB to conduct business in an inappropriate manner. As part of the sale of wheat to Iraq, AWB was asked to pay "discharge and land transport" fees to transport wheat to silos throughout Iraq (Attorney General's Department 2006). They were informed that, should they not pay this fee, Iraq would not purchase any wheat from them.
All companies exist to serve the needs of their customers. The old adage "the customer is always right" is not always true, but the seller must always behave as though it is. Generally a company will not question how the customer would like to do business, but rather go out of their way to ensure their needs are met.
A.1.2 Suppliers
The suppliers of an organization are also key to its success. For AWB,
A United Nations report on October 27, 2005 found that the Australian Wheat Board (AWB) had paid $US221.7million in kickbacks to the Iraqi government under the United Nations Oil-for-Food program (Whitton 2007). Acting in such a manner they cheated their shareholders out of those monies as well as damaging Australia's trade reputation. This paper will examine the environments the organization was operating in, the managerial ethical issues and corporate social responsibility. The academic theories behind each managerial issue will be identified and other relevant cases will be introduced as well in an attempt to understand the situation in greater depth and what led to such decisions being made.
Part A: The environment
A.1 External
Four main groups make up the specific external environment (Robbins et al, 2006), customers, suppliers, competitors and public pressure groups. "Each has a direct and immediate influence on managers' decisions and actions and is directly relevant to the achievement of the organization's goals". In this case factors in the external environment encouraged the organization to behave in an unethical way.
A.1.1 Customers
In an unusual twist, it was the customer that was asking AWB to conduct business in an inappropriate manner. As part of the sale of wheat to Iraq, AWB was asked to pay "discharge and land transport" fees to transport wheat to silos throughout Iraq (Attorney General's Department 2006). They were informed that, should they not pay this fee, Iraq would not purchase any wheat from them.
All companies exist to serve the needs of their customers. The old adage "the customer is always right" is not always true, but the seller must always behave as though it is. Generally a company will not question how the customer would like to do business, but rather go out of their way to ensure their needs are met.
A.1.2 Suppliers
The suppliers of an organization are also key to its success. For AWB,
References: Gettler, L (2006) ‘UN chief takes swipe at corporate behaviour ' The Age, 5/4/06, p.12 Gettler, L Heller, R. (2007) Business Communication: Corporate Culture and Communicating in Management. http://www.thinkingmanagers.com/management/business-communication.php [Accessed 20/05/07] Kohlberg, L Kotler, P. and Lee, N. (2005) Corporate Social Responsibility. Hoboken, NJ: John Wiley & Sons Overington, C Robbins, S., Bergman, R., Staff, I. and Coulter, M. (2006) Management 4th ed., Australia: Pearson Education Australia Seligson, A