After the death of Hammond, the former CEO who was known as the backbone of a successful American International Aerospace company, Hammond Aerospace named Cheryl Tobin as the new replacement for its previous CEO. Entering her first day as the CEO, she is aware of the rumor that has been circulating outside, about the company practicing bribery and the possibility of slush fund. The new CEO Is currently confronted with the issue of whether to overlook any conceivable wrongdoing or keeps moving on and conducts an investigation on the matter that might uncover a possible corporate scandal.
Cheryl is now faced with a dilemma of which action should she choose considering that it is also her first day of work as the appointed replacement CEO by the board. Each action that she will choose has its own consequence. The problem of ignoring the possible issue without taking any action and letting the executives that could possibly put the company at risk by doing corruption is, if it’s true that there has been slush fund going around then, when the time comes, not only will she execute herself, but also her negligence will make allowance for the current corporate culture to win contracts over bribery as an acceptable behavior. Meanwhile, if she chose to change the corporate culture to a more ethical one by conducting an internal investigation, it will cause the executives of the company to go on the edge. In addition to this, it will also cause some serious issues on trust, loyalty, and division problem within the company. If the doubts are proven to be true and they are found guilty, it will not only put their jobs on the line, but also their reputation as professional executives and freedom are at risk. Seeing this option from another perspective, if the news of the investigation into possibly illegal conduct is known to the World, it will cause a serious harm to the company, such as the negative outcome on stock sales and the result in loss of clients.
Keeping quiet after knowing such serious rumor is definitely not the best way to start the job as the new CEO. First of all, Cheryl has to weigh the risks of doing the investigation into the company’s past history. She has to see and deal with this issue as the head of the company and not an outsider. The problem she has now is actually seeing herself as an outsider and asking too much opinions from her employees regarding this issue and got swayed too much by each opinions suggested. Having the position of a CEO, she needs to know that she has to create a change within the company, not to keep things the same. There should be some reasons why the board chose her instead of bringing Hank Bodine in. There could be a possibility that the board had wanted her to conduct the investigation about these rumors. Thus, before starting the investigation, she has to see first whether or not she has the support from the board whether or not the corruption is exposed.
Based on the case, after knowing about this matter, the first person she spoke to was Hank Bodine about her intention on doing the investigation. She took the wrong step because this is where the problem started, which was asking the wrong person for suggestion. He could be one of the parties involved in the corruption matter and he also opposes her entry into the company. He kept on suggesting not 6conducting an investigation and just keeping quiet about it. This approach might actually be beneficial because rumors are not proven and can be simply brush off as untrue. However, ethically it is very wrong because if she keeps quiet about it once and letting it go, in the future this could lead to an even bigger problem and could cause a bad relationship between her and Bodine. Moreover, if one day everyone knows what has been going on the company even after she knows what happened in the past and letting it go, it will be her position that is put on risk and it will be hard for her to pursue another career with such background. Even if this happened way before her tenure, when she’s holding the position of the CEO, she is fully responsible for everything that happens inside the company. With full responsibility, it means that she knows that she could be held legally responsible if she signs any financial statements that she has doubts about. If she decided to do an investigation, of course it will cause some serious damages to the company’s reputation. Nevertheless, if the company can fully cooperate with all parties and create good will and consumer confidence then the company will soon recover the bad reputation they get from this issue. It all actually depends on how well she manages and handles the crisis.
The next action she took was contacting a well-known law-firm to ask for advice, and probably running a probe, was the right step. Whether or not the investigation would be the best choice, there are some ways to look at it. If there really is a corruption happening within the company, then it’s just a matter of time before the word spreads even larger than before. Since Cheryl is now with full responsibility for what’s going on in the firm, whether it started before or during her tenancy as a CEO, for the sake of the company’s long-term viability, it is best to hold an investigation. Upon doing the investigation, she has to carefully think on how to respond appropriately after they found out either the company is found guilty of bribery practices. If the result shows no evidence to corruption, she will be put in a bad position, which is why it is very important to see how far will the board support her regarding this issue. Meanwhile, if the company is revealed to be guilty, Cheryl will have to think of a set of rapid response plans to avoid this from happening again and try to minimize the damage that could be caused by this.
As a conclusion, when a new CEO like Cheryl is faced with such situation, there are three strategies that could be applied for solving such issue. The first strategy would be time management strategy where knowledge about time effectiveness is important. For example, is it the right timing to be doing the investigation and how much time will be consumed for solving the issue? The second strategy would be communication and networking strategy where communication is very needed, not only how to communicate but knowing whom you communicate with is very important. For example, who can your trust, how to communicate with the board, how to control the situation with communication internally or externally. The last strategy is decision-making and planning strategy, that is the most crucial knowledge needed by the leader of every company. Decision making and planning should be combined because every CEO has to be prepared for what short-term effect or long-term effect the company had to confront for every decision made. Such as, what actions to take if the company is face with a negative long-term effect that the investigation could cause, how to keep things under control if investigation were to be conducted, how to still keep good relationship with clients despite the investigation that is going on. As for planning, It is better for any leaders to increase as many options as possible and the more diverse the alternatives, the more chances you will get the best solution to any issue. But the thing I would like to emphasize here is that what ever issue a company is dealing with, if the company wants to hold high standards and consistent practices, CEOs should follow the ethical standards in leading the company.
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