Olympus - Caught in the Act

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Afterwards Woodford called into a board meeting that was supposedly about the fraudulent acts that took place. However, it was quickly replaced about his resignation in the position. After his departure he blew the whistle to the Serious Fraud Office (SFO) at UK.

On November 24, 2011 the company announced the resignation of Kikukawa, Yamada, and Mori from Olympus. Kikukawa was replaced by Shuichi Takayama.

POINT OF VIEW

Michael Woodford

STATEMENT OF THE PROBLEM

- What was the cause of a Bubble Economy?

- What is the purpose of employing the Zaitech?

- Why did they decide to continue that fraudulent accounting practices?

- How does a country’s culture affect the business culture within it?

- In what ways does the Japanese culture hinder fraud detection and deterrence?

- What is the impact of national culture on corporate culture?

- What can the current Board of Directors of the company do to deter this type of fraud?

- Will the corporate world encounter this kind of case again with our current corporate governance?

OBJECTIVES

- Disseminate everyone about the bubble economy and the things it will cause

- Employ properly the use of zaitech, not the fraudulent one

- Make sure that everyone learn from this kind of mistake in order to avoid it in different circumstances

- Discuss the role national culture plays on corporate culture

- Identify components of Japanese culture that may hinder fraud deterrence and detection

- Examine the impact of national and corporate culture on ethical behavior

ALTERNATIVE COURSES OF ACTION

- When they think that the operation will result into a loss they should’ve consulted a financial expert or a remarkable CPA in order to lessen or prevent the company from incurring losses.

- It is not bad to recognize a loss, it will give us more opportunities to make relevant decisions in order to improve the operation and the profitability of the business. Otherwise if we decide to make fraudulent accounting procedures in order to cover up all the losses, we may incur losses until the end of the corporate term which is irrelevant in decision making. It will be better to accept than to regret.

- High foundation of knowledge of corporate governance is a must in each one of us in order to attain high level of performance of the business with competency.

RECOMMENDATION

- Appoint a quality and competent financial advisor, private CPA, and those who belong to finance department so that there will be a remarkable cash control of the company.

- The employees must be aware of the company’s condition and must not put all their dependence and trust to the superior in order to prevent the manipulation and to know the outcome of those fraudulent decision.

- Represent a welcome improvement in Japanese corporate governance for Japanese stakeholders and foreign shareholders alike.

- Confidentiality is a must to everyone in order to tighten its security and a monthly audit to the company’s financial statements.