BUSINESS ETHICS CASE ASSIGNMENT

Aaron Beam and the HealthSouth Fraud

Imanda Mulia Rahman 361168

1. Aaron beam used two obstacles to excuse his actions. Rationalizing Our Actions was
used because he was just trying to do what he was being told to do and even doing it
as minimally as possible. And also he used Distorting the Harm in the fact that he could
make the financial report look better in the eyes of public and investors.
On the other hand, Scrushy used Displacement of Responsibility because he didnt
directly manipulate numbers but instead he asked other to do that for him. Scrushy
also used Redirection Blame because the let everyone to take the fall by convincing a
jury that he didnt do anything that was illegal.
2. No, the loyal agent argument is not valid here. Because even with good intentions
behind, Beam still continued to get deeper and deeper into unethical behaviors that he
already knew was wrong.
3. According to Kohlbergs views on moral development, the stage for moral development
for Aaron Beam is level two. Because he admitted that his actions were wrong and
unethical. Initially, he justified his participation only as aggressive accounting but
then it was found out that intimidation played a role in his decision to follow Scrushys
order. His behavior portrayed of stage three, which is Interpersonal Concordance
Orientation when he was aware of right and wrong actions but nonetheless had a
stronger desire to please the employers. As the time goes by, the fraud became more
serious and Beams started to fall into Stage Four, which is Law and Order Orientation
by retiring from the company which is his action to not involved again in the fraud. His
latest action to the company showed that he was confused whether he had to please
his employer or stand on the moral, which showed that he is at level two of Kohlbergs
Moral Development.
Richard Scrushy is at level one. Scrushy is a charismatic individual who has boundless
energy and work like dictator. However, his moral development is not as good as his
intelligent that he could plan aggressive accounting and he also refused to take any
responsibility of his action. Level one state There is little awareness that others have
needs and desires like ones own which reflects Scrushy perfectly. He made efforts to
avoid punishment and covered it by contributing to charities
4. Aaron Beam can be said to be morally responsible in the case of aggressive
accounting, because:
He caused and helped the aggressive accounting to happen
He had the responsibility and knowledge of what he was doing
He did it consciously at his will
This action of aggressive accounting can be mitigated because:
Difficulty to avoid the circumstances, because of the behavior of dictatorship
enacted by Richard Scrushy
Seriousness of the wrong, which are still in the bounds of accounting rule
Aaron Beam can be said to be morally responsible in the case of fixing the books,
because:
He caused and helped the book fixing to happen
He had the responsibility and knowledge of what he was doing. He did it
consciously at his will
This action of fixing the books can be mitigated because:
Difficulty to avoid the circumstances, because of the behavior of dictatorship
enacted by Richard Scrushy
The people who cooperated can be said to be morally responsible in the case of fixing
the books, because:
They caused and helped the book fixing to happen
They had the responsibility and knowledge of what they were doing
 They did it consciously at their will
This action of fixing the books can be mitigated because:
Minimal contribution of the employees cooperated in this action
Difficulty to avoid the circumstances, because they might lose their jobs
Richard Scrushy can be said to be morally responsible in the case of fixing the books,
because:
He caused and helped the book fixing to happen
He had the responsibility and knowledge of what he was doing
He did it consciously at his will