CASE QUESTION

Lina, the newly appointed Human Resources Manager at Zumaju Company, sat at her desk
wondering what she should include and what she should omit in her report to be presented at
the Board meeting scheduled for the next day. Two days ago, he received a memo from the
CEO ordering him to give a 30-minute presentation entitled 'Integrity in Zumaju Company'.
When he first saw the memo, he laughed, after which he felt like crying. In fact, he was
seriously thinking of submitting his resignation in the morning. He did not know why this
show was necessary but, after much thought, he decided that he was not willing to be a
hypocrite. He will not lie to protect the CEO.

Immediately after reading the memo from the CEO, Lina had written on a note-pad a list of
unethical and illegal practices that officers had brought to her attention in her first six month
of service in the company. The list included:

 False advertising: two job advertisements had been inserted in the local newspaper in
which the stated salary was significantly higher than that which the company intended
to offer. The previous human resource manager believed that this would help to attract
a large number of applicants.
 Overtime payments: the letters of appointment routinely issued to employees stated
that executives were not entitled to overtime payment when they worked hours in
excess of their normal hours of work. However, some executives were earning only
RM1,400 per month and were within the scope of the Employment Act. None of them
had complained so far, presumably because they did not know their right under the
law.
 Telephone conversation were being recorded: apparently, the CEO suspected that
several senior managers were thinking of leaving the organization and joining a
competitor. He had ordered a maintenance technician to insert a recording device into
the telephones in the office of these managers without their knowledge.
 Complaints from the company accountant: the accountant had told her that he had
been instructed to source a large loan for the company without the approval of the
Board of Directors. He had only agreed to carry out this task because the CEO had
threatened him with dismissal if he did not do it.
Lina knew that what she had written on her list was only a start. She had heard of many
other disturbing and unethical incidents but she did not have the time to investigate them
and so was not in a position to lay out the facts to the Board of Directors.

1. What should Lina tell the Board of Directors concerning integrity at Syarikat
Zumaju?
2. How should Lina go about ‘cleaning up’ Syarikat Zumaju?