Ethics Cases

-The CEO of Starbucks and

the Practice of Ethical
Leadership
-Google
-Bernie Madoff’s Ponzi
Scheme
-Wells Fargo Banking
Scandal

Ethical
behaviour is all
about doing the
right thing.
Zainab Iqbal
BBI2O1-02
 LEADERSHIP
PRACTICE OF ETHICAL
STARBUCKS AND THE
THE CEO OF
On April 12th of 2018, two black men were arrested in a
Philadelphia Starbucks after previously explaining that
they were just waiting for a business meeting to the
manger who had asked them to leave because they
hadn’t ordered anything. The manager then called the
police and had the two men arrested. The arrest was
being recorded by another costumer who posted this
video on social media which then went viral.
In an interview after the video went viral, the women who
recorded the video said that she wasn’t asked to leave even
though she had also just been sitting there without ordering
anything.
The arrests also caused protests at that Starbucks and the
manager was fired a few days after the incident.
The CEO of Starbucks, Kevin Johnson, also issued an apology to
the men and stated that Starbucks was a place where you could
sit without having to order anything and you wouldn’t be
asked to leave. Johnson took full responsibility for his
employees actions and decided that his employees needed more
training. He also acknowledged how hurt and upset the
costumers and other Starbucks employees were after this racist
incident, and to help the situation he temporarily closed 8,000
stores for training and created a “Use of Third Place Policy,”
which states that Starbucks seeks to create a culture of warmth
and belonging where everyone is welcome. So, Johnson did the
right thing and tried to handle the situation as best as he could.
Google is constantly searching for new ways to improve the well-being, morale,
and health of its users. Google also creates the most comfortable office setting
for its employees to work in, and Google has been using renewable energy to
help the environment. Google promotes green energy and always tries to be
ethical by doing the right thing.

In the past few years, Google has been
planning to power all of its offices and
data centres with renewable energy to
help the environment.
-Google offers medical
services, on-site
physicians, nurses, and
health care coverage to
keep its employees
healthy and happy.
Employees can travel
without worries because
they’re covered
with travel insurance and
emergency assistance on
both work-related and
personal vacations.
-Google also offers a
Global Education Leave
program, which allows
employees to take a leave
of absence to continue
education. All of the cost
for education is covered
by Google.
-To help with morale, the
employees are allowed to
bring their pets to work.
Some employees say that
bringing their pets to
work gives them more
energy and makes them
happy.
 In 2008 was when the Bernie Madoff’s Ponzi Scheme was
discovered. Madoff was then convicted on March 12, 2009
which was when he pleaded guilty. He was sentenced to 150
years of prison at a medium-security federal prison in
Butner, North Carolina with another penalty of $170 billion
in restitution.
Madoff had the biggest fraud scheme in all of U.S.
history. To make this scheme work, Madoff used a scheme
called the Ponzi scheme which is where you lure investors in
by guaranteeing them unusually high returns. These types
of schemes are run by central operators who use the money
that’s coming in from the new investors to pay off the
promised returns to the older investors. This makes the
business seem profitable even though an actual profit isn’t
being made. Then the person who’s in charge of this scheme
can keep the extra money or use it to expand the business.
So, with using this technique, Madoff convinced thousands
of investors to invest their money, while he falsely promised
them high profits. He was then caught in the December of
2008 and he was charged with 11 counts of fraud, perjury,
theft, and money laundering. Many of the investors still
don't have their money back to this day and Madoff
defrauded his clients of almost $65 billion which is the
largest investor fraud committed by a single person. So, this
was very unethical of Madoff because he lied to his
investors and stole their invested money.
Wells Fargo is an American financial services company that had a
huge scandal go public in 2016. This breach ruined the most basic
requirement for banking which is trust.
The employees working with Wells Fargo at the time of the scandal
were under constant hourly tracking, a compensation system based
heavily on bonuses, and also pressure from their managers to
engage in unethical behaviour to reach their quotas. Many of these
employees had then quit due to the substantial amount of pressure
that they were facing daily. The CEO of the company, John Stumpf,
told the board that the scandal was the result of only some of the
managers of Wells Fargo not honouring the company’s values and
not following the rules. The board was very understanding of his
situation and had agreed with Stumpf’s reasoning but they soon
received his resignation letter and had to re-think the situation.
This scandal also ruined the company's reputation which interfered
with their stock performance because no one wants to do business
with a company with a huge scandal. So, Wells Fargo was very
unethical when they stole their clients identities and made fake
accounts for their own purposes.
RESOURCES
-https://www.scu.edu/ethics/focus-areas/leadership-
ethics/resources/the-ceo-of-starbucks-and-the-practice-of-
ethical-leadership/
-https://www.scu.edu/ethics/focus-areas/business-
ethics/resources/wells-fargo-banking-scandal/
-https://ca.finance.yahoo.com/news/every-wells-fargo-
consumer-scandal-since-2015-timeline-194946222.html
-https://www.businessinsider.com/how-bernie-madoffs-ponzi-
scheme-worked-2014-7
-https://www.bloomberg.com/news/articles/2018-12-11/the-
bernie-madoff-ponzi-scheme-who-s-where-now
- https://www.youtube.com/watch?v=3-r_-z4L13A
- https://www.investopedia.com/articles/investing/060315/top-
10-reasons-work-google.asp