BUSA 4980 • Ethics Report • Summer
Assignment – Governance
Failure at Satyam
Access: Students have
to purchase a copy of the case from Harvard Business School Publishing. Please follow the link below to access the
case study, which will cost $4.25.
Computers, winner of the Golden Peacock Award for excellence in corporate
governance, ironically became a noted failure in the history of governance in
India when Ramalinga Raju, founder and chairman, admitted fraud in his
resignation letter. An unrelated
acquisition by Satyam Corporation created discontent among shareholders and
lead to a series of investigations. The
investigations revealed a fraud of about INR 50 billion ($1.5 billion). This led to resignations by several board
members and the CEO. Ultimately, Tech
Mahindra acquired the company. The
entire episode became a mockery of corporate governance practices, raising
questions about the efficacy of well accepted norms.
This case covers the
events that led to the failure of Satyam’s governance practices. The roles of various parties, such as the
managers, board of directors, auditors and bankers, are discussed in detail. The case draws attention to various corporate governance
and ethical issues, providing an opportunity to discuss the measures that
should be taken by regulators, auditors and other bodies to prevent such
Assignment: Students must
address the following questions in an essay:
- Discuss the circumstances under
which Satyam’s fraud was exposed. What do you think were the reasons for the
fraud? How was the fraud able to occur?
- Critically evaluate the corporate
governance mechanisms adopted by Satyam. What characteristics of the board of
directors may prevent financial statement fraud? What lessons about the audit committee can be
learned from this case? What other
governance mechanisms should be adopted to ensure compliance?
should address the questions above in a typed document (double spaced; 12-point
font; 5 pages maximum; essay format). The
case report should provide a title page, with the student’s name, section
number, and date of submission. Your
responses should be uploaded to the Assignment folder on iCollege by Wednesday, July
24. Strong responses will
reference the material covered in Chapter 10 of our textbook, as well as the
additional readings suggested on the following page.
Guidelines: Please note the following:
case reports are to be written (double spaced) using 12 point type with a serif
font for the body (Times New Roman) and sans serif font for headings
(Calibri). The report should follow
correct form, spelling, grammar, etc.
The body of the paper should be no more than five pages including specific recommendations supported
by your analyses. Number the pages.
report may include an assortment of charts, tables, and
exhibits in an appendix to support your analyses and recommendations. Do not add exhibits that are already included
in the case. Each exhibit must be
referenced and discussed in the body of the paper. The appendix does not count towards the main body limit of five pages.
- Please reference all sources used.
main body of your report should contain sufficient detail to explain and
support the major issues identified in the case and the primary recommendations
for solving these problems. Do not just rehash case facts.
Present an insightful and unique analysis.
reports will be judged according to standards of effective business
communication. They should be clear and
criteria for grading case reports include:
of appropriate analytical techniques, sound logic, and well-supported arguments
in evaluating the organization’s present condition and future prospects.
of your ability to formulate realistic and workable recommendations for
action. Quality contributions will
reference the material in Chapter 10 of your textbook, as well as the
additional readings suggested below.
— both (a) scope and coverage and (b) depth of analysis.
of a clear and effective writing style; i.e. strong communication skills.
R. (2003). “Pathologies of Decision-Making: Causes, Forms, and Handling,” Management International Review, 43, pp.
J.C. (2008). “Strategy as a Wicked Problem,” Harvard Business Review, May, pp. 98-106.
S.T., Connelly, B.L., and Tihanyi, L. (2008). “Managers and Their Not-So
Rational Decisions,” Business Horizons,
51, pp. 113-119.
La Rama, M. (2012). “Corporate Governance and Corruption: Ethical Dilemmas of
Asian Business Groups,” Journal of Business
Ethics, 109: 501-519.
Lynn, Rohit Deshpandé, Joshua D. Margolis, and Kim Eric Bettcher (2005). “Up to
Code: Does Your Company’s Conduct Meet World-Class Standards?” Harvard Business Review, December, pp.
Bahram (2014). “The Anatomy of Corporate Fraud: A Comparative Analysis of High
Profile American and European Corporate Scandals,” Journal of Business Ethics, 120: 251-274.
W., Connelly, B.L., and Hoskisson, R.E. (2016). “External corporate governance
and financial fraud: Cognitive evaluation theory insights on agency theory
prescriptions.” Strategic Management
Journal, 38(6): 1268-1286.
materials may be sourced at the GSU library and online through PAWS. Students are also free to conduct their own
search for relevant readings that may address the qu