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CMA Intermediate · Business Laws and Ethics · Business Ethics and Emotional Intelligence

The chief executive of a listed company is told by the audit committee that a senior executive, who is also a major performer, manipulated expense claims. The CEO proposes only a verbal warning to avoid demotivating the team, while junior staff were dismissed earlier for similar acts. Which ethical culture problem does this most directly illustrate?

This illustrates inconsistent enforcement of the code. Junior staff were dismissed for similar acts while a senior high performer receives only a verbal warning. Such selective treatment erodes fairness and credibility and weakens ethical culture, since employees conclude that rules depend on status rather than on the conduct itself.

  1. AInconsistent enforcement of the code undermining fairness and credibilityCorrect
  2. BExcessive reliance on rule-based compliance
  3. COveremphasis on stakeholder consultation
  4. DLack of any written code of conduct

Explanation

The facts show similar misconduct treated differently depending on seniority and performance. This inconsistency destroys fairness and teaches employees that rules apply selectively. The case does not say there is no written code, and nothing suggests excessive rule reliance or over-consultation.

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