Essay --

Unethical business practices have been an issue over the past decade, from Enron to Wall Street. Pilot Flying J recently was prosecuted for defrauding many of their clients. The scandal extended all the way to the senior management. The scandal was driven by greed and could have easily been prevented by applying one or all of the following five systems: written contracts, external auditors, compliance officers, handbook training, and moles. Pilot Flying J only had informal verbal agreements with their partners; they did not have firm contracts. When combined with the complexities needed to calculate the constantly varying average cost of fuel and the sophistication needed to interpret these numbers, PFJ had some flexibility to fudge the numbers if inclined. Due to constantly varying fuel prices the average cost of the fuel was constantly changing, leading to relatively significant changes in the amount of the rebates. Since their clients complained about being cheated due to the varying rebates, PFJ decided to manually change the rebates so that they are more consistent. This manual change often reduced ones rebate. This reasoning illustrates the senior management’s lack of ethics. PFJ and their clients had somewhat of a rough verbal contract. Verbal contracts are just as enforceable as written contracts on paper, but it is not as easy to enforce them in the real world. Written contracts between Pilot Fly ing J and their customers would have forced PFJ to become more accountable to their customers. A written contract should have been made between PFJ and their customers that stated the discount rate and all of the other factors that went into the relationship. PFJ was not transparent in their inner workings, often ... ...to ensure that they are both doing their duty. Neither of these options for placing a mole within ones organization would be difficult or time consuming. Either option would be a valid way to ensure that nothing illicit is going on inside the business. Although having a mole in one’s organization can be seen as borderline illegal and unethical, if having a mole prevents fraud on a significant scale, then it is considered justifiable. By following any of the aforementioned ways to enact systems that create a lawful work place PFJ could have prevented this scandal from happening. All PFJ had to do was spend a little time reiterating their daily rules and procedures. These systems were probably not in place because the executives were the ones that were committing the fraudulent activities. Greed has cost Pilot Flying J $85 billion dollars and their good name.