Marsh & McLenan Companies Scandal
Organizational Behavior: Business Article Analysis
The Facts
It's happened again-yet another seismic crisis has shaken the foundation of corporate America, in this case, in the highly profitable yet chancy climate of the insurance industry. "Staggered" by accusations that it cheated its customers, Marsh & McLenan Companies, "the world's biggest broker of commercial insurance," released a statement on November 9, 2001 that it was going to be forced to lay off 3,000 employees in the coming months. To give a reader an idea of the magnitude of such a layoff, this comprises five percent of the overall staff and total work force of the company. (Treaster, 2004) Poor profits and poor ...
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Commission (the same individual, incidentally, who prosecuted Martha Stewart) company stock has been falling to record lows. However, the need for layoffs is not simply a cost cutting measure, but an ethical cleaning of the company's house and staff. The allegations regarding cheating of customers are, company insiders state, reflective of the free and loose ethical climate at the institution in recent years, particularly regarding executive perks.
The new chief executive, Michael G. Cherkasky was chosen to lead the company into an uncertain future because his former job was as a prosecutor. He said in an interview he was, as his first action as CEO, selling the previous CEO's "Falcon 900 corporate jet" and getting rid of a company fleet of half a dozen Mercedes and BMW sedans with chauffeurs. Also, he would end "the company's long tradition of a free lunch for two dozen top executives in the company's 44th-floor executive suite." (Treaster, 2004) Doing so, he stated, would ...
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of Spitzer's motivation, the goal of showing a short-term profit at the insurance giant got in the way of what should have been the company's overall goal of showing a long-term profit and generating long-term company leadership and stability in the organizational structure. Instead, a high tolerance of unethical behavior permeated the company from the top down.
Analysis
Thus March & McLenan's goals of ethical profit making for shareholders and employees were supplanted by the desire for a showy and cushy lifestyle on the part of company leaders and of showing a quick profit for company shareholders. The result, however, has been neither happy nor profitable for ...
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Marsh & McLenan Companies Scandal. (2017, January 15). Retrieved November 20, 2024, from http://www.essayworld.com/essays/Marsh-McLenan-Companies-Scandal/106055
"Marsh & McLenan Companies Scandal." Essayworld.com. Essayworld.com, 15 Jan. 2017. Web. 20 Nov. 2024. <http://www.essayworld.com/essays/Marsh-McLenan-Companies-Scandal/106055>
"Marsh & McLenan Companies Scandal." Essayworld.com. January 15, 2017. Accessed November 20, 2024. http://www.essayworld.com/essays/Marsh-McLenan-Companies-Scandal/106055.
"Marsh & McLenan Companies Scandal." Essayworld.com. January 15, 2017. Accessed November 20, 2024. http://www.essayworld.com/essays/Marsh-McLenan-Companies-Scandal/106055.
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