Running head: CORPORATE CULTURE AND ITS ROLE IN THE DOWNFALL

Corporate Culture and its Role in the Downfall
Of Arthur Anderson LLC and Sunbeam Corporation
Darrell V. Davis
Grand Canyon University
Bus 604 Business Ethics
July 5, 2009
Abstract
Corporate culture plays an extremely important role in the development of a company. Whether explicitly stated or not, the culture of a company reveals its attitude, motivation, and intentions. Arthur Andersen’s and Sunbeam’s cultures revealed that they were on the hunt for huge profits at the expense of independence and sound financial reporting, respectively. They instituted accounting practices that they knew pushed the envelope of, if not legality, acceptability. In fact, they were bedfellows in Sunbeams accounting methods. With each of the company’s histories, they had the resources to make better decisions regarding their actions. Yet, it appears they ignored their responsibility to the public in order to garner the highest gain.

Arthur Andersen LLP

Arthur Andersen LLP, with its ninety year history, for a long while stood as one of the most well respected, influential, high-earning, and ethical accounting firms in the world. Yet, with the rise of its consulting services, several apparent oversights, the demise of a number of its clients, and questions of the firms relationships with clients; the company came under attack from investors of its clients, regulators, and courts. Without a valid defense, based simply on its profession and who the company was suppose to defend, Andersen found itself answering tough questions and paying millions of dollars in restitution. The result was that Andersen was forced to cease auditing public companies and to end its long history as a well respected accounting practice.

There are several legal and ethical issues surrounding