The Scrushy Way

Abstract

In business, ethics starts and ends at the top. If a company has unethical leadership, the company will perform in an unethical manner (Bello, 2012, p. 229). There have been several examples of this in recent years. Companies such as Enron, WorldCom, Adelphia, and Tyco have all engaged in fraud, accounting manipulation and unethical behavior (Giroux, 2008, p. 1206). Such is the case with HealthSouth and its former CEO, Richard Scrushy. Mr. Scrushy epitomizes the unethical leader, using intimidation and fear to achieve goals and post earnings any way possible. His laundry list of unethical behavior includes falsifying financial statements, whistle-blower retaliation, harassment, political favors, bribery and conflicts of interest. This paper explores the corporate culture at HealthSouth, the impact this culture had on its stakeholders and the lawsuit brought by the Securities and Exchange Commission in 2003. It also examines the outcome and fairness of the punishments received by the officers of HealthSouth as a result of the suit.

Introduction

In business, ethics starts and ends at the top. If a company has unethical leadership, the company will perform in an unethical manner (Bello, 2012, p. 229). There have been several examples of this in recent years. Companies such as Enron, WorldCom, Adelphia, and Tyco have all engaged in fraud, accounting manipulation and unethical behavior (Giroux, 2008, p. 1206). Such is the case of HealthSouth and its former CEO, Richard Scrushy. Mr. Scrushy epitomizes the unethical leader, using intimidation and fear to achieve goals and earnings any way possible. His laundry list of unethical behavior includes falsifying financial statements, whistle-blower retaliation, harassment, political favors, bribery and conflicts of interest.

The problem to be investigated is how the leadership of HealthSouth contributed to a corporate culture of fraud. This paper will explore the corporate culture at HealthSouth, the impact...