3. Toshiba Case Summary
From Toshiba overstated net profits totaling 1.2 billion
Investigators discovered that corporate leadership exerted strict pressure on employees to meet specific numbers often implying that failure wasn’t an option
Meeting the challenges that were given to employees often resulted in business units having no choice but to use irregular accounting techniques
Investigators concluded that the corporate culture at Toshiba was a driving factor of the fraudulent accounting practices

4. What Groups will Benefit? What Groups will be Harmed?
Benefit vs. Harm
What Groups will Benefit?
What Groups will be Harmed?
Former CEO Atsutoshi Nishida
Norio Sasaki
Competitors
Sony
Skyworth
Employees
Shareholders
Toshiba
Employees
Employees Families
Shareholders
Japan Economy & Stock Market
US Economy & Stock Market

5. Rights Former Executives Employees Shareholders Toshiba Investors
Whose Rights will be Exercised?
Whose Rights will be Ignored?
Investors
Financial Analysts
Rating Agencies
Consumers
Shareholders
Toshiba
Stakeholders
President Morumachi
Competitors
Former Executives
Employees
Shareholders
Toshiba

6. Moral Problem
Was it wrong for Toshiba leadership to set high profit targets in which failure was unacceptable?
Is it morally wrong for Toshiba to build a culture of strict obedience to leadership and where failure is not tolerated?

7. Economic Benefits Present: Future: Very few economic benefits
The company posted an operating loss for 2015
Forecasts predict the same for at least 3 more quarters
Some investors have lost money while others have gained
Future:
Restructuring will help stakeholders, the economy and employees
Investors will see an increase in stock price as Toshiba improves

8. Legal Requirements
Civil suits have been pursued by many shareholders angered by the losses incurred due to the fraudulent accounting
Toshiba is planning to pursue legal action against the top executives they believe responsible
It is still uncertain whether the former top executives will face criminal charges for the role they played in the overstating of company profits

9. Ethical Duties Self Interest: The firm is facing retaliation
Personal Virtues: Executives resigned following the scandal
Religious Injunctions: Toshiba did not work to improve each community it which it conducted business
Government Requirements: Misreporting accounting information is not supported by Japanese or US governments
Utilitarian Benefits: Toshiba did not create more benefits than harms
Universal Duties: Executives would most likely not want to see a company they had a stake in do what was done
Distributive Justice: Benefits were not equitably distributed
Contributive Liberty: Freedom of choice was denied to stakeholders