Hard on the heels of my comments recently about a report claiming US graduate business students think cheating is accepted practice in business comes some disturbing news about one of NZ’s largest companies.
The NZ Herald reports that forest products company, Carter Holt Harvey has been found guilty of knowingly selling timber that did not meet the grading standards it claimed. This went on for 3-4 years, from 2000-2003, resulting in incorrectly graded timber being used in the construction of 20,000 new homes. According to the Herald, “internal documents revealed the company had a view that to not act as it did would be “‘financial suicide’”.
So what is the outcome? The company has been fined $900,000 (about US$600,000). This is for a company that in 1994 (the latest numbers I could find) had revenues of $2.57 billion, and earnings of $312.5 million.
So instead of financial suicide they get a fine of less than 0.3% of their annual profit. I guess dishonesty does pay.