Many corporate scandals later involved penalties amounting to hundred of millions in damages awarded to aggrieved parties. The Ford pinto car disaster cost the company a $4.9bn jury verdict. Philip Morris faced a $10bn penalty over the risk of "light" cigarettes.
Others say even say that the actual costs of corporate scandals runs to hundreds of billion dollars, such is the case of the collapse of Enron that also led to the collapse of Arthur Andersen.
Philippines is not free from corporate scandal either. Such scandals involved Amman Futures, Legacy group, Union Bank among others that costs running to hundreds of billion pesos. There are also corporate scandals that lead to environmental disasters, the actual cost was never accounted for like Marcopper Mining disaster.
Business wanted to grow and increase profit. To achieve this there are many different strategies available. But the most commonly use strategy is to lower cost that in the end sacrifices quality and security features of the product, service or the operations of the company itself.
However, by cutting on cost to increase profitability, many of these companies, in the long run, when disasters come, accidents happen, incur more than they gain from cutting on cost.
Doing it right is expensive but it the end, it will save the company from unnecessary cost. Besides, doing it right, may in the end be a competitive advantage of the company. Brands associated with quality and integrity are more profitable in the long run.
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