Overstated Earnings:Bausch & Lomb

Dhruv Barman(29) Rashi Yadav(69)

Sakshi Sidana(76)Vithika Gupta(100)

“Bauch & Lomb”

Case Study on

“OVERSTATED EARNINGS”

Ethical Issues• Tremendous pressure on the employees to

make numbers• Unvigilant Senior Management• Over statement of earnings and profits• Excessive distributor inventories• Faked sales to real customers by dumping

glasses at discount prices to gray market• Shipping of products that were never

ordered• Non disclosure of information

Ethics Test• Smell test- unethical• Utility test- unethical• Rights test- unethical• Exceptions test- unethical• Choices test- unethical• Justice test- unethical

Power Interest Grid

Stakeholder Analysis• Employees- Top Executives- Low Interest-High Power Middle Management- High Interest-Low Power• Distributors- High Interest- Low Power• Shareholders- High Interest- High Power• Government/SEC- High Interest- High Power

Code of Conduct

• Framed by the Management-

Set a good example by always abiding by the law,   Keep our promises and commitments;  Treat others the way we would want to be treated;  Tell the truth, even when doing so may be difficult;  Seek advice when uncertain about the right course of action;  Help each other;

Exhibit the courage to question, and  Compromise our dedication to product quality and employee safety

Questions

• What went wrong with the Bausch & Lomb culture?

• How was the company affected? Financially? Competitively?

• Why are all those named in the

consent decree “former” employees?

Thank You