Nissan Corporation’s Corruption Scandal Investigation Research Paper

Nissan Corporation’s Corruption Scandal Investigation Research Paper


This paper focuses on the investigation of the corruption scandal that occurred with the former CEO of Nissan in Japan. In 2018, the monetary misconduct circumstances have been revealed, and Carlos Ghosn was accused of underreporting his income. Later, the inappropriate use of the company’s resources was also found and served as another reason for his detention. The key objective of this paper is to discuss this case by way of business ethics and perceive the meaning of Ghosn’s behaviors. It can also be expected to consider the Japanese context that was the background of this case. Another objective of the paper is to formulate relevant recommendations for Nissan and the business ethics subject as an entire.

The methodology of the literature review was used to gather and analyze pertinent info. Namely, the scholarly sources and credible media portals were chosen to obtain information that reflects both Nissan’s and Ghosn’s positions in addition to the theoretical foundation of enterprise ethics. The findings of the investigation present that Ghosn’s financial misconduct is evident as he used some sources for particular person purposes, although he denies any allegations. The ideas of honesty, integrity, and commitment to company objectives had been violated. It can be discovered that the Japanese tradition of insider prevailing would possibly partially trigger this misbehavior since it appears that the company needed to act without Ghosn. The recommendations for Nissan embrace the reconsideration of their corporate culture in direction of becoming extra open to new people and ideas. In common, enterprise ethics principles must be developed and improved throughout firms to attenuate financial misconduct points. The promotion of ethical commitment and transparency is one more suggestion that ought to be implemented by businesses.


Financial dishonesty and misconduct pose important threats to any enterprise. Carlos Ghosn, an influential top manager and ex-CEO of Nissan, was arrested because of monetary misconduct in Japan in 2018. The scandalous information led to a panic on the stock trade, and Nissan’s shares crashed quickly, which also affected other automobile corporations. Today, the company prepares for troublesome occasions and reputational losses, which might not be prevented, even if the most serious accusations aren’t confirmed. Currently, Ghosn has already been interrogated by the police, and an investigation against him is underway. This paper aims to check the recognized scandal from the purpose of enterprise ethics to explore key issues and recommend possible options.

Theoretical Framework and Topic Statement

To understand the ethics of this case, it is important to briefly discuss the battle background. The 64-year-old prime manager was accused of economic misbehavior, utilizing his position. To do that, he intentionally distorted the data on the amount of his remuneration, which he obtained from the Alliance brands, corresponding to Nissan, Renault, and Mitsubishi. Ghosn was also criticized that for 20 years of working with the Alliance, he obtained virtually limitless power, and his wage reached $ 17 million in 2017 (Leggett and Palumbo). Ghosn and Kelly, who’s the previous executive, were suspected of deliberately underestimating the dimensions of their tax evasion fees. It is estimated that they underestimated this data by about 50 billion yen from 2011 to 2015 (about $ 446.4 million). Presumably, Ghosn used for personal purposes a third of those funds, together with the purchase of an expensive yacht and investment in his son’s enterprise within the United States. In addition, the investigation states that Ghosn intentionally underestimated Nissan’s revenue in tax reporting documents over time in order to transfer its own monetary losses to the corporate.

The official response from Nissan’s global office was immediate. They acknowledged that the company had lengthy been conscious of Ghosn’s illegal actions. The internal investigation towards him, in addition to the member of the board of directors, Greg Kelly, had been carried out for the previous a number of months. This investigation revealed that over the years, both Ghosn and Kelly intentionally undervalued Ghosn’s earnings. It additionally turned out that Ghosn made many different violations of the corporative ethics, together with using the company’s funds for personal functions, of which Kelly was also properly aware (Leggett and Palumbo). All details about the investigation was submitted to the prosecutor’s workplace, and the company’s official press release declares that they’re ready to supply all possible help to the authorities. Nissan deeply apologized to the shareholders and stated that the company will remove Ghosn from the publish of head of the model.

At an emergency press convention, Nissan officials didn’t even attempt to mitigate the blow to their disgraced leader in any way. On the contrary, they mentioned that they have been deeply disappointed with what occurred. Nevertheless, the corporate recalled that Nissan continues to be not personally Ghosn. When journalists asked concerning the blow to the brand’s picture, they said that what occurred was primarily a blow to Ghosn’s reputation. In other phrases, Nissan’s officers claim that Ghosn however not Nissan faced damage to reputation.

In turn, Ghosn denies all allegations against him and views himself as a sufferer of a conspiracy and the so-called backstabbing. The trial of his case is expected to start in Japan in 2020. Ghosn considered himself a citizen of the world, who received the largest managerial compensation on the earth in the amount of € 10-12 million annually and performed business all over the world (Leggett and Palumbo). Although, under Japanese law, any income acquired in different countries is topic to necessary declaration and taxation. In addition, it turned out that previous management sometimes used the company’s assets for private purposes. It is particularly emphasised that this is not about theft, but about unauthorized use.

This paper uses the theoretical framework of enterprise ethics as the inspiration for discussing moral issues in Ghosn’s behaviors. The ethics of business relations is a system of rules based mostly on typically accepted human values ​​and uniting members of 1 firm (Vasudev 97). Namely, business ethics implies respect not just for the pursuits of employees but also for the target audience, companions, and even opponents. Financial misconduct is known because the waste of funds of the company and their improper use. As for corruption, it’s the misuse of affect that violates the responsibilities and brings further, unauthorized benefits. The present evidence exhibits that stories about misconduct within the subject of finances enhance (Vasudev 97). Therefore, there’s a want to check such circumstances as Ghosn’s ethics, which will help in the prevention and early identification of similar cases sooner or later. The following research questions were posed to guide this investigation:

  • Were the behaviors of Ghosn and Kelly ethically applicable or not?
  • What was the function of the Japanese context in Ghosn’s monetary misconduct?
  • What are attainable selections to take to avoid such circumstances in the future?


The primary objective of this research paper is to answer the questions which may be identified within the earlier part. To achieve this, the crucial literature review method was chosen. The tutorial assets, such as digital databases, were accessed on-line, and pertinent data was collected. In addition, The New York Times, Bloomberg, and Reuters had been used as the sources of the most recent information relating to the case. The scholarly books and articles had been used to find Ghosn’s misconduct when it comes to business ethics. Relevant theories and ideas allowed evaluating this case from the point of ethics and handle the questions acknowledged. After the gathering of the necessary information, it was correctly analyzed and structured, and the important thing findings are presented in the results part. Furthermore, the discussion part provides a detailed analysis and a transparent understanding of the subject of research. The important analysis was taken as the muse for making recommendations particular to the discussed case and business ethics in general.


Arrested for financial misconduct, Ghosn was released on bail on March 6, 2019: in complete, he spent 108 days in jail. The ex-head of the automobile concern, along along with his alleged confederate, Kelly, was first arrested in November final year. The prosecutors accused them of not declaring a half of their income, which was received in the type of remuneration ($ 80 million) from 2010 to 2018 (Kelly and Takenaka). Later, the ex-head of Nissan was accused of misappropriation of funds. According to some reports, he transferred from the so-called presidential fund about $ 32 million to the consultant of the concern in Oman. At the identical time, about 5 million dollars were spent on the acquisition of a yacht, which was used for private purposes.

The internal investigation of Nissan revealed the private use of corporate finance by Ghosn and Kelly. A new meeting of board decided that the further keep of those persons in Nissan is not possible. The Alliance declares that more checks shall be organized to detect any corruption circumstances in the administration of the corporation. It should also be acknowledged that Ghosn denies all accusations towards him and claims innocence (Kelly and Takenaka). Namely, he believes that all his actions were taken in honor of the corporate. It is talked about that the alleged ex-leader is certain that he reported about all earnings sources and their amount. In spite of the criticism positioned by Nissan and the general public on Ghosn, the case remains beneath the consideration of the Japanese justice system.


In the trendy world, many entrepreneurs meet only with the established authorized norms and legal guidelines, whereas paying little attention to the ethics of business. Ignoring it could possibly seriously undermine the image of a businessman and pose a threat to the business. While ethical requirements within the area of enterprise may be perceived as an act of goodwill, the selection to carry out with out obliging them is up to employees. In many instances, non-compliance with enterprise ethics is fraught with punishment and dismissal. The evaluation of Ghosn’s actions exhibits that he doesn’t feel answerable for this concern and most often adheres to behavior that’s largely contrary to the essential principles of enterprise ethics. Often, when their non-compliance issues instantly the businesspersons themselves and is carried out by other firms, loud statements about injustice and unwritten laws begin. Up so far, plainly the only principle that guided Ghosn is that the top justifies the means.

At the same time, the expertise of Nissan exhibits that the presence of certain ethical and moral requirements cannot serve as a guarantee of a snug existence within the business sphere. It must be confused that the main premise of success in almost any economic industry is the quality of work. It, in turn, immediately depends on the ambiance within the group, employee relationships, and their attitudes to their obligations together with the company as a complete (Crane, et al. 38). Thus, the idea of ethics in enterprise is essential to control relations between the organization and staff, partners, shareholders, and so forth. As it can be seen in the given Nissan scandal, the failure to comply with formal business etiquette violates the workplace environment that cannot promote productive work. The belief and mutual respect of the members of 1 group to every other are primarily based on social responsibility, in addition to transparency of the principles and competent administration.

The professional ethics of contemporary business includes a range of dimensions which are essential to discuss in this paper. The universal values ​​that govern the social accountability of business are job creation, the production of certain items, caring for workers, and so forth. This dimension appears to be adopted by the company with regard to Ghosn. As for the ethics of doing business in relation to product patrons, it implies a prime quality of the product, honesty in advertising, and justified prices. Ethics in relation to the employees of the corporate is an efficient wage, a full social bundle, medical insurance, and so on. An moral attitude to companions, shareholders, and buyers means compliance with the terms of the contract, timely cost of the agreed quantities, and entry to public info.

At the macro stage or ethics of business, office relations are thought of on the scale of a specific sector of the economic system. This is the absence of discrimination within the labor market, respect for market competitors, and private property recognition. This is ethics in relations with suppliers, clients, san stakeholders, which was, on the one hand, violated by Ghosn. On the other hand, his guilt isn’t proved utterly. The makes an attempt to persuade the courtroom of his innocence are to be continued, which implies that there are arguments that reveal his strong viewpoint. Nevertheless, the very look of accusations additionally indicators some misbehavior of Ghosn, which cannot be ignored.

From the point of Ghosn, the Japanese enterprise was irritated by the enthusiasm with which he tried to construct an alliance between the French state-owned firm, Renault, and Japanese non-public Nissan. Ghosn did not conceal plans to merge the 2 firms into one. In this case, Renault that owns 43 % of Nissan shares would play the main position, while Nissan had only 15 percent of Renault shares (Kelly and Takenaka). Thus, the Japanese suspected that the French state may take possession of the second largest automotive manufacturer within the nation after Toyota. It ought to be famous that the exchange value of the Japanese company is twice the value of the French one.

From this perspective, one might counsel that it was the deliberate accusation of Ghosn by the talked about carmaker. According to the observer of the Guardian, it was these circumstances, and not the mythical advantages of utilizing the situation, that led to a battle with an try and get rid of Ghosn. He continues to be in prison in the intervening time, with each Nissan and Mitsubishi rushing to take away Ghosn from all posts (he served as chairman of the board of directors at Mitsubishi). In flip, Renault supported the disgraced businessman and kept him on the head of the corporate.

The fall of Ghosn presents more particulars concerning the company tradition of Japan that’s driven primarily by insiders. Koichi Nakano, supervisor of the Japanese equity fund in Japanese corporations at Nikko Asset Management, hyperlinks Nissan’s fundamental administration challenges to a culture of implicit conspiracy (McCurry). It is particularly strong within the automotive sector, hampering any attempt to extend transparency. Despite his popularity, Ghosn was not able to eradicate it at Nissan. At the identical time, the board of directors at Nissan is one other downside, Nakano notes (McCurry). It is incapacitated as a end result of it does not have ethics management features. There is control of the relations with investors, audits, and compliance with laws. It seems that the corporate should utterly change the board and change its capabilities. There is not an atmosphere the place folks can speak freely and argue with different departments.

To make clear the importance of the mentioned findings, it’s important to discuss with the position financial misconduct play in organizations. The more there misbehavior of staff, the higher the danger that a company would undergo losses. This case demonstrates that the principles of honesty and integrity had been violated. These are basic principles that function the idea for constructing relationships and mutual respect among workers. The failure to meet these ethical requirements leads to the decrease of the public belief in Nissan and businesses normally. Therefore, it may be very important acknowledge and promote truthfulness on the workplace, corresponding to staying committed, targeted, and responsible.


Based on the discussion provided in the earlier part of this paper, it is potential to recommend some recommendations. It appears to be helpful to supply assumptions for Nissan’s additional actions and business ethics field as a complete. The first suggestion is to enhance transparency across the company and improve management over the work of the key leaders, who make an important selections. For example, the necessities to disclose information about inside occasions of the corporate ought to include all of the above components of information disclosure, together with the requirement to disclose data on the decision-making course of. Also, the latter sort of openness would work for the pursuits of stakeholders throughout the firm and in the lengthy run, would increase its competitiveness. The significance of the openness of the company’s high management for employees and that of every division of the company for workers ought to be recognized when disclosing the benefits for the progressive development of horizontal coordination.

There is a range of positive sides to adopting transparency as an moral precept. Openness in decision making, including strategic and tactical decisions, would enable reducing the chance of underreporting. Transparency would additionally help to reduce corruption dangers throughout the business and encourage workers to achieve higher effectivity in their actions. Timely disclosure of the data is beneficial to manage conflicts of interest, cut back the risk of abuse by firm managers, and the potential of making ineffective choices.

The problems with social accountability in international business ethics are of great significance. A set of ethical rules established by the rules and laws in every country imposes its personal corrections and restrictions on the worldwide moral system. However, honesty, openness, and duty are the promises of the power to adhere to the rules of reliability and efficiency and concentrate on long-term cooperation. The capability to work effectively in the international market can additionally be decided by ethics, observing the regulation in accordance with established guidelines and customs. Using the norms and rules of enterprise etiquette, one can predict the behavior of colleagues, which helps to effectively organize the management process. It is very important to review all of the parts of business ethics in worldwide business since, along with uniform norms and guidelines, there are many national and cultural amendments that are vital in business relations.

The advice for bettering business ethics generally and avoiding misconduct is to maintain the balance between advantages and obligations. Indeed, even a enterprise one that is accustomed to following the foundations of ethics of enterprise relations for many years may begin to hesitate when choosing between critical earnings and loyalty to principles. The scenario seems to be critical particularly if it is fraught with serious harm to one’s firm. However, it must be recalled that a status is gained over time, and misconduct can lead to the fact that an individual can lose it in in the future. As a end result, all fastidiously thought-out policies and moral standards could additionally be threatened by the intention to realize more revenue.

To avoid such a scenario, any business person who desires to adjust to moral standards must discover a steadiness between the pursuit of income and social responsibility. This suggestion includes a selection between short-term achieve and long-term success. In addition, it’s essential to determine the significance of religious and materials values, public and personal interests, as well as individual goals and methods for attaining them. It is vital to understand that it’s the stability between these elements and not the rejection of certainly one of them that’s the key to a successful enterprise for a long time.


To conclude, you will want to state that this paper explored the corruption scandal in Nissan, namely, the monetary underreporting of Carlos Ghosn, the ex-CEO of the corporate. It is discovered that his failure to report about financial operations in addition to tax evasion had been the principle causes for the accusation. On the one hand, Nissan alleges him of violating the moral principles of integrity and compliance. On the other hand, Ghosn refuses to acknowledge his guilt, insisting that each one his actions have been in honor of the corporate. The context of this scandal also performs a big position within the conflict. It is suggested that the Japanese company culture of insiders additionally affected Ghosn’s decisions. Based on the critical evaluation, several suggestions have been instructed for the field of business ethics and Nissan as well. For the corporate, one might assume reinventing the moral principles and selling compliance with them throughout the group. At a bigger scale, the value of enterprise ethics must be explored and clarified in detail to be carried out by all companies.

Works Cited

Crane, Andrew, et al. Business Ethics: Managing Corporate Citizenship and Sustainability within the Age of Globalization. 5th ed., Oxford University Press, 2019.

Kelly, Tim and Kiyoshi Takenaka. “Nissan’s Ghosn Claims Innocence in First Appearance Since November Arrest” Reuters, 2019. Web.

Leggett, Theo, and Daniele Palumbo. “Carlos Ghosn: Five Charts on the Nissan Boss Scandal”. BBC, 2018. Web.

McCurry, Justin.”Nissan Crisis Sheds New Light on Japan Inc’s Awkward Secrets”. The Guardian, 2018. Web.

Vasudev, P. M. “Financial Misconduct, Ethical Theory, and Regulatory Ethics-Promoting Accountability.” Journal of Business, Entrepreneurship & Law, vol. 9, no. 1, 2015, pp. 93-128.

Leave a Reply

Your email address will not be published. Required fields are marked *