22) A civil action is brought forth claiming the CEO of a major corporation was

Question

22) A civil action is brought forth claiming the CEO of a major corporation was funding his lavish lifestyle from the Company’s pension fund. The CEO has fled to Aruba to escape these charges but claims he is completely innocent. The media frenzy is swift and brutal, causing a sharp drop in stock price and even caught the attention of the FBI. The claims later turn out to be true, and the US authorities are hoping to extradite him very soon. Which type of crisis can best describe what happened to this company?

A. Natural Disaster

B. Hostile Takeover

C. Rumors

D. Organizational Misconduct

Explanation / Answer

This is a case of grave misconduct where the CEO has used his position to exploit the company resources for his personal benefit which he is not entitled to and thus causing a great harm to large section of people including employees who contribute to the pension fund.

There is no incidence of natural disaster or hostile takeover of the company except for plummeting of stock prices upon organizational misconduct has come to be known to everybody in the market.

ANSWER : ORGANIZATIONAL MISCONDUCT

ANSWER : ORGANIZATIONAL MISCONDUCT

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