Business Question

Week #1 Integrative Essay.Apply chapter concepts to your corporate scandal in an essay in this format:

Part I:  Conduct a stakeholder analysis.  Identify the stakeholder groups impacted by your corporate scandal. Discuss each stakeholder group’s interests and power with respect to the scandal (see figure 1.3, p. 12). Draw a stakeholder map (see figure 1.4, p. 18). Explain key insights you gain into the corporation and/or scandal through this stakeholder analysis?

Part II:  Referring explicitly to the Issue Management Process (Chapter 2), explain how your corporation has addressed the scandal. Discuss areas where you believe your corporation excelled at issue management and where it could have done better.

Part III: Drawing explicitly on concepts from Chapter 3, discuss how your corporation/company has engaged in corporate social responsibility OR how you think it should engage in CSR. Consider the stages of corporate citizenship & cite them in your response.

Part IV:  Drawing explicitly on concepts from Chapter 13, explain what you recommend senior executives, shareholders, and the board of your corporation/company do in light of this scandal.

The Rise and Fall of FTX
FTX was established in 2019 by Sam Bankman-Fried. The company became a significant player in the
cryptocurrency industry. It had excellent features for trading, different cryptocurrencies, and userfriendly platform. These properties attracted many investors, with and without trading experience. The
company experienced rapid growth, receiving endorsements from high-ranking individuals such as Tom
Brady and Kevin O’Leary. This boosted both its credibility and market presence. Despite its great
expansion, its operations were flawed. FTX engaged in financial practices that were very risky. The
company used customer deposits to make risky investments and loans. The company engaged in
financial transactions with its sister trading company, Alameda Research. As a result, this created a
conflict of interest. There was also lack of transparency on how the deposits from the customers was
being managed. However, it took long to notice these practices as the cryptocurrency industry was not
highly regulated. As the value of cryptocurrency dropped, customers started withdrawing their funds
from the company. As many customers withdrew their funds, the company faced a serious liquidity
challenge. The company had limited liquidity and therefore it could not fulfill the customer’s withdrawal
requests. This caused a crisis of confidence among its users and investors.
After investigation to the company’s operations, it was found that the company used new deposits to
settle older withdrawals. This caused its downfall, making its users and investors loose billion of dollars.
Its founder, Sam Bankman-Fried, faced legal charges for fraud and mismanagement of customer funds
On November 2, 2023, the jury convicted Sam Bankman-Fried on all seven counts of fraud and
conspiracy. He misappropriated nearly $10 billion from customers for political donations, venture capital
investments, and lavish spending and could face up to 115 years in prison.