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The event reported in the article relates to the arrest of Nissan’s boss Carlos Ghosn for underreporting his income on financial statements sent to Japanese regulators. According to the author, Ghosn “had been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount in order to reduce the disclosed amount of [his] compensation” (Jolly, 2018, para. 4). Nissan also said that Ghosn had been involved in other acts of misconduct and clear violations of duty, in large part due to his position as the CEO and the fact that he was enjoying too much authority in terms of governance.
The issues of Ghosn’s understating his income and abusing authority are not an isolated social problem and hence cannot be contextualized to an individual. Rather, there are issues viewed as destructive to society members and hence in need of remediation. Indeed, the importance that society has placed on wealth and prosperity has made it possible for individuals to shift their values and beliefs of what constitute good business practices and ethics.
Consequently, the failure by Ghosn to observe ethical corporate governance arises due to society’s entrenchment of beliefs that value wealth and label poverty in negative connotations. According to the sociological imagination perspective, therefore, there is a social basis for Ghosn’s behavior and actions. Contemporary society worships money and wealth but devalues those considered as poor, hence providing the impetus needed for individuals to enrich themselves through illegal ways in order to align with societal expectations.
This event happened in an institutional social context, which is essentially described in sociological scholarship as “an established and enduring pattern of social relationships” (Giddens, Duneier, Appelbaum, & Carr, 2011, p. 28). Nissan is clear that Ghosn was able to engage in the unethical underreporting of his income since he had been at the helm of the company for a very long time (Jolly, 2018). The patterns of social relationships Ghosn formed with other members of the institution enabled him to engage in income understating in order to create more wealth, which is sanctioned by society as a sign of success. The members formed part of Ghosn’s social group which facilitated the malpractice since they not only interacted at the institutional level but also shared a common identity of attaining wealth and prosperity using all means possible so that they are viewed favorably by society.
Ghosn’s problem touches on several parties that are critical to understanding the issue using a sociological perspective lens. First, the problem touches on Ghosn’s primary group, which basically denotes those individuals he used to informally interact with in the institutional setting to facilitate the crime. Second, the problem touches on Ghosn’s secondary group, which basically encompasses those individuals the culprit used to associate with through impersonal and formal interactions but who nevertheless facilitated the malpractice. The intricate web of Ghosn and his primary and secondary groups serves to demonstrate that the social problem of governance malpractice cannot be reduced to an individual issue since it involves two or more people. The problem also touches on two other typologies of social structure, namely statuses and roles. A status is described in the literature as “a position that a person occupies within a social group” (Giddens et al., 2011, p. 29). Ghosn’s achieved status as the CEO of Nissan for more than 10 years serve to show how the culprit used his power and authority to influence other members of his social groups to undertake the malpractice on his behalf. Roles are described as “the set of rights, obligations, and expectations associated with a status” (Giddens et al., 2011, p. 29). Consequently, it becomes easier to understand how Ghosn rights and obligations as a CEO provided an enabling environment for the culprit to influence others in underreporting his income so that he could benefit unfairly.
The sociological theory which best explains this event is the conflict perspective. This perspective views society as consisting of groups and interests that are in competition for power and resources. The perspective “explains various aspects of our social world by looking at which groups have power and benefit from particular social arrangements” (Ritzer & Stepnisky, 2013, p. 58). Karl Marx, the architect of the conflict theory, argued that “society is in a state of perpetual conflict because of competition for limited resources” (Ritzer & Stepnisky, 2013, p. 59). Using this prism, it is easy to term Ghosn as a bourgeoisie who used his power as the CEO of Nissan to control the institution to his own advantage by underreporting his income in order to optimize his own benefits. The competition for wealth led Ghosn to underreport his income and succeed in doing so due to his use of domination and power as the company’s CEO. Indeed, the conflict perspective helps us to understand how Ghosn suppressed the poor and the powerless (lower-level employees) to entrench an economic inequality in terms of understating his income to the relevant authorities. The problem can also be explained in terms of the social pathology theory in the structural-functionalist perspective, which views the issue of unethical corporate governance as a decay that results from the “sickness” in society, particularly in terms of worshipping money and wealth at the expense of good ethical practices.
The news source is credible since the event has been published in a reputable newspaper which has a global appeal. The source also provides detailed information of all the parties to the event. Lastly, the news source is current.
This paper shows that we can analyze events using the sociological imagination perspective to develop an adequate understanding of their social bases and their interactions with the social context. Overall, the paper underscores the dangers of individualizing common social problems such as unethical corporate governance and corruption.
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