How To Address College Board Data Related Ethical And Legal Issues

ii.three Identifying Ethical Issues

Learning Objective

Place upstanding problems that yous might face in business organization, and clarify rationalizations for unethical behavior.

Brand no mistake about it: When you enter the business globe, you'll find yourself in situations in which you'll have to choose the appropriate behavior. How, for instance, would you answer questions like the following?

Is it OK to have a pair of sports tickets from a supplier?
Can I buy office supplies from my brother-in-law?
Is it appropriate to donate company funds to my local customs center?
If I detect out that a friend is nigh to exist fired, can I warn her?
Will I have to lie about the quality of the goods I'm selling?
Can I take personal e-mails and telephone calls at piece of work?
What do I exercise if I detect that a coworker is committing fraud?

Evidently, the types of situations are numerous and varied. Fortunately, we can break them down into a few basic categories: bribes, conflicts of interest, conflicts of loyalty, issues of honesty and integrity, and whistle-blowing. Let's look a little more closely at each of these categories.

Bribes versus Gifts

It'southward not uncommon in concern to give and receive small gifts of appreciation. But when is a gift unacceptable? When is it really a bribe? If it's OK to give a bottle of wine to a corporate client during the holidays, is it OK to give a case of wine? If your company is trying to get a big contract, is it appropriate to send a gift to the key decision maker? If information technology's all correct to invite a concern associate to dinner or to a ball game, is it besides all right to offer the same person a fully paid weekend getaway?

There'south frequently a fine line betwixt a gift and a bribe. The questions that we've just asked, however, may assistance in drawing information technology, because they raise key issues in determining how a gesture should be interpreted: the cost of the detail, the timing of the gift, the type of gift, and the connection betwixt the giver and the receiver. If you're on the receiving end, it's a good idea to refuse any item that's overly generous or given for the purpose of influencing a decision. But considering accepting even small gifts may violate company rules, the best advice is to check on company policy.

JCPenney'south "Statement of Business Ethics," for instance, states that employees tin can't have any cash gifts or whatsoever noncash gifts except those that have a value below $50 and that are generally used by the giver for promotional purposes. Employees can attend paid-for business organization functions, but other forms of amusement, such as sports events and golf outings, tin be accustomed simply if it's practical for the Penney's employee to reciprocate. Trips of several days tin't be accustomed under whatsoever circumstances (JCPenney Co., 2006).

Conflicts of Interest

Conflicts of interest occur when individuals must choose betwixt taking deportment that promote their personal interests over the interests of others or taking actions that don't. A conflict can exist, for example, when an employee's own interests interfere with, or accept the potential to interfere with, the best interests of the company's stakeholders (management, customers, owners). Let's say that you work for a visitor with a contract to cater events at your college and that your uncle owns a local bakery. Apparently, this situation could create a disharmonize of involvement (or at to the lowest degree give the advent of ane—which, by the style, is a problem in itself). When yous're called on to furnish desserts for a luncheon, you might be tempted to throw some business your uncle'south manner fifty-fifty if it's not in the best interest of the catering company that yous work for.

What should y'all practise? Y'all should probably disembalm the connection to your dominate, who can and then arrange things then that your personal interests don't conflict with the company's. You may, for example, agree that if you're assigned to order products like those that your uncle makes, you're obligated to detect some other supplier. Or your boss may brand sure that someone else orders baker products.

The same principle holds that an employee shouldn't use private data almost an employer for personal financial benefit. Say that you learn from a coworker at your pharmaceutical company that one of its nearly profitable drugs volition be pulled off the market place because of dangerous side effects. The think volition severely hurt the visitor'south fiscal performance and cause its stock price to collapse. Before the news becomes public, you sell all the stock you own in the company. What y'all've washed isn't merely unethical: It's called insider trading, it's illegal, and you could go to jail for information technology.

Conflicts of Loyalty

Sometimes you discover yourself in a bind between existence loyal either to your employer or to a friend or family unit fellow member. Mayhap y'all but learned that a coworker, a friend of yours, is almost to exist downsized out of his chore. You also happen to know that he and his wife are getting ready to make a deposit on a house nigh the company headquarters. From a piece of work standpoint, y'all know that you shouldn't divulge the information. From a friendship standpoint, though, you lot feel information technology's your duty to tell your friend. Wouldn't he tell you if the situation were reversed? Then what practice you lot do? As tempting as information technology is to be loyal to your friend, you lot shouldn't. As an employee, your primary responsibility is to your employer. You might exist able to soften your dilemma by convincing a manager with the appropriate dominance to tell your friend the bad news before he puts downwardly his eolith.

Problems of Honesty and Integrity

Master investor Warren Buffet once told a group of business students the following:

I cannot tell you that honesty is the best policy. I can't tell you that if you carry with perfect honesty and integrity somebody somewhere won't behave the other way and brand more money. But honesty is a proficient policy. You'll exercise fine, yous'll slumber well at night and you'll feel expert about the case you are setting for your coworkers and the other people who care well-nigh y'all" (Gostick & Telford, 2003).

If you work for a company that settles for its employees' but obeying the police and post-obit a few internal regulations, you might think virtually moving on. If you're being asked to deceive customers about the quality or value of your product, you're in an ethically unhealthy environment.

Think almost this story:

A chef put 2 frogs in a pot of warm soup h2o. The commencement frog smelled the onions, recognized the danger, and immediately jumped out. The 2nd frog hesitated: The water felt good, and he decided to stay and relax for a infinitesimal. After all, he could e'er jump out when things got likewise hot (and then to speak). Equally the h2o got hotter, nonetheless, the frog adapted to information technology, hardly noticing the change. Soon, of course, he was the chief ingredient in frog-leg soup" (Gostick & Telford, 2003).

And then, what's the moral of the story? Don't sit effectually in an ethically toxic environment and lose your integrity a petty at a time; get out before the h2o gets too hot and your options have evaporated.

Fortunately, a few rules of thumb tin guide you. We've summed them up in Figure 2.4 "How to Maintain Honesty and Integrity".

Figure 2.four How to Maintain Honesty and Integrity

Whistle-Blowing

As we've seen, the misdeeds of Betty Vinson and her accomplices at WorldCom didn't go undetected. They caught the centre of Cynthia Cooper, the company'due south director of internal auditing. Cooper, of form, could have looked the other way, only instead she summoned upward the courage to be a whistle-blower—an individual who exposes illegal or unethical beliefs in an organization. Similar Vinson, Cooper had majored in accounting at Mississippi State and was a hard-working, dedicated employee. Dissimilar Vinson, however, she refused to be bullied by her boss, CFO Scott Sullivan. In fact, she had tried to tell not only Sullivan just also auditors from the huge Arthur Andersen accounting firm that in that location was a problem with WorldCom's books. The auditors dismissed her warnings, and when Sullivan angrily told her to drop the matter, she started cleaning out her role. Merely she didn't relent. She and her team worked late each night, conducting an all-encompassing, secret investigation. Two months later, Cooper had testify to have to Sullivan, who told her again to back off. Again, nonetheless, she stood upwards to him, and though she regretted the consequences for her WorldCom coworkers, she reported the scheme to the company's board of directors. Within days, Sullivan was fired and the largest bookkeeping fraud in history became public.

As a consequence of Cooper'south actions, executives came clean about the company's financial situation. The conspiracy of fraud was brought to an end, and though public disclosure of WorldCom's bug resulted in massive stock-price declines and employee layoffs, investor and employee losses would have been greater without Cooper's intervention.

Fifty-fifty though Cooper did the right matter, the experience wasn't exactly gratifying. A lot of people applauded her activity, but many coworkers shunned her; some even blamed her for the visitor's troubles. She's never been thanked past whatever senior executive at WorldCom. Five months afterwards the fraud went public, new CEO Michael Capellas assembled what was left of the demoralized workforce to give them a pep talk on the visitor's future. The senior management team mounted the stage and led the audience in a rousing rendition of "If yous're happy and you know it, clap your hands!" Cynthia Cooper wasn't invited (Gostick & Telford, 2003).

Whistle-blowing oft ways career suicide. A survey of two hundred whistle-blowers conducted by the National Whistleblower Center found that half of them had been fired for blowing the whistle (National Whistleblower Center, 2002). Fifty-fifty those who get to keep their jobs experience painful repercussions. As long equally they stay, some people will treat them (equally one whistle-blower puts it) "like skunks at a picnic"; if they leave, they're frequently blackballed in the industry (Dwyer, et. al., 2002). On a positive notation, in that location's the 2002 Sarbanes-Oxley Deed, which protects whistle-blowers under federal constabulary.

For her own function, Cynthia Cooper doesn't regret what she did. As she told a group of students at Mississippi State: "Strive to be persons of accolade and integrity. Practice not allow yourself to exist pressured. Do what yous know is right even if there may be a toll to exist paid" (Waller, 2003). If your company tells employees to do whatever it takes, push the envelope, look the other way, and "exist sure that we brand our numbers," you lot have three choices: go along with the policy, try to modify things, or leave. If your personal integrity is part of the equation, yous're probably down to the last two choices (Gostick & Telford, 2003).

Refusing to Rationalize

Despite all the good arguments in favor of doing the correct thing, why do many reasonable people act unethically (at to the lowest degree at times)? Why do good people make bad choices? According to one report, there are four common rationalizations for justifying misconduct: (Gellerman, 2003)

My behavior isn't actually illegal or immoral. Rationalizers try to convince themselves that an action is OK if it isn't downright illegal or blatantly immoral. They tend to operate in a grey area where there'south no articulate evidence that the action is wrong.
My action is in everyone'due south best interests. Some rationalizers tell themselves: "I know I lied to brand the deal, but information technology'll bring in a lot of business concern and pay a lot of bills." They convince themselves that they're expected to act in a certain style, forgetting the archetype parental parable about jumping off a cliff simply because your friends are (Gostick & Telford, 2003).
No one will notice out what I've done. Here, the self-questioning comes down to "If I didn't get caught, did I actually exercise information technology?" The respond is yes. There's a simple style to avoid succumbing to this rationalization: Always human action every bit if you're being watched.
The visitor volition disregard my activeness and protect me. This justification rests on a fallacy. Betty Vinson may honestly have believed that her deportment were for the adept of the company and that her dominate would, therefore, take total responsibility (as he promised). When she goes to jail, withal, she'll keep her own.

Here'south another rule of pollex: If you notice yourself having to rationalize a decision, it'southward probably a bad one. Over time, you'll develop and strop your ethical decision-making skills.

Fundamental Takeaways

When you lot enter the concern earth, you'll find yourself in situations in which you'll have to choose the appropriate behavior.
You lot'll need to know how to distinguish a bribe from an acceptable gift.
Y'all'll meet situations that give ascent to a conflict of involvement—situations in which you'll accept to choose between taking activity that promotes your personal interest and action that favors the interest of others.
Sometimes you'll be required to cull between loyalty to your employer and loyalty to a friend or family member.
In business, as in all aspects of your life, you lot should act with honesty and integrity.
At some point in your career, you might become aware of wrongdoing on the part of others and will accept to decide whether to written report the incident and become a whistle-blower—an individual who exposes illegal or unethical beliefs in an organization.
Despite all the good arguments in favor of doing the right thing, some businesspeople nevertheless human action unethically (at least at times). Sometimes they use one of the post-obit rationalizations to justify their conduct:
1. The behavior isn't actually illegal or immoral.
2. The action is in everyone'southward best interests.
3. No i will find out what I've done.
4. The visitor will condone my activeness and protect me.

Exercises

1. (AACSB) Analysis

Each December, Fourth dimension magazine devotes its encompass to the person who has made the biggest impact on the world that year. Fourth dimension'due south 2002 pick was non 1 person, but iii: Cynthia Cooper (WorldCom), Coleen Rowley (the FBI), and Sherron Watkins (Enron). All three were whistle-blowers. We detailed Cynthia Cooper'south backbone in exposing fraud at WorldCom in this chapter, but the stories of the other two whistle-blowers are every bit worthwhile. Become to the Time.com Web site (http://www.time.com/fourth dimension/magazine/article/0,9171,1003988,00.html) and read a posted story about Rowley, or visit the Time.com Web site (http://world wide web.fourth dimension.com/fourth dimension/mag/article/0,9171,1003992,00.html) and read a posted story about Watkins. Then answer the post-obit questions:

What wrongdoing did the whistle-blower expose?
What happened to her when she blew the whistle? Did she experience retaliation?
Did she do the right thing? Would yous take blown the whistle? Why or why not?

2. (AACSB) Analysis

You ain a tax-preparation company with ten employees who ready revenue enhancement returns. In walking around the function, you observe that several of your employees spend a lot of time making personal employ of their computers, checking personal e-mails, or shopping online. After doing an Internet search on employer computer monitoring, respond to these questions: Is it unethical for your employees to use their work computers for personal activities? Is it upstanding for you to monitor computer usage? Do y'all have a legal right to practise it? If yous decide to monitor calculator usage in the hereafter, what rules would yous make, and how would you enforce them?

References

Dwyer, P., et al., "Yr of the Whistleblower," BusinessWeek Online, December xvi, 2002, http://www.businessweek.com/magazine/content/02_50/b3812094.htm (accessed January 22, 2012).

Gellerman, Due south. W., "Why 'Expert' Managers Make Bad Ethical Choices," Harvard Business Review on Corporate Ethics (Boston: Harvard Business organisation School Printing, 2003), 59.

Gostick, A., and Dana Telford, The Integrity Reward (Salt Lake Metropolis: Gibbs Smith, 2003), 103.

JCPenney Co., "Statement of Business Ideals for Assembly and Officers: The 'Spirit' of This Statement," http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irol-govconduct (accessed Apr 24, 2006).

National Whistleblower Center, "Labor Mean solar day Report: The National Status of Whistleblower Protection on Labor Day, 2002," http://www.whistleblowers.org/labordayreport.htm (accessed April 24, 2006).

Waller, Southward., "Whistleblower Tells Students to Have Personal Integrity," The (Jackson, MS) Clarion-Ledger, November eighteen, 2003, http://www.clarionledger.com/news/0311/18/b01.html (accessed April 24, 2006).