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QUESTION 14
Title:
business ethic
Please read the case study and answer all questions.
Michael Vasquez was proud of his job as a new product manager for a technology start-up, and he loved the challenges, risks and tough decisions that went along with the job. But as he sat in his office after a long day, he was troubled, struggling over what had happened earlier that day and the information he now knows.
Just before lunch, Michael’s boss had handed him a pile of private strategic documents from their closest competitor. It was a competitive intelligence gold mine-product plans, pricing strategies, partnership agreements and other documents, most clearly marked ‘private and confidential’. When Michael asked where the documents came from, his boss told him with a touch of pride that he had taken them right off the competing firm’s server. ‘I got into a private section of their intranet and downloaded everything that looked interesting,’ he said. Later, realising Michael was suspicious, the boss would say only that he had obtained ‘electronic access’ via a colleague and had not personally broken any passwords. Maybe not, Michael thought to himself, but this situation wouldn’t pass the 60 Minutes test. If word of this acquisition of a competitor’s confidential data ever got out to the press, the company’s reputation would be ruined.
Michael didn’t feel good about using these materials. He spent the afternoon searching for answers to his dilemma, but found no clear company policies or regulations that offered any guidance. His sense of fair play told him that to use the information was unethical, if not downright illegal. What bothered him even more was the knowledge that this kind of thing might happen again. Using this confidential information would certainly give him and his company a competitive advantage, but Michael wasn’t sure he wanted to work for a firm that would stoop to such tactics.
Sources: Adapted from Weber, Kent (January−February 2001). Gold Mine or Fool’s Gold? Business Ethics, 18.
Questions:
What is the ethical issue in this scenario?
What should Michael do? Justify your answer using at least two ethical theories.
Do you perceive Michael’s boss to be ethical or unethical? Explain your answer in detail
Should Michael blow the whistle? Define ‘whistleblowing’. Explain what motivates whistle-blowers and under what circumstances whistleblowing is justified?
Based on the case study, provide four reasons why ethics is relevant to business?
Due date and assignment submission- Monday 23rd October at 11.55pm
Word limit: 1800 words (+/- 10%) plus references.
References: Students should use at least 7 references including academic journals, books, industry sources and newspaper articles (media sources)
Structure of the responses in a report format
- Title page
- Table of contents
- Introduction
- Main body – answering all the required questions
- Conclusions
- References
- Appendices (if applicable)
| Subject | Business | Pages | 8 | Style | APA |
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Answer
Table of Contents
2.0 Ethical Issues in Case Scenario. 3
4.0 Michael’s Boss as Unethical 6
5.0 Michael as a Whistleblower 7
6.0 Relevance of Ethics to Business. 8
Business Ethics Case Study
Introduction
Business ethics refers to the study of proper business practices, and policies in regard to potentially controversial business issues such as; insider trading, discrimination, corporate governance and bribery among other issues. Ethics dictates the conduct of business by stipulating a framework of conduct between employees and the employer, as well as the business and the outside world. This is so because ethical principles help people distinguish between wrong and right when making decisions thus enabling them make informed decisions that are binding to self and the organization. Apart from ethical principles, there are theories, which equally influence the way businesses operate. This background on ethics is important in guiding the answering of the following ethical questions based on a case study.
Ethical Issues in Case Scenario
According to the case study, Michael Vasquez, who is a new product manager at a technology start-up is faced with the dilemma requiring critical application of ethical theories and principles, in order to make an informed decision. As an employee at the firm, his conduct is bound by a moral obligation to the organization and a moral obligation to self. This makes it hard for him to make a decision that is devoid of conflict of interest. On a personal level, Michael can be noted as a morally upright manager who is interested in fair and just competition against his competitors. However, the CEO of the technology firm introduces private strategic documents belonging to competitors and it is marked as private and confidential. The document brings to question the ethical stand and morality of the CEO and his firm. This is the main dilemma facing Michael on whether to be part of the illegal and unethical practice of using leaked and highly confidential information from competitors or whether to take action. And if so, which is the best action for Michael, which will protect the image and reputation of his employer while equally helping the firm to be ethical in its future dealings. Michael is concerned that the CEO might continue with the illegal practice and has to find a way to address the issue before it is discovered by the industry regulators or outsiders who might use it to damage the reputation of the start-up firm. To this point, it can be noted that the ethical issue in this scenario is data theft which is considered an illegal practice among businesses.
What Michael Should Do
The first theory that is relevant to the case study is duty theory, also known as deontological theory. The theory is suitable to this case because it guides the questioning of morality in the behavior of Michael as well as that of the CEO. Duty theory detail moral principles. Its application is grounded on the view that moral standards are intuitive obligations. Ferrell and Fraedrich (2015) define duty as a moral obligation where someone is entitled to behave in a particular manner towards another. Given the executive position held by the CEO, Michael who is a manager has the duty of reporting to the CEO. IN addition, his duty as an employee is to help in maintaining the reputation and integrity of the firm. On the contrary, he has a duty not to lie to the CEO or to his own conscience. The duty theory requires that Michael follows moral rules that are known. Universally, there are laws requiring employees to keep confidential information on the insider dealings of their organizations. It is upon this argument that Michael needs to act based on prevailing laws and discuss the issue with the CEO. This should be the first move by the manager, since he will be administering his moral obligation of reporting any identified issues with the CEO.
Duty theory is often associated with non-consequentialism whereby a is entitled to performing their duties, as long as it is instinctively right or as long as it is justified by their human reasoning. The theory requires Michael to engage the CEO and discuss over the issue of data theft without thinking about the consequences that might follow his actions. In addition, being that his position as a manager exposes him to company secrets, he has a higher bargain in the discussions. This is because Michael has information on the alleged data theft and could use that to the disadvantage of the CEO.
The duty theory can be applied to this case based on two dimensions or philosophies. First, the philosophy by Kant advocates for moral duties whereby the firm is required to behave morally by the external and internal stakeholders. Based on this duty, it is wrong for the organization to steal and use data from its competitors to their advantage. In addition, Kant talks about the concept of categorical imperative where a person has to perform a duty that is morally upright irrespective of their personal desires. Naturally, it is the desire for any organization to outdo their competitors, nonetheless, it is unfair to steal their data and use it to your advantage. This reasoning justifies why Michael, in spite of the gains, which his firm might make from the stolen data, should talk to the CEO on the need for fair and just dealing.
The second philosophy is duty based theory by W.D Ross which emphasizes on the need for individuals and organizations to administer prima facie duties. The duties listed as prima facie include fidelity, reparation, gratitude, justice, beneficence, self-improvement and non-maleficence (Shapiro et al, 2014). The duty of justice and non-maleficence stands out since they emphasize the need for recognizing fair merit and duty not to injure others. A critical application of these duties favors discussions where Michael is entitled to inform the CEO of the dangers of data theft and why it should be discouraged.
The second theory that supports the need for discussion between Michael and the CEO is the consequentialist theories. Shaw (2016) notes that the theory has three subdivisions; ethical egoism, utilitarianism and ethical altruism. This theory emphasizes the need for determine the moral responsibility attached to given actions by considering their consequences. Consequentialism thrives on the cost-benefit analysis where the most moral conduct is likely to have the least cost to the firm. Trevino and Nelson (2016) support this statement by noting that consequentialist theorists believe that morally right actions tend to have more favorable results that unfavorable. Based on this theory therefore, Michael should face the CEO and discuss the issue by outlining bad and good consequences of data theft. Then they will collectively determine if the total good consequences of data theft outweigh total bad consequences to be faced by the firm in the event that they are discovered.
Assuming that the bad consequences outweigh the good, which will certainly be the case, then Michael will be in a better position to convince the CEO on the need for the firm to introduce an ethical culture. He should convince the CEO that immoral business conduct could enable the business to thrive at first, but it will collapse once its reputation is ruined. On the other hand, the CEO will have the option of participating in fair competition against competitors and operating for a long period.
Michael’s Boss as Unethical
Michael’s boss is unethical. This answer is supported by the following arguments. First, the CEO misuses the employer-employee relationship. According to English common law, an employee is supposed to be obedient, loyal and involved in diligent pursuit of the interests of the employer. The relationship between Michael and his boss is protected by the English common law and thus, it requires the Michael remains obedient and loyal. This the reason why Michael’s boss finds it easy to entrust Michael with the documents and believes that he will not act in contravention of the employer-employee relationship (MacKinnon & Fiala, 2014). This action by itself is unethical since the CEO is supposed to be first person to advocate for fair business practices. On the contrary, he is directly involved in mischief and data theft which justifies his unethical character as a boss. This creates conflicting interests where Michael, as much as he is proud of his work, begins to question the morality of the company he is working for and is unsure whether to pursue personal interests or become an accomplice to the boss unethical ways.
Second, the CEO is unethical because he has failed to introduce a structure, culture, procedures and policies that uphold high standards of ethical and moral behavior among staff (Treviño et al 2014). This is evident in the fact that the boss colludes with employees from a competing firm to steal their confidential and private data. This amounts to insider trading and breach of proprietary rights pertaining to trade secrets. By being in possession of sensitive information from his competitor, and the fact that he is willing to use it to the advantage of his organization means that he is not ethical. His actions lead to unfair competition which is an unethical business practice.
Michael as a Whistleblower
Michael should not blow the whistle. Russell, (2016) defines whistleblowing as an employees’ act of informing a government agency or the public of an immoral or illegal behavior of an organization or employer. The scope of the illegal behavior should be intense in a manner that causes unnecessary harm, violates human rights, illegal, immoral and runs counter to the defined purpose of the organization. Vaughn (2015) notes that whistleblowers are motivated by the need to safeguard public interests, by professional responsibility and the perception of acting in the best interests of the organization. As much as whistleblowing is necessary, it has to be justified by the following reasons. First, the whistleblower should exhaust internal channels of settling an issue. Based on this point, Michael should first exhaust internal channels of solving problems before considering whistleblowing.
Relevance of Ethics to Business
From the case study, it becomes justifiable that ethics could derive a range of benefits to a firm. First, ethical businesses attract reputation of its employees and customers among other stakeholders (Austin, 2016). As a result, they want to be associated with the firm. This is unlike unethical businesses which lose reputation and fail. Second advantage is that it enables an organization to retain its employees. People want to work with an organization whose integrity is unquestioned. From the case, Michael is made to question his stay at the organization after realizing that it is involved in unethical business practices of data theft. Prior to the revelation, he was proud of working for the firm.
Conclusions
In conclusion, this paper justifies why employees and employers need to be aware of ethical and moral business conduct. Failure to have knowledge on business ethics could compromise the growth of a firm. For instance, it is important that a firm maintains ethical dealing in order to remain in good standing with its stakeholders and other business partners. This is justified in this case through the application of the duty theory and consequentialist theories. The paper also analyzes circumstances under which an employee can engage in whistleblowing. This critical analysis justifies the need for Michael to discuss with the CEO on how the firm can introduce an ethical culture.
References
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Austin, E., 2016. Administrative Theory of Ethics. London: Liven Press. Ferrell, O.C. & Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. New York: Nelson Education. MacKinnon, B. & Fiala, A., 2014. Ethics: Theory and contemporary issues. London: Nelson Education. Russell, B., 2016. Contractualism, Consequentialism and the Moral Landscape: A New Pro-Contractualist Picture of Ethical Theory. New Haven: New Press. Shapiro, J.P., Stefkovich, J. & Gutierrez, K.J., 2014. Ethical decision making. Handbook of ethical educational leadership, pp.210-228. Shaw, W.H., 2016. Business ethics: A textbook with cases. London: Nelson Education. Trevino, L.K. & Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do it right. New York: John Wiley & Sons. Treviño, L.K., den Nieuwenboer, N.A. & Kish-Gephart, J.J., 2014. (Un) ethical behavior in organizations. Annual Review of Psychology, 65, pp.635-660. Vaughn, L., 2015. Doing ethics: Moral reasoning and contemporary issues. New York: WW Norton & Company. |