Business Ethics: Gold Mine or Fool's Gold?

This case study examines the need for business ethics in organizations and the potential consequences of unethical behavior. It discusses a scenario where a manager is faced with an ethical dilemma and explores the different ethical theories that can guide decision-making. The case also addresses the question of whistleblowing and the importance of ethics in improving reliability, productivity, and avoiding legal obligations.

Business Ethics: Gold Mine or Fool‟s Gold?

Running Head: Business Ethics
Contents
Introduction......................................................................................................................................2
Need for business ethics in an organization....................................................................................2
Questions.........................................................................................................................................3
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
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Running Head: Business Ethics
Introduction
A well-based structure of right and wrong ideas or thoughts is known as ethics. The structure of
these ethics is built on the pillars of loyalty, trust, rights of people, fairness and obligations of our
society. Based on this, a standard is set as a benchmark, crossing which would mean an unethical
behaviour. Basic human rights for example, right to freedom, right to privacy are also covered
under the umbrella of ethics. In order to consider the standards and norms as ethical, it has to be
supported with reasonable arguments.
Business ethics means the applicability of the ethical norms and standards in day to day
operations of the business. The involvement of ethical norms helps to differentiate between a
wrong and right choice. Business ethics is said to be one of the vital parts when corporate social
responsibility is integrated into the business. What makes business ethics different from other
ethics is that business ethics helps the organization to build a behavioural structure which is
followed by the employee and management team efficiently.
Need for business ethics in an organization.
The need for business ethics in an organization are stated below;
1. Boost in sales and profit.
Following an ethical approach can ensure the investors and customers that their investments and
interest are safe and secure. It is observed that a company with ethical behaviour tends to attract
more investors and helps the company to maintain a high share price, thereby minimizing the
risk of business takeovers.
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Running Head: Business Ethics
Therefore, unethical behaviour act as harmful for the firm's goodwill as it minimizes the
stakeholder's interest.
2. Minimizes employee’s turnover ratio.
Involvement of ethics in business makes employees stay in the organization. It reduces labour
turnover and promotes a healthy working environment and therefore increase productivity.
Ethical practices attract more employees, reduce the recruitment expenditure and help the
company to retain talented employees (Matthews, 2012).
Questions
Question 1
A proud manager, Michael Vasquez was trapped in an ethical dilemma when he got the pile of
private strategic documents of the rival firm from his boss. These documents were confidential
having information related to pricing policy, product innovation, partnership plans etc. After
acknowledging that his boss has taken these documents from another company's private intranet,
Michael was into the trauma. He was well aware that this incidence may spoil the goodwill of
the rival firm.
While seeking help, he looked for company policies to get remedial measures but it was of no
help. According to his personal ethical values, this tactic is not only vague but also unethical.
Using the documents may give a short term success but can drastically spoil the profitability and
credibility of the company in future. Therefore, what seems like a gold mine can turn into fool’s
gold too. (Sinha, 2017).
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Running Head: Business Ethics
Question 2
The given case study is under the topic of moral theory, based on the act of utilitarianism. This
helps an individual to decide the approach for following the moral theory. Ethical theory helps
the employee's to improve the working and wellbeing of the organization. Michael was aware of
the fact that stealing private and confidential data will help the company to grow in the short run
but can be dangerous enough in the long run. He regrets the fact that he is working for an
organization that has followed such poor code for gaining a short term advantage. He should
discuss this matter and go for strategic evaluation of the company. This will help him to find the
reason behind this act and will also help him to evaluate the working of the organization. The
fact cannot be ignored that using confidential data of the rival company is not only unethical but
illegal too. (ECI, 2019).
In order to develop the ethical code to his boss, Michael can refer to SCIP ethics i.e. Strategic
and Competitive Intelligence Professionals. Over the years, it has proved to frame guidelines for
working professionals. This code of conduct pays more importance to the fact that organizations
and other members must respect the confidentiality of any document or information. This will be
helpful for Michael.
Virtue ethics theory: Aristotle has developed this theory of virtue ethics. This can be helpful in
this scenario as it focuses more on the individual perspective rather than one’s societal, political
and religious aspects. Virtue ethics theory helps an individual in guiding someone else to
overcome unethical situations by following a moral approach. Following this virtue ethics
theory, Michael can ask his boss not to repeat such incidence in future. (Sakellaroouv, 2015).
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Running Head: Business Ethics
Question 3
Yes, the incident of Michael’s boss, stealing private and confidential documents from rival
company’s intranet is considered to be unethical. There is a difference between gathering
information which is disclosed and stealing one from the private source that is marked as
confidential. He breached the Business Ethics intellectual property rights of the rival firm.
Considering a few definitions of business law, governing the companies act, the method adopted
by Michael’s boss is not only considered to be unethical but an illegal act too. The boss took help
from the company employee to unlock the proprietary key then he shared them with his
company’s employee to gain extra profit or to know the planning and policy framing structure of
a rival firm. It is unethical to obtain or to share another company’s confidential data. (Cakir,
2017). But in this case study, it is difficult to find the details of confidential data. It is understood
from the description, observation and reaction of his boss that the data are extremely important
for the rival company. I
Different company follow a different set of policies and trade secrets, but the act governing the
trademark or patent of a company is different. One of the most known acts, the Uniform Trade
Secrets Act states, any misappropriate use of a trade secret is illegal and the person breaching
this can be put into legal actions.
Question 4
No, at this stage Michael should not blow the whistle.
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Running Head: Business Ethics
Whistleblowing is an act which is generally preferred when all other options within the
organization are exhausted. The consequences or impact of whistler blowing act can be found
harmful for both the parties. Hence at this situation, it is not suggested to blow the whistle as
Michael has not tried any other remedy.
Whistleblowing: The whistleblowing policy is the act where a person (employee) can report
activity that he or she considers to be unethical or illegal. After filing a complaint by the
whistleblower management officials are appointed who are given the charges to evaluate the
incidence and deliver the appropriate reports (Turteltaub, 2014).
Protection under this policy is given under important areas which include confidentiality and
against retaliation. In any case, the confidentiality of a whistleblower is maintained. In a few
cases, the identity of a person has to be unveiled for conducting an investigation. In case an
employee feels he is being retaliated against his act he should immediately report to the human
resource director for protection. Before going for this policy the whistleblower has to understand
that his protection doesn't include immunity for any personal wrongdoing that is investigated.
Therefore, the whistleblowing policy is the right way to deal with wrongdoing.
Motivators of Whistleblowing: The perspective of whistleblowing is concerned with moral
obligations. However, there are circumstances in an organization that leaves no option but the
whistleblowing. If it is found that unethical practice or act is not in companies and other
employee's favour the act of whistleblowing is required. Therefore, it is always suggested to the
whistleblower to report the upper-level managers like human resource head or manager about the
unethical practice and when it is found they are not taking any actions then this act is
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Running Head: Business Ethics
appreciable. A valid document should be made available to support the claim. The person should
also keep in this mind; the changes his whistleblowing will bring should not be the reason for
any public harm. It is expected that whistleblowers have to face the challenges and conflict
between the people involved. Here, the motivational factor plays a vital role in justifying the
whistleblowing act. His motive should work in his favour and he should also take care it doesn't
harm the interest of the organization or people involved with it. He should be sure about the
unethical practices that can harm the organization. When there is no option left whistleblowing is
absolutely justified otherwise it is not suggested. (Waytz, 2016).
Question 5
Ethics are found relevant for the business because of the following stated reasons:
1. Improves Reliability.
Ethics helps the company to build reliability and trust over time. In this above case, the unethical
approach by an individual or group of an employee forced Michael to think about the policies
and trustworthiness of the company. Therefore, the unethical practice demotivates the employee
to work and at the same time, they lack the interest. (Midtown, 2018).
2. Ethical Practice improves Productivity
Ethics is moral guidance, helping the organization to improve the workforce and overall
efficiency by minimizing the risk of leaving the job. When the organization is following ethical
practices, even the working force get the motivation to follow the path of loyalty and honesty.
Here, the unethical code by his boss leaves a negative and bad impact on other workers. (Akrani,
2011).
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Running Head: Business Ethics
3. Avoiding Legal obligations.
Following ethics can help organizations from legal obligations. In this case, his boss has
breached the intellectual property rights of a rival firm, by stealing the confidential and private
documents. In case this incident is known to the rivals, he will have to face legal challenges.
4. The right approach to deal with wrongdoing.
A company following an ethical approach in its business operations has a set of standard
formulation of policy. This policy will restrict everyone to follow ethical misconduct. Even if
someone commits such, there is a chance they will have to face legal actions. The boss didn't
give it a thought before engaging in ethical misconducts because the organization was not
following any ethical policy. (Charter College, 2019).
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Running Head: Business Ethics
Conclusion
The given case study helped to analyze and understand the need for ethics in business practice, in
order to carry good and desirable working force, reputation, and efficiency for long term duration
business ethics helps the organization to grow and improve. Generally, it is observed, unethical
code of conduct helps the company to experience temporary benefits, but there are high chances
of failure and shutdowns in the long run. Following the code of Ethics always help the
organization to smoothly regulate its operations and build a healthy business environment.
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Running Head: Business Ethics
References
Akrani, G. (2011) Need or Importance of Business Ethics, Available at: https://kalyan-
city.blogspot.com/2011/09/need-or-importance-of-business-ethics.html
Cakir, H. (2017) Whistleblowing: Ethical or not, Available at:
https://www.academia.edu/23765668/Whistleblowing_Ethical_or_not
Charter College (2019) Why Are Good Ethics so Important to Businesses?, Available at:
https://www.chartercollege.edu/news-hub/why-are-good-ethics-so-important-businesses
ECI (2019) Why Have a Code of Conduct. [Online]
Available at: https://www.ethics.org/resources/free-toolkit/code-of-conduct/
Matthews, J. (2012) Eight Elements of an Ethical Organization, Available at:
https://www.entrepreneurship.org/articles/2002/12/eight-elements-of-an-ethical-organization
Midtown, B. (2018) Why is Ethics Important For Business?, Available at:
https://blogs.accaglobal.com/2014/11/25/why-is-ethics-important-to-business/
Sakellaroouv, A. (2015) Virtue Ethics and it's Potential as the Leading Moral Theory, 12(1).
Sinha, K. (2017) Business Ethics: Meaning, Sources and Importance, Available at:
http://www.yourarticlelibrary.com/business/ethics/business-ethics-meaning-sources-and-
importance/64095
Turteltaub, A. (2014) Why Risk It? The Motivations of a Whistleblower, Available at:
http://complianceandethics.org/risk-motivations-whistleblower/
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Running Head: Business Ethics
Waytz, A. (2016) Whistleblowers are Motivated by Moral Reasons Above Monetary Ones,
Available at: https://promarket.org/whistleblowers-motivated-moral-reasons-monetary-ones/
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