Ethics and Whistleblowing in a Startup

This assignment delves into a case study about Michael Vasquez, manager of a startup facing ethical challenges. It examines the negative consequences of unethical practices on the company's reputation and resources. The role of whistleblowing in mitigating these issues is analyzed, along with two ethical theories – deontology and utilitarianism – to provide a comprehensive understanding of the situation.

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Table of Contents
Introduction......................................................................................................................................3
Q. 1..................................................................................................................................................4
Q. 2..................................................................................................................................................4
Q. 3..................................................................................................................................................5
Q. 4..................................................................................................................................................6
Q. 5..................................................................................................................................................7
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
The basic objective that can be held responsible behind the preparation of this report is to
develop an understanding on the ethical issue associated with the organization. In this report, a
scenario that is related with the acquiring the data of other company has been presented. In this
report, that case has been analyzed in an effective manner. The issue and its related
consequences are indentified in this report. Then, relevance of ethics with the business has also
discussed in this report.

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Q. 1
The ethical issue present in the given scenario is related with the privacy of the data. Every
company requires maintaining the confidentiality and privacy of their data. In the given scenario,
the senior executive of the company acquires the data of competitors in order to gain competitive
advantage which is unethical according to the law (Pardo and Siemens, 2014). Along with this,
the company is also breached the approach of ‘duty of care’.
Q. 2
There are two ethical theories that are present related with ethics. These theories are
deontological ethic and Utilitarianism ethic.
Deontological ethics: It is also called as deontology, which is the similar to the normative
ethical as well as adjudicator’s acts of ethics that have its reliance on rules and policy. In
philosophy, deontological ethics, the theories of ethical, has put unique importance on the
relation of morality and duty of exploit on the human (Williams, 2011). The ethic of deontology
has included further positive elements although it has also includes some faults. The fault is that
there has no valid or justification origin for dividing the responsibilities and duties individually.
For example, a business person always divides the duty and responsibility for its employees
during the meetings time.
Utilitarianism ethics: It is also known as the ethical theories of utilitarian, which is based on the
capability of individuals in order to forecast the cost of an achievement. Act utilitarianism and
rule utilitarianism are the two method of utilitarianism. The meaning of Act utilitarianism is that
individual achieves operations which is beneficial for the public, the societal constraints like
laws or regardless of individual approach. Rule utilitarianism comprises the law account as well
as it has afraid from the transparency (Groves and LaRocca, 2011). It is inquiring about the

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advantages of main people although during the fairest, also for most of the part just means it is
available.
On the basis of above both ethics it can be observed that it is illegal for the company to theft the
other company’s data. Michael Vasquez has been told his boss that it is not good for the
reputation of the company. It might happen that company may bear profit and both deontology
and utilitarianism ethics also states that it is illegal for the company. According to the deontology
ethics, it is based on polices and rules than Michael has required to advise his boss to follow the
ethical rules. Besides, sometime it happens that it is beneficial for the company but at the same
time also bears the fault. On the other hand, according to the utilitarianism ethics, Company has
been following the fair laws. If company has not followed the rules, it may affect the goodwill of
the company as well as financial position in the market.
Q. 3
On the basis of above, it can be interpreted that the act done by the executive can be put under
the category of unethical behaviors. Hence, the executive of the company can be considered as
theft in market because company has faced endurance in the market. In addition, it is unethical
for the company because it may not be able to survive in the industry. Company has suffered
from many problems and issues in front of public. A company will lose its position in the market
as well as employees will leave the company. The company cannot maintain and sustain in the
market field. The company may not be able in generating good products and it can be the
disadvantage for the company. The Executive of the company may not build up the trust in front
of its employees and employer (Joosten, et al., 2014). At the same time, the perspective of
unethical company has not maintained and developed the partnership to the other business
person and business. Michael Vasquez, who is the manager of the company, is not supporting his

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executive in doing illegal work. The company may faces several lose and disadvantages due to
the unethical act performed by the senior executive. And the survival of the company may faces
danger which can put a question mark on the existence of the company.
Q. 4
Whistle blowing refers to the process of drawing attention of people towards the misconducts
that are happened within the organization. This act can be done at any time in the organization by
any of the people of they seems that they any type of illegal or misconduct is happening in the
organization. This enables the employees to react on the incidences which are illegal and
misconduct and helps in maintaining a safe environment of workplace. It also helps in protecting
the brand reputation and loyalty of the company. Generally, this act is popularized in private
sectors due to the restriction on openness and transparency, restricted disclosure of illegal
behavior in front of the public (Arszulowicz and Gasparski, 2011). The main act of whistle
blowers is to interfere with the rights of public. The act of whistle blowing is required to conform
to the requirements of ethics as it involves representation of understanding of person to a broader
extent.
There are many motivating factors present in the behavior of a person which induces them to do
the act of whistle blowing. Possessing a fundamental nature of justice is the main motivating
factor of whistle blowing. Stating the wrong person accountable for the wrong actions can also
be held as a motivating factor. The willingness of self preservation is also held as motivating
factor of whistle blowing. The willingness for gaining more benefits in the form of cash and
other forms also motivates the act of whistle blowing. Authority that is granted to SEC for the
purpose of making rewards and extra payments also acts as a motivator. The broader and
comprehensive type of authority has been provided by Dodd-Frank Act (Bozeman and Su,

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2015). Providing greater employment opportunities and securities also leads to the motivation of
this act.
There are several circumstances which justify the implication of whistle blowing. Any type of
serious and significant harm that can be caused by any type of the product or service justifies the
implication of this act. Another situation occurs when an employee of an organization identifies
the danger threats which are against of his moral understanding to the various stakeholders of the
business. Not giving of responses by the immediate boss can drain the methods and chain of
command to the board members (Alleyne, et al., 2013). Situation of unethical actions can be
raised by drawing the incentives and benefits of the employees despite of their best efforts laid in
the work.
Q. 5
Four major reasons that shows the importance of ethics in the business structure:
Ethics lays the strategic decision-making: With the proper implementing of appropriate
structure in the organization, the decision making process of the company can be strengthened.
The ethics prescribes the guidelines and norms which governs the behavior of the employees.
The decisions taken keeping in view the various ethics of the company are generally accepted by
the society. The strategy of the decision making process gives permission to the stakeholders of
the business to participate in the decision making process of the company (Thiel, et al., 2012). It
also helps in building a positive environment in terms of investment.
Helps in framing and maintaining reputation: The main objective of the company lies in
ensuring the good reputation and goodwill of the company in the market. Optimum and effective
compilation with the ethical structure of the company helps the managers and executives in
maintaining the good position of the company (Feldman, et al., 2014). One of the most important

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things of ethical structure is that it allows customers will investigate the decision relating to the
carry on the business or not. It also helps in promoting business in an effective and efficient
manner.
Helps in developing employees and customer’s loyalty: The main objective of the business is
to survive and continuous growth which can be achieved by gaining the faith of the customers. It
will help in developing positive image and brand reputation of the company in the market. With
the effective implementation of strategic environment and legal framework, the company can
maintains the loyalty of its employees which helps in improving the productivity of the
employees (Karpen, et al., 2012). This ultimately results in improving the profitability of the
business. If a company possesses good reputation, then recruiting of the personnel becomes quite
easy for the company.
Attract more stakeholders: Effective implementation of ethical structure within the
organization avail several benefits to the company in numerous ways. Company can maintain
effectual relationships with the suppliers which help in the growth of the company. A good
ethical structure also attracts the opportunities of partnership which facilitates the expansion of
business. It also helps in reducing the risks of business environment. It also helps in promoting
the spirit of teamwork and improves the level of coordination within the organization.

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Conclusion
On the basis of this case study it can be observed that Michael Vasquez is the manager of the
startup company. It can be concluded that unethical practices influence the business negatively.
Moreover, unethical practices ruin the company’s goodwill and other key important resources.
Furthermore, it is also concluded that whistle blowing police reduces the unethical practices in
business and smoothens the process of company’s operations. Two different theories that are
deontology and utilitarian relating to the ethical aspect of the company has also discussed in
detailed in the report.

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References
Alleyne, P., Hudaib, M. and Pike, R. (2013) Towards a conceptual model of whistle-blowing
intentions among external auditors, The British Accounting Review, 45(1), pp.10-23.
Arszulowicz, M. and Gasparski, W.W. eds. (2011) Whistleblowing: In defense of proper
action (Vol. 1). USA: Transaction Publishers.
Bozeman, B. and Su, X. (2015) Public service motivation concepts and theory: A critique, Public
Administration Review, 75(5), pp.700-710.
Feldman, P.M., Bahamonde, R.A. and Velasquez Bellido, I. (2014) A new approach for
measuring corporate reputation, Revista de Administração de Empresas, 54(1), pp.53-66.
Groves, K.S. and LaRocca, M.A. (2011) An empirical study of leader ethical values,
transformational and transactional leadership, and follower attitudes toward corporate social
responsibility, Journal of Business Ethics, 103(4), pp.511-528.
Joosten, A., Van Dijke, M., Van Hiel, A. and De Cremer, D. (2014) Being “in control” may
make you lose control: The role of self-regulation in unethical leadership behavior, Journal of
business ethics, 121(1), pp.1-14.
Karpen, I.O., Bove, L.L. and Lukas, B.A. (2012) Linking service-dominant logic and strategic
business practice: A conceptual model of a service-dominant orientation, Journal of Service
Research, 15(1), pp.21-38.
Pardo, A. and Siemens, G. (2014) Ethical and privacy principles for learning analytics, British
Journal of Educational Technology, 45(3), pp.438-450.
Thiel, C.E., Bagdasarov, Z., Harkrider, L., Johnson, J.F. and Mumford, M.D. (2012) Leader
ethical decision-making in organizations: Strategies for sensemaking, Journal of Business
Ethics, 107(1), pp.49-64.

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Weiss, J.W. (2014) Business ethics: A stakeholder and issues management approach. USA:
Berrett-Koehler Publishers.
Williams, B. (2011) Ethics and the Limits of Philosophy. USA: Taylor & Francis.