SHR012-6 Leading and Managing People: Business Ethics Case Study

This case study examines the ethical challenges facing a new Procurement Agency (PA), focusing on accountability, transparency, and employee conduct. The assignment analyzes potential risks such as conflicts of interest, fraud, and corruption, drawing on examples like the Uber sexual harassment case and supply chain issues in the clothing industry. It proposes ethical standards related to management responsibility, the implementation of an ethics code, and controls within the procurement process. Furthermore, it explores leadership management of change initiatives, including the use of agents and incentive/reward systems to remedy unethical behavior. The case study emphasizes the importance of transparency, both internal and external, and offers a framework for building an ethical organizational culture. The assignment is structured around the 4 V model of ethical leadership, emphasizing values, vision, voice, and virtue as essential components of ethical decision-making. The solution provides a comprehensive approach to mitigate risks and promote ethical practices within the PA.

LMP 2 SU New
Business Strategy Law
Student’s Name
11/13/2018

Table of Contents
Introduction.................................................................................................................................................3
Business Ethics.........................................................................................................................................3
Why is it Important?................................................................................................................................3
TASK-1.........................................................................................................................................................3
The potential risks that would affect the new Procurement Agency.......................................................3
Business Ethics Issue -1........................................................................................................................3
Business Ethics Issue -2........................................................................................................................3
Transparency...........................................................................................................................................4
Procurement Process: Ethical Risks.....................................................................................................4
Risk application to the parties.............................................................................................................5
TASK-2.........................................................................................................................................................5
A suitable ethical standard relating to accountability, transparency and employee conduct to be
achieved by PA and monitored in practice..................................................................................................5
Management responsibility.....................................................................................................................5
Ethics Code..............................................................................................................................................5
Controls in Procurement.........................................................................................................................6
TASK-3.........................................................................................................................................................7
Leadership management of change initiative to remedy the unethical behavior.......................................7
Using Agents............................................................................................................................................7
Using incentives/reward systems............................................................................................................8
References...................................................................................................................................................8
Introduction

Business Ethics
Business ethics is known as the system of an organization based upon the moral and ethical
beliefs guiding the values, and decisions regarding the business and the employees. Few of these
requirements are enforced by law, such as minimum wages and punishment against sexual
harassment, others are environmental regulations (Crane and Matten, 2016).
Why is it Important?
It is the duty of the management team to set out rules and regulations for how the organization
runs on a daily basis. The management philosophy and regulations must have a base of ethical
practices. It is imperative that leaders use directive management principle to direct the employees
through their examples. A foundation based on ethics and principle helps build long lasting
stakeholder relationships, attract and retain the best in industry talent and sustaining the upbeat
reputation. The principle issues to be dealt with include the accountability, operational and
financial transparency and employee ethical conduct (Trevino and Nelson, 2016).
TASK-1
The potential risks that would affect the new Procurement Agency
1. Accountability,
2. Transparency of operation and
3. Employee ethical conduct
Business Ethics Issue -1
In 2007, Susan Fowler an Uber employee told the public via her blog that she was being sexually
harassed by her manager in the workplace and also experienced gender bias during her tenure.
Her blog titled “Reflecting On One Very, Very Strange Year At Uber”, mentioned her #metoo
story (Murray, 2018).
Business Ethics Issue -2
It was reported in the media groups that the lowest paying clothing stores online is violating the
human rights in the supply chain showcasing an unethical practice in the workplace in U.K.
based companies. The companies lacked transparency in supply chain, according to law, they
must report the risk pertaining to slavery and also to provide the steps concerning the issue and

how they are handling the same. The companies, however, have pledged to raise the issue and
steps, but the suppliers have failed to perform (Jennifer, 2016).
Transparency
An unconstrained visibility is called transparency. As it has been seen in the case study and the
examples of recent scams, transparency is utmost important especially in the procurement
activities. The details related to the material quality, the pricing, the amount of material procured
and shipped must be kept in a record to avoid any unethical treatment from the supplier to the
agency and from the agency to the consumers (Fernandez, Romero, and 2014). It is required to
maintain the transparency in the business process which could assist in strengthing the business
process and lower down the scams (Kaptein, 2015).
Degrees of transparency:
1. Internal scrutiny
2. External scrutiny
The internal scrutiny is when the transparency is within the procurement agency (Orion
Analytics), and U.K. Government authorities, such as, internal audits. There are compliance
officers being appointed by the government, which are responsible for the tasks. On the other
hand external scrutiny is when the transparency is outside the agency and the Government. When
the member states for whom the company is working, the media and external auditors are
responsible and they observe the practices being followed (Marquis, Toffel, and Zhou, 2016).
These two scrutinies are required to undertak to increase the transparency of the process.
Procurement Process: Ethical Risks
1. Conflict of interest: when there is a conflict of interest between the employees of the
company and the between the company and states for which they are procuring.
2. Fraud: any intentionally made fake representation of the facts.
3. Corruption: when the cash is given to the procurement company to sway the action.
4. Coercion: either to harm or to threaten to affect the contract.
5. Collusion: when the suppliers they amalgamate and create a union in order to hike the
prices.

Risk application to the parties
1. Conflict of interest: Employees, Government officials
2. Fraud: Suppliers and PA and Government officials
3. Corruption: Procurement officer
4. Coercion: Government officials and Procurement officer
5. Collusion: Suppliers (Neu, Everett and Rahaman, 2015).
TASK-2
A suitable ethical standard relating to accountability, transparency and
employee conduct to be achieved by PA and monitored in practice.
With great responsibility comes along the accountability, therefore, the management of
an organization is responsible to manage the transparency, business ethics and the conduct of the
employees (Kaptein, 2015). It will not only lower down the ethical scandal but also assist
manament to operate the business effectively in transparent manner.
Management responsibility
1. It is the management’s responsibility to maintain the integrity to its highest standards to
be dealt with each day. If there are fraud and corruption at the top level management it
flow down to the roots.
2. The management needs to be a leader, so that the employees are able to follow them with
integrity and respect. There must be clear indications and strict following of the correct
behavior to be followed (Kaptein, 2015).
3. The management must ensure there are procedures and practices and also they are being
followed by each employee and the employer for maximum security of the employees,
especially the female employees at work (Hoffman, Frederick and Schwartz, 2014).
Ethics Code
It is a formal statement having certain ethical codes for the employees. Since, the project is for
ten long years, it is the duty of the procurement company to write down the code of ethics for the
employees, which they must also follow. This will provide the current employees and future
employees the written set of rules pertaining to acceptable and unacceptable behavior.

Activity Required behavior
Preliminary Screening Even before a candidate enters the premises, the applicants
must provide their background information, which, along
with other information must be checked (Kaptein, 2015).
The information classification and
protection
There must be filing cabinets for the employees so as to
maintain the security, privacy and utmost care of the
important documents (Jennifer. 2016).
Data security There must be standards followed for the data security and
maintenance by the procuring agency and the scandals that
have been observed so as to process the data securely and to
allow transparency in the organization.
Reporting an incident Any security issue, or any unethical practice being followed
must be reported to the top management or the concerned
authority.
Controls in Procurement
There must be a manual given to all the staff members. There must be authorities, procedures,
responsibilities and accountability along with the punishments and penalties in case of non
adherence must be clearly stated. The procuring agency must avoid short term and small orders,
if the company has been contracted for 10 years, they must go for taking long and big
procurement tasks to limit and avoid the unethical practices. The supplier expenses must also be
verified. The proper manual set up program not only strengthen the employee accountability and
responsibilities towards the system but also assist in increasing the overall outcomes in effective
manner (Jennifer. 2016).

TASK-3
Leadership management of change initiative to remedy the unethical
behavior
There is given a proper leadership model which could assist in supporting the ethical decision
making and proper leadership model in organization. Leadership model to support the ethical
organization (Jennifer. 2016).
Source: https://www.toolshero.com/leadership/ethical-leadership/
As per the 4 V model, it is the leaders who can create a difference.
1. Values: the core values must be designed in order to follow them and they must be
adhered to.
2. Vision: there must be a vision in the minds of a leader for themselves and for their
followers to lead them towards the goal, together with the organizational goal.
3. Voice: an ethical leader needs to constantly motivate the employees.
4. Virtue: they have a virtuous behavior to become a role model for the staff and do the
right things to be followed as it is (Neves, Almeida and Velez, 2018).
Using Agents
1. There must be agents to certify the seller to create authenticity and maintain security.
2. The products being sold to the hospitals and hotels must also be certified
3. In case of the child labor by the supply chain, there must be agents to identify and check
whether the organizations are hiring within the age limit or hiring minors.
4. Government must provide licensing for the products being procured (Jennifer. 2016).

Using incentives/reward systems
1. There must be negative reinforcement and punishments for the employees who do not
abide by the laws specified for working in the organization.
2. However, there must be a constant reward system to eliminate and remedy the unethical
behavior and promote ethical behavior and activities.
3. The proper motivation theories and reinforment program should be there to help
employees so that they could comply with the all the applicable rules and regulations.

References
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. USA: Oxford University Press.
Fernandez-Feijoo, B., Romero, S. and Ruiz, S., 2014. Effect of stakeholders’ pressure on
transparency of sustainability reports within the GRI framework. Journal of business
ethics, 122(1), pp.53-63.
Hoffman, W.M., Frederick, R.E. and Schwartz, M.S. eds., 2014. Business ethics: Readings and
cases in corporate morality. John Wiley and Sons.
Jennifer. M. 2016. Modern slavery allegations burn clothing supply chains [Online]. Available
from https://www.supplychaindive.com/news/modern-slavery-clothing-retail-supply-chain/
429021/ [Accessed as on 14 November 2018].
Kaptein, M., 2015. The effectiveness of ethics programs: The role of scope, composition, and
sequence. Journal of Business Ethics, 132(2), pp.415-431.
Marquis, C., Toffel, M.W. and Zhou, Y., 2016. Scrutiny, norms, and selective disclosure: A
global study of greenwashing. Organization Science, 27(2), pp.483-504.
Murray, C.C., 2018. No Longer Silent: How Accurate Are Recent Criticisms of Employment
Arbitration?. Alternatives to the High Cost of Litigation, 36(5), pp.65-80.
Neu, D., Everett, J. and Rahaman, A.S., 2015. Preventing corruption within government
procurement: Constructing the disciplined and ethical subject. Critical Perspectives on
Accounting, 28, pp.49-61.
Neves, P., Almeida, P. and Velez, M.J., 2018. Reducing intentions to resist future change:
Combined effects of commitment‐based HR practices and ethical leadership. Human Resource
Management, 57(1), pp.249-261.
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do
it right. Australia: John Wiley and Sons.