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MGMT 1040 (37)
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Department
Management
Course
MGMT 1040
Professor
William(bill) Woof
Semester
Winter

Description
1 Chapter 8: Moral Choices Facing Employees Pg 275 • Question:  Where does an employee's overall moral duty lie? • If an employee has conflicting moral obligations, they must decide:  Am I morally obligated to pursue this matter?  If they blow the whistle they could face false negative consequences of their actions 276 • Many moral theorists agree that depending on the circumstance, certain personal sacrifices might be so great that we cannot reasonably be morally obligated to make them OBLIGATIONS TO THE FIRM • Accepting employment=agreeing to perform certain tasks, during specified hours, in exchange for money • An oral or written, implied or obvious, deal requires work relationship to provides the basic framework for understanding mutual obligations between you and your employer • employment contract determines what you are supposed accomplish for your employer • Terms of employment contract may be specific and detailed or vague Loyalty to the Company • Obligated to promote your employer's interests • Traditional law of agency requires legal duty to act loyally carryout lawful commands • Morality requires you not to be loyally blind or total obedient to the organization • Employees work to get paid, if they view themselves as being loyal to the company they are wrong • Employees willing to sacrifice for organization beyond their job descriptions, view loyalty as an important value • Loyalty works both ways • May expect employees to defend the company if it is slandered, work overtime if needed, accept transfer if for the good of the organization, or demonstrate their loyalty • Displaying loyalty seems morally permissible, even if it is not morally required • Moral theorists believe circumstances that process of group identification can create an additional obligation of loyalty that the employee would not otherwise have Conflicts of interest • Loyal employees can find their interests collide with those of the organization • conflict of interest arises when employees interests differentiate with their job duties • Personal interests could lead them to make decisions detrimental to employer's interests • Work contract is the primary source of an organization's right to expect employees to act on behalf in a way that is unprejudiced by their personal interests • If job is legal, employee under obligation to fulfill the terms of the agreement • Individuals may seek to benefit from being employed with a certain business but in honoring contractual duties, employees should not lower the benefit of the organization to their own gain • Interests are likely to delay the employee's ability to exercise proper judgment on behalf of the organization-a conflict of interest exists. • Danger, is those interests lead employee to sacrifice the interests of employer 2 277 • Conflicts of interest are morally troublesome when employee's private interests are substantial to allure the person • research shows conflicts of interest can unconsciously alter the decisions of honest people • By definition, having a conflict of interest is to be in a morally risky situation; which is why employees should remove themselves from them • Deciding when an employee's private interests are substantial enough to start a conflict of interest is difficult • People are encouraged to divulge the conflict to those relying on their judgment stopping dishonesty and allowing them to adjust their reliance Financial Investments • Conflicts of interest exist when employees have financial investments in suppliers, customers, or distributors with who their organizations do business 278 • Sometimes companies limit the percentage of outstanding stock their employees may own in a potential supplier, customer, distributor, or competitor (usually up to 10 percent) • Organizations need detailed policy that reflect their needs, explain the limits of permissible outside financial investments and what employees should do when they have possible conflicts of interest • This policy can affect the financial well-being of those who fall under it, it should be open to negotiation just as employee compensation is ABUSE OF OFFICIAL POSITION • use of official position for personal gain raises moral concerns • Examples: misusing expense accounts to billing the company for unnecessary travel, from using subordinates for non-organization-related work to abusing a position of trust within an organization to enhance one's own financial leverage and holdings deals to his own accounts instead of having them go to the company's shareholders. Insider Trading • common way of abusing official position is through insider trading • Inside traders defend actions by claiming they don't injure anyone • It's true but moral concerns arise from indirect and direct injury • federal government regulates insider trading in corporations under its jurisdiction through the Canada Business CorporationsAct and the Canada Criminal Code 279 • core disagreement outcome is that insider trading has opposing perspectives of what makes the market work • insider trading benefits a company by providing employees a reason to invent new products, put together deals, create new info that increases value of company stock 3 • many ways of profiting from insider information do not benefit the company causing damage of its interests • insider trading dents and violates the economic, and moral, defense of the free system • How employees treat this secret data raises important moral issues Proprietary Data • Companies guard information that affect their competitive standing 280 • When novel information is patented or copyrighted, legally protected but not secret. Others may have access to the information, but they are forbidden to use it • "trade secret" not in the public domain, is eligible for classification as a trade secret, if the information is valuable to its carrier and treated confidentially • Trade secrets, don’t have the same protection as a patent • three arguments for legally protecting 1) trade secrets are the intellectual property of the company 2) the theft of trade secrets is unfair competition 3) employees who release trade secrets violate the privacy owed to their employers • trade secrets that firms seek to keep have become a part of the an employee's capabilities • Not all "noncompete" or "nondisclosure" contracts are legally valid • without one, companies sometimes sue departing employees BRIBES AND KICKBACKS • Abribe is a reward for the show of an act that is inconsistent with the work contract or the nature of the work one has been hired to perform • The bribe can be money, gifts, entertainment, preferential treatment, any object or activity of value 282 Canada has signed the Convention on Combating Bribery 4 • Argument against legislation on bribery of foreign officials, that the law imposes standards on foreign countries and that bribery is a common business practices in nations • arguments can be given against bribery, because practices are intended to tempt people inside business to make decisions that wouldn’t be justified according to normal business • if business activity in a competitive setting is possible under standard values inherent in business activity, an argument that there can be no "business transactions" between culturally different societies • The phenomenon of "globalization" is aiding and abetting the recognition of common "moral code" across culturally diverse societies GIFTS AND ENTERTAINMENT • Business gifts and entertainment of clients raise conflict-of-interest and border on bribery, knowing where to draw the line is not easy • The issue is more urgent in the public sector • Public servants must not allow own personal interests, to interfere with their judgment 283 • determining the morality of giving or receiving gifts in a business situation isn’t easy • It’s human nature to feel the pull of giving gifts and feeling pleasure in receiving them • There are several factors a businessperson should take into account: 1) What is the value of the gift? Is the gift of nominal value, or is it substantial enough to influence a business decision? 2) What is the purpose of the gift? 284 3) What are the circumstances under which the gift was given or received? 4) What is the position and sensitivity to influence the person receiving the gift? 5) What is the accepted business practice in the industry? 6) What is the company's policy on gift giving? 7) What is the law on gift giving? 5 OBLIGATIONS TO THIRD • The better we know the possible results of different actions, the better we understand the exact results of the alternatives-we are more likely to make a moral decision • Reflecting on the effects of different courses of action can help us understand what ideals are at stake and determine the exact strength of the more specific obligations we have • The impact of our actions on significant moral ideals is the second consideration • Any serious moral decision should take into account various ideals advanced or respected, ignored or hindered, by the alternative courses of conduct open to us • any responsible moral decision, take into account the more specific obligations we have 285 • when people are emotionally involved in a situation, they focus on one or two points, ignoring relevant factors • Input from others keep us from overlooking relevant concerns, assisting in making unbiased moral judgment 286 WHISTLEBLOWING • Definition: an employee telling the public about illegal/immoral behavior of an employer • whistleblowing is a practice where employees know that company engaged in activities that: cause unnecessary harm, violate human rights, are illegal, run counter to the purpose of the institution, are immoral, they tell the public or government about these activities • Whistleblowing can be done only by a (past or present) member of an organization • Does not encompass sabotage or taking retaliatory action against the employer or firm • When Is Whistleblowing Justified?  motivations of whistleblowers may and most often are honorable and praiseworthy  whistle can be blown in error or malice, privacy invaded, and trust undermined  internal prying and mutual suspicion make it difficult for any organization to function  must know that whistleblowers are only human beings, sometimes serving own agenda 6 • According to Bowie, whistleblowing is morally justified if: 1) It is done from an appropriate moral motive 2) The whistleblower, has exhausted all internal channels for conflict before going public 3) The whistleblower has compelling evidence that wrongful actions have occurred 287 4) The whistleblower has acted after analysis of the danger: How serious is the moral violation? How immediate is the problem? Can they point to specific misconduct? 5) The whistleblowing has some chance of success SELF-INTEREST AND MORAL OBLIGATION • workers who lower the organization's interests to an outside party are exposed to charges of: disloyalty, disciplinary action, freezes in job status, forced relocations, dismissal • "Prudential" refers to considerations of self-interest • "moral" refers to considerations of the interests of others and the demands of morality 288 • if prudential concerns outweigh moral ones, employees does what’s in best interest • If moral reasons override prudential, workers should honor obligations to others • No neutral view outside morality and self-interest from which we can make a judgment • Morality does not, require us to make large sacrifices in order to right small wrongs • prudential reasons obviously is colored by one's character and perceptions of self-interest • Exaggerating the costs to ourselves of acting otherwise makes it easier to rationalize away the damage we do to others • Relationship between prudential and moral considerations concerns our collective interest in protecting the welfare of society by inspiring people to act in non-self-interested ways 289 • To discharge moral responsibilities and safeguard own interests, companies develop clear, proactive whistleblowing policies 7 • At minimum, these policie
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