Chapter 8 – Moral Choices Facing
Two Step Process
i. There is the question of where an employee’s overall moral duty lies
ii. Once employees have decided to blow the whistle, they must face the
possible negative consequences
a. However, certain personal sacrifices might be so great that we cannot
reasonably be morally obliged to make them.
Obligations to the Firm
Loyalty to the Company
Because you’re hired to work for your employer, you have an obligation: to promote
your employer’s interests
Morality requires neither blind loyalty nor total submission to the organization
Some say that employees simply work to get paid, and they are misguided if they see
themselves as owing loyalty to the company.
However, some obligations of loyalty come with the job (ex. The obligation to warn the
organization of danger, the obligation to act in a way that protects its legitimate interests,
the obligation to cooperate in the furtherance of legitimate corporate goals)
Conflicts of Interest
Conflict of interest arises when employees at any level have special or private interests
that are substantial enough to interfere with their job duties
Their personal interests lead them to make decisions that are detrimental to their
Work contract – primary source of an organization’s right to expect employees to act on
If the contents of the work agreement are legal and if the employee freely
consents to them, the employee is under an obligation to fulfill the terms of the
agreement. It’s best for employees to avoid conflicts of interests.
Conflicts of interest may exist when employees have financial investment in suppliers,
customers, or distributors with whom their organizations do business.
Usually, organizations needs a detailed policy, customized to reflect their needs and
interests, that spells out the limits of permissible outside financial investments and what
employees should do when they have possible conflicts of interest.
Abuse of Official Position
The use of one’s official position for personal gain may be a violation of one’s
obligations to the firm/organization.
Ex. Misusing expense accounts to billing the company for unnecessary travel
Definition: the buying or selling of stocks by business “insiders” on the basis of
information that have not been generally disclosed to the public. This information is
expected to significantly affect the market price or value of security.
Ex. Martha Stewart: she had purchased shares of a pharmaceutical company who
were developing a new drug. Someone told her that FDA did not approve of the drug
(which meant that the stock would significantly drop after that announcement). She sold
the stock as soon as she found out the news.
This is a criminal offence, and it is outlined in the Ontario Securities Act
“ a person is liable to prosecution if he/she buys or sells a security knowingly
using inside information they posses.
Trade Secret if information about it is commercially valuable, not in the public domain,
and reasonable steps towards its secrecy are made.
There are 3 arguments for protecting trade secrets
1. They are the intellectual property of a company
2. The theft of trade secrets is unfair competition
3. Employees who disclose trade secrets violate the confidentiality owed to their
employers This is a problem in hightech firms, where employees have special information.
Two factors make this a moral problem:
A) The individual’s right to seek new employment
B) The difficulty from separating trade secrets from the technical knowhow,
experience, and skill.
Bribes and Kickbacks
Bribe – remuneration for the performance of an act that is inconsistent with the work
contract or the nature of the work has been hired to perform.
Canada and Corruption of Foreign Officials
It is an offence for a person to bribe in order to obtain or retain business or “other
improper advantage” (situations where the briber was