Social Influences on Ethical Behavior, Case Study Example

Summary

Steve’s expense reports showed very low costs related to travel and Greg wanted him to ‘bump up’ the costs related to travel by a percentage of 20-25% to match the other workers expense reports so that they would not appear to look faulty. Greg signed all the expense reports hence he had final approval over what Steve claimed. The impact of the ethical issues on the stakeholders put them in a compromising position where they both had to make choices to conduct themselves in an unethical position where they had to do illegal acts against the company’s policies and against the law by padding their expense sheets.

Ethical Analysis

The key ethical issues were padding the expense sheet to match the expense sheet of others and the boss signing off on the padded time sheet. This is forging expense sheets for expenses not accrued which is illegal and having a company supervisor approving a forged expense sheet having knowledge of the forgery which is illegal. This is further theft of funds from the company. The worker demonstrated ethical behavior by voicing his opinion that he did not wish to pad the expense sheet. The supervisor demonstrated unethical behavior by asking and promoting the worker to pad the expense sheet to meet the demands to meet the expense sheets of the other workers. It appears to the supervisors that if Steve continues to turn in honest expense sheets that are 25% below other workers expense sheets, upper management and the owners of the company will question the other workers expense sheets and demand they lower their expenses and also question Greg’s ethical behavior for signing these time sheets. Greg wants Steve to lie in order to compensate higher false time sheets and to cover his ‘butt’. This is forgery which is a crime and this is theft of company assets.

Cost/Benefit Assessment of Company Actions

The costs and loss to the company on an annual basis are 25% per employee. There are no gains to the company as long as the workers are padding their expense sheets. “ Fraud and deception in a company with relation to time sheets and expense sheets cost companies thousands of dollars annually depending on the size of the company.” (Darley & Messick, 2001). Social influences such as trying to stay up with the Jones’s and wanting better lifestyles have huge impacts on why workers pad their timesheets. Often managers see the bottom line and wanting to keep themselves out of ‘the eyes of owners and upper management’ as the way to simply keep the expense sheets signed off and close their eyes to company forgery and theft. They take the easy way out instead of correcting the in house corruption problem. When this happens they become part of the criminal problem as an ‘accessory to the crime’.

There has never been more of a corporate mistrust then the one with the rise and downfall of Enron Corporation. People realize that corporate “biggies are shady and undercover with some of their doings and are committed to flagrant breaches and known for turning the blind eye when acts of impropriety were brought to their attention.” (Ghosh, 2008).

Recent Business Unethical Practice

A recent business unethical practice has been witness through PBS an independent company that is used to spot unethical business practices. They have recently noticed Wal-Mart’s unethical practices by organizing non-unions so that when employees complain they have to go to management. “This policy gives the company the upper hand or leverage to terminate any complaint they do not want to deal with.” (Walton, 2010). The company further prohibits any union representation for its employees and according to the National Labor Relations Act this is against the right of workers to attempt to form a union for worker’s rights and protections. This further promotes unfair treatment of workers which is against human and civil rights.

Further Wal-Mart “was under investigation for the illegal use of illegal immigrants in order to avoid paying regular wages to American workers. In October 2003 it was discovered that Wal-Mart was hiring these illegal immigrants as contract workers to do the cleaning in the stores.” (Walton, 2010). The workers were in fact paid less than the minimum wage, cheated out of social security benefit and were not taking payroll taxes out of the paychecks of these illegal immigrants. This is a serious federal crime committed by many employers in the United States and cannot be tolerated for the American businesses and economy to flourish.  America must live by ethical and moral standards to be treated with respect and dignity by others.

Theories of Ethical Thought are based upon whether a person or persons within a business act rationally within the scope of how society can rationalize their actions. “This is best divided into two sub schools: utilitarianism and rule utilitarianism. This judgment is based upon whether the determining act brings happiness to a business.” (“Ethics, Social Responsibility and the Business Manager”). Managers have hopes of running an ethical business so that the ethical practices shine to their customers. They further conduct training programs to ensure their business practices are run according to the Codes of Business Conduct and Ethical Practices as cited by Certo (2000).

Deontological Theories of are judged by practices of human morale regardless of the consequences of their actions or whether their actions result in a net happiness. “Kant stated a person should live by a principle of engaging in actions that only result in actions of universal standards of morale living.” (“Ethics, Social Responsibility and the Business Manager”). Further these theories should be applied justly and equally to all.

Humanist Theories make judgment on actions depending on how they contribute to society as in terms of intelligence, wisdom and self-restraint. Humanist theory is based upon the principles of natural law and that humans make good choices according to the Divine Power. For example: the bribery of a foreign official would not be inherent of a humanist theory of principle.

An individual’s code of ethics makes up a business’s code of ethics and standards by which all standards of theories are applied. People are influenced by peers, teachers, churches, brothers, sisters and the environment in which we reside. It is seen quite often a business has conflict between their ethical values and the individual values of a worker. The key to success is ensuring the individual has complete loyalty to the company. The company should have loyalty to its employees as well by divesting time and energy into its workers and not engaging in any shady operations such as: insider trading, giving gifts to customers, fixing prices and bribing foreign officials. It is through the elimination of these simple practices that a company maintains its high moral and ethical standards and keeps the trust of its customers and employees. There remains a bond of loyalty.

References

Darley and Messick (2001) Social Influences on Ethical Behavior in Organizations-Book Retrieved from, http://findarticles.com/p/articles/mi_m4035/is_3_47/ai_97740711/

Ghosh (2008) Corporate values, workplace decisions, and ethical standards of employees (2008) Retrieved from, http://www.entrepreneur.com/tradejournals/article/177552212.html

Walton, Samuel Moore. Encyclopedia Britannica. 2005. Encyclopedia Britannica Online Retrieved April 5, 2010 from,
http://www.pbs.org/itvs/storewars/stores3.html