Ethics in Business

Case Review

Theme 1 : Honesty
Honesty refers to truthfulness, integrity and trustworthiness. It is an
quality that applies all aspects of business life. The decisions one makes
should comply with company standards, rules and regulations. In other
words, when a decision is being made by an employee, that employee must
choose the action that is acceptable to the company. If an employee
willingly does something counter to company rules or policy, then that
employee is not acting with integrity. The company's trust in that
individual is also diminished.

The key to making honest decisions lies in clear and concise

communication of company standards, rules and regulations. In addition,
the employee must understand these standards, rules and regulations.
Most companies have company handbooks which spell out these
expectations. How employees interpret these expectations is another
matter altogether.

Misunderstandings and misperceptions can easily lead to an employee

thinking that they are acting honestly, while in fact they are acting
unethically

Personal uses of Expenses

ABC Company is in the computer software business, which is a very

competitive field. Molly King works for the ABC company in sales and has
done so for the past 10 years. She is very good in sales and has brought in
a substantial amount of business for the company. Even so the company
has been in some tough financial times for the past few years and salary
increases have been minimal. It is the nature of her job that she travels
quite extensively.
Molly King recently made an onsite visit to acquire new business from PC
Corporation. As usual the trip required her to spend her weekend away
from home again in order to finalize her business. During the trip she was
invited to spend the day with the president of PC Corp., Mr. Smart, at his
ranch discussing the deal. Mr. Smart was very generous and paid for any
meals for the day. During the trip, Molly unfortunately broke a heel on her
shoe and had to purchase a new pair of shoes ($78). This was the only pair
that she had brought with her. Molly feels it looks very promising that ABC
Corporation will acquire this account from a major competitor.
Molly recently completed her expense form allocating the $75 for meals for
the day she was with Mr. Smart. The policy of ABC Company is to allow
$75/day for meals with no receipts required for anything over $25 per meal.
Molly submitted her expense form to her supervisor, Mr. Lax About-It, for
approval. Lax has been Mollys supervisor for quite some time and values
what she has brought to the company. He said recently he would like to
give her a raise but at this time is not able to do so. When given Mollys
expense form for signature, he quickly scanned and found nothing out of
line that he should question. The total cost is way within budget for the
trip.

Mollys coworker, Jim Steal, occupies the cubicle next to her and is known
by his coworkers as a bit of a stick in the mud. His job does not allow him
to travel and he is constantly making comments about Molly traveling and
quite openly verbalizes his disapproval of this. He tends to listen in on
conversations and overheard Molly talking the other day about the pair of
shoes she purchased. He assumes from her conversation that she fudged
her expenses to cover this but is not sure.

When Molly came in today, there was a message from the Controller, Ms.
Penny Pincher, that she would like to speak to Molly about her expense
account. Penny Pincher has indicated that she has selected her expense
form for audit and would like to meet with her. When Molly calls Penny
Pincher back, Jim Steal, overhears the conversation. He then proceeds to
call Ms. Penny Pincher and voice his assumptions about the meal money.
When Molly and Ms. Penny Pincher meet, Molly does not say anything
about the $75 she submitted for the day at the ranch. A few days later,
Molly is called in to the supervisors office, Mr. Lax About-It. He has been
informed by the Controller, Ms. Penny Pincher, that Molly is in jeopardy of
losing her job.

http://www.personal.psu.edu/staff/c/x/cxd31/expenses.htm
 Perspectives

Molly the Employee

Employee use of the telephone, the mail room, and the inter-net for
personal matters can also result in conflict of interests. Is it right for an
employee to use the company phone to make dinner reservations for an
evening out with his or her spouse. Is it unethical to order flowers for a
sick relative using the company phone. What about using the company
inter-net while on break to browse through the latest shopping web site? Is
that right or wrong? How do you decide? I am required to have a large,
expensive wardrobe for work financed completely out of my own pocket.
Since most of my salary is derived from commissions, I sometimes have to
wait several months before receiving the bulk of my pay. On this particular
day, my left shoe ripped as I got out of the cab on my way back to the hotel
from a meeting. I still had three days of meetings and travel and was relying
on those shoes, which I had just purchased before my trip. I could not
afford to buy another pair of shoes. Given the long hours that I must spend
on my feet, I cannot inexpensive, buy poorly made shoes. In my vocation,
clothing is truly a uniform. In other professions, uniforms are subsidized.

Supervisor, Mr. Lax About It

Molly King is one of my best employees and a great salesperson. I have not
been able to give her a raise or a bonus recently. She is great about
traveling at the last minute and a constant performer. Im not sure of all
the details in this situation but I certainly dont want to lose her over $75.
Business expenses should be covered, if she was allotted the money for food
anyway and didnt have the opportunity to use it because she was always
on the job I have no problem with her getting a little extra for her hard
work. Now if she starts taking Caribbean vacations on the companynow
thats another story

Ms. Penny Pincher (Corporate Chief Financial Officer)

Ive been looking over our financial records recently, and Ive noticed that
our policy as a corporation is to allow expenses to be reported without the
submission of receipts. It would appear that each salesperson has an
allowance of $25 per meal, charging up to $75 per day. I would like to have
this situation investigated more thoroughly for corporate responsibility from
 a tax liability standpoint. I would presume that a company is responsible
for reporting accurate business expenses incurred to legitimize the daily
business expenses incurred by its employees. To accomplish this, accurate
receipts would be required for each expense incurred during routine
business transactions. Otherwise, funds may be inappropriately expensed
without plausible justification. We must also specify legitimate business
expenses for our employees to avoid any further confusion regarding this
matter.

Jim Steele, Co-worker

When I overheard Molly King bragging about her new pair of shoes at the
watercolor, even having the audacity to model them in the office, flaunting
her illegal and ill gotten gains in the very place of business she is taking
advantage of, I practically blew a gasket. Here she is, jetting around to
exotic locales, flying first class, probably staying in luxury hotels, , dining in
fine eateries, carrying an expense account and she has the nerve to buy
shoes -at the companys expense.I cant help feeling a bit angry and even
jealous. Here I sit chained to this desk, handling all the local accounts. Do
I get an expense account? No, not even one dime! Seventy five bucks for a
days worth of meals! Why, I could feed my family for a week on what she
pays for a pair of shoes. And I wonder how much of company profits these
so called expense accounts eat up. Ive noticed my quarterly profit sharing
dividend has been pretty measly lately. She should be grateful for anything
the company pays for. Instead, shes abusing the generosity of the
company while poor slobs like me end up directly or indirectly paying for
her abuse. Im so furious, Id like to say something. But I dont want to
risk rocking the boat right now because I myself am up for promotion to the
travel department. Otherwise, Id have half a mind to report her to Ms.
Laxaboutit. Or, better yet, Ms. Pincher. Penny would fix her in no time
flat.
 Theme 2 : Conflict of Interest
Conflict of interest occurs when an individual chooses to serve his or her
own interests over those of the organization. In order to avoid conflict of
interest an employee must be able to separate their private interests from
company functions.

Accepting bribes, personal payments, gifts or special favors are obvious

examples of conflict of interest. There are however, more subtle forms of
conflict of interest. Employee use of the telephone, the mail room, and the
inter-net for personal matters can also result in conflict of interests. Is it
right for an employee to use the company phone to make dinner
reservations for an evening out with his or her spouse. Is it unethical to
order flowers for a sick relative using the company phone. What about
using the company inter-net while on break to browse through the latest
shopping web site? Is that right or wrong? How do you decide?

Companies must be very clear in spelling out policy on matters that could
lead to conflict of interest. Employees must clearly know what is
permissible and what is not acceptable behavior. If not, employees have
difficulty separating their personal interests from company interests.

Personal use of the internet

ABC, Inc. is a well-respected computer software company with an

outstanding reputation. The employees at ABC, Inc. all agree that the
company is a great place to work. They enjoy the freedom and flexibility of
the workplace. The employees also enjoy the feeling of autonomy they have
in their respected positions. Joe Smith has been employed with ABC for
eight years and has always been considered a good employee. He is a hard
worker and his co-workers consider him to be an all around great guy.

As a customer service representative, Joe spends a great deal of time

talking on the telephone with clients and researching solutions on the
Internet. Joe has been commended several times by his supervisor for the
number of customer calls he handles and the level of service he provides.
He is also well known among his co-workers as the representative with the
most calls completed.
For the past several weeks, Joes average of completed calls has been
steadily decreasing. Even though he has been at work everyday, no one
can explain his lack of production. During a random audit of computer
usage, it was discovered that Joes usage of the Internet was double and in
some cases even triple the amount of time for other representatives. A
more detailed audit revealed that most of his usage could be linked to
searching non-work related websites. It was calculated that Joe had spent
an average of twenty-five hours a week conducting non-work related
searches on the Internet.

Joe Smith was fired from his job at ABC, Inc. for failing to comply with the
computer usage rules and regulations. Prior to this incident, employees
were allowed to use the Internet at work but with great discretion. In his
defense, Joe provided information regarding other employees and their
Internet usage. While Joe was fired, the other employees in question were
warned to use the Internet for work related matters only.

Joe Smith felt that he was unjustly singled out and terminated for his
actions. Since this incident occurred, specific rules regarding Internet
usage have been published in the employee manual.

http://www.personal.psu.edu/staff/c/x/cxd31/internet.htm

Perspectives

Angie Stone: Employee in the IS Department

I do not abusive the Internet. I work in the IS department and 90% of my
job duties involves answering computer questions. These questions range
from hardware to software issues. Sometimes I do not have all the answers.

I need the Internet to provide the answers. Since our company is very
paced, I do not have the time to read technical books or magazines. The
internet gives quick answers. The Internet cuts down on half of time it
would take to find other resources. If this company cut down on the
Internet usage I cannot do my job efficiently and effectively.
Ms. Disgruntled Co-worker
We work very hard at work and give of my time freely. Often we are asked
to commit extra time to a job that needs to be completed even if it cuts into
my personal time. Occasionally, we need to look for something on the
Internet for personal use. Since some of us do not have Internet at home
and we give much of our time beyond the requirements of our job, we feel
we should be able to use this service as a trade off to our work efforts.

Mr. Stone the Spouse

My wife works for a large corporation. She is able to set her own hours and
has her own office. Every employee has free Internet service. We do not
have free Internet service at home, and pay $20 month. I suggested to her
the idea of discontinuing our service to save money. Even though she knew
this was against company policy, she agreed. Besides, I only use the
Internet about twice a week. I also thought of the business ethics but I
figured, all of the extra hours my wife puts in for this corporation, we
deserve it. Heck, my wife didnt even get a Christmas bonus! Lastly, using
the Internet at her work is nice too because I get to spend more time with
her!

Mr. Big CEO

As I see it, as long as my employees are doing their expected jobs and not
abusing the use of the Internet, then there is nothing wrong with surfing
the net from time to time. I would be a hypocrite to tell employees that they
are not allowed to use the Internet for personal reasons. If people wish to
check other e-mail, read news, play games, or do personal research, then I
see no harm in exploring from time to time.
The Internet can be a nice stress reducer and I know that some people have
stressful positions. If the use of the Internet allows people to unwind on
their lunch hour and to break away from the busy workplace for a period of
time, then what harm can it cause? I, myself, have used sites that send
free greeting cards. This saves time and money. Also, sometimes I need to
send gifts to family members or loved ones, and I dont want to bug my
secretary.
The Internet allows me to send gifts privately and quickly without having to
talk to someone over the phone. Like I said, as long as people are
performing their jobs in a timely fashion, then the use of the Internet is not
hurting anyone!
Mr. HR, Human Resources
Even though Fred has been employed by us for over twenty years, we had
to let him go because of what he did. He was using the Universitys time
and resources to access pornographic sites and chat rooms.
When our network was installed five years ago, everyone had to sign off on
our computer policy that explicitly states that the purpose of our computing
systems at What's-a-matter U is to support the educational mission of the
University, in accordance with University policies and in a manner
conducive to the overall academic climate.
Access to the computing systems is a privilege. Computer users must
respect the rights of others and the integrity of the computing systems and
related resources. Users must observe all relevant laws, regulations, and
contractual obligations. Use of the University's network to access, copy, or
transmit obscene or pornographic material is not permitted. What Fred did
was a direct violation of policy that he agreed to he had to be dismissed.