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It is important to note that whenever an employee is hired to work for an employer, there is an implicit obligation to represent and promote the latter’s interests. Company loyalty refers to a concept of the willingness of employees to sacrifice for the benefit of the company, which means performing beyond the job description specifications (Shaw 365). As a result, situations can arise where an employee’s interests do not match organizational ones, which creates a conflict of interest (Shaw 366). The moral predicament must be addressed by adhering to the work agreement and loyalty, which requires an employee to act in the best interest of an employer. The prime examples of conflict of interest are financial investments in distributors, customers, or suppliers, which is why it is critical to consult the company policies on permissible limits (Shaw 368). Employees are obliged to uphold, honor, and respect their work contracts by using their moral judgment to consider their employers’ interests in all work-related matters.
When an employer is granted with official position, a degree of power and authority is given, which can be abused, constituting an abuse of the official position. Insider trading is an example of the phenomenon where one engages in selling or buying stocks on the basis of insider information unavailable for traders outside the company (Shaw 368). The Securities and Exchange Commission (SEC) is an agency charged with policing the stock market and identifying insider trading practices (Shaw 370). Proprietary data is any sensitive company information that belongs to the company and can be considered vital for its competitiveness (Shaw 372). Although patents and copyrights are protected by the law, they are not necessarily secrets. However, a trade secret is “any formula, pattern, device, or compilation of information which is used in one’s business and which gives him an opportunity to obtain an advantage over competitors” (Shaw 372). Stealing trade secrets is a federal crime under the Economic Espionage Act of 1996. The conflict emerges between the right of an employee to choose his or her employer and sharing proprietary data with competitors.
It should be noted that abuse of positional power can manifest itself in the form of a bribe. It refers to an employee’s action violating and inconsistent with his or her job duties done for the payment or reward from another person (Shaw 374). Kickbacks are a form of bribe, which “is a percentage payment to a person able to influence or control a source of income” (Shaw 375). Many US companies avoided bribery in the United States but engaged in such practices abroad, which led to the Foreign Corrupt Practices Act (FCPA) of 1977 (Shaw 375). It made bribes in foreign locations illegal, with punishments ranging from fines to prison sentences. Grease payments are not illegal according to FCPA, which are payments to foreign governments with ministerial duties. OECD’s anti-bribery convention enabled more extensive monitoring and identification of bribery among public officials to ensure the preservation of the free-market system (Shaw 376). Although some critics argue that imposing US standards on foreign nations is unfair, the argument is rather weak since bribery cannot be morally acceptable in any form.
Business gifts and entertainment are other examples of dubious practices in the business world, which are more strictly regulated in governmental spheres. The moral acceptability of the gift or entertainment is determined by its purpose, value, circumstances, position, company policy, industry standards, and the law (Shaw 380). When it comes to conflicting obligations, it is critical for employees to utilize a balanced approach on the basis of specifics (Shaw 381). In other words, one should resolve moral conflicts by focusing on key obligations, ideals, and effects to determine the priority for decision-making. Whistle-blowing is an action of “an employee informing the public about the illegal or immoral behavior of an employer or an organization” (Shaw 384). The sense of professional responsibility can be considered the main driver behind whistle-blowing practices. It is done from an appropriate moral motive, with internal channels failing to prevent an immoral act by the employer (Shaw 386). In addition, compelling evidence must be presented, accompanied by a thorough analysis of the level of danger as well as the likelihood of success.
Self-interest can become a point of conflict of interest between personal loyalty going against organizational ones. Therefore, “it is perfectly legitimate to inquire about the weight that considerations of self-interest should be given in resolving cases of conflicting obligations” (Shaw 387). Conducting such a judgment is not easy, which is why it is important to distinguish between moral reasons and prudential reasons (Shaw 387). Firstly, the process of evaluating prudential reasons must be conducted by minimizing the exaggeration of the importance of self-interested considerations. Secondly, judging between moral and prudential reasons is substantiated by people’s collective interest in defending the welfare of society (Shaw 389). As a result, companies are encouraged to be more proactive as well as explicit about their whistle-blowing practices and policies.
10 Multiple-Choice Questions
When an employee’s interests do not match organizational ones, it is called:
- company disloyalty
- conflict of interest
- work agreement
- moral predicament
Which is NOT a conflict of interest for financial investments in:
- suppliers
- customers
- distributors
- employer company
Abuse of the official position takes place when one is:
- exercising the authority
- violating one’s obligations to the firm
- holding an official position
- trading stocks
Insider trading is:
- buying financial securities inside an organization
- selling or buying stocks made public
- selling or buying financial securities by causing injury
- selling or buying financial securities on insider information
Insider trading is morally unacceptable because it:
- often harms people directly
- often injures people directly
- denies profit for outsiders
- can cause major scandals
Proprietary data is important because:
- it affects companies’ competitive standing
- Toshiba abused its business relationship with Lexar
- only high-tech firms are concerned with it
- it violates confidentiality
Under the Economic Espionage Act of 1996, stealing a trade secret is:
- a misdemeanor
- a federal crime
- punished if it is patented or copyrighted
- not prohibited
Offering a bribe of morally unacceptable because it:
- is a crime
- causes code violations
- enriches a person
- induces to act dishonestly
Under the Foreign Corrupt Practices Act (FCPA) of 1977, a grease payment is:
- a misdemeanor
- a federal crime
- punished if it involves a patent or copyright
- not prohibited
Which is NOT a consideration to be made when determining the moral acceptability of gift giving and receiving:
- value
- decision-making authority
- entertainment level
- company’s policy
Work Cited
Shaw, William H. Business ethics. Cengage Learning, 2015.
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