For this week’s Shared Practice, reflect on your own professional experiences and search reputable news sources on the internet to find an example in the news where managers and employees at a company fell short of doing the “right thing.” Consider the circumstances that surrounded the example and whether it makes the person or organization ‘bad’?
With these thoughts in mind:
Part 1 (300 words or more)
Post a response to the following:
Describe a case you have experienced or a story within the last three years that you have found through a reputable news source, where the manager(s) of a company did not act ethically or align their conduct with laws and regulations. Discuss the consequences that occurred, or might occur, as a result.
Hint: Your answer should address who was affected and what happened to the reputation of the organization or the individual(s) involved in the situation.
Explain actions would you take if you knew management at your organization was not aligning its actions to the valued and policies of the organization, or worse, to the law. Discuss how would you proceed, and the concerns might you have.
Hint: In your answer, be sure to consider seriously the obstacles you might confront. Your actions might put friends and colleagues in legal trouble, your own job might be at risk, and “whistle-blowers” often face severe backlash. Your answer should account for these challenges.
Part 2 (250 words for each Colleague)
Read a selection of your colleagues’ posts.
Respond to two or more of your colleagues in one or more of the following ways:
Share with a colleague an insight you have gained about the importance of a manager being aware of the legal and ethical risks that may occur in the work environment. Share whether you think such awareness could have avoided the ethical dilemma posted by your colleague.
Share with a colleague some specific resources you know of that can assist managers in the situation described in his or her original post. Discuss how to access or utilize resources, such as, human resources managers, legal/regulatory departments, or outside assistance.
1st Colleague to respond to:
Nestle has been under heat for decades with ethical allegations. More recently in 2017, there was an investigation into industry practices supporting the deforestation in Ghana and Ivory Coast. It was found that the cocoa beans traders were selling to Nestle were being grown in protected regions illegally (Maclean, 2017). This support of resources is adding to detrimental deforestation in West Africa. When confronted about buying from these illegal cocoa traders, Nestle did not deny their involvement. Instead, they stated they have pledged to work hard to remove these beans from their products (Maclean, 2017), but so far there has been no confirmation of efforts to verify/certify sourcing of legally cocoa beans being used.
For some, there is no surprise that Nestle has not been ethically sound on this issue, as there has been admittance to slave labor and other human rights issues within their plantations across the world (Hodal, 2016). For one, the future of the West African rainforest is continuing to look grim, and the farmers are not even benefiting from their crops. Because of the deforestation, it is becoming harder to find placers safe to grow and the local industry will not be able to keep up. This ethical situation seems to just promise those who are concerned that commitment will happen to only source from certified growers, but it is not happening fast enough. The rainforest is still dwindling away at the profit of larger companies for chocolate distribution. The main consequence of continuing to buy from illegal traders is complete and utter deforestation. Once the rainforest is lost, there is no rebuilding!
Going into college, I would be a bit withdrawn to confront issues that were seen to be beyond my control. Ten years later, I am in a completely different place in my life where I would take a stand against something I feel is not reflecting the organization in a positive manner. I would need to gather notations of observance and evidence of what I feel is misaligned with the organizational values and policies. Once my concerns were established, I would go to the department head (if they were not the ones involved) for guidance on how to approach HR or our legal/compliance head. I am well acquainted with both individuals at our institution, so I would not find it uncomfortable to reach out to them versus someone I didn’t know. Addressing the issues I feel that are misrepresenting the organization shows a refreshed intention of reminding the company managers to remember what the organization values itself as and what they came together to accomplish in the first place (Duska, 2004). Obviously, my main concern would be the backfire should the individual I approach fumingly disagrees or is part of the unethical situation. I know there are laws set up against that feared rebellion, but I would still prefer to connect with a higher up before moving forward with an accusation of unethical management. Having someone be aware of the movement I look to challenge is important for having my back looked out for, but also potentially dangerous for others. By jumping in fully prepared this way, I feel that I would have the support to countersuit any job security threats or putting others in the way.
Duska, R. F. (2004). Six cures for current ethical breakdowns. Journal of Financial Service Professionals, 58(3), 23–26.
Hodal, K. (2016). Nestlé admits slave labour risk on Brazil coffee plantations. Retrieved from: https://www.theguardian.com/global-development/2016/mar/02/nestle-admits-slave-labour-risk-on-brazil-coffee-plantations
Maclean, R. (2017). Chocolate industry drives rainforest disaster in Ivory Coast. Retrieved from: https://www.theguardian.com/environment/2017/sep/13/chocolate-industry-drives-rainforest-disaster-in-ivory-coast
2nd Colleague to respond to:
The case study that I looked into is the Enron scandal. Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 20,000 staff and was one of the world ‘s leading electricity, natural gas, communications, and pulp and paper companies, with claimed revenues of nearly $101 billion in 2000. Ghosh states “At the end of 2001, it was revealed that its reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud, known as the Enron scandal.”The shareholders of this company lost $74 billion and the employees lost their jobs and billions in pension. Executives were involved in this fraud. By December 31, 2000, Enron’s stock was priced at $83.13 and its market capitalization exceeded $60 billion, 70 times earnings and six times book value, an indication of the stock market’s high expectations about its future prospects. In addition, Enron was rated the most innovative large company in America in Fortune ‘s Most Admired Companies. In addition, its complex business model and unethical practices required that the company use accounting limitations to misrepresent earnings and modify the balance sheet to indicate favorable performance.
Enron’s plunge occurred after it was revealed that much of its profits and revenue were the result of deals with special purpose entities. The result was that many of Enron’s debts and losses that the company suffered were not reported in the financial statements. Enron had created offshore entities that were being used for planning and avoiding taxes, which in turn raised the profitability of the business. The executives and insiders at Enron faced an ethical dilemma because they knew about the offshore accounts that were hiding losses for the company. However, the investors knew nothing of the fraudulent practices. The combination of these issues later resulted in the bankruptcy of the company. In this, particular dilemma and whether or not it is ethically wrong takes time and critical thinking. The accountants of Enron could have avoided this situation by stepping in and explaining to their superiors the cost of the long-term consequences compared to the short-term benefits was not worth what they were putting out on the line.
If I knew management at the organization where I work was not aligning its actions to the values and policies of the organization, or worse even the law. Admin. (2013) notes, “In many organizations, managers behave badly, negatively affecting employees and the workplace environment, and putting their companies at risk. Bad management behavior can range from minor to major offenses but can be destructive, eventually chase away great employees, and sometimes even cause a lawsuit.” In situations like this, I would have to report the incident to persons that are higher than myself so that the company can avoid open shame and the risk of avoiding its employees from being placed under investigation. I believe that office policy is to be followed by all employees and this will help in the growth of a company. Something that I have learned is to always make documentations, so I would have my documentation before I address all concerns.
Admin. (2013, November 4). What to Do When Managers Behave Badly. Retrieved October 15, 2019, from https://www.yourerc.com/blog/post/what-to-do-when-managers-behave-badly.
Ghosh, T. (n.d.). Enron Corporation: A Case Study. Retrieved October 15, 2019, from https://www.academia.edu/28328128/Enron_Corporation_A_Case_Study.