_Business and ethics _
By: JY
Abstract From a business perspective, working under government contracts can
be very lucrative. In general, a steady stream of orders keep coming in,
revenue increases and the company continues to grow. There are a few obvious
downfalls to working with government contracts; a higher quality is to be
expected as well as extensive research accompanied by accurate and complete
documentation are usually required. If one part of the process fails to
perform correctly it can cause minor flaws as well a problems that can carry
some serious repercussions. Business Communication of Ethics For example the
case of the failed computer chip at Company X. When both the employee and
company are found at fault, the question arises of how extensive should the
repercussions be? Is the company as a whole liable or do you look into
individual employees within that company? From an ethical perspective one
would have to look at the available information of both the employees and
their superiors along with the role of others in the situation. Next you would
have to analyze the final outcome from a corporate perspective and then
examine the corporate responsibility as a whole in order to find a resolution
for cases such as thisThe first mitigating factor involved in the Company X
case is the uncertainty, on the part of the employees, on their duties that
they were assigned. It is possible that during the testing procedure, an
employee couldn't distinguish between the parts they were to test under
government standards and commercial standards. In some cases they might have
even been misinformed on the final product that they tested. In fact,
ignorance on the part of the employees would fully excuse them from any moral
responsibility for any damage that may result from their work. Whether it is
decided that an employee is fully excused, or is given some moral
responsibility, would have to be looked at on an individual basis The second
mitigating factor is one of threats that an employee might suffer if they do
not follow through with their assignment. After the bogus testing was
completed in the Company X labs, the documentation department also had to
falsify documents stating that the parts had more than met the governments
testing standards. From a legal and ethical standpoint, both the testers and
the writers of the reports were merely acting as agents on direct orders from
upper management. The writers of the reports were well aware of the situation
yet they acted in this manner on the instruction of a supervisor. Acting in an
ethical manner becomes a secondary priority in this type of environment. As
stated by Alan Reder, if they [the employees] feel they will suffer
retribution, if they report a problem, they aren't too likely to open their
mouths. (113). The workers knew that if the reports were not falsified they
would come under questioning and perhaps their job would be in jeopardy.
Although working under these conditions does not fully excuse an employee from
moral fault, it does give a starting point to help narrow down the person or
department that issued the original request for the unethical acts The third
mitigating factor is one that perhaps encompasses the majority of the
employees in the Company X case. We have to balance the direct involvement
that each employee had with the defective parts. Thus, it has to be made clear
that many of the employees did not have direct involvement with the testing
departments or with the parts that eventually failed. Even employees, or
sub-contractors that were directly involved with the production were not aware
of the ignorance on the part of the testing department. For example, the
electrical engineer that designed the defective computer chip could have
stated that it was tested and it did indeed meet the required government
tests. Also, for the employees that handled the part after the testing
process, they were dealing with what they believed to be a piece of equipment
that met government standards. If the part was not tested properly, and did
eventually fail, isn't the testing department more morally responsible than
the designer or the assembly line worker that was in charge of installing the
chip? In large corporations there may be several testing departments and in
some cases one may be held more responsible than another depending on their
involvement. A process like this can serve as a dual purpose for finding
irresponsible employees as well as those that are morally excused The fourth
mitigating factor in cases of this nature is the measure of the seriousness of
the fault or error caused by the product. Since Company X was repeatedly being
added to the list of approved government contractors, one can safely assume
that the level of seriousness, in the opinion of the contractor approval
committees, is not of monumental importance. Yet a person has to wonder how
this case would have been different if it caused the loss of life in a
military setting. Perhaps the repercussions would have taken effect much
faster and been more stringent. The fact that Company X did not cause a death
does not make them a safe company. They are still to be held responsible for
any errors for which their products cause, no matter the extent As for the
opposition to the delegating of moral responsibility, mitigating factors and
excusing factors, most would argue that the corporation as a whole should be
held responsible. The executives within a corporation should not be forced to
bring out all of the employees responsible. A company should be reprimanded
and be left alone to carry out its own internal investigation and
repercussions. From a business law perspective this is the ideal case since a
corporation is defined as being a separate legal entity. Furthermore,
opposition would argue that this resolution would benefit both the company and
the government since it would not inconvenience either party. The original
resolution in the Company X case was along these lines. The government
permanently removed Company X from its approved contractors list and then
Company X set out to untangle the web of wrongdoing from within. This allowed
for a relatively quick resolution as well as an ideal scenario for Company X.
In response, one could argue that the whole corporation has no morals or even
a concept of the word. A corporation is only as moral and ethical as the
employees that work for it. All employees, including top ranking executives
are working towards the advancement of the company as a whole. All employees,
including the sub-contractors and assembly line workers, are in some part
morally responsible. Every employee should have been clear on their employment
duties and aware of which parts were intended for government use. Uncertainty
is not an excuse for moral responsibility in the case of the workers. Also,
the fact that some employees failed to act in an ethical manner gives even
more moral responsibility to that employee. While some are definitely more
morally responsible than others, every employee has to carry some burden of
weight in this case. In fact, when the government reached a final resolution,
they decided to further impose repercussions and certain employees of Company
X were banned from future work in any government office (Velazquez, 54).
Looking at the case from the standpoint of Company X, the outcome was
favorable considering alternate steps in which the government could have
taken. As explained before, it is ideal for a company to be able to conduct
its own investigation as well as it's own punishment. After all, it would be
best for a company to determine what specific departments are responsible
rather than having a court of law trying to decide which employee is to be
blamed. Yet, since there were ethical issues of dishonesty and secrecy
involved, Company X should have conducted a thorough analysis of their
employees as well as their own practices. It is through such efforts that a
corporation can raise the ethical standard of everyone in the organization.
This case brings into light the whole issue of corporate responsibility. The
two sides that must ultimately be balanced are the self interests of the
company, with main goal of maximum profit, and the impacts that a corporation
can cause on society (Sawyer, 78). To further strengthen this need, one could
argue that there are very few business decisions that do not have an affect on
society in one way or another. In fact, with the vast number of growing
corporations, society is being affected on various fronts; everything from
water contamination to air bag safety is becoming a major concern. Every
decision that a business makes is gauged by the financial responsibility to
their corporation instead of their social responsibility to the local
community. This was pointed out on various occasions as the main reason why
Company X falsified their reports. The cost of reingineering of the defective
part did not outweigh the loss of business. In the opinion of the executives,
they were acting in a sensible manner. After all, no executive wants to think
of themselves as morally irresponsible The question that naturally arises,
in debating corporate responsibility, is what types of checks and balances can
be employed within a company to ensure that a corporation and all of its
agents act in an ethical manner. Taking the example of the Company X case, one
can notice many failures in moral responsibility. Company X would have to
review its employees, particularly the supervisors, for basic ethical values
such as honesty. For example, ultimately it was the widespread falsification
of the testing documentation that caused the downfall of Company X, not the
integrity of its employees. In the outline of the case it is never mentioned
that the employees initiated this idea, it would seem that it was the
supervisors that gave the order to falsify the documents. Through open
communication, a company can resolve a variety of its ethical dilemmas. As for
the financial aspects of the corporation, it has to decide whether the long
term effects that a reprimand can have outweighs their bottom line. In other
words, corporations have to start moving away from the thought of instant
profit and start realizing both the long term effects and benefits. These long
term benefits can include a stronger sense of ethics in the work force as well
as a better overall example to society In conclusion, I agree with the use
of mitigating factors in determining moral responsibility. A company, as
defined by law, is only a name on a piece of paper. The company acts and
conducts itself according to the employees that work for it. I use the word
employee because in ethical thinking there should be no distinction of rank
within a company. There are times when executives can be held directly
responsible and at the same time, there are cases where employees are acting
unethically without the executives knowing. Neither title of executive or
employee are always morally perfect. Therefore, when a company has acted
irresponsibly, its employees must be held liable in a proportionate amount. As
for the future of ethics in business I would speculate that if employees
started to think more in long term benefits and profits, many of the ethical
dilemmas that we face today would be greatly reduced. As mentioned before,
businesses today uses the measuring stick of profitability. We need to stress
the importance of placing ethical weight on all major business decisions.
Opponents would argue that this is a long term plan that require too many
radical changes. Also, there is no way that an industry wide standard can be
set due to the vast differences in corporations In response, I would argue
that although there are no industry standards that are feasible, but it is
possible for every company to examine their practices as well as the attitudes
of their employees. There will be a number of companies that will defend that
are doing all they can to make sure their employees are aware of their moral
values. Yet other companies will find that they do have areas that need
improvement. It is steps like these that spark change in an organization. Once
a few companies start to see the benefits, it can help to encourage other
companies to follow suit. After all, as seen in the case of Company X,
mistakes in one department can cause the deterioration of an entire
corporation. When a corporation realizes the costs involved with decisions
such as this, the changes required to rectify are small in comparison.
References Pava, Moses. Corporate Responsibility and Financial Performance.
Quorum Books, March 1995. Reder, Alan. In Pursuit of Principle and Profit.
G.P. Putnams Sons Publishing, 1995. Sawyer, George. Business and Society:
Managing Corporate Social Impact. Houghton Mifflin Publishing, Feburary 1993.
Velazquez, Manuel. Business Ethics: Concepts and Cases.
_Bibliography _
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Word Count: 2146
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