ACCT19083 Corporate Governance and Ethics Oz Assignments

ACCT19083 Corporate Governance and Ethics Oz Assignments

ACCT19083 Corporate Governance and Ethics Oz Assignments

Part A

Question 1:

Describe the ethical issues inherent in bullying and harassment in the workplace. Can bullying be linked to management style? Use the case study to inform your.

These days, bullying has become a common habit. Numerous employees have confirmed to have experienced bullying or at least know someone who has been bullied. Workplace bullying represents a huge ethical challenge from numerous vantage points. However, there seems to be lack of an apt conceptual model for facilitating its deterrence and remediation. Therefore, the beginning point for comprehending the ethical issues inherent in workplace bullying is by formally offering propositions that could guide practitioners in addressing the concerns regarding workplace bullying ( LaVan & Marty, 2009).

Schumann (2011) uses a three-pronged strategy in determining the ethical rights of employees from an ethical rights viewpoint.  Distributive justice refers to the actions that produce fairly distributed benefits for all concerned parties. Distributive justice is solely based on an economic view whereby production depends on the cooperation of all the key stakeholders. Assessing workplace bullying through the distributive justice principles indicates that the behaviour is highly unethical as it decreases the company’s productivity.

Care ethics assumes that people work and live in relationships with other humans with feelings and emotions. Therefore, morality and ethics is crucial in developing and sustaining caring relationships. The lack of caring in workplace bullying does not help in the formation and sustaining of caring relationships, hence unethical.

Virtue ethics focuses on the aspects that make a virtuous person. Workplace bullying dilutes the ethical claims upon a virtuous individual. Basically, workplace bullying is an unethical behaviour when assessed using the virtuous agent approach. Workplace bullying is largely associated with autocratic leadership styles. Also, bullying can be associated to an unpredictable leadership style whereby punishment is only meted out on the terms of the leaders ( Hoel, Glasø, Hetland, Cooper, & Einarsen, 2009). In Origin, the corporate whistleblower notes that subordinates were subjected to a bullying culture when they tried reporting serious incidents (Slezak, 2017). The leadership style in Origin Energy is outright autocratic and tyrannical. An organization’s style of leadership plays a role in the workplace bullying culture.

References:

  • Hoel, H., Glasø, L., Hetland, J., Cooper, C., & Einarsen, S. (2009). Leadership Styles as Predictors of Self?reported and Observed Workplace Bullying. British Journal of Management. 21. 453 - 468. Doi: 10.1111/j.1467-8551.2009.00664.x.
  • Lavan, H., & Marty, M. (2008). Bullying in the U.S. Workplace: Normative and Process-Oriented Ethical Approaches. Journal of Business Ethics. 83. 147-165. Doi:10.1007/s10551-007-9608-9.
  • Schumann, P. (2011). A Moral Principles Framework for Human Resource Management Ethics. Human Resource Management Review 11, 93–111.
  • Slezak, M. (2017). Origin Energy ignores coal seam gas well leaks, whistleblower says. The Guardian. Retrieved from https://www.theguardian.com/environment/2017/jan/27/origin-energy-ignores-coal-seam-gas-well-leaks-whistleblower-says.

Question 2:

What are the ethical issues involved in cases of discipline and dismissal? Make sure that you discuss the rights of employers and employees, and use the case study to support your answer.

The decision to dismiss an employee is associated with a huge risk of a legal tussle. This is dependent upon the policies of the employer. If an employee had a contract of employment, they may claim breach of contract (Muskovitz, 2018). It is, therefore, imperative for the employer to understand the employee rights and all the legal implications of terminating an employee’s employment to avoid legal challenges.

When a worker commits, either negligently or intentionally, an act that could considerably affect the organization’s operations or even impact the company’s image adversely, they can be disciplined, and justifiably so. Nevertheless, even if disciplinary actions are justified, it is important for the organizational leadership to comply with the appropriate ethical requirements in such cases. The ethical requirements primarily concern four major factors:

  1. The kind of practices and the types of behaviours that are being sanctioned;
  2. The nature of rules by which the identified practices are being sanctioned;
  3. The sanction system being imposed inside the organization;
  4. The disciplinary approach through which the sanctions are established (Bîgu & Anastasiu, 2017).

Employers are legally obligated to provide written procedures to the employees that could be followed in the process of employee dismissal. In McDow’s case, her employer unfairly dismissed her despite of being protected under the whistleblower provisions of the Corporations Act (Slezak, 2017). The Origin workplace culture is characterised by bullying, autocratic leadership style and meting out of unfair disciplinary actions to the employees. Origin violated McDow’s rights and she could justifiable wage a legal war against them.

References:

  • Slezak, M. (2017). Origin Energy ignores coal seam gas well leaks, whistleblower says. The Guardian. Retrieved from https://www.theguardian.com/environment/2017/jan/27/origin-energy-ignores-coal-seam-gas-well-leaks-whistleblower-says.
  • Muskovitz, M. (2018). Employment terminations: How to avoid legal problems. The balance careers. Retrieved from https://www.thebalancecareers.com/employment-terminations-how-to-avoid-legal-problems-1918635
  • Bîgu, D & Anastasiu, I. (2017). Layoffs and employee discipline: business ethics issues. Proceedings of the 11th international management conference: the role of management in the economic paradigm of the xxist century” November 2nd-4th, 2017, Bucharest, Romania. Retrieved from http://conferinta.management.ase.ro/archives/2017/pdf/5_10.pdf

Question 3

What are the ethical issues involved with “whistleblowing”? For whistleblowing to be conducted in an ethical manner, how should it be done? Does the case study describe ethical whistleblowing? Explain your answer.

Whistle-blowing is an indispensable tool in an organisation’s corporate governance approach. Whistle-blowing empowers workers to take action on misconduct and contribute towards maintaining a workplace that is safe. Nevertheless, whistle-blowing could cause conflict of interest between the organization’s key stakeholders (Expo Link, 2012).

Much of the conflict of interest stems from the perspective with which the whistle-bower is viewed. Is it as someone sharing information on misconduct for the public benefit or as an individual acting ‘disloyal’ to their company?  Whistle-blowing promotes an ethics- driven culture, and individual ethics are bred of a culture that advocates for ethics (Matthewson, 2012). While whistle-blowing can improve the organization’s corporate governance, there is an ethical conundrum associated with the practice thus leading to most employees being silent (Luke, 2017).

For whistle-blowing to be conducted ethically, there are some critical factors that should be considered. First, the whistle-blower should check their motivations to ensure that there’s no possible conflict of interest. Also, the whistle-blower should have adequate evidence to back their claims. Before voicing their concerns, the whistle-blower should re-evaluate whether the claims hold any benefit to the general public. Finally, whistle-blowers should be careful to ensure that they are reporting on infractions that they are not guilty of themselves (Travis, 2017).

McDow’s case is an example showing ethical whistle-blowing. Judging from McDow’s position in the organization and the claims that she raised, it is quite evident that there was absolutely no conflict of interest regarding the case. Besides, McDow provided substantial 120 pages of evidence to back her claims. Additionally, McDow’s claims against her own organization were meant particularly for preventing dangerous gas leaks to the environment that could potentially cause death of many people (Slezak, 2017).

References:

  • Expo Link. (2012). Ethics and whistleblowing. Retrieved from https://www.expolink.co.uk/blog/ethics-and-whistleblowing/
  • Luke, M. (2017). Five Ethical Dilemmas Faced by Employees in Whistle-Blowing. Bizfluent. Retrieved from https://bizfluent.com/info-8546932-five-dilemmas-faced-employees-whistleblowing.html
  • Slezak, M. (2017). Origin Energy ignores coal seam gas well leaks, whistleblower says. The Guardian. Retrieved from https://www.theguardian.com/environment/2017.

Question 4:

Use the AAA Ethical Decision-making model to review the decision by Sally McDow to “blow the whistle”. Was her decision ethical? Use the facts from the case to support your responses to each step of the AAA model.

The American Accounting Association model offers a conceptual framework by which one can determine how to make an ethical decision. The model’s seven crucial stages are:

Establishing factual information on the case.

This stage requires that the process of decision making be initiated with no ambiguity in the information about the case. Ms. McDow collected of about 120 pages before going public about the issue.

Identifying exactly the ethical concerns in the case.

This stage involves the examination of the factual information gathered on the case and evaluating all the ethical concerns at stake. In McDow’s statement, she outlines numerous incidents where her organization did not comply with regulations.

Identification of the principles, values and norms relating to the case.

This stage requires one to place all the decisions in different contextual outlooks such as the social, professional, and ethical contexts.

All possible courses of actions are determined

The alternative recourses are determined without taking into consideration specific values.

Values or norms.

The principles, norms, and values are matched to the options. The identified principles are matched to all the options identified in the previous stage.

All consequences of the possible outcomes are taken into consideration.

The primary purpose of this model is to avoid ambiguousness in the implications of all the outcomes.

The final decision is made.

The concerned part can make their final decision after going through all the above-mentioned stages (American Accounting Association, 2016).

McDow mentions that she once attended a meeting where numerous critical issues were concerned. The issues included contamination of aquifers and leaks of gas and oil. She also mentions that a shipping container that was ferrying radioactive material broke and spilled contents (Slezak, 2017). The issue was not reported. McDow asserts that the company had a deliberate non-compliance policy. Based on the AAA decision making process, McDow ethically made the decision to blow the whistle after acquiring all the most crucial information and evaluating all the possible courses of action and consequences.

References:

  • Slezak, M. (2017). Origin Energy ignores coal seam gas well leaks, whistleblower says. The Guardian. Retrieved from https://www.theguardian.com/environment/2017/jan/27/origin-energy-ignores-coal-seam-gas-well-leaks-whistleblower-says.
  • The American Accounting Association. (2016). Seven-Step Ethical Decision Model. Retrieved on 2nd October, 2018 from https://studymoose.com/the-american-accounting-association-seven-step-ethical-decision-model-essay

Part B

Question 1:  

Assume that Origin Energy does not (or did not) have an effective ethics program at the time of the events described in the case study. Advise Origin Energy why they should have an ethics program, what needs to be done to make it effective, and what it should contain

An effective compliance and ethics program requires involvement of the senior management. When building a strong corporate ethics program, it is imperative to begin with an organizational Code of Conduct that is meant to hold individuals in the organization accountable to their actions. Otherwise, all the regulations and rules of the program will be of no significance (American Bar Association, 2014). Some of the benefits of an effective ethics program include:

  1. Attracting more customers to the organization’s products, and thus boosting the company’s sales and profitability (Leviticus, 2018).
  2. Making the employees more satisfied with their work conditions, while reducing the turnover in labour and thus increasing the company’s productivity (Frangos, 2016).
  3. Implementation of an effective corporate compliance and ethics program gives the organization a good reputation and thus making it attractive to more prospective employees. This reduces the organization’s costs of recruiting new taskforce and enables the organization to acquire talented workers.
  4. A company’s reputation, which is dependent upon its implementation of the corporate compliance and ethics program, is responsible for attracting new investors to the organization and hence keeping the price of shares high. This safeguards the organization’s business from going bankrupt. (ACCA, 2014).

The confidence that the organization that they are investing in is morally upright and that they have reassured them to run their operations ethically gives the investors peace of mind (Regan, 2008). An effective corporate compliance and ethics program is crucial in building and maintaining a company’s reputation.

A corporate compliance and ethics program should address issues such as:

  1. Prevention and resolution of interpersonal conflicts in the organization;
  2. Compliance with all the set rules and stipulated regulations;
  3. Emphasizing on the company’s customer relationship management;
  4. Deterrence of abuse of confidential company information;
  5. Encouraging and empowering ethical whistle-blowers.

There are numerous core components that have to exist to make an ethics program effective. These components are:

The procedures and standards of the program

An organization needs to have preset standards of conduct and internal controls that reduce the probability of inappropriate conduct within the organization. The foundation of these procedures is the company’s code of conduct. The standard procedures of the program should identify the parties responsible for administering the program and the responsibilities of the authority. Additionally, the program should provide insight to what exactly is expected of the employees (Koehler & Morrissey, 2013).

Organizational leadership and culture

The company’s leadership should be aware of the content, development and operation of the compliance and ethics program in the organization. A few individuals should be tasked with the responsibility of monitoring the programs daily performance and reporting it to the governing authority of the organization. Moreover, it is anticipated that the leadership of the company should work towards fostering a culture that promotes adherence to rules and regulations.

Excluding non-reputable individuals from leadership roles

The organization’s governing authority should make deliberate efforts to exclude individuals with questionable reputations from taking positions of leadership. This procedure requires the organization to screen and vet all the potential employees. This entails performing background studies on the individuals and following through their former employers.

Educating and training the employees

A company should make sure that the compliance and ethics program’s procedures and policies are well promulgated throughout the organization. Also, the organization’s governing authority should make sure that all the employees are well trained on the program’s policies and objectives..

Auditing, evaluating and monitoring of the effectiveness of the program.

The compliance and ethics program should include the evaluation and auditing systems designed for the detection of any inappropriate or criminal conduct in the organization. This component of the program is essential as it helps the organization’s management to evaluate the effectiveness of the program and the feasibility of continuing to run it. Essentially, the auditing and evaluation component reviews the compliance with program’s policies.

Setting incentives for performance and disciplinary measures for non-compliance.

A firm should constantly enforce and promote the program by incentivising it and setting disciplinary measures for non-compliance. This procedure should be carried out in all levels of the organization.

Setting apt counteractive action

This involves defining the steps that could be followed in case of inappropriate conduct. Clearly defining these steps is purposely for preventing more misconduct in future. The failure to detect and curb misconduct does not necessarily mean that the program is ineffective

Assessment of risk

It is advisable for the organization to occasionally assess the risk of inappropriate conduct. Additionally, the organization should implement appropriate steps in designing, modifying and implementing all the program elements to minimize the likelihood of risk of inappropriate conduct within the organization’s operations (Williford & Small, 2013).

An effective corporate compliance and ethics program encourages whistle-blowing (Greenberg & Boehme, 2011). The most important element of an effective ethics program is a defined connection between the  company’s code of conduct and the measures of performance. The company’s leadership should promote whistle-blowing in case of misconducts within the organization. Promoting the culture of whistle-blowing and setting up an effective whistle-blowing program will foster a transparent relationship between the company’s employees and leadership (Yeoh, 2014). Also, the culture promotes accountability (Mintz, 2016). By having a robust and effective compliance and ethics program, Origin could have prevented the incident of McDow’s whistleblowing. A robust ethics program promotes addressing of issues and in this case, if Origin had addressed the particular issues that raised concern, McDow could have thought against whistle-blowing.

References:

  • ACCA (2014). Why is ethics important to business? Retrieved from https://blogs.accaglobal.com/2014/11/25/why-is-ethics-important-to-business/
  • American Bar Association (2014). Having a corporate ethics and risk management program is smart business. Retrieved from https://www.americanbar.org/publications/youraba/2014/october-2014/having-a-corporate-ethics-and-risk-management-program-is-smart-b.html