EthicsSituation Case Analysis
Thecase presented involves Bob, a senior division manager in a smallauditing and inventory firm. The case presents an unethical Bob whouses company resources and grossly misuses the firm’s property. Inthe case, Bob misuses the company’s finances and resources in fourways. First, he takes gift cards that he should give to employeeswhen they perform their duties well. Secondly, Bob uses the fuel cardthat is given to him as part of the company’s financing of histransport at work. He uses it to fuel other people’s cars and cashthe money. Thirdly, he gives false fuel reports so as to cash in fromthe extra mileage that he shows to the company. Finally, he uses thecompany expense card to by gift cards for himself and not for thebusiness of the company.
Thecase of Bob presents the challenges that managements of largeorganization face in detecting the proliferation and misuse ofcompany resources. Bob had four main loopholes that he utilized forhis selfish gains and at the expense of the company. These loopholescan be traced to the lack of clear leadership skills from themanagement of the company. Through the loopholes, Bob and otheremployees find it easy to misappropriate the resources of thecompany. In addition, there are critical flops in the ethics of thecompany that justify the use of company resources for personal gain.It is therefore recommended that the company explores the followingleadership skills and the subsequent ethics to address the situation.
Oneof the leadership skills needed in the case is responsibility of theleaders. Bob should practice a lot of responsibility towards himselfand towards other employees. When dealing with the employees that hehas been assigned to by the office, Bob should be responsible fortheir needs and their interests. However, Bob is irresponsible withthe resources and people that have been bestowed to him by thecompany. He is using the company finances to fuel other cars otherthan the company car and also using company expense car for personalgains. At the same time, he disregards the need to motivateemployees, which is an important practice for a responsible leader.
Responsibilityis also a leadership skill that should be practiced by other peoplein the company both under and above Bob. The juniors to Bob should beresponsible leaders in their own capacity and report him to thecompany’s management. This can be done by reporting the absence oftheir gift cards, which will expose Bob’s irresponsibility.Secondly, the management at the company is short of responsibility interms of their oversight of the utility of the firm’s resources.The management should practice responsible leadership because theyare tasked with the protection of the organizational resources. Theycan do this by promoting accountability measures at the firm andsetting rules that guide responsibility.
Accountabilityis a top skill that leaders should have when handling organizationalresources. A leader should be accountable for the resources that areavailed to him or her by the organization that they work with(Schulman 54). Throughaccountability, leaders should understand the company’s staff andtheir practices. As a leadership skill, leaders should be able toaccept the blame of the irresponsibility at the company.
Anotherleadership skill that is needed in the case above is propermanagement skills. The leaders in the auditing firm where Bob worksdo not have competent organizational skills. This is because theyhave not set effective controls to guide the company and the usage ofthe organizational resources. According to Krause (42), responsibleleaders should establish strong organizational controls that preventmisuse of resources. Setting organizational guidelines give thecompany a parameter of evaluating how people use the resources of thecompany. This is the basis through which leaders will formaccountability procedures (Velasquez 37). In the case of the auditingfirm where Bob works, there are no established measures to holdleaders accountable of their decisions and actions.
Oneof the best ways of promoting accountability of this nature is byestablishing an effective internal control system. This will be thebest tool that the management can use to develop a sense and aculture of ethics and accountability. Through internal controls,employees like Bob will be forced to be accountable as per the rulesand not as a decision. Due to proper leadership, a comp-any with goodinternal controls is able to develop an organizational culture thatrespects the set guidelines. This means that employees like Bob willact ethically as per the norms of the organization and not just amatter of personal choice.
Anotherimportant leadership skill that is needed at the company iscommunication skills. According to Velasquez (38), leaders shouldposses’ excellent communication skills that help them to understandevery employee by getting information about them. This places theleaders at positions that inspire trust of all the employees despitetheir positions. By communicating with the employees, the managementwill create a good rapport that will inspire people to giveinformation without fear of victimization. The current organizationalset up of the company lacks credible communication platforms thatemployees can use. The leaders in the organization should use theirorganizational skills to establish proper communication in the firm.As a result, the management at the company will be informed of theunethical practices that some employees do.
Thereis a link between communication in an organization and themaintenance of ethics. The first importance of leaders maintainingethics in the company is by communicating expected ethical practicesin the company. For instance, the company can communicate its code ofconduct to all employees. The code of conduct will be relevant ininforming the members of the organization of the expectations of themanagement ion terms of responsibility and accountability. Byestablishing an ethical guideline, the company will form anexpectation towards the employees that will communicate theconsequences of their actions. This can only be implemented if theleadership in the firm has a competent communication skill thatfacilitates ethical practices.
Criticalrole of Ethics
Themain role of ethics is to prevent the misappropriation of resourcesby the employees of the company. If the company where Bob and Shannonwork had proper ethics, the resources that were inappropriate wouldhave been saved. The case shows that there are poor regard to ethicsin the whole company. All transactions are usually double checked bya senior employee in the company, who should have discovered someirregularities in the company. However, these seniors are eitherignorant, irresponsible or also assisting in the unethical practicesof using company resources. This may be the reason why Shannon hasnot yet discovered the misuse of office by Bob and lack of motivationamong the employees under Bob.
Anotherrole of ethics is to inspire confidence that allows people to reportunethical practices. Lack of proper ethics in the organization leadsto cover up by the corrupt and unethical employees. In the case ofBob, there are employees who are unfairly treated by lacking theirgift cards but they cannot report. This is because they may befeeling that they have no moral or ethical responsibility to do so(Schulman 54). In addition, they have not questioned Bob as top whyhe uses the company’s expense card for his own gain. This meansthat the entire organization has not empowered its people to questionthe practices of their seniors as well as those of colleagues. Ethicsplay this role by empowering people to have moral authority toquestion and report unethical actions.
Inaddition, ethics play an important role in the protection of theresources of the company. If organizations promote ethics among theirmembers, the use of their resources will be directed to theappropriate use, and for the benefit of the company. This will createa company with honest employees who honestly practice ethics in theuse of financial resources (Christian 27). The cases for employeesmisusing the money of their employers and covering it up are anincreasing unethical practice. Misappropriation of finances bytrusted employees of major corporations across the globe makes itchallenging for the management of these discover some unethicalpractices in the workplace.
Accordingto Fredin (54), there are several crimes in the world that happenwhich could be prevented if the employees would have taken a step andreported as whistle blowers. Fredin (54) reports the PWC report thatshows 34% of the companies involved in the survey had reportedsignificant financial crimes. While this report reflected the globalenvironment, 45% of these companies were from the United States alone(Fredin, 54). The case of Bob is just an example of the many cases inthe country that go unreported for many companies.
Ethicsfurther inspire the leadership of an organization to developstructures that promote development of the company. One of theorganizational structures is ethical committees that investigate andhandle unethical behaviors. In addition, ethics form the culture ofthe company by developing into statements of purpose. For instance,in the company that Bob works at, the motto of the company is “trustbut verify” which shows that there is a need for trusting eachother but everything must be verified. If this motto was applied, theunethical practices of Bob would have been discovered.
Thecase of Bob shows a typical situation where many organizations findthemselves due to misuse of organizational resources.Misappropriation of the company finances by Bob, even under the watchof seniors and colleagues like Shannon presents a case of unethicalpractices that thrive when an organization lacks effectiveleadership. Therefore, leadership skills of management,organizational skills and communication skills are needed. Moreover,the company requires competent leaders who are responsible andpromotes accountability in the company. As a result, the rightinternal controls will be established to promote ethical practices inthe firm.
ChristianMastilak et al, DesigningHonesty into Your OrganizationStrategic Finance,2011. InAnnual Editions: Business Ethics 13/14, 25th ed.,William J. Kehoe (ed.), The McGraw Hill Companies Inc., 2014. Print
Fredin,Amy. Not blowing the whistle may seem like the easy way out, butthose who choose silence pay a price. In The Unexpected Cost OfStaying Silent. StrategicFinance,April 2012
Velasquez,Manuel et al. ThinkingEthically: A Framework for Moral Decision MakingIssues in Ethics,Winter 1996, In AnnualEditions: Business Ethics 13/14, 25th ed.,William J. Kehoe (ed.), The McGraw Hill Companies Inc., 2014. Print
Krause,Thomas and Voss Paul, Buildingan Ethical Framework,In AnnualEditions: Business Ethics 13/14, 25th ed.,William J. Kehoe (ed.), The McGraw Hill Companies Inc., 2014. Print
Schulman,Miriam.Principlesfor Building an Ethical Organization,Markkula Center for Applied Ethics, Santa Clara University, June2007, InAnnualEditions: Business Ethics 13/14, 25th ed.,William J. Kehoe (ed.), The McGraw Hill Companies Inc., 2014. Print