MORAL CHOICE FACING

EMPLOYEESTOPIC 7

LEARNING OBJECTIVES

• Define abuse of official position, bribes, kickbacks, gifts and entertainment

• Discuss the obligations to third parties

• Define whistle blowing• Explain what motivates whistle

blowers• Evaluate when whistle blowing is

justified

Abuse Of Official Position

• The act of using one’s position of power in an abusive way. This can take many forms, such as taking advantage of someone, gaining access to information that shouldn’t be accessible to the public, or just manipulating someone with the ability to punish them if they don’t comply

Bribes• persuade (someone) to act in

one's favor, typically illegally or dishonestly, by a gift of money or other inducement.

Kickbacks• A kickback is an illegal payment that occurs when

a portion of some payment is paid back –kicked back- to the payer as an incentive to make the original payment.

• Eg. A manager who awards a contract to a construction company might receive money or other benefits back from that company as a condition of receiving and incentive of awarding.

Gifts• A gift or a present is an item given to someone in

dealing business with the expectation of reciprocity in terms of awarding a contract or for inside information.

Discuss the obligations to third parties

• Three topics that involve employees responsibilities to parties other than their employers.

Honesty

Whistleblowing

Insider Trading

HonestyThere are three reasons to explain the ethical

responsibility to be honest:o Dishonesty undermines the ability of people to communicateo Honesty and trust create essential preconditions for all

cooperative social activitieso A dishonest person must have more than one identity, which

undermines his integrity

A bluff can only work as a bluff if the person being bluffed believes that it is true (is being deceived).

While a dishonest act can have beneficial social consequences, routine dishonesty erodes the trust that seems essential to social cooperation

WhistleblowingA whistleblower is an employee or other

insider who informs the public or a government agency of an illegal, harmful, or unethical activity done by their business or institution.- Whistleblowing puts the employee at risk- Whistleblowing pits responsibilities to third parties at odds with employees responsibilities to their employer

WhistleblowingRichard DeGeorge argues three conditions

must be met before whistleblowing is ethically permissible:- There must be a real threat of harm that needs to be addressed- The whistleblower should first seek to prevent the harm through channels- The whistleblower, if possible, should exhaust all internal procedures for preventing the harm

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Insider TradingInsider Trading generally refers to

the practice of buying or selling securities on the basis of nonpublic information that one has obtained as an “insider”.

Honesty, Whistleblowing &

Insider TradingThree arguments are cited in ethical

criticism of insider trading:- Property rights- Fiduciary duties- Unfairness claims