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ACCT19083 Final Assignment Governance And Ethics

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Question:

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 answer.

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.

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.

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.

 

Answer:

Answer: Ethical frameworks in the management of workplace bullying will be discussed from two separate, but related perspectives: a normative model and a process-oriented model. The normative model of managing workplace bullying is drawn from the moral principles framework (Schumann, 2001). The moral principles framework consists of five complementary moral principles. Normative and Process-Oriented Ethical Approaches. These principles are utilitarian, moral rights, distributive justice, care ethics, and virtue ethics (Schumann, 2001).

These ethical principles have their own theory or principle to prevent bullying and harassment in any organisation and work as human rights for every employee at work.

Work-related bullying and harassment are severe psychosocial risks that have devastating consequences on worker psychological health and organisational processes (Hoel & Cooper, 2001). Over the past 20 years, research has consistently linked bullying and harassment to a range of psychological health and well-being outcomes, including general mental health outcomes, anxiety, depression, post-traumatic stress, generalised strain, psychosomatic symptoms, burnout, and physical health problems (Nielson & Einarsen, 2012).

 


Bulling can be linked to management style because the key actors included human resource managers (HR managers) and elected head safety representatives (HSRs) plays a vital role in all parts of the organization, including the handling of cases of workplace bullying and the development of practices devoted to the prevention and management of these problems. Hence, it is reasonable to expect that these organizational members have the most accurate knowledge of any implemented systems and organizational practices regarding the prevention and handling of workplace bullying, including having a good overview of the prevailing norms and practices for conflict management in the organization, here denoted as climate for conflict management.

For instance, in given case study Sally McDow, a former senior manager of compliance at Origin, describes a culture of bullying, where staff were sometimes yelled at, abused and physically intimidated when they attempted to report serious incidents, and where staff left the organisation after being bullied or harassed. Several employees allegedly left the organisation when they were victimised after raising concerns with managers.

At this time Australia had the 6th highest rate of workplace bullying when compared to 34 European countries. Australia’s current rate now exceeds the rates measured in Europe in 2009?11.

Marker’s Comments: The marker will provide feedback here.

Answer: The Fair Work Act 2009 (Cth) is key legislation in Australia which governs the relationship between employer and employee. Section 386 of the act defines dismissal which is referred to a situation when an employee is terminated by the employer, or the employer has formed the employee to leave his/her job based on the conduct of the employee (Legislation, 2018). Based on this statement, it can be seen that dismissal and discipline are interrelated with each other. Generally, the main reason for dismissal of an employee is related to his/her undisciplined behaviour in the company. However, this did not make dismissal and ethical action and many times it is considered unfair and unethical if it is not genuine.

There are various ethical issues which are involved in the case of dismissal and discipline. The provision of dismissal provides that each employer has the right to dismiss his/her employee for undisciplined or unethical behaviour. Moreover, employees also have rights under the Fair Work Ombudsman act along with the employer (Fair Work, 2018). The act has provided each employee the right to seek a reasonable and fair dismissal based on which liability is imposed on the employer to comply with the regulations given regarding the dismissal which includes making payment of due salary, notice period and others. In case an employee is dismissed unfairly, then he/she has the right to file an action against his/her employer as per the provisions gave under the Fair Work Act 2009.

In the case of Sally McDow who was operating as senior manager of compliance in the company, a proper legal notice was not served by the company on her dismissal. A reasonable ground for her removal was not present. The CEO of the company dismissed McDow because she was reporting that the company is indulging in unethical behaviour (Wilkinson, 2016). Speaking the truth is not considered as a reasonable ground for dismissal of an employee; therefore, the decision to dismiss McDow was unethical.

 


Marker’s Comments: The marker will provide feedback here.

Answer: Whistleblowing is defined as an act of reporting to the authorities or the public regarding the illegal or immoral actions of the organisation. There are various guidelines issued by the Australian Securities and Investment Commission (ASIC) regarding whistleblowing because there are many ethical concerns relating to whistleblowing based on the relationship of employer and employee (ASIC, 2018a). In most cases, whistleblowing is used by employees to report improper or immoral actions of the employer which is also defined as ethical whistleblowing. However, this is not the case with all whistleblowing incidents. There are many cases in which the employee acts unethically while leaking the confidential information regarding the corporation. Moreover, the employer also acts unethically or unfairly towards whistleblowers in order to protect themselves. Therefore, provisions are made by the government to provide protection to whistleblowers under the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 in Australia.

According to the provisions given by ASIC, the whistleblowers should only report those matters which are unethical or unfair. Moreover, the whistleblowers have to comply with a particular hierarchy while reporting the issues. The whistleblower should not directly go to an outsider such as media or other authorities since it could adversely affect the reputation of the company (ASIC, 2018b).

In the case of McDow, a proper procedure is followed based on which it is considered as ethical whistleblowing. McDow first reported the issues to the internal management of the company. Due to the lack of ethical standard of Origin Energy, the company failed to take any actions. McDow reported the issue many times and even prepared a report regarding the case, however, the CEO of the company declined to take the report (Slezak, 2017). In the report, McDow described the issue of gas leakage along with bullying and harassment of employees in the workplace. The company dismissed McDow based on this issue without following the proper procedure after which McDow reported the case to the Federal Court. Therefore, the whistleblowing of McDow was ethical since she followed a proper procedure as provided by the ASIC.

Marker’s Comments: The marker will provide feedback here.

Answer: AAA Ethical Decision-making model has provided seven steps which can be followed by people while making an ethical decision in a particular scenario. The first step provides that parties should establish all the facts of the case. In this case, Origin Energy is acting unethically since it has failed to take appropriate measures to stop the leakage of gas wells. Moreover, the company has violated many provisions by failing to report the spillage of radioactive material to the regulators (Robins, 2015). Employees also face the issue of bullying in the workplace. The second step is recognition of the ethical issues. The first ethical issue is leaking of gas and spillage of radioactive materials which was not stopped to report by the company which has violated many provisions. The second ethical issue is failing to eliminate bullying and harassment in the workplace. In the third step, the norms, principles, and values are identified. Origin Energy has violated environmental principles and values by failing to ensure that its operations are not adversely affecting the environment. The norms of Fair Work Act are violated since the company has failed to stop bullying and harassment at the workplace and proper procedure was not followed while dismissing McDow.

In the fourth step, alternative options are considered. McDow had the option to do nothing so that she can secure her job and continued her work. Another option is blowing the whistle on the company by giving the information to appropriate authorities. In the fifth step, the norms, principles, and values of step 3 are overlaid on options discussed in section 4. All the norms and values are violated in the first option since the company will continue to pollute the environment and badly treat its employees. However, in the second option, the authorities can enforce the principles on Origin Energy. In the sixth step, the consequences of the outcomes are considered. The outcomes under first option are negative since the environment will continue to be polluted and bullying will continue in Origin Energy. The outcomes of second options are ethical since the immoral practices of the company will stop along with bullying at the workplace. The decision is taken in the seventh step. McDow had taken the second decision which is ethical since it prevented the company from polluting the environment and it stopped bullying at the workplace as well (Ferguson, 2017).

 


Marker’s Comments: The marker will provide feedback here.

 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. Emphasise how an effective ethics program could have prevented the need for a whistleblower to highlight the problems with Origin’s operations. Support your answers with examples from the case study.

Answer: An effective ethics program can assist the companies in identifying the ethical challenges which they face and implementing policies to address such issues. There are various provisions which Origin Energy should include in its ethics program in order to make it effective. Following are various provisions which should be included by Origin Energy in its ethics program in order to prevent the need of a whistleblower in order to recognise the issues relating to Origin’s operations. While implementing an ethics program, the leadership of the company plays a crucial role. In this scenario, ethical leadership would have prevented this scenario, and it would have prevented the need of whistleblower to highlight the issues involved in the operations of the company. The leaders of Origin Energy are focused on increasing the revenue of the company. They did not comply with corporate governance policies while forming business strategies. In order to implement an effective ethics program, they are required to implementing the principle of stakeholder theory which focuses on fulfilling the requirements of all stakeholders of the company which includes customers, employees, shareholders, government, local communities, directors, and the environment. In the case of Origin Energy, the leaders did not address the issue of bullying in the workplace since they were involved in it as well. They also decided that they will rather pay the fines than fixing the problem of leaking of gas wells (Ferguson, 2017). It shows that the leadership of Origin Energy was unethical due to which the requirement of whistleblower increased.

Therefore, the ethics program should focus on establishing ethical leadership in the company which will increase its effectiveness. Firstly, the leaders should focus on changing its value and vision statement. The value statement shows the key morals on which the company stands for and takes its actions. The statement should include the environment since it is affected by the operations of the company. By focusing on improving its policies and adopting new methods to improve the environment, the company can ensure that it complies with ethical values. The corporation should also focus on its employees since they assist the company in achieving its targets. Value statement should give appropriate value to the employees that assist the company in preventing the requirement of whistleblowers to address its issues. Moreover, the vision statement gives a direction to the board of directors of the company which assists them in forming business policies which are targeted towards achieving its corporate goals. The board members of Origin Energy calculated that it is cheaper for the company to pay the fines rather than actually fixing the problem of leaking of gas wells (Slezak, 2016). This shows that the vision of the company is focused on generating more profits rather than achieving sustainable goals. After incorporating ethical principles in the value and vision statement of the company, the directors should implement a code of conduct in the organisation. The principles given under the code of conduct should apply to all individuals operating in the company, and they should adhere to these values.

The code of conduct should specify the conduct of the management and employees in the workplace which would assist them in acting ethically while taking business decisions. The code of conduct should specify the way in which the management should deal with employees, and it should also govern the relationship of employees with others (Weber & Wasieleski, 2013). It will assist the company in eliminating the issue of bullying in the workplace. In case a party breached the provision of the code of conduct, then the aggrieved party should have the right to make complaints regarding the same and the party who breached the policies should be punished appropriately. These principles should also apply to the decisions of the directors of the company. It will ensure that they did not prioritise the interest of a particular stakeholder while taking business decision. Effective compliance with the code of conduct will remove ambiguity in case an employee faces issues regarding the operations of the company since it will be reported and addressed accordingly which will prevent the requirement of a whistleblower. In order to ensure that all the parties comply with the code of conduct of the company, an ethics committee should be set up by Origin Energy. The committee should include non-executive officers who did not have an interest in the operations of the company. The committee should appoint a sufficient number of members and hold periodical meetings in order to ensure that they appropriately discussed the ethical issues arise in the company and find their appropriate solutions.

 


The employees should be able to make an application to the ethics committee in case they wanted to report issues relating to the operations of the company. Moreover, the committee should provide a periodical review which will be included in the annual report of the organisation to ensure that the operations of the company did not go with proper evaluation. Along with an ethics committee, the corporation should also appoint ethics officer in different departments who submits a report to the ethics committee regarding the performance of the particular division. Employees who did not want to appear before the committee can submit their issues to the ethics officer who should be authorised to take actions on his/her own and also able to submit the issues to the committee. In case of Origin Energy, the appointment of an ethics officer had eliminated the issue of bullying and harassment at the workplace since the actions of the management would be reported by the officer to the committee (Ferguson, 2016). The ethics committee and the officer should continuously monitor and tracks the performance of the ethics program. Without monitoring the policies, it will become easier for parties to violate them which would create an unhealthy working environment that promotes issues such as bullying and harassment. Along with tracking of the performance of the ethics program, the corporation should also conduct a periodic review of the program. This review should be conducted by the ethics committee, and the report of this periodic review should be sent to appropriate authorities.

The review creates a fear among the management and the employees that their actions are being watched based on which they are encouraged to act ethically in the organisation. The ethics program of the company should have appropriate communication channels which assist the employees in communicating their issues directly to the appropriate authorities. In Origin Energy, there were no such communication channels due to which McDow was not able to share her issues with the senior level management of the corporation (Slezak, 2016). Therefore, the company can ensure that all its ethical issues are addressed without the requirement of a whistleblower in case it implements appropriate communication channels for its employees. Furthermore, training a key part of the ethics program without which its policies cannot be implemented across different divisions of the organisation. The ethics program of Origin Energy should implement procedure regarding the training of the staff members of the company to ensure that they act ethically. Along with the management of the company, the training should be given to the employees as well so that they understand how to resolve any ethical dilemma which they face in the enterprise. Based on effective training, the management will act ethically while dealing with employees that will prevent the issue of bullying and harassment at the workplace. By implementing all these principles into the ethics program, Origin Energy can prevent the requirement of the whistleblower to ensure that all the issues in the organisation are addressed accordingly without the assistance of external authorities.

 

References:

Ferguson, A. (2016). Origin Energy's Sally McDow exposes dire whistleblower protections. Retrieved from https://www.afr.com/leadership/workplace/origin-energy-case-spurs-discussion-of-whistleblower-protections-20160214-gmtr7h  

Ferguson, A. (2017). Whistleblower panel examining new protections. Retrieved from https://www.afr.com/business/legal/whistleblower-panel-examining-new-protections-20171001-gys5vc

Slezak, M. (2017). Origin Energy ignores coal seam gas well leaks, whistleblower says. Retrieved from https://www.theguardian.com/environment/2017/jan/27/origin-energy-ignores-coal-seam-gas-well-leaks-whistleblower-says

Weber, J., & Wasieleski, D. M. (2013). Corporate ethics and compliance programs: A report, analysis and critique. Journal of business ethics, 112(4), 609-626.

Shaw, W. H., Barry, V., Issa, T., Catley, B., & Muntean, D. (2016). Moral Issues in Business (3rd ed.). South Melbourne, VIC: Cengage Learning Australia Pty Ltd.

 Part B Question: 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. Emphasise how an effective ethics program could have prevented the need for a whistleblower to highlight the problems with Origin’s operations. Support your answers with examples from the case study (1,200–1,600 words).

Ferguson, A. (2017). Chilling tale of Origin Energy whistleblower. Retrieved from https://www.smh.com.au/business/chilling-tale-of-origin-energy-whistleblower-20170124-gtxuhz.html

Robins, B. (2015). Origin denies claims of oil, gas leaks. Retrieved from https://www.smh.com.au/business/origin-denies-claims-of-oil-gas-leaks-20151231-glx6dj.html

ASIC. (2018a). Whistleblowing. Retrieved from https://asic.gov.au/about-asic/asic-investigations-and-enforcement/whistleblowing/

ASIC. (2018b). Guidance for whistleblowers. Retrieved from https://asic.gov.au/about-asic/asic-investigations-and-enforcement/whistleblowing/guidance-for-whistleblowers/

Slezak, M. (2017). Origin Energy ignores coal seam gas well leaks, whistleblower says. Retrieved from https://www.theguardian.com/environment/2017/jan/27/origin-energy-ignores-coal-seam-gas-well-leaks-whistleblower-says

Fair Work. (2018). Managing performance & warnings. Retrieved from https://www.fairwork.gov.au/employee-entitlements/managing-performance-and-warnings

Legislation. (2018). Fair Work Act 2009. Retrieved from https://www.legislation.gov.au/Details/C2017C00323

Wilkinson, J. (2016). Regulator says no evidence supports whistle blower's Origin Energy gas leak claims. Retrieved from https://www.stuff.co.nz/taranaki-daily-news/news/76497684/regulator-says-no-evidence-supports-whistle-blowers-origin-energy-gas-leak-claims 

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