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Scenario Description

Question:

Discuss about the Business Ethics for Gold Mine or Fools Gold.

Ethics tells more than just few codes and policies, it highlights moral principles of someone. Business ethics is a significant part of ethics where corporate social responsibility in integrated (Crane and Matten 2016). The business ethics tells how the employees and management should maintain the ethical behavior within the organizational environment. Any effective organization is built upon certain business ethics that guides the organization towards the right direction of business performance. The selected business scenario highlights various ethical concerns one might face within an organizational structure and how he should deal in such situations. 

Michael Vasquez works for the start up firm and enjoys the professional challenges (Weber 2001). However he is suffering from an ethical dilemma that his boss has created for him. His boss has handed him over the confidential documents of their rival company. The documents consist of ‘private and confidential’ information about the competitor’s pricing strategies, product plans and partnership agreements. Michael asked his boss to know where did he get these confidential documents and he answered that he stole them from their private intranet. However upon realizing that this is getting suspicious to the boss explained that he did not break any password and accessed it through a colleague’s help. Michaels knows that the news of his company’s acquisition of other company’s confidential data will affect his company’s reputation greatly. He is suffering from the ethical dilemma, which is whether he should use the information for their company’s benefit or not (Johnson 2017). He searched for company policies to get clear direction and assistance but could not find any. He feels that using the personal data is not only unethical but also illegal. Michael is worried this thing can happen to him and his company and he is having hard time to accept that his company is applying such low and unethical strategies to gain competitive advantage. The utilization of that confidential information is capable of giving him and his company a competitive advantage but it might cause great negative impact on the company in future (Ferrell and Fraedrich 2015). Therefore hat seems to be the gold mine might turn into fool’s gold.

This is a moral theory based on the act utilitarianism that helps someone to decide what the right moral duty for someone to fulfill is (Hayry 2013). The ethical theory helps the professional to maximize the well being of the company. Michael knows that this private and confidential data of other company will help them achieve certain competitive advantage but is capable of causing harm for the longer term.

Ethical Theory and Analysis

As Michael is suffering from the dilemma that he is working for a company that could go so low for achieving certain competitive advantages. In order to overcome this dilemma Michael should evaluate the company strategies and find out whether his company has been implementing this procedure regularly. This will help him to decide if this job is really suitable for him or not. His evaluation will lead him to the realization that how the organizational culture can be improved without such tactics (Ruiz-Palomino and Martínez-Cañas 2014).

This is undeniable that using other company’s “private and confidential” data is equivalent to be engaging in unethical practices for temporary gains. Michael could refer his boss the codes of ethics of SCIP. Strategic and Competitive Intelligence Professionals (SCIP) has developed guidelines for the for the intelligence professionals (Weiss 2017). The guidelines also highlight that professionals or organizations must respect requests related to the ‘confidentiality of information’. This could help Michael to warn his boss about the future consequences that such strategies could bring for the company.

Virtue ethics theory might prove to be effective in this scenario. Aristotle developed this theory of ethics that focuses more the individual beyond his religious, societal or cultural identity (Yu 2013). Virtue ethics guides someone to help other person helps him to overcome circumstances in the right moralistic way (Vaughn 2015). Following the codes of ethics provided by the SCIP, Michael should tell his boss to return it and never to use it. The business professionals refer this as fed-ex which could be an effective strategy for Michael to follow in this scenario. As Michael struggled to find any proper ethical guidelines he could suggest the management to evaluate their policies regarding maintaining ethical issues. The guidelines provided by SCIP should be referred and incorporated by the management. Michael could also suggest his boss that they should discuss this matter with the legal counsel of the company.

Many recent corporate incidents have highlighted that competitive intelligence has caused great problems for few organizations. Avant’s incident of stealing important codes from other company is a significant example from such cases. Intelligence gathering is not unethical or illegal if the ethics are maintained (Evans 2014). Michael’s boss crossed the fine line between the corporate espionage and competitive intelligence. Michael’s boss has breached the intellectual property rights of the other company. The method that Michael’s boss applied was not only unethical but can be considered as illegal. The boss found the proprietary key through a company employee and downloaded all the closely guarded confidential information driven by the temptation that it will help to gain great profit. It is absolutely unethical to acquire and share other company’s confidential strategic plans. However the scenario does not clearly state what data or information are there in the documents but it is quite evident from the description that the data are extremely important for the rival company. Though different companies engage themselves in different policies related to trade secrets but policies related to patents or trademarks are different. “Uniform Trade Secrets Act” clearly states that misappropriating a trade secret is illegal (Dole Jr. 2016). When boss was asked about the sources of the data he mentioned that to acquire the data he took help of another employee. It is unclear  why did the employee assisted him in the practice but if it comes to the foreground that the boss paid him for acquiring the data it is unethical and illegal.

Possible Actions

Michael should not blow the whistle on the first instance. Whistle blowing is a serious act that can bring harmful consequences for both the whistle blower and the organization. The boss has told him two stories behind acquiring the confidential data from the competitor. There are multiple methods he could apply before going for the ultimate action of whistle blowing. Many experts have suggested that whistle blowing can be applied only when all other options are exhausted. 

Whistle blowing is the process of disclosing the unethical or illegal acts by the management or certain organization member by another member (Miceli, Near and Dworkin 2013). However it should be mentioned that whistle blowing brings a load of issues along with the process for both him and the organization. The social and moral responsibilities of the individual lead the whistle blower to apply this method to resist the unethical practices and fulfill the social responsibilities. Whistle blowing is not an easy method as requires planning and support for the whistle blower to execute that effectively. The National Business Ethics Survey demonstrated that significant number of employees would not blow the whistle because of the fear (Ethics Resource Center 2012). The moral obligation towards the organization and society motivates the whistle blower to be engaged in such act.

The act of whistle blowing can be read from various perspectives; however all of them are mainly concerned with the moral obligations that have already been mentioned. However there are circumstances that permit the whistle blowing without any doubts. If the unethical practice is potentially harmful to the company and to the others the whistle blowing is justified. It is expected from the whistle blower to inform the concerned authority about the unethical practice yet they refrain themselves from taking any actions. The documents should be available to support his claim and the changes his whistle blowing is about the bring will not cause any harm to the public. The whistle blowers mostly suffer from the challenges by the conflict between the organizational loyalty and societal or legal commitment. Before he publicizes the wrong doings the whistle blower must have to sure about the legitimacy of his accusation (Guthrie and Taylor 2017). The right motive plays an important role in justifying the act of whistle blowing too. His motive must serve to protect the people or the organizations from any harmful situations. Once he is sure that the unethical and illegal activities are harmful it is absolutely justified for him to blow the whistle.

Impacts of Ethical Practices

Ethics develops the company as a responsible organization. The ethical practices make the company communicate the message to its employees that it is doing business responsibly. In this case, the unethical practice by a certain individual led Michael question the company policies and strategies as a whole. The unethical practice drives the employee to lose trust over the organization. If the ethics is not protected by the organization and its employees the mission and vision of the company will be hampered and the expectations and standard of the organization to its employees will be affected in a significant manner. 

Ethics in the organization acts as moral guidance that helps the company to increase the employee workforce, efficiency and morale. If the organization is engaged in ethical practice the employees also do engage in the practices of integrity and honesty. The unethical practice the boss will have negative impact on other employees as well where some of them will be tempted to take unethical routs. The employees’ ethical involvement helps the company to benefit more in the longer run.

The code of ethics in the business operation also acts as a corrective action (Kaptein 2015). The codes will resist anyone to do any ethical misconduct and if someone commits such, he or she will be punished. The boss has definitely engaged in ethical misconducts because there are no effective policies that the organization applies in such cases.

The ethics can save the organizations from any legal challenges (Braswell, McCarthy and McCarthy 2017). Michael’s boss is breaching the intellectual property rights of the other company by acquiring their confidential data. Once this incident is known to the other company they are most likely to face legal challenges. If the company had strong and effective ethical codes and conducts this scenario would not have occurred.

Conclusion

This case study analysis helped to highlight the fact that ethical business practice is essential for any organization to maintain their reputation and employee efficiency for longer term. Effective business ethics not only helps the company to gain more productivity but also encourages the employee to grow the business in responsible way. It is quite evident that unethical practices might help the organization to gain temporary competitive advantage but might lead to long term harm. Ethics on the other hand helps the organization to do business responsibly and the builds effective relationship among the management, employees and the consumers.

Reference

Braswell, M.C., McCarthy, B.R. and McCarthy, B.J., 2017. Justice, crime, and ethics. Taylor & Francis.

Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

Dole Jr, R.F., 2016. Identifying the Trade Secrets at Issue in Litigation Under the Uniform Trade Secrets Act and the Federal Defend Trade Secrets Act. Santa Clara Computer & High Tech. LJ, 33, p.470.

Evans, M., 2014. Trade Secret Misappropriation in Texas. Southern Law Journal, 24(1), p.67.

Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson Education.

Guthrie, C.P. and Taylor, E.Z., 2017. Whistleblowing on Fraud for Pay: Can I trust you?. Journal of Forensic Accounting Research.

Hayry, M., 2013. Liberal utilitarianism and applied ethics. Routledge.

Johnson, C.E., 2017. Meeting the ethical challenges of leadership: Casting light or shadow. Sage Publications.

Kaptein, M., 2015. The effectiveness of ethics programs: The role of scope, composition, and sequence. Journal of business ethics, 132(2), pp.415-431.

Miceli, M.P., Near, J.P. and Dworkin, T.M., 2013. Whistle-blowing in organizations. Psychology Press.

Ruiz-Palomino, P. and Martínez-Cañas, R., 2014. Ethical culture, ethical intent, and organizational citizenship behavior: The moderating and mediating role of person–organization fit. Journal of Business Ethics, 120(1), pp.95-108.

S3.amazonaws.com, (2012). NATIONAL BUSINESS ETHICS SURVEY® OF FORTUNE 500® EMPLOYEES. [online] Available at: https://s3.amazonaws.com/berkley-center/120101NationalBusinessEthicsSurveyFortune500Employees.pdf [Accessed 20 Oct. 2017].

Vaughn, L., 2015. Doing ethics: Moral reasoning and contemporary issues. WW Norton & Company.

Weber, K., 2001. What Would You Do?: Gold Mine or Fool’s Gold?. Business Ethics: The Magazine of Corporate Responsibility, 15(1), pp.18-18.

Weiss, A., 2017. Corporate Intelligence. In The Palgrave Handbook of Security, Risk and Intelligence (pp. 373-392). Palgrave Macmillan UK.

Yu, J., 2013. The ethics of Confucius and Aristotle: Mirrors of virtue (Vol. 7). Routledge.

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