Download Employee Responsibility Chapter Seven

Employee Responsibility
Chapter Seven
Jerry Estenson
What do I owe other people?
• Contractual
• Relationships based on love and dependency
Manager as Agent
• Milton Friedman
– Conduct business in accordance with desires of
owners of the business
• Agent – A person who acts on behalf of another
person
• Master – Servant
– Master supervises because of expertise
– Servant obeys the employer’s direction
• Employees owe a legal duty of trust, obedience, and
confidentiality
Issues with Agency Theory
• Consent - Employee give consent to take the
job therefore must follow orders.
– Fire folks who do not comply
– Reasonable approach – obey the directives of an
employer when those directives are job-related
and do not violate legal or ethical duties
• The party that has greater power and authority has a
greater responsibility to the vulnerable party
Professional Ethics
• Role in society requires action that may
conflict with role in organization
• Therefore some professions are seen as
“Gatekeepers” or “Watchdogs”
– Insure those who enter the marketplace are
playing by the rules
Reason for Action
• Legitimacy or justification for action
• Motivated to act (less logical or cognitive more
affective (feeling)
• Personal morality and principle based action
requires: Moral courage (my term), discipline and
willpower.
– Each individual is responsible for their own character
• Sometimes structural changes are necessary to
help people act in ethical ways (rules, policies,
expectations, reporting relationships)
Conflict of interest
• Managers responsible to act in best interests of
company (that means all interests not just
financial)
• Managerial decisions require costs (one option
gains one looses)
• Personal interests come second to company
interests
• Kickbacks
• Soft money (research support, trips, expenses
covered by contributors, Christmas baskets)
Trust/Loyalty
• A trusted person is one who we confident in
their judgment
• Loyalty (really big deal)
– Willingness to make personal sacrifices in interests
of the firm
– Duska (no responsibility to be loyal to firm since
both company and employee are acting in their
own best self interest)
– Another view is that people want to be devoted
and faithful to a common goal
Honesty
• Carr – bluffing, lying, manipulation and deception
are acceptable practices in business
• Another view based on Utilitarian pespective
– Dishonesty undermines ability to communicate
• Kant
– Dishonesty treats people as a means to an end
• Human
– Dishonesty requires the dishonest person to pay to
high a price
• Loss of moral wholeness, authenticity and coherence
(connection to reality)
Whistleblowing
• Action of insider or employee who informs the
public or government agency of an illegal,
harmful or unethical activity done by business
or institution
• DeGeorge – Permissible only if meets the
following tests:
– Real serious harm
– Seeks to prevent harm
– Exhausted all internal methods
Insider Trading
• Buying or selling securities on the basis of
nonpublic information.
– Unfair to security traders
– Information used is really property of firm
– Violates trusted implied in fiduciary relationships
Your are …….. Explain your action
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Kenneth Lay
Andrew Fastow
Arthur Anderson Managing Partner for Enron Account
Jeffrey Skilling
Clifford Baxter
Sherron Watkins
Board of Director’s Audit Committee
Wendy Gramm
John Wakeham
Phil Gramm