Ethics of Whistleblowing When is it ethical to reveal wrongdoing ? When is it ethical to remain silent? Whistleblowing Example In charge of Quality Control Company makes parts for automobile brakes Find defect in brake part Could cause failure in brakes Failure not certain May take many years to develop Whistleblowing Example (cont.) Go to VP of Production, your boss He tells you to overlook defect - company may loose too much money What would you do? Challenger Disaster Morton-Thiokol “O” rings Cold in Florida Engineers warned “O” Rings could fail NASA management made decision to launch Space Shuttle anyway Cautious Approach to Whistleblowing 1. Make sure situation involves an imminent threat to society or to the business 2. Document all allegations 3. Examine internal whistleblowing first 4. Should you remain anonymous? 5. Get another job first!!! Bribery A payment, usually to a public official, to induce that person to either do something improper or to influence decisions or actions Extortion - same as bribery - recipient of payment initiates transaction Case International consulting firm - designs and supervises construction of hydroelectric power generating systems Your proposal is far superior to any other technically lowest bid To get job, must deposit $250,000 in official’s personal Swiss bank account Should you pay the money? Foreign Corrupt Practices Act of 1997 Grease payment allowed Standard Practice in most foreign countries Results in lost business opportunities for US companies American tax dollars may be used to pay bribe Bluffing and Deception Negotiating a labor contract Plant has experienced losses over past several years - not clear why Want concessions from labor Tell labor that plant will be closed if no concessions are made. In reality , no such plans contemplated Is This Ethical? Managerial Implications Top Management Leadership Organizational Culture Realistic Goal Setting Ethics Audit Code of Ethics Ethics Committ
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