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Mary reports on a coworker’s misappropriation of funds to the CFO. A week later she is...

Mary reports on a coworker’s misappropriation of funds to the CFO. A week later she is demoted. What effect is this incident likely to have on the company’s ethical environment?

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The overall effect of such an incident is a strict yet a positive outlook as it signals that the top level management of the company doesn't allow miscreants to dwell in the company and that there will be consequences for such behavior. Ethical environment means creating such an environment which is comfortable for everyone and yet is compliant to the rules and regulations of the company.

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