Question

Barbara King graduated from Santa Clara University at the perfect time. It was the peak of the dot-com boom and businesses were competing for recent graduates. Barbara had no problem getting her first job in the high-tech industry as a corporate communications specialist.

Many of her friends struggled when entering the corporate world, but Barbara didn't have any problems. The workplace had a casual atmosphere, she enjoyed a salary far above that of her friends, she received perks regularly and she enjoyed Mai-Tai Fridays at the office every week.

She was at the job for less than two months when the company released the quarterly numbers. As the internal communications representative, Barbara was responsible for reporting the numbers to all the employees within the company. Because the company was not publicly traded, only those within the organization were privy to the information.

"I was aware something wasn't quite right with the numbers," said Barbara. "But I was so young and naive-I never thought they could be wrong." She knew the company was doing well, but Barbara had been tracking the high-tech industry and was conscious of the usual financial targets. She also knew that the industry was getting out of control and each company was willing to do anything to get ahead. After asking her coworkers, she realized that they all knew the numbers were intentionally inflated every quarter. Barbara took the hints from her coworkers and passed the numbers on without question.

"We were a young company and we needed our stock price to rise so that we could stay competitive in the booming industry," said Barbara. "Everyone questioned the numbers, but, because of the hip work culture that everyone enjoyed and the potential for riches, there was an underlying pressure to be loyal."

The inflated numbers became another part of the culture. Barbara observed coworkers laughing when they picked up the paper and read the headlines about their company's booming quarter.

"Everyone was just enjoying the ride and didn't want it to end," said Barbara. "Venture capitalists were practically throwing money at our company and we were spending it faster than we thought possible."

"I was new at the company, was making great money and had great benefits-why would I jeopardize all of that?" said Barbara.

Discussion Questions:

• Describe the ethical dilemma that Barbara faces.
• What are Barbara’s possible choices to make in this situation, based on the ethical theories that you have studied?
• For each alternative choice/approach, who are the stakeholders? Who benefits (gains) and loses (is harmed) as a result?

Answer 1

Answer:

The ethical dilemma that Barbara is facing is genuine, it is common and natural. The coworkers are not in this stage because they are used to with this working nature. The company is knowingly changing the revenue amount generated quarterly because in the recession and competitive time they do not want to show it publicly. Because of these changes market capital is easy for the company and it is showing that it is in the blooming stage. Although it was not a registered company, in order to get capital from market it can sell some shares without being registered in SEC. In a private company, management does not reveal its disclosure statements.

But Barbara is new in the company and in the corporate world. So the ethical and moral values of not accepting the wrong thing are normal. She wants to be a whistleblower but also wants to enjoy the working culture, a good salary, this all is attracting and confusing her to accept all this.

There are many possible things which Barbara can do in this situation and theories are explaining all these points:

• Clarify the issue with superiors
• Can advise some other options
• Escalate to other authorized person like an auditor, a general counselor
• Whistle blow
• Leave the job because it's her first job, new starting for her career.

The ethical theories which are related to this matter are:

Justice theory it is because it will not be fair to the stakeholders who are investing their money. Like one day when it will be disclosed, they may lose their capital invested. She can Whistleblow the whole issue

Deontology Theory- This states that the company and management should be loyal to their work and duties .they should be obliged to their work. Barbara must escalate to auditors.

Utilitarianism Theory says clarify and reveal whatever is the status of the company no matter what may be the consequences but be true towards your work if you will value your work, work will equally value you. Barbara should clarify with superiors.

Virtue theory explains about reputation and character are judged by his actions so the management should take care and even Barbara should also take care of it because if she will be attracted once she will not learn but she will only earn money.

In this case, according to the approaches Stakeholders are people who have invested their capital in this technical company. This is a new private company that is showing that it is generating a huge revenue every quarterly because there are inflation and competition risk as well. So here the company is in benefit because as it is easily getting capital from the market. Management is also benefited as working ethically but surviving their business in huge competition. Employees are also in profit as they are getting a good salary and enjoying benefits. The harm or the loss is for the persons who are investing their capital in this company assuming that the company is in profit.