Ethical Issues Faced In It Businesses Commerce Essay

Mr. Bob is a good old friend of Mr. Adrian and both know each other since their schooling from last 10 old ages. With the engineering alterations and varied chances in the I T Industry attracted Mr. Adrian and he completed his Networking grade an twelvemonth in front of Bob. Mr. Adrian now works for a taking IT package development company “ ITSD NZ Ltd ” , he is working in this organisation since last 4 old ages and late been promoted in to direction as Assistant Manager, Bob works for a local City Councils Library as a Personal computer Coach for Senior Citizens, learning rudimentss of computing machines.

ITSD advertised for 2 new functions for Network Analysts with wage compensation between NZ $ 40,000 to $ 50,000 per annum + 5 % Performance based Bonus and besides states compensation will be decided on the footing of past experience and accomplishments. The two new functions advertised happened to be in the same section where Mr. Adrian works. Mr. Bob late met Adrian and during a insouciant conversation Adrian was been made cognizant that Bob is looking for a chance. Mr. Adrian rapidly recollected this conversation and invited his friend Bob to his topographic point in the eventide and wanted to discourse about an gap in their section.

Since Bob is besides an I.T Networking Graduate Mr. Adrian discussed about this New Role and encouraged Mr. Bob to fall in their ITSD and as portion of staff referral plan of ITSD NZ Ltd. Bob was pleased to hear about this gap instantly provides a transcript of Resume to Adrian to be forwarded to HR of ITSD NZ Ltd. , . Mr. Adrian does the same really following twenty-four hours and within a hebdomad Mr. Bob gets a call for an Interview. Mr. Bob successfully secures the function after being through HR Recruitment procedure, Along with Bob ; Mr. Charles besides secured a function from other section in ITSD NZ Ltd.

Both Bob and Charles will describe to Mr. Adrian who is their immediate director. Mr. Adrian is been handed Employment Contracts by his Manager and was been advised to present on the first twenty-four hours of describing to the company. Contractual Documents are “ Marked Confidential ” . But, Mr. Adrian has to read them and acquire a signed transcript from both Bob and Charles, during which Mr. Adrian checks the Compensation Packages for both and was surprised to see that Mr Adrian his friend is been remunerated 10 % more than Mr. Charles in-spite of Mr. Charles working in the same organisation and moved internally within ITSD NZ Ltd and holds 2 Old ages experience within the same company.

Compensation Information:

Mr. Charles new wage bundle: $ 44800 ( Prior to this function was on $ 40,000 / annum )

Mr. Bob ‘s new wage bundle: $ 49280

Difference between bundles – 10 %

Statistically it will take about 2 + Old ages for Charles to compare or near Bobs wage compensation Provided Bob ‘s wage remains the same which is improbable due to the fact Company has a Annual Pay Review Policy which is public presentation based and the rise can be anyplace between 3 % to 5 % . Depending on the single public presentation, Evaluations are classified as:

Not Achieved – 0 % , Achieved All – 3 % , Exceeding – 4 % , & A ; Outstanding Ratings – 5 % .

Mr. Adrian instantly reports this to his immediate director who advises him to raise with HR, HR receives the difference and advises it ‘s the company policy that compensation is based on Skills and External Candidates for enlisting will be compensated more to pull into the ITSD and farther advises Mr. Charles is internal and maximal allowable compensation hiking is 12 % on the current compensation as per Company Policy on Existing Staff Compensation.

ITSD does non hold any Employees Union of its Own but encouraged their staff to fall in an External Union “ For Ur Rights ” and had a tie up with the said. ITSD besides has staff policy which clearly discourages staff to discourse one another ‘s compensation bundles.

Mr. Adrian on the same twenty-four hours after work meets Bob and discusses the state of affairs, Bob encourages Adrian to be impartial and be ethical. Further advises Adrian to propose Charles for taking aid from For Ur Rights. Adrian felt really happy that his friend is supportive in malice of being cognizant that both Bob and Charles will be working together.Mr. Adrian since he could non acquire the issue resolved with HR discusses with Mr. Charles and encourages him to near For Ur Rights and raise a difference ; Mr. Charles appreciates Mr. Adrian ‘s aid and near the employees brotherhood to raise a difference.

For Ur Rights is a reasonably new and been in being since last 3 months and even-though they have a tie up with ITSD they ne’er received any concerns from the ITSD Staff. Mr. Bob ‘s instance will be the first one to be raised against the ITSD NZ Ltd.

Ethical Dilemma

Union ( For Ur Rights ) : Since, it is reasonably new and Mr. Charles ‘s difference will be their first one against ITSD, given that their repute will be at interest if they loose, and will besides present a negative feeling on the current staff of ITSD subscribing to the Union they are under ethical quandary “ Whether to accept the concern raised by Mr. Charles and stand for him against the ITSD Management ” .

Case Analysis – Part B


This study is an analysis of the Case Study presented in Part-A discussing in item on the Currency of Ethical Issues derived, impact on Stake Holders and a elaborate rating of the ethical quandary presented by the Employee Union ( For Ur Rights ) in comparing with the Whistle Blower Theory, Pyramid of CSR and Potter Box Ethical Model ‘s.

Apart from Analysis this study besides provides a Recommendation to the Union in get the better ofing their Ethical Dilemma.


Currency of Ethical Issues

Stake Holders

Analysis on Mr. Adrian ‘s Decision based on Whistle blowing theory

Pyramid of CSR.

Potter box Analysis




Currency of Ethical Issues

A A Conflict of Interest

Human Resources

Staff Engagement

A Confidentiality

A A Equal Employment and Compensation

1.1 Conflict of Interest: A A

A ” We can specify a struggle of involvement as a state of affairs in which a individual has a private or personal involvement sufficient to look to act upon the nonsubjective exercising of his or her official responsibilities as, say, a public functionary, an employee, or a professional. “ ( Chris MacDonald, Michael McDonald, and Wayne Norman ) .

In enterprises the struggle of involvement largely happens in about all degrees of direction. But it is widely noticed between Middle Level Management and Administrative degrees, as Middle Level Management act as the mediator between the Upper degree Management and the Staff degrees.

In this instance Mr. Adrian involvement seems to hold a struggle between the company ‘s involvements, as Mr. Adrian holds his ethical value which contradicts with company ‘s policy.

1.2 Human Resource

Human resource is a section or a group of persons in an organisation who looks after the employee related activities. This section is charged with the duties of employees, for illustration enlisting, using schemes and policies in concern of the employees.

Example: HR section of AIS St Helens takes attention of enlisting, preparation and development, oversing, supplying aid to employees in every job related to work.

Mention to Case Study: Role of human resource of ITSD is to come up with some just solution staying with recruitment policies. In this instance Mr. Bob is paid more because of the fact that ITSD wants to pull new employees to fall in the company and Mr. Charles being loyal with the organisation from two old ages was deprived of Equal Compensation for Employees aspect. This may ensue in struggle between the bing employees and the new employees.

1.3 Confidentiality.

Confidentiality is an ethical rule that is attached with different professions like medical, jurisprudence, faith and many more. Confidentiality in an organisation means the communicating between two parties, whether it is written or spoken should non be discussed or revealed to any 3rd parties. At a client support degree foremost point of client is with the support executive and personal information is readily available to the executive to continue with his undertaking. But, an component of confidentiality lies with the support executive and should adhere to the same without uncovering and or sharing personal information of the clients staying to Ethical Policies of the company. As per the ethical policies this information can non be disclosed to anybody and should be kept confidential. ( Beck C: 1990 )

Mention to Case Study: As per ITSD policy, employee ‘s compensation should be kept confidential. Mr. Adrian had entree to Individual Employment Contract marked “ Confidential ” his attack to raise with his director is admissible within in the company policy, but his determination to unwrap and discourse with Mr. Bob breached confidentiality. But an implicit in ethical belief and rule forced Mr. Adrian to discourse with Bob. Mr. Adrian could hold avoided this by following the right escalation channel within the organisation without uncovering the confidential compensation information to Mr. Bob.

1.4 Equal Employment and Compensation.

“ Equal employment and compensation relates to the equality among all the employees within the organisation based without any favoritism based on race, colour, faith, sex, compensation etc. “ ( Conoll J, Conolly B: 1979 )

Harmonizing to the New Zealand Bill of Rights Act 1990, the jurisprudence is meant to salvage most New Zealand employees from employment favoritism based on race and faith, gender, minority favoritism. ( )

Mention to Case Study: Mr. Charles was the victim of ITSD HR Policy, which resulted in a miss-match of compensation bundle alongside an External Recruitee. Company ‘s policy of pulling new employees by supplying a higher compensation bundle in comparing with Internal Recruitee, Over-shadows the work and trueness of Mr. Charles for the organisation which is genuinely unethical.

1.5 Staff Engagement

“ Staff battle is characterized by employees being committed to the organisation, believing in what it stands for and being prepared to above and beyond what is expected of them to present the outstanding services to the client and within the organisation ” . ( Cook S: 2008 ) .

Example: Mc Donald ‘s retail nutrient concatenation, staff is extremely committed to work to present high quality services to the clients. At times particularly during weekend it is busier than the concern yearss and yet, Staff are good prepared for the said, company ensures to supply excess resourcing during the busy hours and expressions after their Staff. Staff and Mc Donald ‘s on the whole received good feedback from clients, adding excess credits to the image of the organisation.

Mention to the Case Study: Staff battle is non up to that degree. The HR section is non that committed to decide the issue of Mr. Charles compensation. The duty of HR section is to be empathic with the staff and give them a proper solution but here they have put the company ‘s policy as an alibi for non making anything. The map of HR is to see staff as a cost and demand to be helped and rewarded.

2.0. Stakeholders

Stakeholder is defined as “ Any group or person who can impact or is affected by organisation ‘s nonsubjective ” ( Freeman 1984: 46 )

Mentioning to the Case Study following are determined as Key Stakeholders –


Employees brotherhood

ITSD direction.

2.1 Staff

From the point of view of staff there may happen a struggle sing the compensation as Mr. Bob is acquiring paid more and there should be equality among all the employees but, from the Management position they hold a different position that new employees are necessary for the company ‘s growing so that they can convey in new thoughts and therefore the ground why Mr. Bob ‘s compensation bundle is valid beliing to the perceptual experience of Staff.

2.2 Employee Union

Employee Union is really much concerned about their being and long term relationship with ITSD due to the fact that there are a Newly Formed Union, Even though the Union ‘s underlying responsibility is to look after the employee ‘s public assistance, they are falling back on ethical quandary “ Whether to stand for Mr. Charles against ITSD ” , this gesture is non leting the Union to carry through their responsibilities.

2.3 ITSD

Harmonizing to the ITSD Management favoritism is done with a point of doing new employees attracted to the house, so as to hold the new coevals with new thoughts to acquire involved in the concern procedures. They think this would enable them to make trade name image among immature and possible employees but this action non merely creates differences towards the house but besides makes the new employees losing their trust in company ‘s direction.

3.0 Analysis on Mr. Adrian ‘s Decision.

Mentioning to the Case Study it ‘s clear that Mr. Adrian is strictly an ethical individual. Even though Mr. Bob whom Mr. Adrian has referred to the company for the web analyst occupation, he is non back uping the difference in compensation bundle offered to Mr. Charles and Mr. Bob. He strongly believes supplying different compensation graduated table for the employees working for the same section on the same occupation is unethical and he wants this to be resolved out regardless of his personal dealingss with Mr. Bob. He did take the proper channel for raising the concern with his immediate director foremost, complied with the ITSD policies of Confidentiality without traveling public and ethically followed the natural justness by placing the individual in the organisation itself.

Mr. Adrian ‘s determination of raising the issue through proper channel was based on Whistle Blowing theory.

3.1 Whistle Blowing theory

Whistle blowing theory is a procedure of an insider in an organisation raising any malpractices or incorrect behaviors within the environment impacting those related, with a position to acquire it solved. The individual who raises the issue is termed as whistle blower. Whistle blowing can be good or bad, depending on the attitude of the whistle blower. The issue may be raised with a position to accomplish personal involvement, which can construe a good or bad depending on the fortunes i.e. , for public public assistance this can be good on the other manus direction perceptual experience may be bad. It besides depends on the channel selected for raising the issue. Particularly in private organisations if any employ goes public, that means improper channel, without confer withing the higher-ups, it could be harmful for the employee and organisation every bit good. ( John Barry: 1998 )

3.2 Mr. Adrian ‘s action relativity with Whistle Blowing theory.

When associating Mr. Adrian ‘s action to the Whistle Blowing theory, Mr. Adrian is the whistle blower. Here we can see that the whistle blowing action was good for the organisation as he foremost informed the issue to the director and followed up harmonizing to what director has advised him. Even though we ca n’t state that Mr. Adrian ‘s manner of deciding things was wholly right because when he could n’t happen a solution through the HR section he, advised Mr. Charles to seek aid from the Employees Union. This action of Mr. Adrian would make a negative impact on his whistle blowing. This state of affairs can non be judged as the connotation was non to hold a negative a negative impact on the organisation instead than to happen a solution for an issue sing the conversation.

4.0 Pyramid of Corporate Social Responsibility

Corporate societal duty ( CSR ) , is a signifier of self regulative theoretical account integrated into any concern theoretical account where in the concern would automatically supervise the jurisprudence, ethical criterions and the international concern norms, environmental norms. It is besides knows as sustainable responsible concern theoretical account.

Figure 1 illustrates the pyramid of societal duty

we will now discourse the nature of corporate societal duty ( CSR ) in employee brotherhood determination in respects to this pyramid.

“ Carroll ‘s CSR Pyramid is likely the most well-known theoretical account of CSR, with its four degrees bespeaking the comparative importance of economic, legal, ethical and beneficent duties severally ” . ( Mahad Huniche, Esben Rahbek Pedersen,2006 )

4.1 Analysis of Employees Union Decision

The intent of the employees brotherhood is a written contract between the employer and the employees, stipulating the rights and responsibilities of each. Harmonizing to Carroll ‘s CSR Pyramid, we can see its economic, legal, ethical and beneficent duties as below:

4.1.1 Economic Duties

Economic duties refer to concern ‘s primary map as a manufacturer of goods and services that consumers need and want, while doing an acceptable net income. This duty is considered to be primary, at the underside of the CSR pyramid, because without fiscal activity the other duties become invalid issues. In the earlier yearss concerns were established as an entity to supply goods and services to the society. Entrepreneurs shortly realized that Money is involved in these concerns along with the term net income. Prior to the said the concern was merely a portion of the society with a intent to supply services, Business was doing acceptable net incomes. During this procedure of transmutation the cardinal term Net income transformed into Desire and this in-turn become an digesting value.

In measuring the Employee ‘s Union determination – following constitute as cardinal economic duties:

Perform in a mode consistent with maximising net incomes per portion of each employee.

Promise the employee to be as personal profitable as possible.

Keep a strong competitory place.

Keep a high degree of runing efficiency of the employment.

A successful employment is the one which attains net incomes systematically.

4.1.2 Legal Duties

In add-on to its economic duties, concern is expected to transport out its work in conformity with the jurisprudence and authorities ordinances, as partial fulfilment of the societal contract between concern and society. Firms are expected to achieve their ends within the model of the jurisprudence.

For the employee brotherhood determination, the legal duties may include:

Perform in a mode consistent with outlooks between the employment and the authorities and jurisprudence.

Instruct the employer to follow with all ordinances of the province and.

Make certain each employee is to be a observant corporate citizen.

A successful employment is defined as one that fulfills its legal duties.

It is of import that we meet the minimum legal demands.

4.1.3 Ethical Duties

The economic and the legal duties talk about the equity and ethical duties but, prohibit the illegal activities. Ethical duties include the criterions, processs, and moral rights on as to what the interest holders regard as carnival.

For the employee brotherhood determination, the ethical duties may include:

Perform in a mode consistent with outlooks of social mores and ethical norms for the employment.

We need to be cognizant of the ethical norms ( present and germinating ) for both employers and employees.

We should non compromise on the ethical norms to accomplish our.

We would be recognized as good corporate citizenship and employment when we are making what is expected morally or ethically.

4.1.4 Philanthropic Duties

Philanthropic means being a good corporate citizen and populating up to the outlook of the society. This can besides be interpreted as prosecuting in plans to advance the public assistance of the society. Examples of philanthropic gift can be parts towards the fiscal demands of society or disbursement clip through instruction etc. We need to move an built-in portion of the community we live in by demoing leading qualities and assisting them. The most of import difference between philanthropic gift and ethical duties is that the former is non expected in either ethical or moral sense

For the employee brotherhood determination, the philanthropic gift duties may include:

We need to make concern in such a manner that we meet the philanthropic and charitable outlooks of the society.

Help the all right and performing humanistic disciplines.

Provide aid to private and public educational establishments.

Help the community in heightening the quality of life.

5.0 Potter Box Analysis

The Potter Box is a theoretical account for doing ethical determinations, developed by Ralph B. Potter, Jr. , professor of societal moralss emeritus of Harvard Divinity School. It is normally used by communicating moralss bookmans.

The Potter Box consists of a few simple stairss, which can be completed in any order. We can utilize the Potter Box to analyse the company by following the stairss below:

Specify the state of affairs: This will assist us understand precisely what ethical quandary we are seeking to work out. From the ITSD instance we can see, Mr. Charles appreciates Mr. Adrian ‘s aid and near the employees brotherhood to raise a difference.

Identify the values: What do the ITSD and Employees Union base for? It could be honesty, duty, and wide minded for both ITSD and the employees.

Choose the truenesss: We may hold several truenesss here, and be certain our determination does non abandon our truenesss. In the ITSD instance, it may be promote the staff to fall in the External Union “ For Ur Rights ” , and cut down the strict policy which clearly discourages staff to discourse one another ‘s compensation bundles.

Identify the rules: Identify the rules and do the concluding determination, whether to raise this with ITSD given that their repute will be at interest if they lose, and will besides present a negative feeling on the current staff of ITSD subscribing to the Union.

6.0 Decision

It is apparent from the analysis of Mr. Adrian ‘s determination in comparing with Whistle Blower theory that the determination taken to raise the concern with the Manager and the HR Department proves that he is persevering in his workss. Mr Adrian is to the full cognizant of moral and ethical duties. A

Mr. Bob on the other manus played a critical function in prosecuting with Mr Adrian and promoting Mr. Charles to raise a concern with the Employees Union. This gesture is applaudable and provides an penetration into Bob ‘s consciousness towards moralss.

A ITSD NZ Ltd policy towards Employee compensation is non logical and ethical in the industry. It certainly impacted on the staff battle. Stake holders are impacted due to the fact of concentrating on the selling scheme of pulling employees into the company instead on Equal Employment and Compensation factor. A

Employees Union ‘s ethical quandary is legitimate but, should non be a determinant factor to stand for Mr. Charles. Union is besides disquieted about its visibleness and perceptual experience by ITSD Management and Stake Holders. This gesture is non leting them to make up one’s mind on whether to stand for Mr. Charles.

7.0 Recommendation:

The followers is a recommendation for ITSD NZ Ltd. , and Employees Union “ For Ur Rights ”

ITSD Company should revisit their company policy towards Equal Compensation for Employees ; it should be impartial and be off from a selling scheme to pull new employees into the company. They needs to work towards raising the engagement degree within the company else would be confronting inauspicious effects in-terms of employees taking to go forth the company and or negative image in the Industry. Stake holders should play a critical function in driving the company policies and codification of moralss of the company which should work towards improvement.

A Employees Union should over-come their ethical quandary and judge their determination on the footing of “ Whether it is right or incorrect to stand for Mr. Charles ” . Once once more Union should follow their representation policies and be governed by them instead in comparing to the fact of their in-experience or length of being. It should work towards a better result for the company every bit good as the staff but, should non unwrap into the impact of the result. Surely Outcome plays a critical function and therefore be concentrating on virtues of the instance instead worrying about their image.

8.0 Referencing

Bratton J, Gold J, 1999, Human Resource: Theory and Practices, Macmillan Publishers Ltd, Hampshire, London.

Carroll, Archie B, ( 1991 ) , The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders, Business Horizons.

Charles. Fombrun, Noel M. Tichy, Mary Anne Devanna, ( 1984 ) Strategic human resource, John Wiley and Sons.

Chris MacDonald, Michael McDonald, and Wayne Norman, ( 2002 ) Charitable Conflicts of Interest, Journal of Business Ethics.

Christians, ( 2001 ) Media Ethical motives: Cases and Moral Reasoning, 6th Edition.

Freeman L, Miles S 2006 Stakeholders: Theory and Practices, Oxford University Press Newyork.

James C Back, 1990, Confidentiality versus the responsibility to protect: foreseeable injury in the patterns. American psychiatrics Inc. New York.

Mahad Huniche, Esben Rahbek Pedersen,2006, Corporate citizenship in developing states: New Partnership Perspectives, Copenhagen Business School Press DK

Sarah Cook, 2008, The Essential Guide to Employees Engagement: Better Business Performance, Kogan Page Limited, London.

Trevino.L.K and Nelson.K, Managing Business Ethics 4th Edition -Straight talk about how to make it right, John Wiley & A ; Sons, Inc.

Visser.W, Revisiting Carroll ‘s CSR Pyramid -An Perspective, Ph.D. Fellow, The University of Nottingham, United Kingdom.

Walter B Connolly, Michael J Connolly 1979, Practical Guide to Equal Employment Opportunity, ALM Properties Inc, Law Journal Press.

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