Identifying unethical issues in companies

Business Ethics Issues

A Company's Scandal in India

Telecom rights are a valuable asset that is typically strictly controlled by national governments. Currently, the Telecom Regulatory Authority of India (TRAI) has been engaged in investigating and prosecuting the unauthorized sale of telecommunications licenses in connection with the illegal practice of bribery in the selling of licenses to entities that were not rightfully eligible for those licenses (Sahota, 2012). Major companies whose stock value rose upon the issuance of those licenses immediately sold off their stocks instead of pursuing any business plan based on those licenses (Sahota, 2012).

The practice is highly unethical because it allows the individuals involved to profit in the process of causing significant harm to other stakeholders: the shareholders of the companies left with worthless stock, employees of both companies not involved, and the general public, by depriving licenses to companies legitimately interested in pursuing a business model based on telecom licenses. The government officials involved violated their fiduciary duties (Halbert & Ingulli, 2009) to the general public and to the national government. The entire scheme also violates fundamental rights-based ethical concepts by taking unfair advantage of others at their expense and without their consent (Halbert & Ingulli, 2009).

The main lesson learned from this case is that valuable intangible commodities like telecom licenses must be better regulated and there must be mechanisms in place to monitor compliance with existing rules and to ensure that public servants cannot systematically use their positions unethically for personal gain. In the future, the entire telecom license application procedure must be more tightly regulated and monitored.

Spyware Software on Blackberry Devices

According to a 2009 Khaleej Times report out of Dubai, a United Arab Emirates (UAE) telecommunications company was found to have installed unauthorized applications on the smartphones of users. The company issued supposed software upgrades that were actually spyware applications designed to intercept confidential information without the consent of users. That practice is totally unethical because it violates the fundamental privacy of others under rights-bases ethics (Halbert & Ingulli, 2009). The main group of stakeholders is the affected subscribers because they have a right to safeguard their private information from unauthorized disclosure.

If there is a lesson to be learned from this case, it might be that laws protecting the public from privacy violations need to be stricter to deter ethical violations of this type. Another lesson might be that consumers might also want to keep in mind that some of the most convenient modern communications media are associated with potential risks to their privacy. Realistically, it is difficult to address this type of issue by trying to monitor it directly because that would require analyzing too many applications than could be done efficiently or economically. Consumers are also comparatively vulnerable because of their relative unsophisticated understanding compared with it professionals. Therefore, the best approach to reducing the risk of this type of unethical conduct would be to make sure that penal laws and civil liability laws impose severe enough penalties to deter those inclined to this type of unethical practice so that the risks of the consequences outweigh the possible benefits or financial profit associated with those practices.

Payroll Manager Embezzlement

A female external operations manager of a UAE company was charged with having embezzled millions of dollars from corporate accounts in connection with her payroll responsibilities that gave her access and control over those funds (Kumar, 2008). That conduct is highly unethical for various different reasons: it violates the divine commands of most mainstream religions that believe in the Holy Bible or Koran all of which expressly prohibit stealing. It also violates rights-based ethics, Utilitarianism, and Kantian ethics because it is exploitative of all of the stakeholders (i.e. employees and company shareholders and investors) involved. Mores specifically, this act of outright theft diverts financial assets of the company to its detriment and damages the value of its stock by virtue of the public release of the news.

It is unlikely that the appropriate lesson learned in this case relates to deterrence simply because the act is already such an outright crime that it is inconceivable that any perpetrator would not already have known that there would be serious penal consequences for such acts. Therefore, the best course of action would be to install oversight mechanisms and protocols capable of detecting payroll theft immediately instead of relying so long on the expectation that employees with access and control of substantial funds will necessarily adhere to fundamental ethical and legal business practices. Typical examples of solutions that could be implemented in the future to prevent this vulnerability would be departmental audits and deliberately redundant levels of immediate oversight (Svensson & Wood, 2008). Ideally, those levels of oversight should include formal protocols and individual responsibility for oversights at every level because that promotes conscientious compliance (Svensson & Wood, 2008).

Employee Charged with Pilfering Recharge Cards

Throughout most of 2009, a 26-year-old Syrian sales executive perpetrated fraud by embezzling funds from his employer (Nammour, 2011). As a sales supervisor, he had the authority to instruct his subordinates to leave certain transactions in his hands even though that violated standard operating sales and credit card replenishment procedures. In his professional capacity, this individual was a manager in charge of all sales operations. He took unethical and illegal advantage of his position by embezzling money paid into the business from the sale of credit purchased by customers to replenish their credit accounts. He would simply instruct his subordinates to hand over to him the money taken in on the cards. In between February and November of 2009, he pocketed approximately Dh 190,000 (Nammour, 2011).

The executive's behavior in case obviously violates divine laws that pertain to theft as well as utilitarian and Kantian ethical principles that prohibit exploiting others for personal gain; it also represents a violation of rights-based ethics by virtue of the financial harm caused to the company and to all of its stakeholders, such as investors and stock holders in particular (Halbert & Ingulli, 2009).

As in the other cases involving outright criminal theft, it is unlikely that deterrence through stricter penal consequences is the right approach because anybody perpetrating this type of crime is already aware of the legal violations involved. Therefore, the lesson learned from the case is that internal financial audits must be performed more frequently. In that sense, this type of conduct could be deterred, but by closing loopholes that make it possible to perpetrate successfully for more than one audit cycle, rather than by the severity of the consequences for being caught if the likelihood of success is perceived as worth the risk.

Prohibition of the Free Calls Applications and Media

In the UAE, telecom companies exploit the fact that VoIP and Skype are illegal as an artificial means employed by the government of maintaining higher prices for telephone services than the market would bear if left to traditional economic and business factors. This practice violates rights-based ethics because there is no ethical justification for interfering with the free market or autonomous personal choice in this manner (Halbert & Ingulli, 2009).

This situation is completely distinguishable from the matter of illegal downloads because VoIP and Skype do not take any other entity's work product or proprietary information or commodity without authority. In this case, the government is prohibiting a harmless act and a legitimate act of ordinary commerce for the sole purpose of monopolizing the revenue and also artificially inflating the cost of telephonic communication. Since there is no basis (such as public safety as in the case of municipal utilities) for prohibiting these communications methods among the stakeholders (the general public that could benefit from lower communications prices and the business entities that could profit by providing competitive services), the laws prohibiting them are unethical because they violate the right-based ethical principle that there must be some objective basis for depriving others of rights to autonomy. It also violates Kantian ethics by treating the population as a means to an end, such as to generate revenue at their expense (Svensson & Wood, 2008).