Waters appears to have fairly limited ethics. His moral imperative appears to be guided by whatever will benefit him the most personally. Under his watch, the organization has become less effective and has seen its size reduced by 60%. Waters does not feel the need to work hard, so he provides a poor example for his team as well. He is an ineffective leader, and is not respected by his charges. Beyond that, he is failing in his responsibility to the shareholders. As a manager, he has a duty to act as an agent of the shareholders (Donaldson & Davis, 1991). This means that he should be pursuing tactics that will earn the company the most profit. Waters instead is pursuing self-interest to the detriment of earning the most profit.
The corporate culture appears to be contributing to the dilemma. Nobody in senior management appears to be especially concerned with Waters, although they did reduce the size of the unit. That nepotism appears to be tolerated at the firm shows immediately a poor ethical guidepost for the other employees. The culture is not one where excellence is promoted, nor is hard work. As a result, Waters is able to believe that he can get away with his activities.
The low morale also contributes to the development of ethical problems. Vitell and Davis (1990) identified that...
Employees are more fearful of their own position, and act defensively. This is the situation that Valerie is facing -- her instincts are to be defensive because the company tends not to support its employees. Low morale issues tend to go hand in hand with unethical behavior, so Waters is as much a symptom as he is a problem. However, Valerie is not in a position to deal with the morale issue. She is in a position to deal with Waters, so that must be her first priority.
Therefore it is recommended that Valerie report Waters. There is no ethical code that would permit her to not report Waters. She is obligated to act in the best interests of the shareholders, first and foremost, but also in the interests of her fellow employees. The outcomes to her should not be bad, but if they are then Wisson was probably not a company she would have wanted to stay with anyway.
Works Cited:
Donaldson, L., Davis, J. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management. Vol. 16 (1).
Vitell, S., Davis, D. (1990). The relationship between ethics and job satisfaction: An empirical investigation. Journal of Business Ethics. Vol. 9 (6) 489-494.
