An ethical dilemma: Betty Vinson from WorldCom
Ethics paper requirements
·
Choose one of the following real-life cases
involving an ethical dilemma:
o Betty Vinson from WorldCom (in the textbook)
o Jeffrey Skilling at Enron (in additional reading
links for this Unit;)
o Michael Vines at HealthSouth (in the textbook)
·
Write a paper, approximately three pages (plus
Bibliography and title page), analyzing the ethical decision-making process the
person involved in the dilemma may have undertaken, using the format
described below. You will need to research other sources in order to
write a credible paper. You will also have to apply critical thinking skills
and analysis.
·
Formatting requirements: Double-spaced, 12 point
Arial or Times New Roman font, one inch margins.
·
Bibliography citing the textbook and other web or book
sources from which you gathered information. Minimum number of sources
for "B" grade: 3.
·
Make sure that you
are concise. Headers and bullet-points are encouraged for
clarity.
·
Suggested structure for the paper:
·
Paragraph
one: Clearly describe the
main ethical dilemma facing the decision maker you have chosen. You may want to
describe how or why the dilemma arose.
·
Paragraph
two: Describe what
the decision-maker ACTUALLY did, and the Kohlberg stage that the decision-maker
was acting at and why it applies. Then delineate the positive and negative
consequences that arose or may have arisen from that choice. These should be
done as headers with bullet points, for clarity.
·
Paragraph
three: Identify a
different possible course of action that could have
been taken, and the Kohlberg stage that would lead to that choice.
Again, bullet multiple positive and negative consequences
for the individual--this time making sure that you include consequences for the
company and the relevant stakeholders.
·
Paragraph
four: Identify a second possible course
of action that could have been taken. Continue with the same
requirements as Paragraph three.
·
Paragraph
five (and six)--OPTIONAL--add
additional courses of action and analyze as above
·
Last
paragraph: Discuss briefly what
YOU would do in the situation and why (based on Kohlberg and other
considerations). Write a concluding sentence that summarizes the theme of your
paper.
Here is a partial example of what the paper
should cover in substance.
Assume that the following was a real-life case, and you were assigned to
analyze this scenario from the point of view of Ms. CPA:
A client asked Ms. CPA
to hide income on a tax return. Ms. CPA's boss also wanted her to do it. Ms.
CPA is a single mother with minimal savings. Her dilemma? Does she break the
law or disobey the boss?
·
Ethical
dilemma: Does Ms. CPA
comply with her fiduciary responsibility to follow the law, or does she do what
the client and her boss want her to do, which violates ethical principles?
·
What
Ms. CPA did: She told her boss
that she did not feel comfortable committing this fraud; she said she would not
be able to do it as a licensed CPA. She then asked her boss if this is typical
of the way business is done in this firm.
This was Kohlberg stage four (law abiding)
Positive consequences:
o Ms CPA had respect for herself, and she would
not face professional or legal censure.
o her boss would know that she was a person of
integrity
o even if she did lose my job over this, that
would be better in the long run than a lifetime of fraudulent transactions that
could lead to incarceration and loss of license
o the client would be confident that the firm had
integrity, and had his best long-term interests at heart--especially if there
were legal alternatives presented that could also result in a lower tax
bill.
·
Negative
consequences that may have occurred:
o her boss may have been temporarily be angry with
her, and talking to him would have been difficult.
o This might affect the kinds of client
assignments she would get in the future.
o There is an outside chance that she might have
lost her job, and she would have faced the loss of income, which may have
affected her family.
o The firm might have lost that client.
·
A
different possible course of action: Do what the client (and boss) wants. This would be a
combination of Kohlberg stage two (doing an action to get paid
or keep a job) or stage three (trying to look good to boss or client by
complying)
o Positives: client and boss will be happy; Ms CPA will not have to worry
about job loss for insubordination; difficult discussion with boss could be
avoided.
o Negatives: Ms. CPA cannot live with the guilt of breaking the law; she has
to hide her actions from her kids; her boss pushes Ms. CPA to do even worse
things in the future; eventually Ms. CPA is indicted; client gets caught and
blames the CPA firm.
·
A
second possible course of action: Realize that working for this firm is not a good "fit"
ethically, Ms. CPA quits. This could be Kohlberg stage 2: (taking
care of herself, and taking the consequences of loss of employment) or it could
be Stage 4/stage 5 (following the rules of society even if one has to
experience personal difficulties)
o Positives: Ms. CPA feels ethically good about herself; client and boss have
the chance to fact the fact that they might not be doing the right thing; law
is not broken and third-party stakeholders do not suffer bad consequences
o Negatives: Ms. CPA and her family must face the loss of income; client and
firm might just continue with their deception, with "Ms. Goody
Two-Shoes" out of the way
· Etc....keep going with the parameters for the paper.
TO BE RE-WRITTEN FROM THE SCRATCH
Jeffrey Skilling at Enron
Enron was once one of the top energy companies in the
United States until the Enron scandal of 2001 arose. The tenure of chief
executive officer Jeffrey Skilling offered great hope and confidence to both
employees and investors regarding the financial prospects of the company (Garsten
& Hernes, 2008). However, Miller and Cross (2013) points out that aided by
the chief executive officer, the company management engaged in financial
malpractices. When the malpractices came into public light, the company stock
fell, leading to massive losses to its shareholders and employees.
Ethical Dilemma: When
Jeffrey Skilling realized that the company had massive debt resulting from
failed projects and deals, did he have to hide them? Could he have advised the company
accounting and audit committee to report all debt in its annual financial
reports? Could he have advised the company board on the available options of
reporting and the resulting impact on the overall performance of the company?
What Jeffrey Skilling Did:
During the tenure of Jeffrey Skilling, the company employees were upbeat
because they felt the prospects of the company were good. Instead of revealing
the actual financial position of the company Skilling continued to depict the
financial position of the company as that of being good despite knowing that it
had massive debts. He hid the massive debts owed to the company by forming a
group of executives who used accounting loopholes, poor financial reporting,
and special purpose vehicles to hide the billions of debts that the company had
incurred. Skilling collaborated with the company Chief Financial Officer to
mislead the company board of directors and the audit committee on the high-risk
accounting practices that they had adopted. Together with Chief Financial
Officer, they advised the accounting and audit firm to ignore the reporting
issues in the company’s financial reports. The action taken by Skilling
corresponded to stage two of Kohlberg ethical decision-making process. Schwartz
(2017) points out that at stage two the decision maker is concerned with
self-interest. At this stage, the right action is based on the satisfaction of
individual needs as seen where Skilling was concerned with satisfying the needs
of the few whom he allowed to sell their stock at a profit before Enron
collapsed due to his self-interest.
The possible course of action: Jeffrey Skilling would have informed the accounting and auditing team to report the company’s debts in its financial reporting. The actions conform to stage three of Kohlberg ethical decision-making process. Ferrell, Fraedrich and Ferrell (2014) points out that decision-makers at this stage are concerned more with the interests of others rather theirs. However, ethical motivation at this stage is considere,...............................................................................................................................................................................................................................................................,............................................................................................................................................................................................................................................................... An ethical dilemma: Betty Vinson from WorldCom
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