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CHAPTER 8 & 9
ETHICAL DILEMMA and
ADVOCACY AGAINST CORRUPTION Presented by: Lumbres, Emelyn M. BSA III
ETHICAL DILEMMA
ETHICAL DILEMMA
is a situation a person faces in which a decision must be made about approptiate behavior
Six Step Approach to resolve Ethical Dilemma 1. Obtain the relevant facts. 2. Identify the ethical issues from the facts. 3. Determine who is affected by the outcome of dilemma and how each person or group affected. 4. Identify the alternatives available to the person who must resolve the dilemma. 5. Identify the likely consequences of each alternatives. 6. Decide the appropriate action.
Illustrative Case: Resolving an Ethical Dilemma Bert Cruz has been working for 6 months as a staff assistant for a law firm, Alvendia and Castro. Currently he is assigned to the case of Ryan Manufacturing Company under the supervision of Carlos Reyes, an experienced senior lawyer. There are three junior legal assistants assigned to the case, including Bert Cruz and more experienced assistant, Martha Sy. During lunch on the first day, Carlos says, " It will be necessary for us to work a few extra hours on our own time to make sure we come in on budget. This case isn't very profitable anyway, and we don't want to hurt our firm by going over budget. We can accomplish this easily by coming in a half early, taking a short lunch break, and working an hour or so after quitting time. We just won't write that time down on ourtime report."
Bert recalls reading in the firms policy manual that working hours and not charging for them on the time report is a violation of Alvendia and Castro employment policy. He also knows that seniors are paid bonuses. Later, when discussing the issue with Martha, she says, "Carlos does this on all of his job. He is likely to be our firm's next manager. The partners think he is great because his job always come in under bugdet. He rewards us by giving us good engagement evaluations, especially under the cooperative attitude category. Several of the other seniors staff follow the same practice.
ETHICAL ISSUE The ethical issue in this situation is no diffucult to find. Is it ethical for Bert to work hours and not them as hours worked in this situation?
What is affected and How is each affected? The following are the key persons involved in this situation:
WHO BERT
HOW AFFECTED
MARTHA
Being ask to violate firm policy. Hours of work will be affected. Pay will be affected. Performance evaluation may be affected. Attitude about firm may be affected.
Same as Bert
WHO
HOW AFFECTED
CARLOS
Succes in engagement and in firm may be affected.
Alvendia and Castro
Stated firm policy is being violated. May result in under billing client in the current and future engagements. May affect the firm's ability to realistically budget engagements and bill clients May affect the firm's ability to motivate and retain employees.
WHO
HOW AFFECTED
Staff assigned to Ryan May result in unrealistic time budget Manufacturing in the May result in unfavorable time future performance evaluations.
Other Staff in firm
May result in pressures to continue process of not charging for hours of work.
Following the practice of this engagement may motivate others to follow the same practice on other engagement.
BERT'S AVAILABLE ALTERNATIVES: • Refuse to work the additional hours • Perform in he manner requested. • Inform Carlos that he will not work the additional hours or will change the additional hours to the engagement. • Talk to manager or partner about Carlos request • Quit working for the firm Each of these options includes a potential consequence, the worst likely one being termination by the firm.
CONSEQUENCES OF EACH ALTERNATIVES Consider the following similar ethical dilemma Bert might face in his career as he advances: A supervisor ask Bert to work 3 unreported hours daily and 15 unreported hours each weekend. A supervisor ask Bert to initial certain procedures as having been performed when they were not. Bert concludes that he cannot be promoted to manager unless he persuades assistant to work hours that they do not record. Management informs Bert, who is now a partner, taht either the company gets a 400,000 legal fee or the company will change lawyers. Management informs Bert that the legal fee will be increased 50,000 if Bert can find a plaussible way to increse probability or win the case.
APPROPRIATE ACTION Only Bert can decide the appropriate action to select in the circumstances after considering his ethical values and the likely consequences of each action. At one extreme, Bert could decide that the only relevant consequence is the potential impact on his career. Most of us would conclude that Bert is an unethical person if he follows the course. At the other extreme, Bert can decide to refuse to work for a firm that permits even one supervisor to violate firms policy. Many people would consider such an extreme reaction naive.
ADVOCACY AGAINST CORRUPTION
CORRUPTION
Is the abuse of Private and Public office for personal gain. It includes act of bribery, embezzlement, nepotism, kickbacks and state capture. Is the misuse of entrusted power ( by heritage, education, marriage, election, appointment) for private gain. It covers not only the politician and the public servant but also the CEO, CFO and other employees of a company.
HOW DOES CORRUPTION LOOK LIKE?
CORRUPTION MAY TAKE PLACE IN ANY OF THE FOLLOWING FORMS AND WAY: A company paying a bribe to win the public contract to build the local highway, despite proposing a sub-standard offer. A politician redirecting investment to his hometown rather than to the region most in need. Public official embezzling funds for school renovation to build his private villa. A private company manager recruiting an ill-suited friend for a high level position. Or, local officials demanding bribes from ordinary citizens to get access to a new water pipes. A salesman bribing the purchasing manager of a company to give preference to his products.
WHY AND HOW DOES A PERSON BECOME CORRUPT?
Corruption spread when there are opportunities, when risk is minimal in comparison to benefits obtained or when one are confronted with issues like: Career Advancement Earning of more income Financial problems caused by illness, loss of property, etc.
CHARACTERISTICS OF CORRUPTION
a. Recipients and Payers b. Extortion c. Lubricant of Society d. An Ethical Dilemma e. Poverty Alleviation f. Culture g. 'Kindness among friends'
THE PHILIPPINES CORRUPTION REPORT
The former secretry of finance reported in 2016 that the Philippines losses 200 billion from smuggling and 400 billion for tax evasion perpetuated through collusion with some personalities in the government agencies. 2.6 Trillion is lost annually in corruption globally.
JUDICIAL SYSTEM
Corruption risk are high in the judicial system. Bribes and irregular payments return for favorable judicial decisions are common. The judiciary are underfunded by the state and often depends on local sponsors for resources and salaries, resulting in non-transparent and biased court decission.
PUBLIC SERVICE Companies contend with a high corruption risk when dealing with the public services. Approximately half of business executives reported being ask for a bribe by someone in the government in 2017. Nearly 3 out of 5 businesses reported expecting to give gifts in order ' to get things done' but only one in ten reported expecting to give gifts to get an operating license.
TAX ADMINISTRATION
There is a high risk of corruption when dealing with the tax administration. Around one to seven companies indicate they expect to give gifts at meetings with tax officials.
CUSTOMS ADMINISTRATION
There is a high risk of encountering corruption when dealing with the customs. About a quarter of companies indicate they expect to give gifts when obtaining an import license.
PUBLIC PROCUREMENT
There is a high risk of corruption in public procurement sector which is subject to rampant corruption, irregularities, and inconsistent implementation of legislation.
ETHICAL DILEMMA and
ADVOCACY AGAINST CORRUPTION Presented by: Lumbres, Emelyn M. BSA III
ETHICAL DILEMMA
ETHICAL DILEMMA
is a situation a person faces in which a decision must be made about approptiate behavior
Six Step Approach to resolve Ethical Dilemma 1. Obtain the relevant facts. 2. Identify the ethical issues from the facts. 3. Determine who is affected by the outcome of dilemma and how each person or group affected. 4. Identify the alternatives available to the person who must resolve the dilemma. 5. Identify the likely consequences of each alternatives. 6. Decide the appropriate action.
Illustrative Case: Resolving an Ethical Dilemma Bert Cruz has been working for 6 months as a staff assistant for a law firm, Alvendia and Castro. Currently he is assigned to the case of Ryan Manufacturing Company under the supervision of Carlos Reyes, an experienced senior lawyer. There are three junior legal assistants assigned to the case, including Bert Cruz and more experienced assistant, Martha Sy. During lunch on the first day, Carlos says, " It will be necessary for us to work a few extra hours on our own time to make sure we come in on budget. This case isn't very profitable anyway, and we don't want to hurt our firm by going over budget. We can accomplish this easily by coming in a half early, taking a short lunch break, and working an hour or so after quitting time. We just won't write that time down on ourtime report."
Bert recalls reading in the firms policy manual that working hours and not charging for them on the time report is a violation of Alvendia and Castro employment policy. He also knows that seniors are paid bonuses. Later, when discussing the issue with Martha, she says, "Carlos does this on all of his job. He is likely to be our firm's next manager. The partners think he is great because his job always come in under bugdet. He rewards us by giving us good engagement evaluations, especially under the cooperative attitude category. Several of the other seniors staff follow the same practice.
ETHICAL ISSUE The ethical issue in this situation is no diffucult to find. Is it ethical for Bert to work hours and not them as hours worked in this situation?
What is affected and How is each affected? The following are the key persons involved in this situation:
WHO BERT
HOW AFFECTED
MARTHA
Being ask to violate firm policy. Hours of work will be affected. Pay will be affected. Performance evaluation may be affected. Attitude about firm may be affected.
Same as Bert
WHO
HOW AFFECTED
CARLOS
Succes in engagement and in firm may be affected.
Alvendia and Castro
Stated firm policy is being violated. May result in under billing client in the current and future engagements. May affect the firm's ability to realistically budget engagements and bill clients May affect the firm's ability to motivate and retain employees.
WHO
HOW AFFECTED
Staff assigned to Ryan May result in unrealistic time budget Manufacturing in the May result in unfavorable time future performance evaluations.
Other Staff in firm
May result in pressures to continue process of not charging for hours of work.
Following the practice of this engagement may motivate others to follow the same practice on other engagement.
BERT'S AVAILABLE ALTERNATIVES: • Refuse to work the additional hours • Perform in he manner requested. • Inform Carlos that he will not work the additional hours or will change the additional hours to the engagement. • Talk to manager or partner about Carlos request • Quit working for the firm Each of these options includes a potential consequence, the worst likely one being termination by the firm.
CONSEQUENCES OF EACH ALTERNATIVES Consider the following similar ethical dilemma Bert might face in his career as he advances: A supervisor ask Bert to work 3 unreported hours daily and 15 unreported hours each weekend. A supervisor ask Bert to initial certain procedures as having been performed when they were not. Bert concludes that he cannot be promoted to manager unless he persuades assistant to work hours that they do not record. Management informs Bert, who is now a partner, taht either the company gets a 400,000 legal fee or the company will change lawyers. Management informs Bert that the legal fee will be increased 50,000 if Bert can find a plaussible way to increse probability or win the case.
APPROPRIATE ACTION Only Bert can decide the appropriate action to select in the circumstances after considering his ethical values and the likely consequences of each action. At one extreme, Bert could decide that the only relevant consequence is the potential impact on his career. Most of us would conclude that Bert is an unethical person if he follows the course. At the other extreme, Bert can decide to refuse to work for a firm that permits even one supervisor to violate firms policy. Many people would consider such an extreme reaction naive.
ADVOCACY AGAINST CORRUPTION
CORRUPTION
Is the abuse of Private and Public office for personal gain. It includes act of bribery, embezzlement, nepotism, kickbacks and state capture. Is the misuse of entrusted power ( by heritage, education, marriage, election, appointment) for private gain. It covers not only the politician and the public servant but also the CEO, CFO and other employees of a company.
HOW DOES CORRUPTION LOOK LIKE?
CORRUPTION MAY TAKE PLACE IN ANY OF THE FOLLOWING FORMS AND WAY: A company paying a bribe to win the public contract to build the local highway, despite proposing a sub-standard offer. A politician redirecting investment to his hometown rather than to the region most in need. Public official embezzling funds for school renovation to build his private villa. A private company manager recruiting an ill-suited friend for a high level position. Or, local officials demanding bribes from ordinary citizens to get access to a new water pipes. A salesman bribing the purchasing manager of a company to give preference to his products.
WHY AND HOW DOES A PERSON BECOME CORRUPT?
Corruption spread when there are opportunities, when risk is minimal in comparison to benefits obtained or when one are confronted with issues like: Career Advancement Earning of more income Financial problems caused by illness, loss of property, etc.
CHARACTERISTICS OF CORRUPTION
a. Recipients and Payers b. Extortion c. Lubricant of Society d. An Ethical Dilemma e. Poverty Alleviation f. Culture g. 'Kindness among friends'
THE PHILIPPINES CORRUPTION REPORT
The former secretry of finance reported in 2016 that the Philippines losses 200 billion from smuggling and 400 billion for tax evasion perpetuated through collusion with some personalities in the government agencies. 2.6 Trillion is lost annually in corruption globally.
JUDICIAL SYSTEM
Corruption risk are high in the judicial system. Bribes and irregular payments return for favorable judicial decisions are common. The judiciary are underfunded by the state and often depends on local sponsors for resources and salaries, resulting in non-transparent and biased court decission.
PUBLIC SERVICE Companies contend with a high corruption risk when dealing with the public services. Approximately half of business executives reported being ask for a bribe by someone in the government in 2017. Nearly 3 out of 5 businesses reported expecting to give gifts in order ' to get things done' but only one in ten reported expecting to give gifts to get an operating license.
TAX ADMINISTRATION
There is a high risk of corruption when dealing with the tax administration. Around one to seven companies indicate they expect to give gifts at meetings with tax officials.
CUSTOMS ADMINISTRATION
There is a high risk of encountering corruption when dealing with the customs. About a quarter of companies indicate they expect to give gifts when obtaining an import license.
PUBLIC PROCUREMENT
There is a high risk of corruption in public procurement sector which is subject to rampant corruption, irregularities, and inconsistent implementation of legislation.
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