ETHICS AND THE EMPLOYEE

ZAKIYAH MAWADDAH
18/436883/PEK/24407

MAGISTER MANAJEMEN
FAKULTAS EKONOMIKA DAN BISNIS
UNIVERSITAS GADJAH MADA
2019
THE RATIONAL ORGANIZATION

The more traditional, “rational” model of a business organization defines the organization
as a structure of formal (explicitly defined and openly employed) relationships designed to achieve
some technical or economic goal with maximum efficiency.
At the bottom of the organization is the “operating layer ”: those employees and their
immediate supervisors who directly produce the goods and services that constitute the essential
outputs of the organization level. Above the operating layer of laborers are ascending levels of
“middle managers ” who direct the units below them and who are in turn directed by those above
them in ascending formal lines of authority. The plant manager quoted earlier worked within these
middle levels of the organization. At the apex of the pyramid is top management: the board of
directors,the Chief Executive Officer (CEO), and other company officers such as the President,
Chief Financial Officer (CFO), Chief Technology Officer (CTO), Chief Human Resources Officer
(CHRO), and various Vice President.

The Employee’s Obligations to the Employer

The employee’s main ethical duty is to work toward the goals of the firm and avoid any
activities that might harm those goals. These traditional views of the employee’s duties to the firm
have made their way into the “ law of agency” that is, the part of law that specifies the legal duties
of “agents” (e.g., employees) toward their “principals” (e.g., their employers).
There are several ways in which the employee might fail to live up to the duty to pursue the goals
of the firm:
a. Conflicts of Interest

Conflicts of interest in business arise when an employee or an officer of a company (1) is

engaged in carrying out a certain task (or using his judgment) for his employer and (2) the
employee has an interest that provides him with an incentive or motive to do the task (or use his
judgment) in a way that serves that interest, and (3) the employee has an obligation to do the task
(or use his judgment) in a way that serves the interests of his company free of any incentive to
serve another interest.
Two kinds of situations and activities demand further attention: commercial bribes and gifts.
1. Commercial Bribes is something of value that is given or offered to an employee by a
person outside the employee’s company who intends it to lead the employee to deal
favorably with that person or the person’s firm
2. Gifts
The Ethics of Accepting Gifts Depends on the value of the gift, the purpose of the gift, the
circumstances of the gift, the job of the recipient, accepted and public local practices, company
policies on gifts, legal prohibitions on gifts.

b. Theft
For the employee to use company resources for his or her own benefit is a form of theft
because to do so is to take or use property that belongs to another (the employer without the
consent of its rightful owner.
 c. Insider Trading
Insider trading as buying or selling a company’s stock on the basis of “inside” information
about the company. “Inside” or “insider” information about a company is proprietary information
about a company that is not available to the general public outside the company, but whose
availability to the general public would have a material or significant impact on the price of the
company’s stock.

The Employer’s Obligations to the Employee

The basic moral obligation that the employer has toward employees, according to the
rational view of the firm, is to provide them with the compensation they have freely and knowingly
agreed to receive in exchange for their services.
1. Wages
Wages are the principal (perhaps the only) means for satisfying the basic economic needs of the
worker and the worker’s family.

2. Working Conditions: Health and Safety

Workplace hazards include not only the more obvious categories of mechanical injury,
electrocution, and burns but also extreme heat and cold, noisy machinery, rock dust, textile fiber
dust, chemical fumes, mercury, lead, beryllium, arsenic, corrosives, poisons, skin irritants, and
radiation.
Occupational Safety and Health Administration (OSHA) “to assure as far as possible every
working man and woman in the nation safe and healthful working conditions

THE POLITICAL ORGANIZATION

The political model of the organization sees the organization as a system of competing
power coalitions and formal and informal lines of influence and communication that radiate from
these coalitions. In place of the neat hierarchy of the rational model, the political model postulates
a messier and more complex network of clustered power relationships and criss-crossing
communication channels.

a. Employee Rights
The moral rights of employees are the right to privacy, the right to consent, the right to freedom
of speech, and so on.
b. The Right to Privacy
The right to privacy can be defined as the right people have to determine what, to whom, and
how much information about themselves shall be disclosed to others
c. The Right to Freedom of Conscience
The right to freedom of conscience derives from the interest that individuals have in being able
to adhere to their religious or moral conviction
d. Whistleblowing
Whistleblowing is an attempt by a member or former member of an organization to disclose
wrongdoing in or by the organization including violations of the law, fraud, health or safety
violations, bribery, or a potential or actual injury to the public.
 e. Workers’ Right to Participate in Decisions that Affect Them
Employees would be allowed to freely express criticism, receive accurate information about
decisions that will affect them, make suggestions, and protest decisions
f. The Right to Due Process versus Employment at Will
Employment at will is the doctrine that employers “may dismiss their employees at will for
good cause, for no cause, or even for causes morally wrong, without being thereby guilty of legal
wrong.”
The right to due process is the most critical right employees have. In employment, the right to
due process refers to the right to a fair process of decision-making when decision makers impose
sanctions on employees.
g. The Right to Work
Right to work is the right to earn one’s living by working.
h. The Right to organize
The right of workers to associate with each other to establish and run a union.
i. Organizational Politics
The processes in which individuals or groups within an organization use nonformally sanctioned
power tactics to advance their own aims; we call such tactics political tactics

THE CARING ORGANIZATION

The caring model of the organization, its dominant realities are those that are emphasized
by an ethic of care: interpersonal relationships. In the caring organization, trust flourishes because
“one needs to be trusting if one sees oneself as interdependent and connected.” Because trust
flourishes in the caring organization, the organization does not have to invest resources in
monitoring its employees and trying to make sure that they do not violate their contractual
agreements.