Kimberly G.

Lofranco Accy 2

Corporate Governance, Business Ethics, Risk Management and Internal Control

Resolving an Ethical Dilemma

1. Relevant Facts
 What is the root cause of the ethical dilemma?
 What are the appropriate actions Jim should undertake?
What
 What compelled Sarah to report the ill ways of Rick in managing his
unit?
 Jim- the protagonist; works for the Human Resources Department.
 Sarah- complainant; an employee working under the supervision of
Rick.
Who  David- Jim’s supervisor; friend of Rick
 Rick- Sarah’s supervisor; sales manager reported for his unethical
methods of management.
 KR Electronics- the company involved.
Where  KR Electronics; Human Resources Department
When  Recently/ Currently
 Sarah was fired by the Head of Sales Rick Martin for reporting the
Why
wrong behavior of sales people.
 How did the problem started?
How
 How did Jim react to the issue?
2. Ethical Issue: Is it ethical for Jim to play along and ignore Sarah’s unjust termination
which he knew was against the company’s policies? What should his next action be?
3. Who is affected and how is each affected?
Who How Affected
 Attitude about firm may be affected.
Jim  Monitoring reports and performance may be affected.
 Being urged to ignore wrong company practices.
 Terminated due to probable retaliation.
Sarah  Trust in the HR Department and the company as a whole may be
affected.
 Management of his unit may be affected.
David  Might be subject to sanctions if found guilty of violating the
company’s ethical policies.
 Same as David.
Rick
 May be questioned for unreasonably firing Sarah.
 Company performance may be affected.
KR Electronics
 Structure and implementation of ethical policies may be affected.
Other employees  Performance may be affected.
Kimberly G. Lofranco Accy 2

Corporate Governance, Business Ethics, Risk Management and Internal Control

Customers/  Might lose trust and confidence in the company.

Clients
4-5. Jim’s Available Alternatives and their Consequences
Alternatives Consequences
A. Quit/ resign from the firm.  He will become jobless.
 He might be unable to sustain his needs.
 He will have inadequate financial resources.
B. Obey David’s commands.  He might become unhappy and unpassionate while
doing his job.
 He will lose trust and confidence in the company
policies.
 He might work less efficiently.
C. Convince David to  Possibility of being rejected again.
reconsider his decision to  David might tell Rick and in return, he will be
ignore the issue. subject to Rick’s resentment.
 David might listen to him and Sarah might get her
job back.
D. Approach the appropriate  The problem might be resolved.
committee that might help  Other unethical practices might be revealed and
resolve the issue addressed accordingly.
 Prone to termination.
6. Criteria for deciding the appropriate action.
Criteria
(5 being the highest and 1 being the lowest)
Action is in Action will Actions
Alternative Jim is safe Action Score
accordance not create is easy to
from is
with company more apply/
termination. ethical
policies. problems. do.
A 1 5 3 5 2 16
B 5 1 3 3 1 13
C 3 5 5 1 5 19
D 2 5 5 1 5 18
Based on the impact of each alternative, the best action Jim should do is to convince
David to reconsider his decision to ignore the issue. Considering the different criteria set,
talking to Jim is the optimal decision for Jim. If he decides to do the extremes which is
quitting or ignoring the ethical dilemma all at once, the issue will not be addressed as
rationally. Thus, Jim should consider talking to David.