Ethics and Corporate Responsibility in the Workplace and the World

Contrenia L. Fluker

Professor Steven D. Bond

Law, Ethics and Corporate Governance (LEG 500)

May 19, 2014

Determine all the stakeholders in this scenario.
A stakeholder is defined as a person, group or organization that has interest or concern in an organization according to BusinessDictionary.com. The stakeholders in this particular scenario are PharmaCARE, a successful pharmaceutical company, CompCARE, a subsidiary of PharmaCARE, Wellco, a large drugstore chain, the employees of the various companies, the African nation of Colberia and its people, the medical community and the consumers of the products.

Analyze the ethics of PharmaCARE’s treatment of the Colberia’s indigenous population and its rank-and-file workers versus that of its executives.

Rank-and-file employees are the lifeblood of organizational success. Without rank-and-file employees, many companies' production levels would dwindle to nothing because rank-and-file employees often are solely responsible for turning out the products that companies sell (www. smallbusiness.chron.com). This is what the Colberian people brought to PharmaCARE. The “healers” were willing to share information about indigenous cures and an abundance of Colberian willing to work for $1.00 a day by harvesting plants walking five miles in and out of the jungle carrying baskets that weigh up to 50 lbs. The countrymen were living in primitive huts with no running water or electricity while PharmaCARE’s executives are living on luxury compound with a swimming pool, golf course and a tennis court.
The executives seem to be the generals in this rank-and-file scenario and live in luxury while the native workers are considered in the lower position (enlisted men). The files are maintained by the upper echelon (chain of command) in the rank and file system and this is this just what the executives have done in this particular scenario. In a rank-and-file status, more than likely the lower positions are made paid a low wage. Overlooking the importance of rank-and-file employees is a mistake. They are responsible for the day-to-day operations of a business; without rank-and-file members in the fold, very few organizations would survive. Executives and organizational leadership traditionally are responsible for developing strategy and implementing large-scale plans; however, rank-and-file employees actually perform job functions that support the organization's strategic plans and processes (smallbusiness.chron.com).
The huge manufacturing PharmaCARE facility in Colberia created more than a few problems in the country of Colberia such as destroying the habitat and endangering the native species through their widespread activities and business practices. PharmaCARE’s neglect of the people of Colberia is unethical and socially irresponsible. The company took advantage of Colberia’s low standard of living and economic plight and used it for profit gain. The people of this country were simply trying to earn a living by putting in a honest day’s work but PharmaCARE chose to pay them a low wage for their work and chose not to help the community even though the company boast of being a caring, ethical and well-run as well as having launched the new initiative, “We CARE about YOUR world” and pledging that it would be committed to the environment through recycling, packaging changes and green initiatives; the company destroyed the country habitat and endangered native species.
Determine whether Allen could legally fire each of the three (3) workers—Donna, Tom, and Ayesha. Suggest steps he should take to minimize the risks to his department and the company.

Legally Allen cannot fire Donna, Tom or Ayesha because the employees are protected by the public policy exception of the employee-at-will doctrine. Under the public-policy exception to employment at will, an employee is wrongfully discharged when the termination is against an explicit, well-established public policy of the State (Muhl, C., 2001). Employees cannot be fired for fulfilling legal obligations or for exercising their legal rights.

Donna has the legal right to file the worker’s compensation claim due to her chronic bronchial problems and because of this is protected under the public policy exception and cannot be fired.
Tom and Ayesha can legally exercise their legal rights to file a complaint with Occupational Safety & Health Administration (OSHA) and Equal Employment Opportunity Commission (EEOC). Tom has the legal right to complain to OSHA about the air quality in the lab and Ayesha has filed with the EEOC because she has not been promoted to supervisor because she is Muslim. Both of these employees are protected by the public policy exception to the employment at will doctrine.
Allen needs to speak with the Director of Operations and explain under the public policy exception that he cannot legally fire any of the employees he suggested and that it would be more economical and ethical for the company to address and repair the ventilation system in the lab to lessen the chances of more employees getting ill and filing worker’s compensations claims. This will also settle the issue with Tom. Allen needs to sit down with Ayesha and have an employee review that shows the employee what she does well and what she needs to improve on in order to advance in the company. Allen needs to act quickly to repair the damage and minimize the risks to his department and the company.
Determine the whistleblowing opportunities, obligations, and protections that could benefit Allen. Explain why and how Allen would benefit.

The legal obligations of whistleblowing would help Allen greatly because most whistleblowing policies have the following components as a minimum: 1. A clear statement that employees who are aware of possible wrongdoing within the organization have a responsibility to disclose that information to appropriate parties inside the organization; 2. The designation of specific individuals or groups outside the chain of command as complaint recipients; 3. A guarantee that employees who in good faith disclose perceived wrongdoing to the designated parties inside the organization will be protected from adverse employment consequences; and 4. The establishment of a fair and impartial investigative process.
To succeed, policies must have the commitment of top management and must be adequately communicated to employees (Barnett, T).
The protection of whistleblowing offers:
Whistleblowing policies also should be motivated by the desire to treat employees fairly. First, individuals concerned about possible wrongdoing within the organization, who honestly express their concerns, should be treated fairly. Those who find themselves the target of whistleblowers' accusations should be treated fairly. Whistleblowing policies can help ensure that all employees concerned receive equitable treatment by standardizing the way such situations are handled.
Whistleblowing policies can also ensure that employees' right to free speech isn't violated. This right is not absolute. Employees do not have the right to make malicious or irresponsible charges of wrongdoing that are not supported by facts. They do not have the right to disrupt the workplace just because they think organizational actions are unwise or because they disagree with company policy. But they should not be expected to go along silently when they are aware of probable wrongdoing, or when they are asked to do something they feel violates the law or generally accepted moral standards.
Recognizing employees' right to speech does not imply that organizational leaders must abandon traditional authority structures or abdicate their responsibilities as managers. What it does mean is that organizations recognize employees' legitimate right to express concerns with organizational practices that they believe violate the law or generally accepted moral standards (Barnett, T.).
Whistleblowing Obligations for Allen are:
Whistleblowing research suggests several conditions that are necessary if whistleblowing is to be effectively managed. First, your employees must be informed of the appropriate steps to take in communicating their ethical concerns internally. Studies of federal government employees indicate that there is a significant association between employees' knowledge of appropriate internal channels and the likelihood that they will report perceived wrongdoings. Second, your employees must believe that their concerns will be taken seriously and will be investigated. Studies suggest that many employees who first report their concerns internally later go outside the company with their information if they perceive their organizations to be unresponsive. Third, your employees must feel confident that they will not suffer personal reprisals for using internal channels to report perceived wrongdoing. Whistleblowing studies suggest that employees who believe that management will retaliate for expressing concerns may be more likely to blow the whistle outside the organization (Barnett, T.).
Having a whistleblowing policy is place is beneficial for Allen because if there is a policy then there should be training as well for managers and supervisors. Managers and supervisors should be educated about whistleblower protections and provided the tools to address employee concerns. The training must be effective enough to sensitizing managers and supervisors to the rights and responsibilities of employees to raise concerns, training should be practical and interactive so that each manager and supervisor should be able to handle the situation should one arise. Moreover, training should address Section 1107 of SOX, which makes it a criminal offense to "knowingly" retaliate against a whistleblower who has provided to a law enforcement officer any truthful information relating to the commission or possible commission of any federal offense (Zuckerman, J.). This would alleviate some pressure that Allen is receiving from the Director of Operations to fire the three employees.
Assess PharmaCARE’s environmental initiative against the backdrop of its anti-environmental lobbying efforts and Colberian activities. Examine if this renders the company’s purported environmental stewardship better or worse and if the company’s public stance should carry an obligation to be a leader in environmental matters. Support the position.

Even though the company has this initiative, it is not practicing what it preaches. PharmaCARE seems to be more focused on the profit margin and its public facade but not truly concerned with Colberian people, their habitat, the endangered native species and the environment. The company looks worse but it does not have to. PharmaCARE can come out a leader in environmental matters by taking a stance, making adjustments and improvements and create a well-rounded environmental initiative. Along with the plan PharmaCARE should create other initiatives to participate in and provides the building blocks for a more robust and deep reaching effort in Colberia as well as the United States. The company has to have remediation and monitoring in place so that it can continue to stay the course and build on the initial initiatives to become the leader in environmental matters.

Analyze the original purposes of and the changes to Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Determine which provision(s) of CERCLA apply to PharmaCARE in the scenario provided. Support the response.

There are only three possible infringements PharmaCARE could have made that could violate CERCLA and one would be if by destroying the habitat in Colberia; the company disposed or exposed the native people to hazardous chemicals. The second violation could be not cleaning up what appeared to be mold around the air vents in the lab and notifying the employees once it was brought to their attention. In the lab incident, people become extremely ill and were forced to file worker compensation claims. The third incident could be the company knew of the dangers of reformulating a diabetes drug to treat Alzheimer’s disease could possibly cause the heart attacks in the patients who used the drugs and still allowed it to be consumed by the public.

References

Barnett, T. Assistant Professor of Management, Louisiana Tech University Sam Advanced Management Journal, Autumn, 1992, pp. 37-42 retrieved from http://ethics.csc.ncsu.edu/old/12_00/basics/whistle/rst/wstlblo_policy.html on April 27, 2014

Muhl, C. (2001). The employment-at-will doctrine: three major exceptions. The Monthly Labor Review. Retrieved from http://www.bls.gov/opub/mlr/2001/01/art1full.pdf on May 16, 2014

Zuckerman, J. (2014). Whistleblower Protections in the Nonprofit Sector. Retrieved from http://www.nonprofitrisk.org/library/articles/employment091005.shtml on May 20, 2014

http://www.businessdictionary.com/definition/stakeholder.html#ixzz32AaymD8i retrieved on May 19, 2014

http://smallbusiness.chron.com/rankandfile-employee-24601.html Retrieved on May 19, 2014

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