Identifying Ethical Issues and Dilemmas

Ethical issues are difficult social questions that involve some level of controversy over what is the right thing to do. Environmental protection is an example of a commonly discussed ethical issue because there can be trade-offs between environmental and economic factors.

Make no mistake about it – when you enter the business world, you’ll find yourself in situations in which you’ll have to choose the appropriate behaviour.

Obviously, the types of situations are numerous and varied. Fortunately, we can break them down into a few basic categories: issues of honesty and integrity, conflicts of interest and loyalty, bribes versus gifts, and whistle-blowing. Let’s look a little closer at each of the categories.

Issues of Honesty and Integrity

At SAIT, both employees and students are committed to the FIRST principles – Fairness, Integrity, Respect, Safety, and Transparency ^[1] – to guide our ethical behaviour.

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Integrity, according to these principles, can be defined as carrying out business with honesty, integrity, and due diligence. As a part of the SAIT community, we honour commitments, are accountable for our actions, and follow through on promises and agreements.

As a transparent community, we conduct our work and communicate in a truthful and open manner.

“I cannot tell you that honesty is the best policy. I can’t tell you that if you behave with perfect honesty and integrity somebody, somewhere won’t behave the other way and make more money. But honesty is a good policy. You’ll do fine, you’ll sleep well at night, and you’ll feel good about the example you are setting for your coworkers and the other people who care about you.” ~ Warren Buffet ^[2]

If you work for a company that settles for its employees’ merely obeying the law and following a few internal regulations, you might think about moving on. If you’re being asked to deceive customers about the quality or value of your product, you’re in an ethically unhealthy environment.

Conflicts of Interest

Conflicts of interest occur when individuals must choose between taking actions that promote their personal interests over the interests of others or taking actions that don’t. A conflict can exist, for example, when an employee’s own interests interfere with, or have the potential to interfere with, the best interest of the company’s stakeholders (management, customers, and owners).

Let’s say that you work for a company with a contract to cater events at your college and that your uncle owns a local bakery. This situation could create a conflict of interest (or at least give the appearance of one). When you’re called upon to furnish desserts for an upcoming luncheon, you might be tempted to send some business your uncle’s way – even if it’s not in the best interest of your employer.

What should you do? 

You should disclose the connection to your boss, who can then arrange things so that your personal interests do not conflict with the company’s interests.

The same principle holds that an employee shouldn’t use private information about an employer for personal financial benefit.

Say that you learn from a coworker at your pharmaceutical company that one of its most profitable drugs will be pulled off the market because of dangerous side effects. The recall will likely severely hurt the company’s financial performance and cause its stock price to drop. Before the news becomes public, you sell all the stock you own in the company.

Is this ethical?

What you’ve done is called insider trading – acting on information not available to the general public, either by trading on it or providing it to others who trade on it. Insider trading is illegal, and you could go to jail for it.

Bribes versus Gifts

It’s not uncommon in business to give and receive small gifts of appreciation, but when is a gift unacceptable? When is it really a bribe?

There is often a fine line between a gift and a bribe. It’s important to consider how a gesture should be interpreted, for example, the cost of the item, the timing of the gift, the type of gift, and the connection between the giver and the receiver.

A bribe refers to offering, giving, receiving, or soliciting something of value to influence the actions of an official or other person in charge of a public or legal duty. In a business context, bribing is an unethical and illegal practice aimed at gaining an unfair advantage, such as securing a contract, influencing a decision, or bypassing regulations.

A gift, in contrast, is a voluntary offering, without the expectation of something in return. In business, gifts can be part of building and maintaining good relationships with clients, partners, and employees. However, the giving and receiving of gifts are subject to corporate policies and Canadian ethics laws to ensure they do not constitute a conflict of interest or are perceived as a bribe. Businesses often set clear guidelines on the value and nature of acceptable gifts and the circumstances under which they may be exchanged to maintain transparency and integrity in their operations.

If you are on the receiving end, it is always a good idea to refuse any item that is overly generous or given to influence a decision. And because accepting even small gifts may violate company rules, always check the company policy.

Abuse of Power or Mistreatment of Individuals

Abuse of power occurs in organizations when individuals in positions of authority or influence use their power to exploit or manipulate others for their own personal gain or benefit. The abuse of power can take many forms, including harassment, discrimination, nepotism, favoritism, embezzlement, and other forms of unethical or illegal behaviour. Such behaviour can vary greatly from a simple annoyance to a major disruption to the workplace.

There are many reasons why abuse of power is unethical:

• First, it violates the principles of fairness, justice, and equality that should govern organizational behaviour. When individuals abuse their power, they create an uneven playing field that disadvantages others and undermines the basic values of democracy and fairness.
• Second, abuse of power can lead to a toxic and unhealthy work environment. When individuals in positions of power abuse their authority, it can create a culture of fear, mistrust, and resentment among employees. This can damage employee morale, job satisfaction, and productivity, and can also lead to high turnover rates, low morale, and a negative public image for the organization.
• Third, abuse of power can have serious legal and financial consequences for the organization. Many forms of abuse of power are illegal and can lead to lawsuits, fines, or criminal charges. Even when the behaviour is not illegal, it can still lead to reputational damage, lost business opportunities, and a decline in the organization’s overall performance.

Harassment

Harassment in the workplace is a form of unethical behaviour that can take many different forms. Harassment happens when an employee, manager, or other individuals in a position of power or influence creates a hostile work environment through unwanted and inappropriate behaviour.

Harassment can take many different forms, including sexual harassment, bullying, verbal abuse, physical intimidation, and discrimination based on race, gender, age, religion, or other personal characteristics. It can also involve unwanted advances, threats, or pressure to engage in unwanted activities.

Harassment violates the basic principles of respect for human dignity and the right to work in a safe and supportive environment. It can also have serious psychological and emotional consequences for employees who are subjected to it. It can lead to stress, anxiety, depression, and other mental health issues and affect an employee’s ability to perform their duties effectively.

All employees should be able to work free from harassment and should be treated with respect and dignity, regardless of their background or personal characteristics. It is vital for organizations to take steps to prevent and address harassment, including developing policies and procedures, providing training and support to employees, and taking swift and appropriate action when harassment is reported or observed.

Is it Ethical? ^[4]

In 2015, Martin Shkreli, the former CEO of Turing Pharmaceuticals, gained widespread notoriety for his decision to increase the price of the drug Daraprim by over 5,000%. Daraprim is a medication used to treat toxoplasmosis, a parasitic infection that primarily affects individuals with weakened immune systems. The drug had been on the market for over 60 years and was widely available for $13.50 per tablet. Shkreli’s company Turing Pharmaceuticals acquired the drug and raised the price to $750 per tablet.

This decision sparked outrage among patients, healthcare professionals, and lawmakers, who criticized Shkreli for his apparent greed and lack of concern for patients who rely on the drug to survive. Many individuals with toxoplasmosis faced the prospect of being unable to afford the medication they needed to stay alive.

Shkreli defended his decision, arguing that the price increase was necessary to fund research and development of new medications. However, many experts disputed this claim, noting that Daraprim was a long-standing medication with a well-established safety profile and that there was no evidence to suggest that the drug required significant research and development funding.

The controversy surrounding Shkreli’s actions led to Congressional hearings, public outcry, and widespread media attention. Shkreli was eventually arrested and convicted on unrelated charges of securities fraud and is currently serving a seven-year prison sentence. ^{[5] [6] [7] [8]}