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Torrens University

Bachelor of Business Information Systems

MIS303 - Assessment 2

Professional Ethics

Vojtech Stary

Date: 4.4.2021
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Internal and External Stakeholders in the Case Study

Ksoft’s stakeholders include its owners, employees, communities, the new

country's governments, and suppliers. All the parties would be significantly affected

by almost all the company decisions. Shawn was one of the first employees to receive

the adverse effects of local government bureaucracies applying to the establishment of

a new company. He then transferred the effects to his manager, Ian. Ian thinks that the

effects should not get to the management headquarters or other organizational

stakeholders. For that reason, he asks Ian to use all the possible means to achieve that

goal. That becomes a fertile breeding ground for unethical practices. This paper

discusses the rightness and wrongness of the use of bribery as a means to ease

bureaucratic restrictions for company establishment.

Comments about the Moral Standards of the Individuals

Ian and Shawn used utilitarianism to justify their actions. They focused on the

action outcomes as the primary determinant of the rightness or wrongness of their

actions. Positive outcomes in the form of a shortened period for company

establishment were the most significant goal. Even though bribery is a crime and a

perceived unethical practice in most countries, Shawn and Ian violated it because of a

conviction emanating from their reward and punishment system. They might have

chosen bribery because it would yield more good than bad. The two parties' behavior

at the beginning of the investigations confirms that point. They are worried that the

government might impose significant fines on them and punish all the individuals
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involved. Shawn and Ian will regret using bribery if the punishment exceeds the

benefits obtained from the chosen approach. That means that Shawn and Ian’s moral

standards are based primarily on the reward and punishment systems.

Pressures that Caused the Ethical Issues to Develop

Several factors pressurize Ian and Shawn into using bribery as the solution to

company establishment delay. The management headquarters’ impatience with the

delay is the most substantial pressure. Local government bureaucracy is also a

significant barrier. The two factors act as a form of punishment to Shawn, Ian, and

Ksoft. They prevented them from gaining the rewards that would come with the timely

establishment of a new company.

Insights into the Organization’s Ethical Culture

Shawn and Ian’s behavior gives an insight into Ksoft’s ethical culture. It shows

that the company also uses utilitarianism as the primary determinant of the rightness

or wrongness of its actions. The employees' desire to achieve organizational goals

through all the possible means shows that the company is concerned by the outcomes

more than the process. Ian's acceptance of bribery shows that the management

headquarters were not ready to accept even valid reasons for the delay. It shows that

Ian accepted bribery to avoid the stress of explaining it to his seniors.

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The Need for a Code of Ethics in the Organization

Shawn and Ian’s fears about the consequences of engaging in unlawful acts

show that utilitarianism approaches have more adverse effects than benefits to the

company. The organization needs an approach that focuses more on the process than

the outcomes. Ksoft needs a code of ethics to guide such situations. In that case, the

rightness or wrongness of its employees’ actions should be determined primarily

based on deontological ethics. An action is justifiable if it followed a set of

established rules and regulations.

Legal Ramifications to the Behavior

Many legal systems in the world define bribery as the use of benefits to

persuade someone to violate the law. Bribing also includes offering promises of

benefits and agreeing to accept or requesting an advantage from someone. Most laws

apply to bribery involving both the local and foreign people. In the case study, Shawn

and Ian are guilty of bribery by offering financial benefits to Peter. The latter is guilty

of accepting the benefits.

Effects of the Situation on Ksoft

Ksoft is guilty of committing a "corporate offense" due to failure to prevent its

employees from engaging in unlawful practices. This case shows that the company's

emphasis on the outcomes could have influenced Ian and Shawn's' behavior. However,

all is not always lost for the company, even if its employees were found guilty of
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bribery. Most laws in the world impose less severe punishment on companies with

"adequate procedures" for preventing bribery among their employees. That means that

Ksoft would have been given special consideration if Shawn and Ian violated its anti-

bribery policies. However, the punishment would be significantly severe if the

company did not have an established code of conduct governing such behaviors. Ksoft

would face the consequences of using its employees to achieve its expansion goals

through bribery subject to the “adequate procedures” defense. That calls for

businesses to understand the local law's definition of adequate procedures and do the

necessary. According to []], such procedures should be released as early as possible

and be as clear as possible so that companies can digest them and make appropriate

changes as early as possible. The procedures should be flexible enough to allow

companies to quickly make changes suited to their business areas.

Actions to be Taken to Prevent such Situations

Ksoft can employ many strategies to avoid legal liabilities related to bribery

and similar issues. The company can encourage appropriate workplace ethics by

conducting annual ethics training sessions. Every employee should learn company-

wide codes and act according to the stipulations to save themselves and the company

from legal liabilities. The organization should also ensure that the ethical culture

starts with its leaders. According to []], leadership behavior substantially affects

organizational culture. Many employees follow leadership behavior in almost every

sector of the organization. That means that ethical leaders are likely to influence

employees into using ethical approaches in solving different organizational problems.

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Organizations that encourage ethical practices among their employees have relatively

low chances of experiencing legal issues related to unethical behavior. Ksoft can

achieve that goal by allowing its employees to report unethical behavior through an

ethics hotline. The company should then investigate the allegations and take

appropriate steps if one is found guilty of bribery. That method requires high levels

of privacy to prevent conflicts between employees. The ethical reports should not

show the identities of the people who submit them.

What I would Do in that Situation

I would act based on the company's code of conduct governing bribery and

other ethical issues if f I were in Shawn's situation. That would save the company and

me from the legal consequences of violating anti-bribery laws. I would act based on

the reward and punishment system if the company did not have an established code of

conduct. The success or failure of the system depends substantially on the accuracy of

one's analysis of the benefits and adverse effects of specific approaches. The

inaccurate analysis could land the company into more problems than benefits. The

accurate analysis allows the company and self to benefit from the positive outcomes.

Shawn's fear of the legal consequences following the government's investigation into

the allegations of bribery is primarily due to an inaccurate analysis of the possible

consequences. That means that his approach was unethical based on utilitarianism. It

is also unethical based on deontological ethics because bribery violated local laws.

However, I would have a relatively difficult time in dealing with the management

headquarters’ pressures of speeding up the company’s expansion process.

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