CHAPTER 5

THE VALUE OF WORK &
EMPLOYEES RESPONSIBILITIES
LEARNING OBJECTIVES
 Discuss the goals and values of career and
workplace decision
 Explain the variety of meanings and values
attributed to work
 Explain the nature and range of employee’s
responsibilities
 Explain the agency view of employee’s
responsibilities
 Explain managerial responsibilities
 Summarize responsibilities of employees
 Define self interest and moral obligation
 Describe the concept of conflict of interest
 Elaborate on the effects of conflict of interest


Discuss the goals and values of career and workplace
decision

 Work is a very important part of our lives and it is
not easily abandoned
 Aristotle: necessary for the good life
 Martin Luther: the toil of work contributes to a higher
cause
 Karl Marx: through work we express our humanity;
labor alienates us from this end

Means-ends reasoning

To the degree that work is a burden that we must all
endure, business ethics is challenged to articulate
and defend the conditions under which work can
be made fair, just and humane
The Meanings of Work
The word “work” has a variety of meanings
 A noun
 A verb
 A job, a profession, a career, trade, labor,
occupation, vocation or a calling

The Value of Work
 Why work?

 What is work good for?

 Instrumental value

 Psychic goods

Does business have a responsibility to provide
employees with meaningful work?

Do we have a right to work?

The Conventional Views of Work
Work is something that must be endured.
- The Classical interpretation of work conceives of
humans as intellectual beings, even though work
is physical.

- The Hedonistic interpretation understands work
as a necessary means for obtaining life’s
pleasures.
The Human Fulfillment Model
 Work is the primary activity through which people
develop their full potential as human beings.
 Telos (“Be all that you can be”): Psychological
benefits
 Social benefits

However, not every job contributes to the
development of the human potential.
 What will this work do for me?

 What will this work do to me? What kind of
person will I become through this work?

The Human Fulfillment Model
 E. F. Schumacher: Bad work is “mechanical,
artificial, divorced from nature, utilizing only
the smallest part of man’s potential
capabilities…”

 Karl Marx: Under capitalist production,
workers inevitably face a life of alienation from
the products of their work, from the creative
process of work, and from their essence as
social creatures
The Human Fulfillment Model
 Pope John Paul II: “work is one of the
characteristics that distinguish humans from the
rest of creatures…only humans work.”

Humans work in order to attain their needs and
wants, but work also shapes humans.

Gregory Baum: “It is through labor that people
create their world, and it is through the same
labor that in a certain sense they also create
themselves
The Human Fulfillment Model
Through work
- we exercise our freedom and autonomy in
making choices
- we develop our talents and exercise creativity
- humans create their society and culture
- we express our nature as social beings
The Liberal Model of Work
The Liberal Model of Work occupies a middle
ground between the conventional model and
the human fulfillment model.
- Workers should be free to choose the ends
of their work.
- Humans can be significantly influenced by
their work; we should make ethical
assessments of work based on how it affects
people who perform it
The Liberal Model of Work
 Norman Bowie
 One of the moral obligations of the firm is to provide
meaningful work for employees
 But what is meaningful work?
 Should meaningful work be given an objective
definition?
 What justification can we find for any normative
objective definition of meaningful work, if work is
subjective?
The Liberal Model of Work
Liberal theories of justice argue that individual
freedom is a fundamental and necessary element
of social justice.

Primary goods of work include autonomy,
rationality, and physical and mental health

The liberal model of work argues that individuals
have certain rights in the workplace and that
these rights function to protect certain central and
primary goods.

Business’ Responsibility for Meaningful
Work
 The classical model argues that to the
degree that work is necessary and
physical, it can not be made meaningful
 Liberals argue that business has a range of
responsibilities to provide meaningful work
 The Human fulfillment model argues that
employers cannot have the responsibility of
making employees better people
What do I owe other people?
 It depends.
 Workers are employees and the employment
relationship establishes a variety of
responsibilities that employees owe to their
employers.
 Managers, while employees, are agents of the
corporation and have specific responsibilities to
the stockholders…and to others.
Employees as Agents
 Agent-principal concept
 An agent is a person who act on behalf of another
person
 Not all agents are employees
 Common law in the U.S. historically has treated all
employees as agents of employers, establishing a
fiduciary responsibility
 Agency relationships variety in the latitude of
decision making
Employees as Agents
 Managerial employees have greater discretion
and responsibility than other employees
 Managerial employees are free from close
oversight
 The law holds that employee-agents owe
legal duties of loyalty, trust, obedience and
confidentiality to the employer-principal
 These duties override employee personal
interests

Is this narrow view ethically defensible?

Why would anyone believe this view?

Employees as Agents
 First, managerial employees in particular play a
particular role within the economic system
 Second, managerial employees in particular must
protect the property rights of owners and prevent
economic harms they might suffer from other
employees
Employees as Agents
 Nonmanagerial employees have a
responsibility to obey only when
employer demands are reasonable,
job-related and do not violate legal or
ethical duties
 We have to consider what
nonmanagerial employees “owe” to
their employers
Employees as Agents
 The narrow view of employee
responsibilities is more plausible
when the employees hold positions of
managerial authority
 In general, managerial employees
have an ethical responsibility to act in
the best interests of their employers –
to a limited degree
Employees as Agents
 There are cases in which ethical
responsibilities take second place to role-
specific responsibilities, e.g. physicians
and lawyers
 But does the role of a manager, like the
role of a physician and a lawyer, serve
social ends important enough that people
in those roles can sometimes be exempt
from ethical responsibilities?
Employees as Agents
 January 1986, the Challenger space
shuttle explosion
 Morton Thiokol and NASA

Explain the agency view of employee’s
responsibilities

Professional Ethics & Gatekeeping
 Our responsibilities are a function of the
relationships that we have with others
 Professionals have very specialized knowledge or
expertise that serves the public good; certification
by some public agency is usually involved
 Within the business and economic context, some
professions have evolved to serve important
functions: attorneys, auditors, accountants and
financial analysts
 Many of these professionals are paid by the
business that they are responsible for watching
over


Professional Ethics & Gatekeeping
 Real conflicts of interest exist between
professional duties and a professional’s self-
interest
 But knowing what one’s duties are and fulfilling
those duties are two separate issues
What does the word “reason” mean?
- In one sense, a reason refers to the legitimacy
or justification for acting in a certain way
- In another sense, reason refers to a
psychological state in which we act, like
motivation

Professional Ethics & Gatekeeping
 Acting on principle sometimes can require real
courage – or discipline – or will-power
 Our habits are developed over time and
influenced by our surroundings
 If we recognize that it can be difficult for
individuals to fulfill their gatekeeping function,
then society has a responsibility to make changes
Managerial Responsibility & Conflicts of
Interest
Return to Enron…
- Who are the owners of Enron?
- How many different “desires” existed in Enron at
the time of the scandal?
- What is the “cult of the shareholder? How did it
become the biggest reason behind the
accounting scandal at Enron?
Managerial Responsibility & Conflicts of
Interest
Return to Enron…
- If the varied interests of various stakeholders
are the interests that a business manager
ought to serve, how does the manager
prioritize these interests, and what interests
might inappropriately conflict with these?
- What are the costs stakeholders endured as
a result of managerial decisions?
Managerial Responsibility & Conflicts of
Interest
 A Kickback is an illegal payment that occurs when
a portion of some payment is paid back to the
payer as an incentive to make the original
payment.
 Soft money occurs when financial advisors
receive payments from a brokerage firm to pay for
research and analysts services that should be
used to benefit the clients of those advisors.
Trust and Loyalty in the Workplace
To trust someone is to be confident in and rely upon
their judgment when one is vulnerable to their
decisions.
 Trustworthy managers develop and maintain
professional competence and expertise

Loyalty, in business, is understood as a willingness
to make personal sacrifices in the interest of the
firm.
- To what degree do employees have a
responsibility to make personal sacrifices for the
firm?
- Ronald Duska argues employees have no
responsibility

Trust and Loyalty in the Workplace
Claims for loyalty by the firm can often be little more
than a disguised way to exploit employees’
willingness to make sacrifices for the firm

However, until and unless the firm is willing to
sacrifice for employees, those employees have
little reason to demonstrate loyalty to the firm

Trust and Loyalty in the Workplace
Is the case different for managerial employees?
- Sherron Watkins
- Andrew Fastow

If loyalty means willing to sacrifice one’s own
interests by going above and beyond ordinary
responsibility, then we ought to be suspicious
of calls for employee loyalty.
Honesty, Whistleblowing & Insider Trading
 Honesty: Are there situations in which dishonesty is
common and acceptable?
There are three reasons to explain the ethical
responsibility to be honest:
 Dishonesty undermines the ability of people to
communicate
 Honesty and trust create essential preconditions for all
cooperative social activities
 A dishonest person must have more than one identity,
which undermines his integrity


Honesty, Whistleblowing & Insider Trading
A bluff can only work as a bluff if the person being
bluffed believes that it is true (is being deceived).

While a dishonest act can have beneficial social
consequences, routine dishonesty erodes the
trust that seems essential to social cooperation.
Honesty, Whistleblowing & Insider Trading
A whistleblower is an employee or other insider
who informs the public or a government
agency of an illegal, harmful, or unethical
activity done by their business or institution.
- Whistleblowing puts the employee at risk
- Whistleblowing pits responsibilities to third
parties at odds with employees
responsibilities to their employer
Honesty, Whistleblowing & Insider Trading
Richard DeGeorge argues three conditions
must be met before whistleblowing is ethically
permissible:
- There must be a real threat of harm that
needs to be addressed
- The whistleblower should first seek to
prevent the harm through channels
- The whistleblower, if possible, should
exhaust all internal procedures for preventing
the harm
Honesty, Whistleblowing & Insider Trading
Insider Trading generally refers to the
practice of buying or selling securities
on the basis of nonpublic information
that one has obtained as an “insider”.

Honesty, Whistleblowing & Insider Trading
Three arguments are cited in ethical
criticism of insider trading:
- Property rights
- Fiduciary duties
- Unfairness claims