Case Study on Ethical Issues in Business

Identified Ethical Issues

The first ethical issues presented in the case study is due diligence defined as the process of conducting business and doing tasks thoroughly and care to prevent careless practices. James engagement with Walter is a breach of due diligence because essentially, as suggested in the UN's Procurement Practitioner Handbook, it is necessary to scrutinize the references and backgrounds of potential suppliers (Interagency Procurement Working Group). James needed to establish criteria for evaluating suppliers and carefully analyze Walter's offer including involvement of Jane and Sam who was on vacation.

The second ethical issue in the case study of infringement of employee's private and confidential information. During the meeting, James disclosed that the two human resource hopefuls, Robert and Gretchen were both married with their spouses working as an accountant and stay-at-home mom respectively. The confidential information leaked by James became the subject of Roberts' discrimination during the decision to retain one of the two human resource experts when the company wanted to cut down its overhead costs. Marital status and performance are among the key employee information which must remain confidential. It was thus unethical for James to disclose marital statuses of the two individuals. According to Nadler and Kufahl, disclosing employees' confidential information predisposes them to victimization, harassment, and discrimination (208).

Walter Burn knew that he had stopped working with Sam because of certification issues. By upholding business ethics, he ought to have told James about the certification process when he asked Walter if there was anything he should know. According to Interagency Procurement Working Group (IPWG), ethical conducts demands that one should behave honorably in all professional activities and other aspects of work. It was necessary for Walter to conduct himself in a way that would maintain confidence and trust in the integrity of supplying tomatoes.

Dealing with the Issues

Dealing with the breach of due diligence is vital in mitigating third-party risk as Walter posed certification challenges to the company. The solution to the ethical issue is strengthening the firm's due diligence in supply and procurement issues. As part of the solution, there will be a policy governing the due diligence of procurement procedures which will cover relationship with supply chain, operational processes, and relationships with external stakeholders such as suppliers. In ensuring due diligence, employees in the production and supplies department are accountable for evaluating potential suppliers' backgrounds and history of their previous working relationship with the organization. Under the new policy, they should also establish impartial criteria for evaluating suppliers and analyzing received offers. There should be no short-cuts in the supply chain procedure for convenience sake. Due diligence has the advantage of minimizing purchasing risks and assists in making informed purchasing decisions. Furthermore, due diligence ensures responsible business operations with consistency with highest ethical standards.

Other than maintaining employee confidentiality, it is essential to ensure that firing workers have an ethical basis. The criteria used in dismissing Robert was his marital status, an aspect which should remain confidential, which amounts to discrimination and victimization (Nadler and Kufahl 207). Evidently, the company lacks criteria for dismissing and firing employees. The proposal to solve the ethical issues is the adoption of appropriate firing policies and procedures. There should be a policy governing the firing process which should emphasize documentation of employees' attendance, behaviors and disciplinary actions, and performance evaluation which should serve as the basis for firing workers. In the US, Equal Employment Opportunity Act of 1972 prohibits unfair discrimination of employees thus firing based on marital status or employment status of their spouses is an infringement of the Act (Equal Employment Opportunity Commission). Therefore, it is important for the company to demonstrate consistency in documenting employee's performance and behavior to find ethical, legal and informed decisions to fire or retain when the need to cut overhead costs occurs. Ethical and informed choice in dismissal dictates whether an organization will part ways with the dismissed employee or it will engage itself in a legal battle. One of the solutions to unfair termination is the use of mutual termination agreement before the beginning of contract or employment. It is a procedure in which employer and employee mutually consent to terminate employment agreement because of unavoidable circumstances such as the unfaithful performance of duties and financial crisis in the organization. Termination agreement occurs in writing to provide evidence in case of lawsuits. In that way, issues such as those encountered in the case of Robert in which the workplace lacks legal backing to support court case if Robert presents an issue of discrimination. The workplace should have a policy stating that during hiring, employee consent to the mutual termination agreement to prevent any liabilities that may accrue in case of legal battles by employee challenging a breach of contract. In cases where the organization finds that it has unfairly dismissed an employee, it is important that it compensates him or her to avoid legal battles. A payment that equals the redundancy payment is necessary to cover the employee distress, reputation damage and humiliation. However, such payments are in special cases where the employer terminates an employment contract based on unfounded accusations that damage the person's image in the society.

Works Cited

Equal Employment Opportunity Commission. An Act. 2016. Web. 18 March 2018. <https://www.eeoc.gov/eeoc/history/35th/thelaw/eeo_1972.html>.

Interagency Procurement Working Group. Ethics in Procurement. London: Interagency Procurement Working Group, 2012. Web. <https://www.ungm.org/Areas/Public/pph/ch04s04.html>.

Nadler, Joel T., and Katie M. Kufahl. "Marital Status, Gender, and Sexual Orientation: Implications for Employment Hiring Decisions." Psychology of Sexual Orientation and Gender Diversity (2014): 1(3): 270 -278. http://dx.doi.org/10.1037/sgd0000050. Print.