Business Ethics Essay, Research Paper
Business Ethics
>From a business perspective, working under government contracts can be a
very lucrative proposition. In general, a stream of orders keep coming in,
revenue increases and the company grows in the aggregate. The obvious downfalls
to working in this manner is both higher quality expected as well as the
extensive research and documentation required for government
contracts. If a part fails to perform correctly it can cause minor glitches
as well as problems that can carry serious repercussions, such as in the
National Semiconductor case. When both the culpable component and company are
found, the question arises of how extensive these
repercussions should be. Is the company as an entity liable or do you look
into individual employees within that company? From an ethical perspective one
would have to look at the mitigating factors of both the employees and their
superiors along with the role of others in the failure of these components. Next
you would have to analyze the final ruling from a corporate perspective and then
we must examine the macro issue of corporate responsibility in order to attempt
to find a resolution for cases like these.
The first mitigating factor involved in the National Semiconductor case is
the uncertainty, on the part of the employees, on the duties that they were
assigned. It is plausible that during the testing procedure, an employee couldn?t
distinguish which parts they were to test under government standards and
commercial standards. In some cases they might have even been misinformed on the
final consumers of the products that they tested. In fact, ignorance on the part
of the employees would fully excuse them from any moral responsibility for any
damage that may result from their work. Whether it is decided that an employees
is fully excused, or is given some moral responsibility, would have to be looked
at on an individual basis.
The second mitigating factor is the duress or threats that an employee might
suffer if they do not follow through with their assignment. After the bogus
testing was completed in the National Semiconductor labs, the documentation
department also had to falsify documents stating that
the parts had surpassed the governmental testing standards. From a legal and
ethical standpoint, both the testers and the writers of the reports were merely
acting as agents on direct orders from a superior. This was also the case when
the plant in Singapore refused to falsify the documents
and were later falsified by the employees at the have California plant before
being submitted to the approval committees (Velazquez, 53). The writers of the
reports were well aware of the situation yet they acted in this manner on the
instruction of a supervisor. Acting in an ethical
manner becomes a secondary priority in this type of environment. As stated by
Alan Reder,… if they [the employees] feel they will suffer retribution, if
they report a problem, they aren?t too likely to open their mouths. (113). The
workers knew that if the reports were not falsified
they would come under questioning and perhaps their employment would go into
jeopardy. Although working under these conditions does not fully excuse an
employees from moral fault, it does start the divulging process for determining
the order of the chain of command of superiors and it helps to narrow down the
person or department that issued the original request for the unethical acts.
The third mitigating factor is one that perhaps encompasses the majority of
the employees in the National Semiconductor case. We have to balance the direct
involvement that each employee had with the defective parts. Thus, it has to be
made clear that many of the employees did not
have a direct duty with the testing departments or with the parts that
eventually failed. Even employees, or sub-contractors, that were directly
involved with the production were not aware of the incompetence on the part of
the testing department. For example, the electrical engineer that
designed the defective computer chip could act in good faith that it would be
tested to ensure that it did indeed meet the required government endurance
tests. Also, for the employees that handled the part after the testing process,
they were dealing with what they believed to be a component that met every
governmental standard. If it was not tested properly, and did eventually fail,
isnt the testing department more morally responsible than the designer or the
assembly line worker that was in charge of installing the chip? Plus, in large
corporations there may be several testing departments and is some cases one may
be held more responsible than another depending on their involvement. A process
like this can serve the dual purpose of finding irresponsible employees as well
as those that are morally excused.
The fourth mitigating factor in cases of this nature is the gauging of the
seriousness of the fault or error caused by this product. Since National
Semiconductor was repeatedly being reinstated to the listed of approved
government contractors, one can safely assume that the level of seriousness, in
the opinion of For the contractor approval committees, is not of monumental
importance. Yet one has to wonder how this case would have been different if the
lack of testing did cause the loss of life in either a domestic or foreign
military setting. Perhaps the repercussions would have come faster much more
stringent. The fact that National Semiconductor did not cause a death does not
make them a safe company. They are still to be held responsible for any errors
that their products cause, no matter the magnitude.
As for the opposition to the delegating of moral responsibility, mitigating
factors and excusing factors, they would argue that the entity of the
corporation as a whole should be held responsible. The executives within a
corporation should not be forced to bring out all of the employees responsible
into a public forum. A company should be reprimanded and be left alone to carry
out its own internal investigation and repercussions. From a business law
perspective this is the ideal case since a corporation is defined as being a
separate legal entity. Furthermore, the opposition would argue that this
resolution would benefit both the company and the government since it would not
inconvenience either party. The original resolution in the National
Semiconductor case was along these lines. The government permanently removed
National from its approved contractors list and then National set out to
untangle the web of culpability within its own confines. This allowed a
relatively quick resolution as well as the ideal scenario for National
Semiconductor. In response, one could argue that the entity of a corporation has
no morals or even a concept of the word, it is only as moral and ethical as the
employees that work in that entity. All of the employees, including top ranking
executives are working towards advancing the entity known as their corporation (Capitman,
117). All employees, including the sub-contractors and assembly line workers,
are in some part morally responsible because they should have been clear on
their employment duties and they all should have been aware of which parts were
intended for government use. Ambiguity is not an excusing factor of moral
responsibility for the workers. Also, the fact that some employees failed to act
in an ethical manner gives even more moral responsibility to that employee.
While some are definitely more morally responsible than others, every employee
has some burden of weight in this case. In fact, when the government reached a
final resolution, they decided to further impose repercussions and certain
employees of National Semiconductor were banned from future work in any
government office (Velazquez, 54). Looking at the case from the standpoint of
National Semiconductor,
the outcome was favorable considering the alternate steps that the government
could taken. As explained before, it is ideal for a company to be able to
conduct its own investigation as well as its own punishments. After all, it
would be best for a company to determine what specific
departments are responsible rather than having a court of law impose a burden
on every employee in its corporation. Yet, since there are ethical issues of
dishonesty and secrecy involved, National Semiconductor should have conducted a
thorough analysis of their employees as well as their own practices. It is
through efforts like these that a corporation can raise
the ethical standard of everyone in their organization. This case brings into
light the whole issue of corporate responsibility.
The two sides that must ultimately be balanced are the self interests of the
company, with main goal of maximum profit, and the impacts that a corporation
can cause on society (Sawyer, 78). To further strengthen this need, one could
argue that there are very few business decisions that do not affect society in
way or another. In fact, with the plethora of corporations, society is being
affected on various fronts; everything from water contamination to air bag
safety is a concern. The biggest problem that all of us must contend with is
that every decision that a business makes is gauged by the financial
responsibility to their corporation instead of their social responsibility to
the local community, and in some cases, the international community. This was
pointed out on
various occasions as the main reason why National Semiconductor falsified
their reports. The cost that the full tests would incur did not outweigh their
profit margins. Their business sense lead them to do what all companies want..
. maximum profit. In the opinion of the executives,
they were acting in a sensible manner. After all, no executive wants to think
of themselves as morally irresponsible. (Capitman, 118). The question that
naturally arises, in debating corporate responsibility, is what types of checks
and balances can be employed within a company to ensure that a corporation and
all of its agents act in an ethical manner.
Taking the example of the National Semiconductor case, one can notice many
failures in moral responsibility. National Semiconductor would have to review
its employees, particularly the
supervisors, for basic ethical values such as honesty. example, ultimately it
was the widespread falsification of the testing documentation that caused the
downfall of National Semiconductor, not the integrity of their components. In
the synopsis of the case it is never mentioned that the
employees initiated this idea, it would seem that it was the supervisors that
gave the order to falsify the documents. In order to accomplish this, the
company executives would have to encourage their employees to voice their
concerns in regards to the advancement of the company. Through open
communication, a company can resolve a variety of its ethical dilemmas.
As for the financial aspects of the corporation, it has to decide whether the
long term effects that a reprimand from the government can have outweighs their
bottom line. In other words, corporations have to start moving away from the
thought of instant profit and start realizing both
the long term effects and benefits. These long term benefits can include a
stronger sense of ethics in the work force as well as a better overall society.
To conclude, I must say that I agree with the use of mitigating factors in
determining moral responsibility. A company, as defined by law,
is only a name on a piece of paper. The company acts and conducts itself
according to the employees that work in that entity. I use the word employee
because in ethical thinking there should be no distinction of rank within a
company. There are times when executives can be held
directly responsible and at the same time, there are cases where employees
are acting unethically without the executives knowing. Neither title of
executive or employee equates to moral perfection. Therefore, when a company has
acted irresponsibly, its employees must be held liable in a proportionate
amount. As for the future of ethics in business I would speculate that if
employees started to think more in long term benefits and profits, many of the
ethical dilemmas that we face today would be greatly reduced. As mentioned
before, businesses today uses the measuring stick of profitability. There needs
to be a shift to the thinking of total utility for the social community in order
to weigh business decisions. Opponents would argue that this is a long term plan
that require too many radical changes in the face of business. Also, there is no
way that an industry wide standard can be set since there are too many types of
corporations. Plus, companies have different needs and every moral rule is
subjective according to the type of business that everyone conducts.
In response, I would argue that although there are no industry standards that
are feasible, it is possible for every company to examine their practices as
well as the attitude of their employees. There will be companies that find that
they are doing fine with employees that are aware
of their moral values. Yet other companies will find that they do have areas
that need improvement. It is steps like these that start implementing changes.
Once a few companies start to see the benefits of changes, it can help to
encourage other companies to follow suit. After
all, as seen in the case of National Semiconductor, mistakes in one
department can cause the deterioration of an entire corporation. When the costs
that are possible are taken into account, the changes required to rectify this
are small in comparison.
Capitman, William. 1973. Panic In the Boardroom. New York:
Anchor Press-DoubleDay Publishing
Harris, Kathryn, Chips Maker Feels Attack on Four Sides Los Angeles Times
April 4, 1982. Pg. B1
Pava, Moses. 1995. Corporate Responsibility and Financial Performance.
London Quorum Books
Reder, Alan. 1944. In Pursuit of Principle and Profit. New York:
G.P. Putnams Sons Publishing
The words «ethical,» «moral,» and «legal» are
often misunderstood and misused. The terms are similar in that each refers to a
human behavioral code. Human behavior is complex and thus no one term is
sufficient to describe it. Ethical, moral, and legal issues also intertwine to
create our entire understanding of behavior as it relates to our sense of right
and wrong.
To further complicate matters, each civilization and culture (past and
present) has its own of what is ethical, moral, or legal. Therefore, one cannot
arrive at a simple, clear definition of what each term means. The
«meaning» of the terms is often dependent upon who is defining them.
Ethics
Many people who write about ethics use the term when referring to the most
general codes by which humankind lives; that is, those codes of behavior that,
for the most part, transcend time, culture, and geography. In simple terms,
ethics is the study of people’s concept of right and wrong.
Therefore, we use the word «ethical» when we are speaking of that
general code of right and wrong recognize by enlightened civilizations from the
beginning of time. When we ask the question «Was that act or decision
ethical?» we are asking if it meets the test of what is accepted as
universally right. Writers suggest that we consider such basic concepts as
honestly, fairness, and compassion as universal ethical values.
Morals
The term «moral» speaks to issues that concern a community of
people rather than humankind in general. The study of morals also concerns
itself with right and wrong but more directly in terms of specific groups of
people. One may consider morals as specific rules of right and wrong based on
universal ethical truths.
Thus, we use this word «moral» when we refer to behavior that may
be acceptable for one society but not for another. Some people consider as moral
issues such things treatment for children, the aged, animals, and the
environment along with questions about marriage and other human relationships.
(Purple, 1989, 66)
Legal
Just as moral can be seen as more specific than ethical, legal is seen as the
most specific of the three terms. Laws are codified behaviors for members of
society enacted by a specific lawful authority. (Gifts, 1991) The law may have
as its foundation moral rules and ethical truths, but it is closely allied with
politics. As a result, it suffers from greater subjectively than do ethics and
morals. Laws differ not only from society to society but also from town to town.
What is legal in Los Angeles, for example, may be punishable in Portland. Laws
are more temporary than morals of ethics, often changed by simple majority vote
or by decree.
We use the word «legal» when judging an act by the most specific
set of local laws that have been codified by local authority. Issues as
universal as theft and as specific as jaywalking are subject to local law.
(Elliott, 1992, 28-35)
The terms «ethical,» «moral,» and «legal» are
similar in the sense that each refers to the interpretation of right and wrong.
Their differences depend upon how explicit and specific a description we use to
interpret a set of behaviors.
Business Ethics
>From a business perspective, working under government contracts can be a
very lucrative proposition. In general, a stream of orders keep coming in,
revenue increases and the company grows in the aggregate. The obvious downfalls
to working in this manner is both higher quality expected as well as the
extensive research and documentation required for government contracts. If a
part fails to perform correctly it can cause minor glitches as well as problems
that can carry serious repercussions, such as in the National Semiconductor
case. When both the culpable component and company are found, the question
arises of how extensive these repercussions should be. Is the company as an
entity liable or do you look into individual employees within that company? From
an ethical perspective one would have to look at the mitigating factors of both
the employees and their superiors along with the role of others in the failure
of these components. Next you would have to analyze the final ruling from a
corporate perspective and then we must examine the macro issue of corporate
responsibility in order to attempt to find a resolution for cases like these.
The first mitigating factor involved in the National Semiconductor case is
the uncertainty, on the part of the employees, on the duties that they were
assigned. It is plausible that during the testing procedure, an employee couldnt
distinguish which parts they were to test under government standards and
commercial standards. In some cases they might have even been misinformed on the
final consumers of the products that they tested. In fact, ignorance on the part
of the employees would fully excuse them from any moral responsibility for any
damage that may result from their work. Whether it is decided that an employees
is fully excused, or is given some moral responsibility, would have to be looked
at on an individual basis.
The second mitigating factor is the duress or threats that an employee might
suffer if they do not follow through with their assignment. After the bogus
testing was completed in the National Semiconductor labs, the documentation
department also had to falsify documents stating that the parts had surpassed
the governmental testing standards. From a legal and ethical standpoint, both
the testers and the writers of the reports were merely acting as agents on
direct orders from a superior. This was also the case when the plant in
Singapore refused to falsify the documents and were later falsified by the
employees at the have California plant before being submitted to the approval
committees (Velazquez, 53). The writers of the reports were well aware of the
situation yet they acted in this manner on the instruction of a supervisor.
Acting in an ethical manner becomes a secondary priority in this type of
environment. As stated by Alan Reder,… if they [the employees] feel they
will suffer retribution, if they report a problem, they arent too likely to open
their mouths. (113). The workers knew that if the reports were not falsified
they would come under questioning and perhaps their employment would go into
jeopardy. Although working under these conditions does not fully excuse an
employees from moral fault, it does start the divulging process for determining
the order of the chain of command of superiors and it helps to narrow down the
person or department that issued the original request for the unethical acts.
The third mitigating factor is one that perhaps encompasses the majority of
the employees in the National Semiconductor case. We have to balance the direct
involvement that each employee had with the defective parts. Thus, it has to be
made clear that many of the employees did not have a direct duty with the
testing departments or with the parts that eventually failed. Even employees, or
sub-contractors, that were directly involved with the production were not aware
of the incompetence on the part of the testing department. For example, the
electrical engineer that designed the defective computer chip could act in good
faith that it would be tested to ensure that it did indeed meet the required
government endurance tests. Also, for the employees that handled the part after
the testing process, they were dealing with what they believed to be a component
that met every governmental standard. If it was not tested properly, and did
eventually fail, isnt the testing department more morally responsible than the
designer or the assembly line worker that was in charge of installing the chip?
Plus, in large corporations there may be several testing departments and is some
cases one may be held more responsible than another depending on their
involvement. A process like this can serve the dual purpose of finding
irresponsible employees as well as those that are morally excused.
The fourth mitigating factor in cases of this nature is the gauging of the
seriousness of the fault or error caused by this product. Since National
Semiconductor was repeatedly being reinstated to the listed of approved
government contractors, one can safely assume that the level of seriousness, in
the opinion of For the contractor approval committees, is not of monumental
importance. Yet one has to wonder how this case would have been different if the
lack of testing did cause the loss of life in either a domestic or foreign
military setting. Perhaps the repercussions would have come faster much more
stringent. The fact that National Semiconductor did not cause a death does not
make them a safe company. They are still to be held responsible for any errors
that their products cause, no matter the magnitude.
As for the opposition to the delegating of moral responsibility, mitigating
factors and excusing factors, they would argue that the entity of the
corporation as a whole should be held responsible. The executives within a
corporation should not be forced to bring out all of the employees responsible
into a public forum. A company should be reprimanded and be left alone to carry
out its own internal investigation and repercussions. From a business law
perspective this is the ideal case since a corporation is defined as being a
separate legal entity. Furthermore, the opposition would argue that this
resolution would benefit both the company and the government since it would not
inconvenience either party. The original resolution in the National
Semiconductor case was along these lines. The government permanently removed
National from its approved contractors list and then National set out to
untangle the web of culpability within its own confines. This allowed a
relatively quick resolution as well as the ideal scenario for National
Semiconductor.
In response, one could argue that the entity of a corporation has no morals
or even a concept of the word, it is only as moral and ethical as the employees
that work in that entity. All of the employees, including top ranking executives
are working towards advancing the entity known as their corporation (Capitman,
117). All employees, including the sub-contractors and assembly line workers,
are in some part morally responsible because they should have been clear on
their employment duties and they all should have been aware of which parts were
intended for government use. Ambiguity is not an excusing factor of moral
responsibility for the workers. Also, the fact that some employees failed to act
in an ethical manner gives even more moral responsibility to that employee.
While some are definitely more morally responsible than others, every employee
has some burden of weight in this case. In fact, when the government reached a
final resolution, they decided to further impose repercussions and certain
employees of National Semiconductor were banned from future work in any
government office (Velazquez, 54).
Looking at the case from the standpoint of National Semiconductor, the
outcome was favorable considering the alternate steps that the government could
taken. As explained before, it is ideal for a company to be able to conduct its
own investigation as well as its own punishments. After all, it would be best
for a company to determine what specific departments are responsible rather than
having a court of law impose a burden on every employee in its corporation. Yet,
since there are ethical issues of dishonesty and secrecy involved, National
Semiconductor should have conducted a thorough analysis of their employees as
well as their own practices. It is through efforts like these that a corporation
can raise the ethical standard of everyone in their organization.
This case brings into light the whole issue of corporate responsibility. The
two sides that must ultimately be balanced are the self interests of the
company, with main goal of maximum profit, and the impacts that a corporation
can cause on society (Sawyer, 78). To further strengthen this need, one could
argue that there are very few business decisions that do not affect society in
way or another. In fact, with the plethora of corporations, society is being
affected on various fronts; everything from water contamination to air bag
safety is a concern. The biggest problem that all of us must contend with is
that every decision that a business makes is gauged by the financial
responsibility to their corporation instead of their social responsibility to
the local community, and in some cases, the international community. This was
pointed out on various occasions as the main reason why National Semiconductor
falsified their reports. The cost that the full tests would incur did not
outweigh their profit margins. Their business sense lead them to do what all
companies want… maximum profit. In the opinion of the executives, they were
acting in a sensible manner. After all, no executive wants to think of
themselves as morally irresponsible. (Capitman, 118).
The question that naturally arises, in debating corporate responsibility, is
what types of checks and balances can be employed within a company to ensure
that a corporation and all of its agents act in an ethical manner. Taking the
example of the National Semiconductor case, one can notice many failures in
moral responsibility. National Semiconductor would have to review its employees,
particularly the supervisors, for basic ethical values such as honesty. example,
ultimately it was the widespread falsification of the testing documentation that
caused the downfall of National Semiconductor, not the integrity of their
components. In the synopsis of the case it is never mentioned that the employees
initiated this idea, it would seem that it was the supervisors that gave the
order to falsify the documents. In order to accomplish this, the company
executives would have to encourage their employees to voice their concerns in
regards to the advancement of the company. Through open communication, a company
can resolve a variety of its ethical dilemmas. As for the financial aspects of
the corporation, it has to decide whether the long term effects that a reprimand
from the government can have outweighs their bottom line. In other words,
corporations have to start moving away from the thought of instant profit and
start realizing both the long term effects and benefits. These long term
benefits can include a stronger sense of ethics in the work force as well as a
better overall society.
To conclude, I must say that I agree with the use of mitigating factors in
determining moral responsibility. A company, as defined by law, is only a name
on a piece of paper. The company acts and conducts itself according to the
employees that work in that entity. I use the word employee because in ethical
thinking there should be no distinction of rank within a company. There are
times when executives can be held directly responsible and at the same time,
there are cases where employees are acting unethically without the executives
knowing. Neither title of executive or employee equates to moral perfection.
Therefore, when a company has acted irresponsibly, its employees must be held
liable in a proportionate amount. As for the future of ethics in business I
would speculate that if employees started to think more in long term benefits
and profits, many of the ethical dilemmas that we face today would be greatly
reduced. As mentioned before, businesses today uses the measuring stick of
profitability. There needs to be a shift to the thinking of total utility for
the social community in order to weigh business decisions.
Opponents would argue that this is a long term plan that require too many
radical changes in the face of business. Also, there is no way that an industry
wide standard can be set since there are too many types of corporations. Plus,
companies have different needs and every moral rule is subjective according to
the type of business that everyone conducts.
In response, I would argue that although there are no industry standards that
are feasible, it is possible for every company to examine their practices as
well as the attitude of their employees. There will be companies that find that
they are doing fine with employees that are aware of their moral values. Yet
other companies will find that they do have areas that need improvement. It is
steps like these that start implementing changes. Once a few companies start to
see the benefits of changes, it can help to encourage other companies to follow
suit. After all, as seen in the case of National Semiconductor, mistakes in one
department can cause the deterioration of an entire corporation. When the costs
that are possible are taken into account, the changes required to rectify this
are small in comparison.