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Whistle Blowing In The Business Ethics Context Philosophy Essay

3369 words (13 pages) Essay in Philosophy

5/12/16 Philosophy Reference this

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Whistle blowing is the fact of raising a concern about a wrongdoing occurring in an organization. It is also the act of filling actions against federal contractors claiming fraud against the government. The allegations are usually done by a person, the common informer, from this same organization and can be done internally or externally. The unlawful activity can be categorized in many ways; indeed it can be a violation of law, rule, regulation and/or a direct threat to public interest, such as fraud, health/safety violations, and corruption. Whistleblowers usually face reprisal at many levels such as internal harassment from the member of the organization or group which they have accused or a related one, or even under law.

In this case, Siemens¿½ employee Per-Yngve Monsen, tried first to raise the issues internally in 2004 by sending some documents to his bosses at the head-quarter in Germany. This was in accordance with the company¿½s own ethical policy and guidelines and according to Norwegian law, employees¿½ right to freedom of speech includes the right to whistle blowing about business wrongdoing. Moreover, Siemens¿½ ethical guidelines guaranteed anonymity as well as protection from reprisals. However, during an executive meeting, CEO of Siemens Business Services, Ole Morten Skymoen, stated there was a mole within the company that will be found and fired. Monsen then started to raise the issues externally by speaking to journalists and giving information about the bribing and corruption of the Senior Executive of Norwegian Armed Forces (NAF), the overpayment of 50 million NOK from NAF and the money laundering by Siemens to hide this overpayment. The Norwegian tabloid newspaper, Verdens Gang, published these reports in February 2005.

Whistle blowing is also related to the qui tam provisions (cf. the False Claims Act, an American federal law, the Common Informers Act 1951, an Act of the United Kingdom Parliament, and Fritt Ord, a Norwegian foundation to support freedom of expression and a free press).

What counts in favor of whistle blowing? What might count against whistle blowing? What would you to if you were Monsen, facing the prospect of becoming a whistle blower?

First of all, before answering this question, we have to set if being a whistle blower is secure. Depending on the reaction of the organization subject to the allegations, it might not be the safest action. Thus, it takes courage and integrity, qualities sought by an employer, to be the common informer.

The whistle blower will be disturbed around a wrong environment and will feel that the optimal option would be to raise the concern about the wrongdoing, i.e. an unlawful and/or unethical doing. He won¿½t allow intimidation tactics to sway him from appropriate action when necessary. He will be marked as a reliable person, truthful and who has fortitude to do the right thing no matter what and that can be trusted when dealing with honesty. Those qualifications are wanted in a working environment where having a clear conscience motivates many to step up against a wrongdoing. Moreover, it can be very gratifying to blow the whistle, even more when the claims are corroborated. However, the whistleblower can benefit from more that personal gratification. Indeed, in qui tam cases, the authority can decide to give whistleblowers a share of the recoveries resulting from their lawsuits to encourage others to step forward and also take the risks involved in reporting fraud.

On the other hand, it can sometimes result in serious troubles and hassle and is not something to take lightly. As said previously, the uncovered organization, or a related one, can take actions at many levels such as internal harassment, legal actions or even worst, direct intimidation or threats towards the family or property of the common informer.

In order to avoid any mistakes and breach in procedures and to be more efficient in the process, the whistleblower will do prior research so that he can approach the right authorities. Moreover, he will be very cautious in order to be sure that his charges are legitimate and that he has some back support. Finally, he will act in a way that the finger pointed organization can fix things and do the right action.

Repercussions won¿½t necessarily be of a life-threatening level but at least, the benefits of blowing the whistle will help keep a peace of mind, which is more important than money and jobs.

Jeffrey Wigand, arguably the most famous whistleblower, endured harassment and death threats for exposing the Big Tobacco practice of ¿½impact boosting¿½. Ultimately, Jeffrey got his story out on 60 Minutes and in the film The Insider.

Although it is a tough to blow the whistle on an employer, the False Claims Act provides the necessary amount of compensation for taking such a difficult step. It is good to know that, in this case, the government is on your side. However, it is not a light decision to take. Indeed, while it can be rewarding on several levels (financial, moral and ethical), it is also very stressful and can get you feel isolated and anxious as dealing with important corporate interests and under court seal. Therefore, the whistleblower cannot disclose any information to anyone so that the authorities can investigate with a maximum discretion. In addition, once the research is complete and the case unsealed, the whistleblower identity becomes public and this can have second effect on his employment, social activities and more.

It is therefore an important decision, and the whistleblower should first assure that all his queries and worries are settled and answered before he takes it.

IN FAVOR AGAINST

Respects of moral values It can be armful to the reputation of the company but also to the its survival

In a long term it will reduce the illegal activities in the companies It can affect the working atmosphere within the company

On a personal point of view, the employee can be rewarded by the company The whistle blower can be seen as the mole and as someone acting against the company¿½s goals.

To work in agreement with one¿½s own virtues The Whistle blower can be fired or can quit his job

+ been seen as moral for the following jobs – Seen as whistle blower

How (if at all) did integrity play a role in the case?

The integrity of the companies is essential to the vitality of the markets and to the stability of our economies. A good company government ¿½ the rules and practices that govern the relations between the leaders and the shareholders of the company and the other stakeholders ¿½ is necessary for the growth and the financial stability. Indeed, it enables to reinforce the confidence, the integrity of the capital market and the economical efficiency. The recent scandals that have occurred in big firms have attracted the attention of the governments, the authorities of control, the societies, the investors and the general public on the weaknesses of the company government regimes and on the necessity to settle this issue.

In the case of the whistle blower in Siemens, we can see that the lack of integrity inside the company and particularly inside the company government has totally destabilized the growth and probably the stability of the markets. We can only applaud the courage of Monsen who has spent his integrity above all.

If we define integrity as to be conform as what we really are, the integrity of Monsen is full. Indeed he reacted spontaneously. He has done what he thought was the best to do. ¿½His first reaction was to try to raise the issues internally in Siemens. In January 2004 he sent a large package of documentation to his bosses at the headquarters in Germany¿½.

If we speak about integrity as we speak about honesty, we can say that Monsen has tried to be honest by revealing the illegal facts that have happened inside the society. He could have gone deeper in the honesty without concealing at the beginning that he was the whistle blower. But it is hard to blame him for this and he was in accordance with the anonymity protection.

The thing is that the goal of Monsen ¿½ which is to help the company to fight against corruption ¿½ and the goal of the company seem totally different. Integrity is a prerequisite for all organization that wants to fight corruption. Struggle against corruption and promotion of integrity inside the organization are essential to create a culture of the company and to enable an economic growth. Here the firm¿½s government does not want the company to be transparent at least for the moment.

When it comes to the theory, we can definitely bring closer integrity with the concept of Deontology. One of the definitions of this theory could be the following one: ¿½Integrity is a moral theory that emphasizes ones duty to do a particular action because the action itself is inherently right and not the result of any calculation about the consequences of the action¿½. Monsen here, made really no calculation in his action. He didn¿½t thought about what could happen if the company fights against him. And after he faces a difficult situation: ¿½Surrounded by critical questions, Monsen panicked. He felt forced into a corner and did not know what to do. So he denied all the allegations, saying he did not know anything whatsoever about the matter.¿½ Here, he lost his integrity because he saw that it was playing against him.

This theory of Deontology can be opposed to the utilitarianism theory which is orientated towards the consequences of an action.

How (if at all) did truth and the virtue of truthfulness play a role?

It is quite easy to define the truth: it is the conformity to fact or actuality. The main ethical question concerning the truth is to know what to do when we know the truth. Do we have the right to remain silent when we know it? This raises the question of the lie by omission. Is it legitimate, moral to lie by omission or is it a duty to always tell the truth?

The Christian tradition condemn all kind of lie even the lie by omission. It is consider a sin. In the religion, truthfulness leads to righteousness, and righteousness leads to Paradise. Moreover many philosophers have the same idea. Especially Kant who believes that we always should tell the truth. In this case, the virtue of truth is connected to sincerity, honesty, good faith.

But there is also a more moderate thinking that allows lie in some cases. For instance, Vladimir Jankelevitch wrote: ¿½Woe betides the bullies who always tell the truth¿½. In other words, he explains that we have to tell the truth if by telling this truth we do not betray another higher, more urgent virtue.

Usually the conclusion of this debate is that there are two kinds of truth: truths that we have to tell and truths that we can keep for us under some circumstances.

Now, if we move this debate to our case it appears that truth and the virtue of truthfulness played a core role. Actually, it is the starting point of the story because without it, the whole story would not have happened. When Monsen discovered the fraud he thought it was a truth he had to tell, it was a moral duty to alert his superiors.

Without it, Monsen wouldn¿½t have raised the problem, the company wouldn¿½t have try to fire the whistle blower and the reputation of the company wouldn¿½t have been tarnished by this all story. In fact, the virtue of truthfulness was above all for Monsen because he acted as if it was normal, without really thinking about the consequences of its acts. Moreover, Monsen did not only tell the truth to his superiors, he fought in order that everyone discovered the truth. Virtue of truthfulness is also to be honest with oneself, we know what we know not less not more. We must not conceal to oneself what we know and we have to look after the right information.

On the other hand, there are all the persons who know about the fraud and want to hide it in order to preserve their own interests. And the few people aware about the fraud put pressure on Monsen because they do not want the truth to come out.

That is the conflict around the truth in this case: a single employee is the only person in the company who wants to reveal the truth. And this man is subjected to high pressure from all his superiors and bosses who, of course, want to hide the truth.

Finally we will consider the theory of personal virtues: ¿½Never take any action which is not honest, open, and truthful and which you would not be proud to see reported widely in national newspapers and on network television programs¿½.

According to this theory, we can assume that Monsen believes in the virtue of truthfulness, honesty and that he is proud of his action, proud to be a whistle blower and if he had to do it again he would do it. For him, the most important was to expose the truth.

But all employees and bosses part of the fraud do not respect this theory. Indeed, they take dishonest, untruthful actions that no one can be proud of. And once the public opinion will learn about it in newspapers or on TV, they will feel shame, they will have to apologize.

How (if at all) did consequences play a role?

Every action raises the question of consequences. The problem is that they are not one hundred percent predictable. Before acting, we subconsciously weigh up the pros and cons of the action. To understand the role of consequences in this case, we will first focus on different theories.

Consequentialism is the view that normative properties depend only on consequences. This general approach can be applied at different levels to different normative properties of different kinds of things, but the most prominent example is consequentialism about the moral rightness of acts. Thus, from a consequentialist standpoint, a morally right action is one that produces a good outcome, or consequence. This view is often expressed as the aphorism “the ends justify the means”. That is why it is usually opposed to the theory of deontology which argues that we have a duty to perform or refrain from certain types of actions and that this duty derives from the nature of the act itself, rather than from the consequences produced by the action. There are different varieties of consequentialism but the most famous one is utilitarianism. This theory is often summed up by the common slogan ¿½the greatest good for the greatest number¿½.

But those theories raise the question of valuation of consequences. What is a good consequence? Who should judge consequences? Consequences for whom?

According many theories, an action is good when it results in an increase in pleasure. There are some slight differences because sometimes it has to result in an increase in pleasure for the greatest number (theory of utilitarianism).

But the main difference that can be made is for the last question: consequences for whom? Indeed, there are two completely different points of view. The first is agent-focused: the person acts for ends in which he has some personal interest or motivation. The second is agent-neutral: he acts for ends perhaps disconnected from his own interests and motivation.

This is of course also connected to the theories of ethical egoism and altruism.

In our case, consequences played a huge role but not as we could have expected after focusing on these theories. As we already wrote before, consequences are unforeseeable and therefore Monsen could not predict exactly what would happened after he blew the whistle. The company could have tried to settle the problem internally and reward Monsen for instance. The hardest to predict for him was to know who would be on his side (i.e. number of allies) and this has a tremendous impact on the consequences. Indeed, if his superiors and bosses at the headquarters were not part of the fraud, the consequences would have been completely different.

But on the other hand, if we focus on Monsen, it is not sure that consequences played an important role for him. He found out a fraud and he denounced it, without taking consequences into account: consequences did not play a big role in the process of action. Monsen was probably not thinking to utilitarianism, he did not want the greatest good for the greatest number. He wanted the truth to come out. Because if he had thought to the consequences it is not sure that he would have acted. He can be considered agent-neutral as he was not acting for his own interests.

But consequences had an important role afterwards. It is because of the consequences that this story ended on TV, in the newspapers and that we are writing a business ethics paper on it.

What role did corruption, bribery, and fraud play in the case? Explain, in terms of one or more ethical theories, why corruption, bribery, and fraud may be problematic. Use ethical theory to highlight these issues as they appear in the case.

Fraud is the starting point of the case. Per Monsen, employee at Siemens, discovered a fraud in the company; ¿½he found evidence suggesting that Siemens was swindling the Norwegian Armed Forces for tens of millions (NOK)¿½. Then he had a choice to make. Remain silent or tell someone about the fraud. If we have a look at the definition of Fraud we can easily identify that Siemens was trying to bribe the Norwegian Armed Forces. According to The American Heritage Dictionary of the English Language, a fraud is ¿½a deception deliberately practiced in order to secure unfair or unlawful gain¿½.

Further in this case Monsen realized that he was not the only person to be aware about this fraud but that he was the only one who should not be aware of it. It underwent some pressure from some persons to keep the situation under silence and then to quit his job. As often in such situations whistle blower is subjected to blackmails. Siemens proposed to offer him three months of wage after his resignation. So in a way they try to corrupt him not to deliver the information.

Regarding the ethical theories, this kind of behavior is totally in contradiction with all of them:

Deontology theory: It is obvious that corruption goes against integrity and against any visceral (deep rooted) behavior. The theory of deontology supposes you do an action because it is inherently good. When it comes to corruption, an individual is influenced by an outside event or person that urges him/her to act. For instance, here Siemens try to put pressure on him to influence him in his choice.

Utilitarianism suggests the greatest good for the greatest number. Corruption only benefits to a little minority of people.

Before acting you have to think to the consequences¿½

According to the Personal virtue theory, corruption fraud and bribery are problematic because nobody wants the other to know that you cheat on another person or organization. Moreover, those notions are obviously in contradiction with honesty and truthfulness.

Ethical intuitionism defends the adage ¿½look before you leap¿½ in the sense that one should think before acting. Clearly, Monsen didn¿½t thought of anything when he decided to reveal the corruption. It is self-evident ethical truth to condemn fraud, corruption.

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