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ACCT19083 Corporate Governance And Ethics

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Course Code: ACCT19083
University: Central Queensland University

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Country: Australia

Question:

Describe the ethical issues inherent in bullying and harassment in the workplace. Can bullying be linked to management style? Use the case study to inform your answer.
 What are the ethical issues involved in cases of discipline and dismissal? Make sure that you discuss the rights of employers and employees, and use the case study to support your answer.What are the ethical issues involved with “whistleblowing”? For whistleblowing to be conducted in an ethical manner, how should it be done? Does the case study describe ethical whistleblowing? Explain your answer
Use the AAA Ethical Decision-making model to review the decision by Sally McDow to “blow the whistle”.  Was her decision ethical? Use the facts from the case to support your responses to each step of the AAA model.

Answer:
Introduction:

The consequences of bullying at a workplace like Origin Energy are far fledged. Bullying influences not only the safety, productivity, engagement but also the workplace culture and trust (lawcouncil.asn.au, 2018). A healthy work culture is therefore necessary for defining the long-term success of a business. The section 789FD of Fair Work Amendment Act 2013 defines bullying as a repetition of unreasonable behaviour of an individual or a group towards a worker causing a risk to his/her safety or health. Bullying comprises of a range of behaviour. This includes:
· Screaming, yelling or using offensive language
· Isolation or exclusion of the employees
· Harassing psychologically
· Creation of an ambience of intimidation
· Assignment of meaningless tasks unrelated to job
· Assigning impossible jobs
· Deliberate changing of work rosters for inconvenience of employees
· Undermining of work performance through deliberate withholding of information necessary for work performance
· Involve in continuous  unconstructive criticism
· Overloading of a person with work or allowing insufficient time for its completion followed by criticism of employees.
Given the provisions of section 789FD of Fair Work Amendment Act 2013, there was a persistence of bully culture at Origin Energy where employees faced yelling and abusive behaviour when trying to report illegal activities of the company.
On the other hand, harassment provisions  finds a mention in section 28A of Sex Discrimination Act 1984 that defines sexual harassment as either an unwelcome sexual favour or advances made by a person(Branch, Ramsay & Barker, 2013). Section 18 C of Racial Discrimination Act 1975 includes the provision of harassment as an offensive behaviour rooted in racial hatred. The provision of harassment also finds a mention in Section 25 of Disability Discrimination Act 1992 where it remains prohibited because of the disability of the employee. However some of the workplace harassment includes:
· Describing  insulting jokes in context of specific racial groups
· Sending sexually suggestive or explicit text messages or  emails
· Display of  pornographic or racial screen savers or posters
· Making derogatory taunts or comments about the disability of the person
Given the provisions for harassment, it was found that the Origin Energy employees faced physical intimidation when they tried to raise a voice against serious incidents.
Bullying or harassment in a workplace breaches the duty of care of the employers towards its employees. Persons responsible for such behaviour are liable to face prosecution under Occupation Health and Safety Act 2004.
Bullying is linked to the management style of Origin Energy were the managers undertook a commanding leadership style. This type of management was characterized by leadership practices that not only made the subordinates feel inadequate and uncomfortable but also angry and sad. Here the manager’s leadership style resulted in negative emotions amongst the subordinates (Magee et al., 2017).
Marker’s Comments: The marker will provide feedback here.
Employers possess a legal obligation of providing the employees with necessary written procedures before undertaking the process of dismissal. Transparency and fairness needs to be promoted through the development and usage of the procedures and rules for handling grievances and disciplinary situations that should be presented in writing in a specific and clear manner (James & Carpenter, 2017). If possible, the representative of the employees should be involved in development of the rules and the procedures. Besides, the employees and the managers should remain in a position to understand the procedures and rules. Instances where formal action is required, the reasonable and justified action will solely depend on circumstances related to a particular case. However, disciplinary process will require dealing with the issues in a fairer manner. This includes a number of elements which are as follows:
· Employees and the employers should deal and raise the issues promptly without an unreasonable delay in the decisions, meetings and the confirmation of such decisions
· Employees and the employers should act in a consistent manner
· Employers should undertake carrying out required investigations for establishing facts of a case
· Employers should informed the employees regarding a problem and given the opportunity of putting a case in response before undermining decisions.
· Employees should be accompanied at any disciplinary formal meeting
· Employees can put forward an appeal against any formal decision.
The dismissal law does not allow any unfair dismissal (Howe,  2016). To implement it the employer should provide substantial grounds for dismissing the employees but he should also prove that he acted in a fair manner in handling the dismissal.
In this regard, if one drew the case of Origin Energy, it was clear that there was no amount of ethical issues concerning discipline and dismissal concerning the employers and the employees (Slezak, 2017). In a case meeting comprising of  thirty five managers when Sally McDow, an ex senior manager of the compliance at Origin Energy  was questioned of not reporting serious issues like leaking gas and oils, contamination of aquifers and radioactive material spill, she utterly had a blatant reply mentioning that she only followed instructions. Besides, when she went up to the present president and the chief executive of Business Council of Australia regarding allegations of cover ups he spoke up supporting it as it could lead to political pressure that would finally scrape the project and put further approvals on hold.  Employees at Origin Energy were intimidated in raising their voices. Even, Sally McDow faced with a fate of dismissal when she directly presented a 120-page write up to the board members of Origin Energy, alleging the cover-ups. 
Marker’s Comments: The marker will provide feedback here.
Whistle blowing refers to the act of informing the public or the authorities about the immoral or illegal activities taking place in an organization (Lee & Fargher, 2013). The ethical issues involved in Whistle blowing bring to the forefront conflict between two distinct moral values, loyalty and fairness. More often than not, doing what is just or fair gets into the conflict with showing loyalty. Taken into the extreme from the perspective of loyalty, Whistle blowing involves agonizing the conflicts that involves the violation of the trust of the co-workers involved in the wrongdoing or trying to jeopardize the team status by moving against prevailing winds within the organization thereby resulting in the fostering of unethical behavior (Vandekerckhove, 2016). From ethical perspective, loyalty represents an ethical value that should never find a place above ethical obligation for acting responsibly and holding accountability of one’s actions that included the reporting of wrongdoings in the interest of the stakeholders and the organization. A responsible employee should thus Whistle blow when he/she feels that it can do more harm to the company if he stays silent. Thus, a virtuous whistle blower acts in an ethical manner and is always ready to face the consequences of such actions.
Whistle Blowing can be done in an ethical manner by adopting the following steps(Shaw et al., 2016):
· Collection of evidence in favor of an organization that has intentionally not paid the taxes
· Whistleblower should collect legitimate and concrete documentation of the wrongdoing
· Whistleblower should gather contact information of the parties and names of the parties involved in activities of  wrongdoing
· The  Whistleblower should avoid discussing the case with anyone and keep it under wraps
The case study involved ethical Whistle blowing since it alleged the wrongdoings of Origin Energy in the public interest by mentioning how the company considered it cheaper in paying the fines than complying with the regulations. It also brought to the forefront the deliberate policy of Origin energy in ignoring the leakage of coal seam gas wells along with offshore gas well that kept on leaking for more than a decade. The Whistleblower of the company also mentioned its failure in measuring the gas produce that led to the underpayment of the royalties to Queensland government. Although all claims were either covered up or ignored by the senior management.
Marker’s Comments: The marker will provide feedback here.
The AAA ethical decision-making model also known as American Accounting Association is an outcome of the report put forward by Rockness and Langenderfer in the year 1990. The model consists of a seven-step procedure of decision making by considering ethical issues.  Based on the model it was an ethical decision on part of Sally McDow to blow the whistle (Cianci et al., 2014).
Step 1 of the model involves establishing facts of a case and no ambiguity exists regarding about the issues that are under consideration. On a similar note, McDow blew the Whistle when she had facts to establish the immoral and the unethical activities of the company right from playing ignorant to the gas leakages to deliberate policy of non-compliance with legislative and regulatory non-compliance to employee bullying and overlooking gaps at paying the loyalties.
Step 2 involves the identification of the ethical issues of the case. This includes examination of the facts related to the case and considering the ethical issues that remain at stake. Based on this step, Mc Dow examined that the culture of bullying is forcing many employees to quit the organization (Slezak, 2017). The facts related to the deliberate breaches of the regulatory and legislative obligations left significant gaps in the monitoring equipment used for calculating the payment of the gas royalty to the government. Facts also showed that the cover up acts of the gas leakages led to the one of the most serious explosions at the Beharra Springs Redback South Well that could have resulted in multiple deaths.  Mc Dow also found that the Origin Energy found it cheaper in paying fines instead of complying with legislations that has been a major concern for the community at large.
In Step 3, Mc Dow identified the principles, values and the norms that violated the case.
In Step 4, McDow identified each alternative course of action. This involved mentioning each one of them, without consideration of the principles, norms and the values identified in the third step. This helped in ensuring that each outcome is considered in spite of being either inappropriate or appropriate.
In Step 5 , McDow mentions each case without the consideration of the principles, norms and values identifies in the third step for ensuring and considering each outcome irrespective of whether the outcome is inappropriate or appropriate
In Step 6, McDow considers the consequences of outcome. Each of the outcomes is considered unambiguous such that the ultimate decision is based on the complete recognition and knowledge.
Step 7 is the final step that determines the final decision. McDow took the final decision by blowing a whistle by directly writing to the chairperson thereby presenting a 120-page evidence of the cover-ups.
References:
Lee, G., & Fargher, N. (2013). Companies’ use of whistle-blowing to detect fraud: An examination of corporate whistle-blowing policies. Journal of business ethics, 114(2), 283-295.
Shaw, W. H., Barry, V., Issa, T., Catley, B., & Muntean, D. (2016). Moral Issues in Business (3rd ed.). South Melbourne, VIC: Cengage Learning Australia Pty Ltd.
Vandekerckhove, W. (2016). Whistleblowing and organizational social responsibility: A global assessment. Routledge.
Howe, J. (2016). Rethinking Job Security: A Comparative Analysis of Unfair Dismissal Law in the UK, Australia and the USA. Routledge.
James, C., & Carpenter, D. (2017). Moral Intensity and Individual State Constructs: Maturing Safety Culture through an Ethical Lens.
Slezak, M. (2017). [online] Available at: https://www.theguardian.com/environment/2017/jan/27/origin-energy-ignores-coal-seam-gas-well-leaks-whistleblower-says [Accessed 5 Oct. 2018].
Cianci, A. M., Hannah, S. T., Roberts, R. P., & Tsakumis, G. T. (2014). The effects of authentic leadership on followers’ ethical decision-making in the face of temptation: An experimental study. The Leadership Quarterly, 25(3), 581-594.
Slezak, M. (2017). [online] Available at: https://www.theguardian.com/environment/2017/jan/27/origin-energy-ignores-coal-seam-gas-well-leaks-whistleblower-says [Accessed 5 Oct. 2018].
0
 
 Question: Assume that Origin Energy  does not (or did not) have an effective ethics program at the time of the events described in the case study. Advise Origin Energy  why they should have an ethics program, what needs to be done to make it effective, and what it should contain. Emphasise how an effective ethics program could have prevented the need for a whistleblower to highlight the problems with Origin Energy’s operations. Support your answers with examples from the case study
An effective ethics program enables in communicating the business philosophy of the company to the vendors, employers, investors and customers (Beeri et al., 2013). The ethics program would have helped Origin Energy in strengthening its relationships with not only the customers and employee but also lead to an improvement in the company’s reputation. Although the employees might remain familiar with the informal stance of the ethics of the company but an effective ethics program helps in eliminating any confusion and ensure providing everyone with similar information concerning the ethical behaviour of business. An ethics program would have enabled Origin Energy in providing clear guidelines to the employees regarding the ethical and the acceptable behaviour (Ruiz et al., 2015). Besides, it would have helped the employees in consulting the ethics handbook for answering questions concerning whether an action seems ethical in decreasing misconduct. Nevertheless, appointment of an ethics compliance officer can act as resource to the employees in solving their queries regarding the job functions. Part of the ethics program also ensures that the company would remain in compliance with the regulations and the laws of the industry. Compliance not only helps in boosting the company’s reputation but it also helps the company in saving thousands of dollars in the fines and the legal fees provided the company fails in meeting the necessities of the specific program. An effective ethics program also would help the company in handling compliance in the particular countries and helps the employees across the world in making ethical decision thereby reducing the risk of harm caused to company (Trevino & Nelson, 2016).
An efficient compliance program should adhere to minimum seven requirements that help in promoting organizational culture and ethical conduct thereby ensuring compliance to the law. The seven requirements that makes an ethics program effective are as follows (Weber & Wasieleski, 2013):
· Establishing procedures and  standards for preventing and detecting the  criminal conduct
· Ensuring  that the governing authorities of the company is able to establish reasonable oversight of the procedures and the standards
· Making efforts in keeping the individuals away from holding positions within the organizations especially those known for engaging illegal activities along with an inconsistency of conduct.
· Communication of procedures and standards through employees, agents, training directors and other means
· Auditing and monitoring program for detecting criminal conduct, evaluation of the periodic program and publicizing a system for the reporting of seeking guidance and suspected violations.
· Promoting and constantly enforcing program by means of appropriate discipline and incentives.
· After the detection of the illegal activity taking reasonable steps in responding appropriately and further preventing similar criminal conduct that included the necessary modifications to ethics and the compliance program.
An effective ethics program should contain (Weiss, 2014):
· Vision statement: This helps in defining the most desirable and the long-term state of the organization. The vision allows the managers and the employers the first screening tests for the decisions.
· Values Statement: This defines the universal principles of the expected behaviour. It represents a criterion against which the actions and decisions get evaluated for determining  whether they meet the requirements of the company and the  employees  
· Code of Organizational Ethics: This refers to definitions specific to the organizations of what is required and expected. The code of ethics helps in clarifying the expectations of the organizations. They also define consequences of the failure for meeting the standard.
· Ethics Communication Strategy: This strategy enables the employees in having access to the required information in a usable and timely fashion. It is in fact a means via which the organization is encouraging the employee communication with regard to standards, values and conduct of the members and the organization.
· Rewards and Measurements: In almost all the organizations the employees remains important by virtue based on what the organization rewards and measures.
· Tracking and Monitoring Systems: It remains critical in accessing the extent to which the employees internalize and accept the values and the code of ethics of the organization.
· Periodic Evaluation: It involves the periodic  evaluation of a particular initiative related to the ethics program
An  effective ethics program could have prevented the need of Whistleblower for highlighting the problem in Origin Energy  provided  it had  the following characteristics:
1. Ethics Was Made Portion of Core Organizational Values thereby Encouraging a Culture of Integrity: This would have helped in establishing a code of conduct and also determine the internal policies (Menzel, 2014). For example, it would have prevented Origin Energy in deliberately ignoring the oil leakage and its non compliance with the legislative and regulatory requirements.
3. Creation of Systems and Structures that Visibly Incentivizes and Protect Internal Reporting: This implied being proactive in regard to the adherence to the newer legislative requirements (Yeoh, 2014). For example, implementation of this would have prevented Origin Energy from the failure to comply with regulatory or legal requirements thereby failing in reporting incidents either to the regulators or the official internal system. In fact, this could have prevented whistle blowing against its failure in maintaining the hundreds of gas wells across New Zealand and Australia, plugging of the abandoned wells and the offshore gas well leak into waters of New Zealand.
3. Hiring and Developing Leaders Exhibiting Ethical Behaviour and Influencing Ethical Cultures: Managers, leaders and direct supervisors should represent them not only as role models but become active listeners(Lawrence & Weber, 2014 ). For example, this would have prevented Origin Energy from covering up the illegal activities in the fear of losing projects and further approvals going on hold.
References:
Branch, S., Ramsay, S., & Barker, M. (2013). Workplace bullying, mobbing and general harassment: A review. International Journal of Management Reviews, 15(3), 280-299.
lawcouncil.asn.au (2018). [online] Available at: https://www.lawcouncil.asn.au/policy-agenda/advancing-the-profession/equal-opportunities-in-the-law/bullying-and-harassment-in-the-workplace [Accessed 5 Oct. 2018].
Magee, C., Gordon, R., Robinson, L., Caputi, P., & Oades, L. (2017). Workplace bullying and absenteeism: The mediating roles of poor health and work engagement. Human Resource Management Journal, 27(3), 319-334.
Beeri, I., Dayan, R., Vigoda-Gadot, E., & Werner, S. B. (2013). Advancing ethics in public organizations: The impact of an ethics program on employees’ perceptions and behaviors in a regional council. Journal of Business Ethics, 112(1), 59-78. 
Ethics management for public administrators: Building organizations of integrity. Routledge.
Lawrence, A. T., & Weber, J. (2014). Business and society: Stakeholders, ethics, public policy. Tata McGraw-Hill Education.
Ruiz, P., Martinez, R., Rodrigo, J., & Diaz, C. (2015). Level of coherence among ethics program components and its impact on ethical intent. Journal of Business Ethics, 128(4), 725-742.
Trevino, L. K., & Nelson, K. A. (2016). Managing business ethics: Straight talk about how to do it right. John Wiley & Sons.
Weber, J., & Wasieleski, D. M. (2013). Corporate ethics and compliance programs: A report, analysis and critique. Journal of business ethics, 112(4), 609-626.
Weiss, J. W. (2014). Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.
Yeoh, P. (2014). Whistleblowing: motivations, corporate self-regulation, and the law. International Journal of Law and Management, 56(6), 459-474.

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