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Current Ethical Issues in Business

Essay by review  •  March 6, 2011  •  Research Paper  •  2,855 Words (12 Pages)  •  3,627 Views

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Current Ethical Issue in Business

Introduction

Ethics and moral obligation are something that we all encounter at one time or another. Even in a professional setting, all persons should act in a manner that would uphold the good of society. Why is it that good, ethical and moral behavior is not always adhered to? Is it because some people do not understand ethics and what it means to be ethical? To be ethical, one has to decide between right and wrong, determine what is for the betterment of society and act accordingly. Ethics have three basic criteria that must be met Ð'- obligations, moral ideas, and consequences (Ruggiero, 2004). Businesses have their own code of ethics and the individuals within that business have to determine whether or not they will follow that code of ethics. Ethical behavior in business is consistent with the principles, norms, and standards of business practice that have been agreed upon by society (Trevino & Nelson, 2004). At times, however, an individual decides to go against the code of ethical behavior for personal gain. This was just the case in the article researched by Team A.

The basis of the conflict.

In the article 2 Free care for UConn official (Knight Ridder Tribune Business News, April 4, 2005), the University of Connecticut Athletic Director, Jeff Hathaway, and his wife each received free cars from a local dealership that does business with the athletic department of the university. The athletic director and his wife were provide the use of the two new cars in exchange for Hathaway's participation in an "advertising campaign" of television and print ads for Monaco, as well as his services as a consultant to the sales and marketing staff. Hathaway and his wife were to receive "unrestricted use" of a Ford 500 and a Ford Freestar minivan for "certain endorsements, marketing advice, and public speaking/motivational sales advice to Monaco Ford Company and its employees. Under a corporate sponsorship agreement the Monaco Ford Company donated $25,000 a year and the use of three "courtesy cars" for Hathaway's staff, in exchange for season tickets to basketball, football and soccer games; reserved parking on campus; and advertising recognition in game programs.

According to the University Of Connecticut policy and the National Collegiate Athletic Associate athletic department officials are allowed to supplement their salaries through outside contracts. But the rules state that the compensation should come from "bona fide" outside employment, in which the officials are "performing services". Public officials are barred for accepting gifts for entities doing business with their agency. Raymond Green, the commission's former interim executive director, stated to Mr. Hathaway that "Your contract with Monaco Ford raises concerns under state ethics laws". Those laws prohibit state employees from deriving private gain by virtue of their public office, or from accepting outside compensation that could impair their independence of judgment on the job. Hathaway's contract also appeared to violate UConn's own ethics policy, which prohibits employees from accepting compensation from any company that holds a contract or agreement with the university. Monaco Ford has been a longstanding sponsor of UConn athletics.

Ground rules.

What are the ground rules for Mr. Hathaway? Ground rules are based the ethical decision-making process and include moral awareness, moral judgment, and ethical behaviors (Trevino & Nelson, 2004). Mr. Hathaway has a responsibility to uphold state ethics laws and the universities own policies. Was Mr. Hathaway aware of the fact that he was committing an act against both sets of laws? Did he feel that accepting the cars and other gifts were acceptable? Mr. Hathaway had been a long time employee with the University of Connecticut athletic department. When interviewed, Mr. Hathaway acknowledged that he has not performed any endorsement services for the car dealership, as called in the contract. This raises further questions to the ethical aspect of the situation as well the legality of the arrangement.

While Mr. Hathaway acknowledges the fact that he took the cars, one has to wonder about his personal ethical beliefs. Did he believe that it was okay to receive gifts for the work that he was supposed to provide and yet supposedly never did? How did the gifts alter the relationship between the car dealership and the university? Did Mr. Hathaway feel that his personal association with the care company is legitimate and appropriate in his position as the athletic director for the university? One has to wonder about Mr. Hathaway's judgment and the reasoning behind his actions.

Mr. Hathaway's ethical behavior seems to be skewed. If he knew upfront that accepting the cars was against the universities policies and the state law of ethics then why did he do it? When interviewed about his decision, Mr. Hathaway has decided to stay out of the controversy. He did state, however, that he planned to end his side of the agreement with the dealership in the coming weeks, to preserve "the university's relations with Monaco. The car dealership spokesperson denied any wrong doing.

Ethical theories.

The theories used in this scenario involved the deontological theory. This theory is based on duty. Deontologist base their decisions about what is right on broad, abstract universal principles or values such as honesty, promise keeping, fairness, loyalty, rights, justice, compassion, and respect (Trevino & Nelson, 2004). Mr. Hathaway was duty-bound to end his contract with Monaco Ford in order to maintain the relationship of the university as well as the athletic department with the car dealer if all parties were acceptable to this arrangement. Another ethical theory that applies is the consequentialist theory in which the consequences are the primary concern. What will happen to Mr. Hathaway if he continues to accept the gifts from the dealership? What actions will the university take to ensure that its policies are maintained? How will the manner be handled by the state ethics committee?

Ethical change, deficiency, or conflict that brought it about

The interests of Hathaway as an Athletic Director are different from the state ethics that governs the university resulting in conflict. On one hand, Hathaway wants to drive the free vehicles without comply with Monaco offer to participate in an advertising campaign on television and print ad for Monaco. This present a conflict as Hathaway under state law is unable

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