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Ethical issue of Employer and Employee Rights

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Ethics is, first of all, a way of thinking; it also is matter of Ethos, participation in a community, a practice, a way of life. Business Ethics is a function of the business ethos. Ethical orientation is not simply a formulation of ideas, but a practice undertaken with understanding management. Holmes (2002) considers ethics as the study of morality through different approaches such as moral philosophy or moral legalism. Moral philosophy takes into account the moral wisdom and value of the role of ethics in daily activities. Moral legalism includes the following principles, of which most standard Western ethical theorists follow (Holmes, 2002) Organizational ethics initiatives have not been effectively implemented by many corporations, and there is still much debate concerning the usefulness of such initiatives in preventing ethical and legal misconduct. In this paper, I will use the 9-point guide to analyse the case ‘A Matter of Principle’ on the book of ‘Ethical Theory and Business’ written by Bowie, T. and Beauchamp, T. (2004).

According to the case, Nancy Smith was hired by a pharmaceutical company as a director of Medical Research. In one of the company’s research projects, Nancy Smith found that the new formula contained saccharin in an amount that was 44 times than that promulgated by the Food and Drug Administration. However, there are no promulgated standards for the use of saccharin in drugs. And it would take at least three months to develop an alternative formula. The company decided to process the existing formula. But Nancy Smith was unwilling to participate in the clinical testing as the saccharin is a possible carcinogen. And she thought the task was unethical. The management gave her a demotion for her being irresponsible, unproductive, and uncooperative with marketing. And then Nancy Smith resigned.

From above review, we could know that it is an issue of Employer and Employee Rights. The key facts are the terms of Nancy Smith’s employment and the ethical aspects of company’s human resource. Right to work is right to freedom. Some questions are raised;

1. Should the company have the right to terminate Nancy only if she refused to take the drug test?

2. Should Nancy Smith have the right to sue for reinstatement to her director position under the circumstances of her resignation?

First, let us have a look on the terms of the Nancy’s employment. It was not fixed by contract and Nancy could be considered to be an ‘at-will’ employee. An ‘at-will’ employee means that an employer may demote or fire an employee at any time for no cause, while an employee may quit her or his job any time without giving any notice. This is a fundamental element for this case. Based on this, the company probably was able to terminate Nancy even she had never been criticsed by supervisors before. Nancy Smith also has the right to sue for reinstatement

Most people would agree that high ethical standards require both organizations and individuals to conform to sound moral principles. However, special factors must be considered when applying ethics to business organizations. First, to survive, businesses must obviously make a profit. Second, businesses must balance their desire for profits against the needs and desires of society. Maintaining this balance often requires compromises or tradeoffs. But in the case, Nancy resigned involuntarily.

Organizational practices and policies often create pressures, opportunities, and incentives that may sway employees to make unethical decisions. Nancy’s responsibilities includes ensuring that the company complies with all laws and regulations for producing safe and efficient medicines as well as following a strong sense of cooperative responsibility in researching and marketing. Occasionally, her responsibilities and duties can conflict with the pharmaceutical’s management who pursue the best business performance.

The ethical issue that Nancy had to face dealt with right at work. Maybe she had to ask herself whether she still wants to work at this company, which she has worked for two years. And she got a great career perspective here. She was promoted to Director from associate director. Or will Nancy maintain her opposition and indicate that the Hippocratic Oath prevent her from giving the formula to old people and children. If she insists the problem, then she would no longer have the trust from company and confidence of director. However, if she keeps quite about the problem, then she would be derelict in her duties for formula case in a manner that is beneficial for the company. She was in dilemma that would jeopardise either the therapeutic principle or her job.

Nancy should have a talk with the management team. She is so far as to say that she does not appreciate the position that the company placed her in, explain why she thought the formula is not fit to children, and why she was unwilling to participate in the test. She should contact in the legal sense, such as use the standard of Food and Drug Administration. Furthermore, Nancy should tell the management that the ‘at-will’ employment now is constrained by Equal opportunities laws, Union agreements, and Unfair dismissal laws. She has the right to protect herself from unfair demotion.

For Nancy, just being a good person and having sound personal ethics may not be sufficient to handle the ethical issues that arise in the workplace. It is important to recognize the relationship between legal and ethical decisions. To address these unique aspects of organizational ethics, society has developed rules–both explicit (legal) and implicit–to guide owners, managers, and employees in their efforts to earn profits in ways that do not harm individuals or society as a whole(Holmes, 2002) Addressing organizational ethics must acknowledge its existence in a complex system that includes many stakeholders. The company could send the formula to a specify government to test if it reaches the industry safety standard.

While the employment at will doctrine is now riddled with exceptions, employers should not dismiss it entirely. While it may be difficult to avoid every claim that a discharge is wrongful, according to Chryssides(1996) employers should take the following steps to avoid wrongful discharge claims:

Make sure that new employees are fully advised before, or at least upon beginning their employment, that it is “at will” and that they may be
discharged at any time. Make sure that all employment manuals, policies, procedural documents, employment application forms and any other documents clearly state that employment is at will. These documents should also be carefully reviewed to make sure that they do not give the impression that an employee may only be discharged for cause.

It is always best to have a legitimate reason for discharge, but do not attempt to create one if it does not exist. Make sure that the reasons for discharge are legal. Where there are problems with employee’s performance or other issues make sure that those are fully documented and the employee is advised.


Ethical considerations are becoming an agenda of mainstream economic institutions. Ethical thinking is ultimately no more than considering oneself and one’s company as citizens of the business community and of the larger society. All of these ethics mention the human nature of doing what is right or moral, regardless of the cultural definitions of values. Both in the long and short run ethical thinking is essential to strategic planning. There is nothing unethical about making money, but money is not the currency of ethical thinking in business.

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