THE UNIVERSITY OF THE WEST INDIES, ST.

AUGUSTINE

MGMT 3035- ETHICS IN BUSINESS

GROUP RESEARCH PAPER

SUMMER 2018

DUE DATE: 6TH JULY, 2018

“Way too Expensive Phone Bill”

Developed by Dr. Ron Sookram

2013

WORD COUNT: 3420

GROUP 6 MEMBERS:
AMRIKA NARINE -815006533
CHELSEA NELSON - 812002191
PEDRIQUE POMPEY - 315100246
SADEEQ MOHAMMED - 814001352
SHANTAL RAMJATTAN - 813000359
 TABLE OF CONTENTS
Page No.

Executive Summary………………………………………………………… 4

Introduction…………………………………………………………………. 5

Literature Review……………………………………...…………………… 6

Analysis and Findings……………………………………………..………… 10

Conclusion………………………………………………..…………………. 14

Lesson Learnt……………………………………….……………………….. 15

References…………………………………………………………………… 16
 EXECUTIVE SUMMARY

An ethical dilemmas is a situation in which there is no obvious right or wrong decision rather
a right or right answer. Dilemmas occur when the decision you must make requires you to make a
right choice knowing full well that you are: leaving an equally right choice undone; likely to suffer
something bad as a result of that choice; contradicting a personal ethical principle in making that
choice; abandoning an ethical value of your community or society in making that choice.
The Code of Ethics states the principles and expectations governing the behaviour of
individuals and organizations in the conduct of internal auditing. It describes the minimum
requirements for conduct, and behavioural expectations rather than specific activities. A code of
ethics is necessary and appropriate for the profession of internal auditing, founded as it is on the trust
placed in its objective assurance about governance, risk management, and control.

Business ethics refers to the established rules and regulation that are used in every
organization to operate their organization activities properly. Business ethics also deals with business
activities, situations, activities and decisions where issues of right or wrong are addressed. In the
20th century, business ethics have turned into an educational subject. Most of the major and
renowned universities have added the topic as their educational subject. Business organization is a
social organization. As a part of the society, they certainly have to follow and maintain such ethics.
This group research paper is entirely based on business ethics theories, ethical decision-making
frameworks and ethical dilemmas.

INTRODUCTION

​Decisions about right and wrong permeate everyday life. Ethics should concern all levels of
life: acting properly as individuals, creating responsible organizations and governments, and making
our society as a whole more ethical. Ethics is sometimes conflated or confused with other ways of
making choices, including religion, law or morality. A salient feature of this case study is its focus on
how Trevor racked up a phone bill of TT$60,000 on personal calls even though Trevor has brought
in so much business in the organisation over the years.
The research question that inevitably arises is whether if Michael will converse with Trevor
about abusing his privileges or if Michael will fire Trevor due to abusing the phone privileges.
Proper discussion will help in making decision for what Michael should do as it can affect the
organization internally and externally, also the reputation of the organization will be at stake.
Supporting theories will be included as it will help in coming up with a final decision that will lead
Trevor’s fate.

​
 LITERATURE REVIEW

“Chase the vision, not the money; the money will end up following you.” –Tony Hsieh, Zappos
​Abusing the organisation's phone for personal benefits is a simple asset misappropriation and
a type of fictitious expense scheme. It can be classified as a crime in which it is a subset of cash
schemes. At the end of the month, an entity's phone statement may include both official business
charges and personal charges. If managers don't detect the personal charges, obviously the entity
unknowingly will pay them and sustain a loss. Abusing the organisation's phone for personal calls is
an unethical behaviour.
When it comes to governing a set of rules, guidelines or principles to adhere in the business
industry, many will agree that it is difficult for everybody to consent on one, due to the complications
of dealing with human nature. Therefore, to a certain degree, the field of business ethics tries to
come up with clarifications to handle problems that surface within the business environment.
According to Brown University (May 2013), ethics can be defined as “Provides a set of standards for
behaviour that helps us decide how we ought to act in a range of situations. In a sense, we can say
that ethics is all about making choices and about providing reasons why we should make these
choices”. With the case study, Michael should incorporate the right decision of what are the ethical
approaches are to be practiced even though that Trevor, his best friend, committed an unethical act.
That is, ethics endows reasons for why something is moral. The term moral can refer to an
individual’s own principles regarding right and wrong. When the law comes into play, as it may face
problematic period enforcing guidelines in important areas and may have challenges in dealing with
new problems.
On the contrary, one should not be tangled with the meaning of morality and ethical theory.
Morality has got to do with principles or rules that are utilized by people to determine between
wrong and right (Jennings, 2008). Meanwhile, ethical theory tends to bestow guidelines that validate
an action to be right or wrong when resolving human conflicts (Jennings, 2008). In accordance to
Status Net, business ethics is a tool an organization uses to make sure managers, employees, and
senior leadership continuously act responsibly in the workplace with internal and external
stakeholders. Which ethical decision-making model is a framework that leaders use to bring these
principles to the company and ensure they are monitored?
There are several ethical theories that can be used to assist leaders in developing ethical
standards in their organisation that the employees would be required to follow. This can aid the
conversation toward employing a model to resolve when someone is in violation of ethics. Many of
these principles were formed by Greek Philosophers who existed long ago, the business leaders are
still utilizing many of them to regulate how they deal with ethical issues and these principles can lead
to a cohesive ethical decision-making model. There are also theories which can explain behaviours
which were identified and were of concern to the company.
Firstly, utilitarian approach is all about equilibrium and this approach attempts to produce the
greatest good with the least extent of harm to those involved. It deals with consequences and
practitioners who practice this method are trying to discover the best ethical approach for the most
people. According to (West, 2004), the utilitarian theory maintain an action which is deemed to be
right or wrong based on the consequences of the action and its influences on majority of the
individuals. This means that an action or practice is ethically truthful when it produces more positive
values in comparison to negative ones to those who are involved. Hence, Trevor knows he is a senior
employee and best performing salesman in the organisation so racking up a phone bill worth
TT$60,000 on personal calls may not been an issue in his perspective. This is because Trevor knows
he is a very hardworking person who works in the best interest for the organisations benefit which is
a good action that many may follow. What Trevor and Michael failed to realized is that many other
employees do look up Trevor since he is well known as one of the best salesman who gets away with
abusing the phone with personal calls worth TT$60,000.
Secondly, agency theory defines the firm as a “nexus of contracts” between different
resources suppliers (Jeensen and Meekling 1976). Two parties are central to agency theory;
principals, who supply capital, and agents, who manage the day to day affairs of the firm. Since the
interests of the agents are not necessarily those of the principal, the organization encounters agency
costs. Agency theory works under the assumptions where there are a low level of trust between
managers and shareholders because it is assumed that men are greedy and seek their own self-
interest. In the case of Trevor it can be seen that he only focus on himself and self-interest. This is
because Trevor thinks only about his benefit and not the expense he racked up that the company now
have to pay. Racking up a bill worth TT$60,000 is a lot of money in which an organisation have to
pay plus other organisation expenses. Trevor is acting on his self-interest and not even considering
the expense he put the company in.
Thirdly, immoral management can be defined as knowing what the correct thing to do is and
doing something that you know is wrong. It is also not following the concept of being moral but
rather ignoring ethics (wisdomjobs.com, 2018). Michael could be faced with the option of covering
for his friend Trevor and by doing this he would be doing the wrong thing even though he know
what is the correct thing to do.
Fourthly, for moral management it takes into consideration ethics in decision making. This
means that you must do the right thing at all times (wisdomjobs.com, 2018). Michael may be put in a
situation where he will have to do the right thing and fire Trevor for breaching company policy and
the code of conduct.
Lastly normative ethics this can be defined as WHAT OUGHT TO BE DONE. This state that
you should do the right thing and that your actions need to be grounded in ethics (Gray, 2014).
Michael in support with this would have to do the correct thing and if that means that he has to fire
Trevor there is no other option as it is what ought to be done.
Subsequently, PLUS Ethical Decision-Making Model is one of the most used and widely
cited ethical models which assist business in their decision making. In creating a clear and cohesive
approach to applying a solution to an ethical problem, the model is solid in a way that it provides the
leader “ethical filters” to make decisions. It knowingly leaves out anything associated to making a
profit so that leaders can emphasis on values in its place of a potential impact on revenue.
The letters in PLUS each stances for a filter that leaders can use for decision-making:
· P – Policies and Procedures:
Is the decision in line with the policies laid out by the company?
· L – Legal:
Will this violate any legal parameters or regulations?
· U – Universal: How does this relate to the values and principles established for the
organization to operate? Is it in tune with core values and the company culture?
· S – Self:
Does it meet my standards of fairness and justice? This particular lens fits well with the virtue
approach that is a part of the five common standards mentioned above.
These filters can even be useful to the procedure, where leaders have a clear ethical framework
alongside the way. In defining the issues automatically entails leaders to understand if it is violating
any of the PLUS ethical filters. It can also be utilized to evaluate the viability of any decisions that
are being contemplated for application, and make a decision about whether the one that was selected
resolved the PLUS considerations questioned in the first step. No model is perfect, but this is a
principle way to reflect four vital components that have a considerable ethical impact.

ANALYSIS & FINDINGS

Beginning the case is the information that Trevor has accumulated a personal phone bill of $60,000
on his corporate phone. The boss has stipulated that this is a breach of the company’s policy and
code of conduct and demands that the sales manager handle the situation. The large expense has
already been categorized as personal phone calls, which can be determined through a review of the
employee’s phone bill. Thus, one should ask if an investigation was conducted. If yes, then how in
depth was it? Working under the assumption that the bill was accumulated in a short period of time
one should ask Trevor what constituted the increase in personal calls compared to previous months
or reports.
As a result of the little information given in the case there is a lot that must be learnt before the
sales manager comes to a decision. This includes determining the reasons for the calls and the length
of time taken for the bill to be accumulated. Was this a continuous habit of Trevor? Or was there
some situation that constituted the large phone bill? This could be compared to the case of former
Tourism Minister of Trinidad and Tobago Shamfa Cudjoe’s accumulation of a phone bill of $59,000
over a four day period on her ministry issued phone. However, after investigation the bulk of the bill,
$50,616.61, was charged in overseas data roaming charges. This was understandably in use for
remaining accessible and conducting continuous business.
Next to consider is Trevor’s history with following protocol and receiving disciplinary action.
Has Trevor ever had to be reprimanded for past actions before? Or is this his first offense? Trinidad
and Tobago’s law system permits employees who have been immediately dismissed to launch a legal
case against the company for wrongful dismissal. This is because before dismissal the company must
follow the steps of natural justice. This supports that all employees has the right to fairness, through
the company conducting the steps of organizing an official investigation and offering the accused
employee the chance to defend or explain himself. Also, before dismissal companies are supposed to
issue warnings or suspensions especially if it is the first time offense of an employee unless dismissal
is due to criminal offenses.
Lastly, Michael made a note to the role of Trevor especially that of having the most profitable
accounts, and this is a matter to consider as well. Is it possible to transfer Trevor’s accounts to other
sales personnel? Or is it that there is an avenue for Trevor to poach clients from the company after
dismissal and possibly finding another job? Depending on the type of industry senior employees
when leaving their current company can persuade clients to follow them to their next job. The
promise of incoming clients would also be a bargaining chip for Trevor to find a job in a competing
company faster. Unless, the organisation have policies barring this from happening this is a
possibility.
Michael, when told to deal with the matter, stated that he needed time to think to make a decision
beneficial for everyone. This may be an indication that he plans on utilizing the utilitarian approach
for decision making. This theory stipulates that the best decision is the one that generates happiness
for the majority of individuals involved. This may also be why Michael focused on the benefits of
having Trevor as an employee, especially on the fact that he acquired the most profitable accounts,
(which equates to bonuses for the executives), and is instrumental in the training of new recruits.
These factors must be considered before determining the consequences of Trevor’s actions. The
factors aligning with the PLUS Ethical Decision-Making Model is discussed below:
P – Policies and Procedures: Is the decision in line with the policies laid out by the company?
Policies and Procedures of a company outline guidelines and actions employees must adhere to and
follow. This assists in the definition of the problem and understanding the extent to which a
regulation was broken. Policies and Procedures also stipulate how superiors should conduct the
handling of any breaches in contract and administering disciplinary action. Michael must determine
from the company’s policy the severity of Trevor’s actions and the avenues that Trevor have. Many
companies that distribute corporate cards and phones allow personnel to utilize the aforementioned
for personal usage either with a limit or with the clear notice that the personal bill be covered by the
personnel. If this is available then Trevor would be required to do so along with receiving a warning
or suspension.
L – Legal: Will this violate any legal parameters or regulations?
Any decision taken must be within the constraints of the local legal system. Working under the
assumption that this case is being handled within the country and therefore the laws of Trinidad and
Tobago, then the company must also conduct all issues within the confines of the Industrial Court
and all relating Acts. Under the Industrial Relations Act the company must perform natural justice
before dismissal. That is the company must first conduct an official investigation into the
misappropriation of funds, Trevor must know he is being investigated and must be given a chance to
defend or explain himself, Trevor must receive a warning or suspension if it is a first time offense,
before he can be dismissed. If natural justice is not served and Trevor is dismissed he can be
represented by the Trade Union and sue the company for wrongful dismissal.
U – Universal: How does this relate to the values and principles established for the organization to
operate? Is it in tune with core values and the company culture?
This point covers two facets of operation. The first is that each country has an Industrial Relations
Court or an entity similarly conducted. Where if the superior mishandles a situation the employer can
take legal action against the company. The second applies to the company core values and company
culture especially if the company involved is a multinational. As this relates to the adopted principles
and beliefs of the home company and relating it to the operations of other branches of the company.
S – Self: Does it meet my standards of fairness and justice?
This last point relies on the beliefs and conscious of Michael in his decision making. As mentioned
above he may be more favourable to the utilitarian approach but ultimately his decision would be
based on his perception and levels of fairness and justice.
Considering the factors stated above Michael should initiate an investigation into the accumulated
personal phone bill of Trevor. Depending on the outcome and findings of the investigation Michael
may then choose either:
 ● To demand Trevor pay the personal bill or deduct it from his salary, management can then
revoke his company issued phone as well as giving him unpaid suspension, or
● Including the aforementioned choice along with a demotion, or
● After following the course of natural justice Trevor may be dismissed.

CONCLUSION
Consequently, from this case study or the dialogue between Michael and his boss it can be noted
that the Utilitarian approach and the PLUS Ethical Decision-Making Model were both relevant
ethical decision making theories and frameworks applied in this situation. The Utilitarian approach
came into play when Michael stated that he needed time to think to make a decision beneficial for
everyone and it explain his behaviour why he focused on the benefits of having Trevor as an
employee, especially on the fact that he acquired the most profitable accounts and is instrumental in
the training of new recruits.
While, the PLUS Ethical Decision-Making Model came into play in deciding whether or not
Trevor’s actions were; in line with the policies laid out by the company; violated any legal
parameters or regulations; in tune with core values, the company culture and principles established
for the organization to operate; and meeting standards of fairness and justice.
In the end based on the applications of these ethical decision making theories or frameworks
we can fairly deduce that from this ethical dilemma that an investigation into the accumulated
personal phone bill or some other course of action should be taken against Trevor. Furthermore,
based on the outcomes and findings of said investigation Trevor would either pay the personal bill,
have it be deducted from his salary, management can revoke his company issued phone and give him
unpaid suspension, have him demoted, have him be dismissed via the course of natural justice, or
nothing can happen to him.
 LESSONS LEARNT
The case study “Way too Expensive Phone” has taught us that:
1. In ethical dilemmas like these the PLUS Ethical Decision-Making Model can outweigh the
Utilitarian Approach for decision making. As in certain workplace situations one must adhere
to the policies, procedures and codes of conduct outlined by a company regardless of the
position, status, feelings or contributions of an employee or even for the benefit of everyone
else in the company as Michael wanted to do.
2. It can be assumed via information discovered that those in senior positions abuse their power
and it may be a trend in the workplace as another employee was under investigation for a
similar offense.

REFERENCES

1. Brown University. A Framework for Making Ethical Decisions.

https://www.brown.edu/academics/science-and-technology-studies/framework-making-
ethical-decisions

2. My Portfolio. Ethical Theory and Its Application to Contemporary Business Practice.

https://ncys82.wordpress.com/2013/03/15/ethical-theory-and-its-application-to-
contemporary-business-practice/

3. Proffitt, D. Agency Theory as a Basis for Business Ethics. (October 2000).

https://www.google.com/search?q=agency+theory+as+a+basis+for+business+ethics&ie=utf-
8&oe=utf-8&client=firefox-b-ab

4. Status Net. Ethical Decision Making Models and 6 Steps of Ethical Decision Making
Process. https://status.net/articles/ethical-decision-making-process-model-framework/
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