Business Ethics - Final Exam

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Final Exam

1. Define what is referred to as an anti-fraternization policy. Draft a policy regarding employee fraternization, addressing issues which you deem important to include in such a policy (not to exceed one page). (Snoyenbos: 394)

(DeGeorge: 226-232)
(LA Times, 03 Feb 2007)

Anti-fraternization policies aim to sidestep potential conflicts of interest that arise from work-related relationships involving people who are relatives or dating/marrying within the company. It is also designed to stop friendships within the workplace from decreasing productivity. While it is illegal for employers to stop their workers from fraternizing to discuss working conditions (LA Times, 03 Feb 2007), an ethical and effective policy should be put in place to address the following concerns:

- Stop preferential treatment in the chain of hierarchy
- Stop unwanted flow of information between departments/divisions
- Stop company time from being used for socialization instead of work

In creating a system that effectively addresses the above concerns while remaining ethical, I would draft a policy with the following components:

- Clearly outline a method in which concerned employees can work with HR to expose and correct any workplace-related issues or concerns due to
fraternization between unequal-powered parties.
- Clearly outline which information is to be shared with which parties
- Employee monitoring to save company time

I would remind employees that their employment is at-will, subject to this policy. Electronic monitoring would be done in an ethical manner, as fully described in prompt #5.

2. Define at will employment. Does an employer have an ethical obligation to an employee prior to terminating his/her employment? (Smalley v. Dreyfus document)
(Snoyenbos: 328-333)
(DeGeorge: 349-351)

At-will employment allows an employee to quit at any time for any reason (or no reason at all). It also allows an employer to terminate its employees at any time and for any reasons not deemed “wrongful.” Firing an employee due to race, color, religion, sex, national origin, age, or handicap status would be a form of wrongful termination. Other forms of wrongful termination include firing an employee that is unwilling to perform illegal acts, firing due to an employee taking a medical leave of absence, firing an employee for failing to limit their constitutional rights (voting), and firing an employee outside of a company’s own termination procedure.

As stated in the Smalley v. Dreyfus article, at-will employees “cannot reasonably rely upon their employers' promises of continued employment.” It is an employer’s right at any time to terminate an employee at will. Employers have no ethical obligation to an employee prior to terminating his/her employment outside of abstaining from “wrongful termination.”

3. In no more than two paragraphs, what are the duties of an agent to its principal? In no more than two paragraphs, what are the ethical limitations, if any, on the exercise of these duties? (Credit Rating Agencies & Conflicts of Interest document)

(Snoyenbos:, 151-159, 169)
(DeGeorge: 106-107)

It is an agent’s duty to support its principle in every way possible so long as it doesn’t become unethical either via a conflict of interest or otherwise. Generally, the best way to ensure that an agent is supporting its principle is by aligning the interests of these two groups. However, there are exceptions. In the relationship between credit rating agencies (agent) and its principle (companies paying for credit ratings), it may be that the rating agencies give dishonest scores to ensure continued business, both for itself and the principle. In this way, dishonest scores work to hurt those who would otherwise trust the worthiness of an asset as “rated” but “not guaranteed” by such credit rating agencies.

People lower in a hierarchy often feel that they are not responsible for...
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