Maintaining good business ethics is the responsibility of every individual in a given organization. Therefore, every person working in an organization is required to perform his or her duties honestly. The decisions taken within a given organization are influenced by its culture even though they may be made by individuals. Moreover, the decision to behave ethically in an organization is a matter of morals. Therefore, the employees must be able to decide whether what they think is the right course of action to take. Unethical behavior in organizations has the potential of damaging the firm’s reputation and makes it less appealing to current and potential stakeholders. Organizations should adopt the necessary values and ensure that employees understand them. The BBDE Health Center has a great ethical challenge because of the behavior of its CEO, Rulan. His unethical behavior has given rise to several ethical dilemmas among the employees and the board.
There are several decisions and actions taken by individuals at BBDE health center that are questionable. It is expected that every individual in the health center should ensure that ethical standards are maintained in order to improve the reputation of the organization as well as appeal to the stakeholders. The actions of Rulan, Don and the volunteer board of directors are inappropriate especially when it comes to financial management issues of the organization. Rulan, the CEO, spend the organization’s funds inappropriately with his wife by making unnecessary overseas travels. Rulan spends ridiculously large amounts of money on trips that seem unnecessary as far as the corporate strategy of the organization is concerned. Moreover, his family members participate in the organization’s activities such as river rafting for free. Rulan makes another suspicious move to buy a piece of land near his house using the organization’s funds even if the purchase is unnecessary. Don realizes that the organization’s funds are being misappropriated by the CEO but he decides to keep quiet as long as he gets his paycheck (Jason & Darryl, 2012). Such a decision by Don is unethical because he is supposed to report any unethical behavior in the organization in order to safeguard its future. The decisions made by the board of directors are also questionable because they allow Rulan to misappropriate the funds of the health center. The board of directors should instead supervise the CEO and ensure that no funds are misappropriated. Furthermore, Dave resolves to shut his mouth and let Rulan continue with his unethical behavior.
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The issue of misappropriation of funds in the organization affects all the employees, the directors and the funding sources. The employees such as Don and Jamie are psychologically stressed because they face an ethical dilemma. Therefore, such employees lack concentration at work because they may be called upon to give an account of the actions of Rulan. The board of directors are also affected especially Dave who is stressed about Rulan’s move to sue the organization regarding the purchase of a piece of property. The funding sources are also affected because their funds are not being used as expected. If such funding sources realize what is happening at BBDE, they may stop the funds.
At the end of the case, the CEO could purchase the piece of property and take it as his own. Rulan could be sued by the funding sources and consequently be fired from the organization if an audit is done. Don, the controller, could keep quiet as long as he gets his paycheck and have Rulan misappropriate the organization’s funds. As such, Don could ultimately be fired for failing to take the responsibility of reporting the actions of the CEO and the board. The board of directors could also fail to stop Rulan from misusing the funds of the organization. Therefore, the board could be sued by other stakeholders for failing in their fiduciary responsibility.
Rulan, the CEO, should champion the corporate strategy of the organization by spending the organization’s funds wisely. He should also consult widely with both the board and the employees. This would ensure that all the stakeholders participate in the achievements of the objectives of the organization. Don could have also reported the issue of funds misappropriation by the CEO to the board and other concerned authorities in order to safeguard the future of the organization. Furthermore, the board should oversee the actions of the CEO and advice accordingly.
The Institute of Management Accountants’ statement of ethical professional practice provides the necessary guidance to Don Blake. The third standard of integrity applies to Don’s case as it advises against engaging in or supporting any activity that might discredit the profession. Therefore, by keeping quiet, Don supports the unscrupulous activities of the CEO. As such, Don should report any unethical conduct by the staff including the CEO.
In conclusion, it is important to uphold business ethics at any given time in order to improve the reputation of any organization. The employees have the responsibility of ensuring that every individual engages in the right activity. The Institute of Management Accountants provides the necessary guidance to individuals in the accounting profession. Therefore, such institutions play a significant role in promoting business ethics.
References
Jason, C. P., & Darryl, J. W. (2012). The BBDE Health Center: A case study of business ethics. IMA Educational Case Journal, 5(3), 1-3
