Betty Vinson was WorldCom’s director of management and was part of the company’s accounting team. She was faced with the ethical dilemma of shifting the company’s line costs that were recorded as expenses to capital expenditure costs without the appropriate documentation to support these entries. She needed to choose to either make these entries without supporting documentation or quit her lucrative job at WorldCom. The dilemma came about due to the changes in the telecommunication industry which WorldCom was part of. The sector was over-expanding, and many organizations were struggling financially to keep up with the overexpansion. The company lacked the financial ability even in its reserves to keep up. The company’s CFO Sullivan, resorted to making fraudulent accounting entries to make the company seem like it was keeping up with the Wall Street Analyst quarterly earnings estimates. The CFO pressured his accounting employees into making these fraudulent entries which resulted in the ethical dilemma that Vinson was facing.
The Kohlberg model of decision making is based on his theory of moral development where ethical decision making is founded on these stages of moral development. When analyzing Vinson’s ethical dilemma and the decision she made, she can be categorized to have been at the pre-conventional level in the first and second stages (Levitt & Aligo, 2013). Vinson decided to act according to what her senior manager wanted and had suggested despite knowing that it was fraudulent. She further made a similar decision later because she was afraid of losing her salary and health insurance which her family depended upon. Individuals at the pre-conventional stage act in obedience and to avoid punishment and the value she would receive from her actions which are individualism and exchange. Various consequences resulted from her decision;
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Positives
She managed to maintain her position in the company
The organization managed to retain its place in the industry even if it was through fraudulent means
The positions of other individuals in the organization were secure for at least the period these activities were going on
Negatives
She had to sacrifice her sense of morality because she knew what she was doing was wrong
She was engaging in illegal activity which risked her freedom
She would lose her job eventually when these activities were discovered
Vinson needed to make a decision that is guided by the law and one that portrays the right thing. These are found in Kohlberg’s stage four and stage six of the conventional and post-conventional categories (Wittmer, 2016). During the fourth stage, one makes a decision that is guided by the law. The primary concern is not that the individual is breaking the law but that he or she is keeping the law for the greater social good. When at this stage, Vinson needed to understand that her decision was abiding by the law despite the consequences. Primarily, the consequences would have been from the organization which was Vinson’s fear. She was afraid of losing her place in the organization which is why she was ready to act against the law.
Positives
She would have maintained an overall positive brand for her organization
The organization would have had the opportunity to rebuild itself after the overexpansion was done
Vinson would have had the overall satisfaction of doing what was right
Negatives
The company would not meet the walls street requirements of quarterly estimates
It would risk the position of the organization in its industry
The company was likely to lose a significant number of customers
Numerous employees were likely to lose their jobs due to the financial difficulties the organization was facing
Vinson would lose her job because of disobeying management
During the sixth stage, the individual makes decisions based on the impact they have on justice. The focus is on maintaining long-term social justice and sustainability (Thiel et al., 2012). He or she identifies the right thing to do and does it. During this stage, what is legal does not make much difference for the person as he or she focuses on what they feel is moral and just for everyone (Vardaman, Gondo & Allen, 2014). Here the person places the need for justice ahead of his or her personal needs and desires. Vinson would have further been guided by this stage in Kohlberg’s ethical decision-making model. Her decision would have been accompanied by various positive and negative consequences which are mentioned below.
Positives
Her decision would have been morally right resulting in moral satisfaction
Her colleagues would not have encountered problems with the law
The organization would have had another chance of rebuilding itself
The company would have maintained an overall positive image towards its customers
Negatives
She would have likely lost her job due to disobeying the manager
The organization would have likely lost significant business due to the inability to stay afloat
The organization would have needed to let go off some employees due to the financial struggle
Vinson would have lost her lucrative salary and health insurance which the family was highly dependent upon
All the stages present the possible decisions that Vinson would have made. Each is guided by different personal, moral or legal concepts that would guide one into making a decision that is ethical or unethical. Vinson had the option to make the right decision but was pushed by her desires and obedience to the manager into making the wrong decision which resulted in significant adverse consequences for her, her colleagues and the organization at large.
If I were in Vinson’s shoes, I would choose to do what is right and just which is per Kohlberg’s stage 6 of moral decision making. I would be ready for immense financial consequences because I was going to lose my job due to making an ethical decision. I would also lose my health insurance that also covered my family, but I would get more satisfaction knowing that I did the right thing. I am sure that I would maintain my corporate and personal dignity that would have earned me another employment opportunity in the future. Overall it is necessary to analyze a situation and overlook one’s desires and personal gains including the needs of one’s manager if they are wrong to ensure that one makes an ethical decision.
Bibliography
Levitt, D. H., & Aligo, A. A. (2013). Moral orientation as a component of ethical decision making. Counseling and Values , 58 (2), 195-204.
Thiel, C. E., Bagdasarov, Z., Harkrider, L., Johnson, J. F., & Mumford, M. D. (2012). Leader ethical decision-making in organizations: Strategies for sensemaking. Journal of Business Ethics , 107 (1), 49-64.
Vardaman, J. M., Gondo, M. B., & Allen, D. G. (2014). Ethical climate and pro-social rule breaking in the workplace. Human Resource Management Review , 24 (1), 108-118.
Wittmer, D. P. (2016). Developing a behavioral model for ethical decision making in organizations: Conceptual and empirical research. In Ethics in public management (pp. 57-77). Routledge.
