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Ethics in the workplace for Lamp Electronics

Scenario: Ethics in the workplace

John Smith, VP of HR at Lamp Electronics is sitting scratching his head over the conversation he had with Joe Group describing what had transpired in the finance department. Joe had been preparing the sales revenues reports for the past five years as the company is required to report to the SEC to issue public and profit forecasts. Lamp has always been high producing and has experienced a decline; hence, the share price has declined.

Joe told John that he had been instructed to use a different and more aggressive accounting method for forecasting and calculating projected sales revenue for the coming year. Joe believed that this approach could mislead the shareholders regarding actual performance. The past CFO was rather conservative in the approach; however, a new CFO, Bob, was hired earlier this year after not obtaining a promotion for a competitor. Bob was perceived as a go getter, smart, and someone to make a positive mark on the company. When Joe pointed out that the accounting practices were different than Lamp's traditional practices, Bob, the CFO said that he was the new CFO and had a different approach. Bob proceeded to tell Joe that sales would turn around and the company is justified reporting higher expected sales revenue in the upcoming months. Bob also mentioned that Joe should want the stock to go up and do well. As Joe continued to question, Bob told him to do his job as instructed. Since then, Joe felt that Bob had become hostile towards him and that there was a change in the relationship. Despite his fears, he felt he had to go to HR for advice. HR intuitively suspected that Joe was worried about Bob finding out about meeting. This information disturbed HR.

Case adapted from: Nkomo, S., Fottler, M., McAfee, R.B. (2005) Applications in Human Resource Management (5th ed.). Mason, OH: Southwestern.

- Imagine you are an HR consultant to the organization involved in this situation. The organization wants to be responsive and fair. What do you recommend?
- Write a policy statement that you would submit to that organization that could be included in their employee handbook. (This recommended policy should focus on whistle blowing)
- What are the risks and challenges the organization faces by implementing the policy you recommend?
- Provide an example of ways in which it is effectively or ineffectively implemented. Elaborate upon and assess this situation.

Solution Preview

- Imagine you are an HR consultant to the organization involved in this situation. The organization wants to be responsive and fair. What do you recommend?

I would recommend that Bob should be told not to use aggressive accounting methods as well as not use forecasting methods that are different from the conservative methods that Lamp has used over the period of time. That apart, I would recommend that a close watch be kept on Bob to ascertain if he is encouraging or carrying out other unscrupulous activities. Bob's activities should also be monitored to see if he is making any short term transaction on Lamp's stock.

The second set of recommendations relate to Joe. He should not be victimized or harassed in any way whatsoever. He has been brave to report the incident to John. If possible, Joe should be transferred to another department so that Bob is no longer his boss. Care should be taken that the fact that Joe had blown the whistle should not affect him adversely in any way.

- Write a policy statement that you would submit to that organization that could be included in their ...

Solution Summary

Ethics in the workplace for Lamp Electronics is discussed in great detail in this solution.

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