an unwarranted audit

checks on manager behavior
November 7, 2019
structuring and valuation
November 7, 2019

an unwarranted audit

WBA AUGUST 2014 BBM 406: BUSINESS VALUES AND ETHICS

INSTRUCTIONS

Read the following case carefully and answer the questions that follow.

“ETHICAL DILEMMA”

A company that fabricates heat exchangers, which shall be called ABC for the purposes of not exposing it to an unwarranted audit, became aware in 2007 through an associational membership meeting that the Occupational Safety and Health Administration (OSHA) had enacted a new standard. This new standard, called Chromium VI established a new action level for Hexavalent Chromium that affected all fabricators of alloy metals. The company soon afterwards contacted their outside safety consultants, in whom they entrusted their safety program, and asked about specifics of the new standard. It is important to note that the outside consultants also represented other metal fabricators who made heat exchangers. The consultant group began looking further into the new requirement on behalf of their clients. Unfortunately, for the next year, there was very little education or direction from the outside consultants and very little communication regarding the health issues and enforcement penalties that could occur if found non-compliant by

OSHA (OSHA, 2009). They also were lacking in providing timely industrial hygiene monitoring.

In May of 2008, ABC hired an internal Safety Coordinator who also shared duties in Quality Inspection. One of the first projects assigned to the Safety Coordinator was to investigate the new Chromium VI standard and provide direction on how to comply. The Safety Coordinator had extensive safety experience in other industries, which allowed him the capability to approach this new learning experience with a satisfactory background. There were several ethical dilemmas that had to be thought through. Conversations on the subject included presenting facts as well as the morality of the situation with shop management and upper management. The Safety Coordinator had to convince all of the decision makers of the moral need to comply fully with the standard.

Questions

1. The dilemmas in company ABC can be presented and solved using different approaches.

Discuss these approaches. (20 marks)

2. “The moral system of a company forbids certain behavior and enjoining certain behavior as right.” With relevant examples from the case, discuss the purpose of morality on company.

(10 marks)

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