The Housing Allowance – Business Ethics

Wilson Mutambara grew up in the slums of Rambia and through hard work and talent he was given the opportunity to study and receive his MBA in the united states. After three years of working at a cellular telephone service company, NewComm, he received the opportunity to go back to Rambia when NewComm decided to expand. All the employees at the NewComm offices in Rambia were set to receive $2,000 monthly for housing needs to insure that its employees live in a safe and convenient area and that their living arrangements are complimentary to the company image.

One of the employees, Dale Garman, found out that Wilson was falsifying his monthly housing expenses and was in fact living in his old neighborhood, which couldn't possibly cost more than $300. The house that Wilson was living in was not up to the company standards and it looked as if he was sharing it with quite a few people. Dale notified Wilson's supervisor Barbara Weston of his living situation and Barbara confronted Wilson. Wilson admitted to the falsified invoices and pleaded to Barbara that there is quite a bit expected of him as a Rambian from the slums.

He provides for his family and pays for his nieces' and nephews' educational expenses from that money. He also felt that if he lived in an expensive area like his colleagues, his family would judge his actions and think of him as selfish. Although Wilson had good intentions in falsifying his claims, he did not use the allowance as NewComm intended for him to do and more importantly falsified his invoices. Now Barbara faces a tough decision of deciding how to appropriately handle this situation in an ethical way. At the personal level of analysis, Wilson is the primary stakeholder.

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He looked at the situation at the beginning and assumed that it was fair for him to receive equal compensation for housing even though he chose to live below his means. He was helping his relatives and was unable to see that the fraud he was committing could have dire consequences. At the corporate level of analysis is NewComm, its’ management and employees in Rambia. The company, NewComm, is a very significant stakeholder since it is providing the money to Wilson and expecting that the obligations they allocate to their employees are met without protest.

NewComm can also garner trouble from authorities or the IRS if they are reporting the housing allowance under benefits, and Wilson’s imprudence comes out as fraud and the government might also think NewComm is involved. The societal stakeholders in this case are Wilson’s relatives and the Rambian community who perceives Wilson as their hero for achieving success in America. After Barbara confronted Wilson about his indiscretion and he explained his reasoning behind it, she has to decide how to handle this appropriately. Barbara is obligated to handle this by taking NewComm’s best interest into consideration.

It is imperative that she consider the harm Wilson’s decision could have caused NewComm since he used the money dishonestly and intentionally misrepresented his false housing, and now Barbara has to decide if Wilson should face disciplinary action, or even termination. However, Barbara needs to show empathy toward Wilson and consider the reasons why he felt obligated to defraud NewComm. Wilson felt that this money was being put to better use since he was helping more people with it instead of spending it to portray a better image of NewComm by living an extravagant lifestyle.

From my perspective, the three alternatives for Barbara in this case are: i. For Barbara to give a probationary period to Wilson to correct his actions and find proper housing in keeping with NewComm’s image. He can move out of Old Town and into the “safer” neighborhood where the rest of his colleagues are residing. Although this is very unfair, he can also receive a pay cut to reimburse NewComm for the money he wrongfully took from the housing allowance allocation. ii.

Since Barbara is the supervisor, she is allowed to change the company rules and can make a change in the housing allowance under special circumstances. She could add a provision in the housing allowance for employees to get approval to live in any neighborhood they choose to. Compared to the money that other employees in Rambia are receiving for housing, it would be unfair to pay Wilson less if he is choosing to live near his loved ones and helping his relatives. iii. The final alternative is for Barbara to terminate Wilson’s employment with NewComm.

Philosopher Immanuel Kant considered moral rules categorical imperatives, meaning that they are absolute and unqualified commands for everyone, in every walk of life, without exception, not even for stressed professionals. Kant pursued moral principles that do not rest on likelihoods and that define actions as fundamentally right or wrong apart from any particular circumstances. A Kantian approach, which considers duty, fairness and rights, would force Barbara to terminate Wilson’s employment with NewComm, even though it would be unfair.

It teaches a lesson to other employees to follow proper policies and procedures when it comes to contractual relationships with employers. Wilson did lie and defraud NewComm and for that Barbara can privately sit him down and explain all the reasons why he is being dismissed. For Kant the source of moral justification is the categorical imperative. In order for an act to be categorically imperative, it must be thought to be good in itself and in conformity to reason. Overall, Kant says what you care about simply doesn’t matter.

Your duty is your duty, and you must do it whether or not you want to or not. Nothing exempts a moral agent from the demands of moral duty. The dilemma that is faced by Barbara can be solved with proper thought given to Utilitarian principles. Most of the utilitarian philosophers would want her to do the “right” thing which would harm the least amount of people since utilitarianism takes into account everyone affected by the action, instead of self-interest only. Aristotle’s four virtues would want to ask about the moral standing of the people engaged in this case.

The four virtues are prudence, justice, fortitude and temperance. Prudence, the cardinal virtue, would require Barbara to exercise sound judgment or apply practical wisdom. Prudence is an ethical excellence of heart and mind, displayed in an eagerness to seek and an ability to find the "just right" course of action, attaining the best outcome possible in the light of present circumstances. Another very applicable virtue is fortitude which ensures firmness in difficulties and constancy in doing the good. Fortitude is sometimes called strength or courage.

Justice is another very important virtue; And Barbara could choose to be fair to Wilson and keep him with the company is he corrects his actions, or better yet have the housing allowance rules changed so that every employee has the right to choose where they want to live. If Barbara were to follow Aristotle’s virtues, then she would think of the greater good and act with prudence, justice and fortitude. Aristotle would advise for Barbara to give a probationary period to Wilson to correct his actions and find proper housing in keeping with NewComm’s image.

He can move out of Old Town and into the “safer” neighborhood where the rest of his colleagues are residing. In this case, Rawl’s theory of original position can also be used. Rawls proposes a set of Principles of Justice to be established through a thought-experiment, a kind of modern replacement for the philosophical state of nature. Basically, Rawls lets us imagine a situation where people are unaware of their own characteristics which may make given principles advantageous or disadvantageous to themselves.

Through the veil of ignorance, people may then agree upon principles of justice independently of personal interests, meaning impartially and rationally. Those collectively decided principles should thus be socially fair. If Barbara is advised by Rawls, she can then look through the veil of ignorance to make this decision; it would most likely come out to that she terminate Wilson’s employment from NewComm. With the veil of ignorance she would have to look past Wilson helping his relatives and only look at the sham that Wilson committed.

Personal knowledge of Wilson helping his relatives might tempt Barbara to select principles of justice that gave Wilson unfair advantage. Rawls claims that rational people will consistently adopt his principles of justice if their reasoning is based on general considerations, without knowing anything about their own personal situation. If Barbara is considering personal benefit over the greater good or the right thing to do then she might not be able to come to a clean and honest conclusion.

There are numerous practical constraints faced by Barbara in this situation. Barbara would have the live with whichever decision she makes regarding Wilson, if she chooses to fire him, she would have to live with the detestations from her inner self because Wilson’s relatives had gotten used to him providing for them and he was the bread winner for a lot of people. Now those people could be going hungry just because Barbara could not make changes to the policy and let Wilson work for NewComm.

If Barbara were to let Wilson stay with company, the rest of the employees would think it is okay for them to also break company policy since the falsification by Wilson was taken too lightly. The action that should be taken by Barbara is to be fair to Wilson since he was trying to be a bigger person by helping his relatives and to payback his share to society. Barbara can be fair by amending the housing allowance and allowing for all the employees to receive the same $2,000 housing allowance for wherever they choose to reside. Barbara can show empathy toward Wilson nd consider the reasons why he felt obligated to defraud NewComm. Wilson felt that this money was being put to better use since he was helping more people with it instead of spending it to portray a better image of NewComm by living an extravagant lifestyle. Although, Wilson should also receive some sort of a reprimand for breaching the company policy and deceitfully misrepresenting his housing invoices. This decision is based on the four virtues of Aristotle and also the Utilitarian theory so she can help Wilson to help his relatives lead a better life.

Read also: Disadvantages of Ethics in the Workplace

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