Veronica Koskovich-Underwood MgtOp 587 Martha McCaskey Case Study Ethical Issues At issue in the Martha McCaskey case is a question of proprietary information. More specifically, McCaskey is faced with the question of what constitutes proprietary information and what is safe to give to the client without breaching any trade secrets. According to DeGeorge, proprietary information, or trade secrets, are a right of each corporation that they can legally and morally protect and refuse to divulge to the public.
The types of information that Seleris’ client is asking for about their target company are held tightly by the target to ensure their market share.
If the information is given to competitors, they will lose their advantage. However, if specific information as to the new chip is not released but instead is based on industry standards and already publicly-held information, the trade secrets would still be upheld, as there is no way to know for sure that the target is using exactly what has been found.
Another issue that McCaskey faces is the methods used to obtain the information to be given to the client.
As mentioned above, if it comes directly from the target, it would be releasing trade secrets and infringing on the target’s right to hold those. In this case, McCaskey has been asked to not contact the target in order to keep them from knowing that the client is looking into the new chip. In order to get the specific information that they are after, McCaskey will have to use alternative means such as contacting other competitors in the industry, vendors of the target, and possibly ex-employees of the target.
Hackert and Malone are pushing for McCaskey to use Phil Devon after learning that he worked for the target in the past. Devon seems open to supplying McCaskey with any information that she needs, but she may be breaching the target’s right to trade secrets by doing so. If he has stayed in the loop with the target and has direct knowledge of the new chip and the procedures being used there, she would ultimately be passing on information that the client has no right to. However, there is a chance that he has no direct knowledge of the new chip nd would only be giving her information that he has obtained in helping other clients out. Even that could be breaching areas of confidentiality though, as she would not know if the other companies held that information closely so the possibility of breaching other trade secrets is unknown. Also at issue is management encouraging what could be seen as unethical methods to complete the projects. As discussed in the Don Taylor case, management has a duty to operate the company as ethically as possible.
By encouraging these unethical activities to McCaskey, Malone and Hackert are saying that they are supportive of using unethical methods in order to further IAD and Seleris, as well as their clients. The case material discussed that IAD did not have any written policies in place in regards to solicitation and acceptable methods to complete contracts. Richardson would occasionally hold lunch meetings in which he would state that no one should use unethical behaviors, but remained vague in just what that meant.
DeGeorge notes that a business has the duty to give clear policies to its employees in order for them to complete their jobs accurately and as desired. Employees also cannot be required to act unethically on the job. Malone and Hackert are impeding McCaskey’s responsibility to complete her job ethically by encouraging her to use Devon no matter what the cost. Another issue that should be noted is the personal issue that McCaskey has in deciding between staying silent on the matter and completing her job as requested, or in voicing her concerns.
In the “Conflict on a Trading Floor” case and the Don Taylor case, it was noted that it is our duty to report any unethical proceedings in the work place. However, DeGeorge notes that employees do not have an obligation to create serious risk to themselves without some compensation to be gained. In McCaskey’s case, she knows of no immediate benefit to her calling out the policies that are being implemented by the old guard. In fact, she has been all but guaranteed a promotion, raise, and easier job duties if she successfully completes the project.
It does not appear that those in the new guard are using the same methods and there has been a significant amount of turnover in the past couple of years at IAD. There is a chance that future replacements will not be willing to use the same methods and the problem will eradicate itself. But by remaining silent, she becomes part of the problem and may have to violate her own moral beliefs. On the other hand, if McCaskey brings attention to what she considers an unethical procedure, she could be at risk with her job. She could be seen as a troublemaker and put back on team projects that are not to her liking.
She would almost certainly be pulled from this project which would result in no promotion, further hurting her own well-being. A fourth issue that may not deal directly with McCaskey would be whether it is appropriate for Phil Devon to be releasing the information that he may have on the target company that he used to work for, or from other companies that he has assisted on new projects with since leaving the target. As an employee of the target, he would be directly breaching the right of the target to have trade secrets. However, as he no longer works there, Devon is not obliged to consider the interests of the target any longer.
Unless a noncompete agreement was signed when he left, he is technically not doing anything wrong by divulging information that he may have on the company. This same logic would apply to any of the other companies that Devon has consulted with recently. Case Analysis The three primary alternatives that are to be considered are: 1) hiring Phil Devon and Martha McCaskey working with him directly; 2) hiring Phil Devon and having another associate work with him while Martha McCaskey remains project leader; and 3) Martha McCaskey stepping down from the project and voicing her concerns about the methods used within IAD.
The primary stakeholders that have been identified are: 1) McCaskey; Tom Malone and Bud Hackert; Seleris; Target company; Client; and Phil Devon; 2) McCaskey; Malone and Hackert; Seleris; Target company; Kauffman (or the employee chosen to work with Devon; and Phil Devon; 3) McCaskey; Malone and Hackert; IAD; Target company; and Client. From a utilitarian perspective, option one woud result in the greatest net welfare for the stakeholders identified. While it goes against what McCaskey believes in and hurts the target company the most, all other layers considered receive the greatest benefit out of this option. Under the utilitarian method, more of the stakeholders receive benefits than costs with option one. Malone, Hackert, Seleris, and the client achieve the end result that they are ultimately wanting from the situation. Malone and Hackert retain a major client for Seleris and IAD remains in good standing with corporate. Seleris sees growth as a company and retains a large portion of their current business. The client receives the information they are seeking and is able to better compete with the competition.
However, all of these stakeholders are setting precedence in the methods that are used to obtain the information and completing projects. Phil Devon receives a large financial consideration for his assistance on the project, but risks possible lawsuits or future retribution from the client for releasing sensitive information on them. The target company sees the greatest cost by having confidential information leaked to a competitor and no longer having the niche in the industry that they would have otherwise. McCaskey sees the greatest mixture of benefits and costs, but ultimately sees more negatives than positives.
She successfully completes the project and receives the promotion and raise, follows her superiors’ wishes, and retains a major client for IAD and Seleris. However, she does not follow her own moral judgement and is directly responsible for the way the project is completed. She also is setting a precedence of methods that she is willing to use and for methods that will be acceptable under her as manager. Under the second option, assuming that the project is successfully completed to the client’s liking and McCaskey receives her promotion, many of the same costs and benefits come into play.
The additional player in this scenario, Kauffman, would most likely receive praise and possibly compensation for his role in the completion of the project, but would be being used to do the unethical activities that no one else is willing to. McCaskey does have the added benefit of not directly doing the unethical research, but she is causing Kauffman to act unethically by having him work directly with Devon. With the third option, assuming that the project is not successfully completed without McCaskey and she does not receive her promotion, more costs occur for the stakeholders identified.
McCaskey would be upholding her moral values, but she would not receive the promotion and would have to continue doing the tedious fieldwork that she has been doing. This option could result in being given only problem projects that no one else wants in the future, she could be labeled a troublemaker, and she would lose her good standing with upper management. A slight possibility would exist that her actions would bring about positive changes in the division and/or corporation, if management takes note of her concerns and decides to implement policies that would prevent these happenings from occurring again.
Malone and Hackert would lose McCaskey as a good candidate for group leader, as well as a major client and future additional projects. IAD not only would lose a major client and future business from them, but would also most likely come under scrutiny of corporate. The client loses the ability to compete head on with the target company by not receiving the information they requested. They would also lose a consulting firm for future projects if they decide Seleris is no longer fulfilling their duties as their consultants.
The target company would see the largest benefit from this option, as their trade secrets would not be leaked and they would retain their market niche with the new chip. From a rights and duties perspective, even though a greater number of rights and duties are upheld with options one and two, option three is preferred in that it upholds the more important rights and duties of McCaskey and the target company. When adding weight for importance to the rights of performing your job ethically and retaining trade secrets, the greatest good comes from option three where both of these rights are upheld.
An analysis of rights and duties shows a greater number of rights and duties upheld than not with option one. By hiring Phil Devon and completing the project successfully, all stakeholders except for Devon and the target are fulfilling their duty to maximize profits and act in the best interest of their immediate stakeholders. For example, McCaskey is acting in the best interest of IAD by retaining a client and bringing in future profits from this client. The client is acting in the best interest of their own shareholders by finding a way to compete directly with the target and thereby maximizing profits.
McCaskey is also upholding her duty to obey her supervisors and to act in her own best interest by ensuring she receives the promotion and raise. However, she is defying her duty to not harm others by completing research that she knows will directly harm the target and their business interests. She is also denying herself the right to perform her job ethically and not upholding the norms of her profession. Malone and Hackert see their authority rights upheld, but don’t uphold McCaskey’s right and duty to perform her job ethically. The target company’s right to keep trade secrets is being denied.
Devon is acting in his own best interest, as well as his family’s, but he is not conducting business ethically and is denying the target the right to have trade secrets. With option two, most of the rights and duties remain the same. Regardless of whether McCaskey performs the research herself or just oversees it, she is not changing the overall picture. She has actually brought someone else into an ethical dilemma by choosing not to address it head on. Now Kauffman is not upholding the duty to perform his job ethically, nor does he uphold the norms of his profession.
Option three results in more rights and duties being denied to the majority of the stakeholders. McCaskey sees more of her rights and duties upheld than the other options, as she is using her right to voice ethical concerns in the workplace and upholding her duty not to harm others and to uphold the standards of her profession. The target company is also seeing more rights upheld, as they retain their right to hold trade secrets and to fair competition in the marketplace. Malone, Hackert, IAD, and the client, however, see more rights and duties denied.
All fail at their duty to maximize profits for the division and company, while Malone and Hackert lose their right to authority. But all are now upholding the individual rights and duties held by McCaskey and the target. From a justice perspective, option three upholds fairness for the target company by not releasing confidential information, for McCaskey by not requiring her to do something that could be considered ethically wrong, and for all others by not allowing them to profit from unethical behaviors. In all three options, distributive justice is more of a concern than any other kind.
By completing the project and obtaining the data from Devon, regardless of whether done by McCaskey or by Kauffman, all stakeholders except for the target receive benefits from unethical proceedings that are not right. McCaskey receives a promotion and higher pay, IAD and Seleris receive full payment on the contract and even receive additional contracts because of the successful completion, Devon receives a large payment for releasing information that is confidential, and the client will most likely receive a greater market share of the new chip than they would have otherwise.
The target, however, loses market share from the divulgence of this information. However, in option three, all parties receive the compensation that they deserve from the situation. The target retains its market share while the others lose out on money from their unethical dealings. While option one or two could be argued from a utilitarian perspective, the added weight of importance to the rights and duties method, as well as the clear indication by the justice perspective, option three supports more of the prominent concerns in this case.
I therefore propose option three as the best option for McCaskey to move forward with. Broad Implications of the Case One of the more prominent themes to this case is the issue of proprietary information and means used to obtain it from competitors. According to DeGeorge, businesses have the right, both legally and morally, to have trade secrets to help protect specific facts about their products or processes. However, it is not discussed who outside the immediate company employees have any duty to protect those secrets.
As technology moves further and further ahead, the implications of trade secrets being leaked becomes greater. Without the trade secrets, there is no way to protect yourself from a competitor moving in on your niche in the market that you may otherwise have had they not obtained the secrets. But on the other side is the right to a competitive marketplace and the duty to maximize profits for the competitor. Consulting firms such as Seleris in the case are becoming a more common option to obtain trade secrets. But employees of these firms eed to take into consideration the ethical connotations to what they are doing by assisting in the gathering of this information. While they have no immediate duty to the competitors to help protect the information, from an ethical perspective the methods that they use to obtain it could be negative. Trade secrets are at a greater risk as the present trend in the workplace continues of employees moving around from job to job during their careers. No longer are employees with the mindset that they should stay with the same firm throughout their career to ensure a better retirement package.
If an employee is not guaranteed to stay with a firm, what information should they actually have access to? In most cases, this is now limited to only what they need to know to complete their individual job. Also of note is what constitutes proprietary information. DeGeorge defines it as any trade secrets that a company can legally and morally protect from others. But in order to legally defend data in the current day, you would need a patent or trademark, which often times can’t be obtained until the item has a prototype developed.
This makes it more difficult to protect new projects from being copied by competitors. Another theme that is touched on in the case and brought out in the issue of proprietary information is employee loyalty and duties to their current employers. DeGeorge explains that while companies would like to have both loyalty to the firm during employment, it cannot be demanded. Corporations want employees to perform their jobs to the best of their abilities and to do what needs to be done to ensure the success of the company.
However, in the present day workforce, it is more common to hear employees talking about what the company can do for them. It is not uncommon to switch jobs several times during your career, nor to apply the knowledge that you’ve gained from a past job on a current one. DeGeorge states that while workers have rights on the job, they also have duty to perform the job for which they are hired. That being said, the employer cannot require an employee to do something that is illegal or unethical. Usually businesses have policies in place that help define what worker’s rights and responsibilities are. Employees need to take the time to review this information and ask questions about the policies prior to being hired on to ensure that they are comfortable with what is being asked of them. However, policies will not address every instance that could possibly occur during an employment. Employees need to know their basic rights and processes available to them so that they can address any concerns as they arise. While employed by a particular organization, the employee has a responsibility to not sabotage the activities of the company.
However, once employment ends, that responsibility is gone. But is there still a responsibility to protect trade secrets and sensitive information that you may have had access to once in a new position? A trend that is starting in the current workforce is to impose noncompete agreements with employees who are leaving and who had access to sensitive information to help curb this issue. Overall, the protection of proprietary information seems to have a direct relation to the loyalty and obedience that employees show a firm.
Ultimately, it is the individual employee who needs to make the conscience decision to help protect the information. While competitors may be able to gain some insight on what is going on behind closed doors through competitors and basic industry trends of the time, without firsthand knowledge of what a specific company is pursuing, it is more difficult to know for sure if your recreation of their item will be better than what they have done and win you the market on the item.