Business ethics


The primary ethical problem and 3 facts supporting the reasoning


In KOTEL case study, discrimination has been evidenced in employment opportunities. When founders of KOTEL left the company for retirement or other investment ventures, Weisel was employed as the President and CEO. He was a worker at another Silicon Valley computers corporation, and when he came to KOTEL, he brought with him several people. These included Tom Konroy and two other people as Vice Presidents. In this case, the board of directors consisted of Weisel, Konroy, the two Vice Presidents, and other investors. The board of directors controlled a large portion of stocks in this company. This is a clear indication that the top job positions in this company were obtained on discrimination.

Gross negligence

Gross negligence is caused by duties and exercises have negative effects on the company and its shareholders. In most cases, people working contrary to the expectation of an organization cause gross negligence. In KOTEL case study, workers have engaged in ethical problem of gross negligence since their leaders do not monitor them. For example, Sebastian enjoys attending his job in blue jeans and his ability to addresses his co-workers by their first names. Attending job in casual attires is gross negligence of dressing code in the work place. Sebastian also indicates that KOTEL was a ‘hand-loose’ organization since they had a TGIF bear and pizza party every Friday. In addition, he also indicates that it was difficult to identify individuals in charge of a project. In most case, although activities were done in this company, they were often several months or a year late.

Side deals

Side deals are other ethical problems that have been depicted in KOTEL case study. This is a situation whereby CEOs divert their companies to other activities in order to make extra cash at the expense of others. In this case, side deals do not involve other corporation but are done secretly. In this case, the President of KOTEL was involved in side deals creating unethical problems. Weisel and Konroy asked Sebastian to prepare a financial report justifying the acquisition of I-Tech. Although Sebastian welcomed the assignment, it made him uneasy. Weisel and Konroy were involved in a side deal through analyzing I-Tech in order to acquire individual benefits.

  1. The primary stakeholders and how are they affected

Primary stakeholders are a group of people that are affected directly by an action or performance in an organization. Companies have stakeholders whose primary goals are to receive a great rate of return on their investments. They are thus highly encounter negative effect whenever their company is affected by financial constraints. This is a situation whereby their shares decreases or they acquire fewer dividends than expected. In KOTEL Inc., the primary stakeholders are founders, the President, Vice Presidents, board of directors, and employees. All these groups of people have a contractual relationship with the company. In case the company progress, they benefit positively, and when the company fails, they are affected negatively.

Primary stakeholders receive various benefits such as job satisfaction, monetary compensation, promotions, job advancements, and opportunities to acquire new skills. In addition, they also get other benefits such as health insurance, mortgage settlement, and retirement plans. When the company makes huge profits, shareholders get higher dividends depending on the percentage of their stock. In this case, Weisel and Konroy have one percent of the stock. The board of directors has five percent of the stock while the rest is shared among thousands of stakeholders. This indicates that higher profits in the company accounts to higher dividends among the primary stakeholders. On the other hand, if the company record negative profits, primary stakeholders will not have sufficient cash to pay the compensation they deserve. In this case, low revenue reduces cash available for dividends and other investments required in expanding the operations of primary stakeholders within the organization.

Ethical problems within the company also affect duties of primary stakeholders. Many business operations are guided by ethical values in order to achieve their primary objectives. In case ethical problems are encountered in a company, the performance of primary stakeholders is affected. This leads to poor result and reduced revenue. In addition, ethical problems prevent primary stakeholders from acquiring the required skills. If primary stakeholders are not guided by ethical values in their activities, their capacity to work as required is reduced.

  1. Individuals responsible for solving the problem and 3 reasons to support

The President in charge of this organization has the greatest responsibility of solving ethical problems. People in the top leadership should address the outstanding intersection of these problems. In this case, Weisel as President at KOTEL has an excellent process in place in order to build a collaborative relationship with subordinate workers. He will also allow them to understand their role in the company. The President thus needs to step beyond their roles and lead others in achieving the objectives of the company. One of the major reasons why the President at KOTEL is highly responsible for solving ethical problems is because he has the strongest pillar that leads other subordinate workers in accomplishing the goals of the company. He is the best communicators and problem solvers in an organization. In this case, he has the capacity to direct other workers on what to do in order to accomplish common goals.

The President at KOTEL (Weisel) is also responsible for solving problems because he has the inevitable task of making decisions. In this case, his capacity to make decisions helps in solving difficult ethical problems within the company. To solve the problem, the President is obligated in setting goals and planning strategies to be implemented in an organization. This forces subordinate worker to perform their duties diligently since the President highly supervises them. In this case, ethical problems arising in the KOTEL Company can be solved if strict rules are laid by the President.

In addition, Weisel as the President has the responsibility of solving ethical problems since he is the administrator in an organization. He also has the capacity to coordinate resources efficiently and effectively in order to achieve the organization’s goals. In this case, he will use this power to ensure his subordinate workers perform their duties effectively. Through this engagement, the President at KOTEL helps to encourage workers to attain common goals of the company.

  1. Optional suggestion to Sebastian

Sebastian as a worker in KOTEL needs to have greater objectives that enhance better performance of the company. Sebastian needs to enhance work accuracy. As a worker, he needs to perform his duties accurately in order to be useful in the development of the company. He should thus refine his work in order to develop good work habit and create a comprehensive understanding needed in the advancement of his position. Through job accuracy, Sebastian will also have a greater chance of advancing his skills. This is will allow him to stand a higher chance of getting a promotion in his job. He should thus work as obligated by his leaders in order to match his goals of career advancement.

Sebastian should also enhance social responsibility in order to achieve the objectives of the company. Through observing social responsibility, Sebastian will have the capacity to perform his duties in an ethical manner. This will help in reducing ethical problems since he will be guided by social values and morals. He should thus always do what is right in order to meet the goals and objectives of the company.

To attain connection with the stakeholders, Sebastian needs to aim at enhancing common goals with other individuals in the company. He should engage in a positive relationship with the stakeholders in order to acquire their stake. Together with other stakeholders, Sebastian needs to be involved in activities that enhance the success of the company.

  1. Moral standards

Social responsibility of workers in a company can be determined by moral values. These standards and principles determine whether an action is wrong or rights. In most cases, moral values are based on moral codes, which are morality systems as depicted by religion, philosophy, or culture.


Relativism is an act of conforming whether a certain act is right or wrong. It allows individuals to determine what suits the entire society. Ethical problems in KOTEL affect principles governing operations or the workers. In this case, an ethical problem cause workers to make decisions that align to sense of right and wrong. This means that the decision affects principles that promote good values such as trust, kindness, fairness, and good behaviors. This affects the smooth running organization since there are no ethical guidelines that favor its objectives of the organization.

Core Values

Core Values is the principles that guide people in their activities. KOTEL is characterized by ethical problems since people working there do not conform to ethics thus lowering their likelihood of achieving the goals and objectives. This indicates that workers do not embrace virtues that are based on reality.


Kant’s theory indicates that certain actions are considered wrong even if they are meant to provide positive results and happiness. From this case, Sebastian was ordered to provide an analysis of I-Tech Company despite his realization that the act was unethical. Although the act was aimed to provide profit to the company, Sebastian is nervous because he knew the assignment was unethical.

Moral Rights

Moral Rights is the ability to do what is right. In this case, there are no moral rights since ethical problems such as discrimination, side deals, and gross negligence characterize KOTEL Company. Higher profit rather than moral rights is what guide stakeholders such as Weisel and Konroy. They are ready to engage in unethical activities in order to make a profit.

  1. Milton Friedman support for the option currently before Sebastian

Milton Friedman would highly support the option currently before Sebastian. Through his de-assembling method, he would encourage Sebastian to perform his duties as required by his employer. Whether their activities are ethical or not, Sebastian need to carry out duties assigned to him. In this case, Sebastian needs to focus on matters that affect the interest of the company.

According to Friedman, Sebastian is only a collective worker who is paid to work at the command of the owners. In this case, he should engage in duties assigned to him even if they breach legal and ethical responsibilities. In addition, Friedman also argue that employees should be solely motivated to fulfill their responsibility of creating profit for the owners and not concentrate on whether their role in the company is profiting society or not. In this case, Sebastian should go ahead in analyzing I-Tech Company as requested by Weisel and Konroy.


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