CASE 10.5 Whistleblowing at the Phone Company Joseph R. Desjardins and John J. M

Question

CASE 10.5 Whistleblowing at the Phone Company Joseph R. Desjardins and John J. McCall Michael J. an employee of the phone company, promote the fund-raiser. When Michael J. brought recognizes that he has divided loyalties. The com his to the attention of his manager, the whole inci- pany has treated him well and, despite some minor dent was dismissed as trivial. After all, the resources disagreements, he gets along quite well with upper were going to charity management and his own department. However the phone company is a public utility, regulated these charitable efforts were betraying the public for the public interest by the state's Public Utlty st. The public, and not private individuals acting Commission (PUC). As such. Michael J. recog as their agents, ought to decide for themselves when nizes that his firm owes a loyalty to citizens that to contribute to charity. As a result, he notified the goes beyond the simple responsibility that other PUC of this misallocation of funds. Knowing that firms owe to their consumers. After some consideration, Michael J. judged that records of calls from his desk could easily be traced, Once a year, as part of a major fund-raising drive Michael J. made the calls from pay phones and from for a local charity, the phone company encourages its his house employees to donate their personal time and money A required by law, the PUC investigated the to this charity. This year, however, Michael J. discov- charges. Although the facts were as Michaeli ers that a significant amount of company resources reported are being used to support the charity. The company is printing posters and sending out mail at its own the public trust. expense and is using employees , the PUC judged that the misallocation was not substantial enough to constitute a violation of However, executives of the phone company were less willing to dismiss the incident. on company time to worth, 1990). From Joseph R. Desjardins and John J. McCall Contemporary Issues in Business Ethics, 2nd ed. (Belmont, CA: Wads

Explanation / Answer

The response to this question cannot be considered to be as straightforward. The fact remains that a company needs to be able to cater to the needs of the public and especially where public interest needs to be considered, such as when we need to consider a business that operates or provides a service for or in the public utility sector. This is why we can say that it is a duty of the employee for such a business to look after the public interest. But, as we all know, it is the duty of the employee towards the benefit of the company as well as the requirements of the stakeholders of the company in order to be able to create a sustainable business practice Therefore, we can also say that as well as the public interest the employee also needs to take into account the wellbeing of the company itself. In the case, however, the public interest will need to be more prevalent.

For an employee of a private company, however, the roles are reversed. We can say that the employee needs to be able to cater to the needs of the company’s benefits and the needs of the shareholders, the stakeholders as well as the wellbeing of the company due to a simple fact that private sector companies need to be more goal oriented and focus due to the presence of intense competition in the market. They could be selling goods that are non-essential to the wellbeing of the people and therefore, in the case, they could be an expansion from the matter of keeping the interests of the public first. This is why we can say that unlike a public utility business such as electricity provided by a private company, the company not only needs to take care of their profit but, their main focus should be the betterment of the interests of the public while at the same time, a privately owned apparel company does not need to cater to these requirements, rather, they will first need to be able to create sustainable practices for their stakeholders and only then need to cater to the needs of the public.

In the case of a large defence contractor, however, they would still be counted as a private firm that is providing a public utility and therefore, public interest should be their priority.

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