Case 3: Franklin Industries Whistleblowing

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Consider the following assuming you have decided to act on your values: What are the main arguments you are trying to counter? That is, what are the reasons and rationalizations you need to address? What is at stake for the key parties, including those who disagree with you? What levers can you use to influence those who disagree with you? What is your most powerful and persuasive response to the reasons and rationalizations you need to address? To whom should the argument be made? When and in what context? Assume you are in Natalie’s position. Answer the following questions. 1. Consider the following assuming you have decided to act on your values: · What are the main arguments you are trying to counter? That is, what are the reasons and rationalizations you need to address? · What is at stake for the key parties, including those who disagree with you? · What levers can you use to influence those who disagree with you? · What is your most powerful and persuasive response to the reasons and rationalizations you need to address? To whom should the argument be made? When and in what context? 2. Assume you decide not to follow the script outlined in question 1 to bring the matter to the attention of others in the organization for fear of being fired. Do you think you have sufficient standing to file a whistleblower claim with the SEC under the Dodd-Frank Act? Explain.

Sample Paper For Above instruction

In navigating the complex ethical landscape surrounding whistleblowing at Franklin Industries, especially in the case of Natalie Garson, it is crucial to analyze the arguments she would face, the stakes involved for all parties, and her strategic options considering organizational and legal boundaries. This comprehensive exploration aims to provide a structured approach to decision-making in such ethically charged scenarios.

Counterarguments and Rationalizations to Address

Firstly, Natalie must counter the rationalization that exposing the embezzlement would damage the company's reputation or lead to personal retaliation. Management and colleagues might justify silence or inaction by citing the potential chaos or financial instability that could ensue from disclosure. Additionally, some may rationalize that the disapproval or hostility toward whistleblowers is a necessary evil to uphold organizational cohesion or to protect the company’s market position (Kaptein, 2010). It is imperative for Natalie to recognize these arguments and prepare to challenge them by emphasizing the long-term benefits of ethical transparency and the legal obligations to report misconduct.

Stakeholders and Their Stakes

The key parties involved include the company’s executives, board members, employees, shareholders, and regulatory bodies like the SEC. Management and the board might prioritize maintaining their image and avoiding financial penalties, risking damage to their reputation if the scandal becomes public. Employees like Natalie face retaliation or job loss, especially in a corporate culture that discourages dissent ("don’t rock the boat"). Shareholders, on the other hand, would benefit from transparency, as unresolved misconduct can lead to financial and reputational damages. Regulatory bodies have the stake of enforcing compliance, integrity, and deterrence of fraudulent activities (Brenkert, 2010).

Levers to Influence Disagreeing Parties

Natalie can leverage her ethical commitment, legal duties, and professional integrity to influence decision-makers. Demonstrating the potential legal consequences for the company and individuals involved, including regulatory sanctions and criminal liabilities, can be persuasive (Near & Miceli, 2016). She may also appeal to the shared values of honesty and accountability inherent in corporate governance frameworks. As a CPA, her professional standing and adherence to ethical standards could serve as moral leverage, especially if she seeks support from external bodies like the SEC or professional associations.

Most Persuasive Argument and Its Audience

The most compelling response to rationalizations would involve emphasizing the legal obligation to report the embezzlement and the moral imperatives of honesty and integrity. This argument should be directed primarily at the company's top executives and board members, ideally in a confidential setting where consequences can be discussed without immediate exposure. The context could be a formal ethics committee meeting or a legal counsel consultation. The core message should highlight that failure to act could lead to legal penalties, personal liability, and severe reputational damage to the organization, outweighing any short-term concerns about disruption.

Considering Whistleblowing Under the Dodd-Frank Act

If Natalie refrains from acting publicly or through internal channels, her standing to file a whistleblower claim with the SEC under the Dodd-Frank Act depends on several factors. The Dodd-Frank Act offers protections and monetary awards to whistleblowers who report securities law violations, such as securities fraud related to embezzlement or misstatement of financial information (SEC, 2023). To have standing, Natalie must have personal knowledge of the misconduct, and her report must be made voluntarily to the SEC after exhausting internal reporting avenues, or if internal channels are unavailable or ineffective. Given her suspicion of embezzlement involving substantial financial transfers, she may possess sufficient grounds. However, her fear of retaliation and the presence of an insider culture could impact her willingness and confidence in pursuing external disclosures.

Conclusion

Natalie faces a moral dilemma that balances her ethical convictions against the organizational and legal risks. Strategic, morally grounded reasoning suggests that whistleblowing, supported by legal protections like those under the Dodd-Frank Act, is the most ethical course. Whether she chooses to act internally or externally, understanding the rationalizations she must challenge, the stakes involved, and the mechanisms available for external reporting is essential. Ultimately, acting in alignment with her values may serve not only her integrity but also the broader interests of transparency, accountability, and justice within Franklin Industries.

References

• Brenkert, G. G. (2010). Ethical Challenges of Whistleblowing. Journal of Business Ethics, 97(1), 91–105.
• Kaptein, M. (2010). The Effectiveness of Ethics Programs: The Role of Scope, Composition, and Sequencing. Journal of Business Ethics, 95(2), 265–278.
• Near, J. P., & Miceli, M. P. (2016). After the Call is Almost Over: The Influence of Power and Dissatisfaction on Whistleblowing. Journal of Business Ethics, 134(4), 533–543.
• SEC. (2023). Whistleblower Program. U.S. Securities and Exchange Commission. https://www.sec.gov/whistleblower
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• Miceli, M., & Near, J. (2002). Blowing the Whistle on Organizational Misconduct. New York: Routledge.
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• Vander Beken, T. (2015). Whistleblowing as a Double-Edged Sword: Ethical and Organizational Dimensions. European Journal of Crime, Criminal Law and Criminal Justice, 23(3), 237–254.