Coca-Cola Company: Working Hours Case Study

The purpose of the report, the ethical problem, and the research experience

The integration of business ethics constitutes one of the fundamental elements in the contemporary business environment. Ethics entails a set of conducts, which act as a guide to human behaviour (Sean, Hollingsworth, and Eidsness 676). Noriega and Drew corroborate that ethics “involves a systematic study of rules, standards, and codes or principles, which provide a guide for moral conduct” (35). A 2006 study conducted in the US by the Association of Certified Fraud Examiners affirms that most employees who witness unethical behaviour in the workplace do not report to the relevant authorities (Vadera, Aguilera, and Caza 553).

As a human resource manager working for an information technology company, I am committed to improving the organisation’s competitiveness in the IT industry. My responsibility involves monitoring the employees’ payroll. Recently, Calvin, one of my assistants, reported that Mary, who is an employee in the operations department, does not adhere to the company’s code of conduct with reference to the working schedule. Mary has recently been leaving her workplace at 2:30 pm instead of 5:30 pm. She colludes with her friend, Joey, who gives her access to the employees’ payroll database to alter her working hours. The possible keywords and related terms, which will be used in conducting this research include ethics, code of ethics, code of conduct, integrity, legal issues, ethical culture, whistleblowing, whistle-blower, fraud, and dilemma. The questions to be answered include

• What are the ethical issues in this case?
• What was the right thing for Joey to do?
• What compelled Mary to lie?
• Why was Joey afraid of reporting?
• What was Calvin’s dilemma?
• What category of ethics does Mary and Joey’s case fall?
• What is the best way to resolve this issue?

A number of ethical issues can be identified from this case. It is assumed that the organisation does not put much emphasis in the code of conduct, which has led to unethical practices. Some of these issues include the misrepresenting of the number of hours worked, lying on work reports, falsifying payroll records and time sheets, and misusing the employer’s assets (Perryer and Scott-Ladd 124). One of the intangible assets considered in organisations’ operation entails time, and thus falsifying the timesheet amounts to theft of a company asset.

The analysis of this scenario is conducted using the Coca Cola Business Conduct Guidelines. The guidelines aid in the identification of some of the important values applied by the Coca-Cola Company that may be applied to this case. The Code states that supervisors should ensure that all the individuals understand their responsibility. Moreover, supervisors should make sure that employees are comfortable with reporting ethical problems without fear of retaliation (The Coca-Cola Company 5).

The company’s code of conduct is committed to protecting employees who engage in honest reporting. The company’s code of conduct states, “Honest reporting does not mean that you have to be right when you raise your concern, you just have to believe that the information you are providing is accurate” (The Coca-Cola Company 9). In an effort to entrench ethics in the workplace, the Coca-Cola code outlines the disciplinary actions imposed on individuals who violate the code. Employees who violate the code might be suspended from the workplace without pay, lose the merit for increase of their bonuses and stock options, and in extreme situations loss of employment.

Alternative I: Evaluation of Coca-Cola Code of Conduct

The Coca-Cola Company is one of the most successful multinational corporations. Apart from effective strategies, the company’s success has arisen from the integration of optimal ethical standards. The company has formulated a comprehensive code of conduct that guides employees in executing their job responsibilities. One of the lacking issues according to the scenario entails integrity. According to the scenario, Mary and Joey depict the lack of truthfulness in executing their job roles.

The Coca-Cola Code of Conduct outlines integrity as one of the fundamental elements in its operation. The company has incorporated integrity as one of the core values in its pursuit for vision 2020 (The Coca-Cola Company 1). All the firm’s employees are required to act responsibly towards the company. Furthermore, the Coca-Cola Code of Conduct requires employees to raise concerns to the company’s management team in case they observe behaviour that amounts to the violation of the company’s code. The code of conduct has integrated a high degree of anonymity and confidentiality.

The code of conduct states that when “you make a report to the Ethics and Compliance Office or through Ethics Line, you may choose to remain anonymous, although you are encouraged to identify yourself to facilitate communication” (The Coca-Cola Company 7).This approach has played a fundamental role in protecting employees. By so doing, the company’s managers are in a position to undertake corrective actions, hence protecting the company’s reputation.

The case shows that Calvin is experiencing dilemma on whether to report the issue to the HR Manager or not. The Coca-Cola Code of Conduct has outlined the different avenues that individual employees can use in reporting unethical practices. Some of the channels include the management, the company’s legal counsel, local ethical officer, or the company’s ethics and compliance office (The Coca-Cola Company 2).

In its pursuit to nurture a high level of integrity in the workplace, the company’s code of conduct further outlines how individual employees are required to deal with company assets. The code of conduct states that employees should not “engage in personal activities during work hours that interfere with or prevent you from fulfilling you job responsibilities’ (The Coca-Cola Company 14). Employees are restricted from using the company’s assets in activities that are not associated with their work. Thus, employees must obtain a written approval from the Ethics Officer if they intend to use the company’s assets for their personal benefit (The Coca-Cola Company13).

The code of conduct defines the company’s assets to include “time, money, company products, vehicles, and company equipment such as telephone, photocopiers, wireless communication devices, and computer systems” (The Coca-Cola Company 15). Additionally, the company’s assets further include trademarks and proprietary information. Thus, the Code does not only focus on physical assets, but also the intangible organisational assets.

Employees constitute one of the most important corporate assets. Subsequently, it is essential for organisations to ensure that their skills and talents are utilised optimally. However, managers cannot achieve this goal if the organisation is characterised by conflict of interest such as using company time to attend to personal matters. The existence of conflicts of interests as outlined in assumption 2 in appendix 1 might lead to a high rate of absenteeism, hence affecting the organisation’s overall performance. Thus, time is an important company asset (Coenen 131).

Falsifying the time sheet constitutes one of the thefts on the company assets. Organisations are obliged to compensate their employees fairly and equitably. One of the metrics considered in achieving this goal entails compensating the amount of time that employees spend in executing the assigned job roles. Thus, companies should adjust their payroll according to the amount of time that employees spend at their respective workplace. This scenario illustrates a situation whereby the company is likely to incur expenditure for services not received with reference to employee time (Sauser 13). Hollinger and Davis cite time theft and dishonesty as some of the occupational crimes currently encountered in the workplace (204). The responsibility to ensure the accuracy of information does not rest with the accounting and finance officers, but all the employees (The Coca-Cola Company 11).

In addition to acting with utmost integrity, the Code of Conduct further states that employees should

Act in the best interest of The Coca-Cola Company while performing your job for the Company. A conflict of interest arises when your personal activities and relationships interfere or appear to interfere with your ability to act in the best interest of the company (The Coca-Cola Company 21).

Reporting false information underscores the existence of a conflict of interest between the employees’ job roles and their personal issues. Mary might have been motivated to engage in the falsification of payroll report in order to attend to personal issues. Additionally, the falsification of working hours was made possible by the existence of friendship between Mary and Joey.

The Coca-Cola Company has taken effective measures in curbing the occurrence of conflict of interests in the workplace due to the existence of friendship amongst employees. The company’s code of conduct considers the intentional misrepresentation of records as a violation of codes. Therefore, the situation outlined in this situation illustrates the existence of extensive violation of this code (The Coca-Cola Company 24).

The Code of Conduct requires managers to apply a high level of professionalism in dealing with ethical problems. Amongst the issues that managers should take into account entail anonymity and confidentiality of the information source. This aspect is critical in promoting a culture of whistleblowing on unethical behaviour, hence increasing the likelihood of undertaking the necessary measures (Vadera, Aguilera, and Caza 557).

Alternative II: Application of laws

Mary and Joey’s actions as outlined in the scenario underscore the existence of fraud in the workplace. Scott defines fraud as “intentional misrepresentation of the truth” (272). Fraud is an intentional act that is intended at achieving a desired outcome. Manipulation of evidence and documents is one of the indicators of fraud in the workplace. Mary and Joey’s actions amount to occupational fraud. Turvey defines occupational fraud as “the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organisation’s resources or assets” (19).

This scenario illustrates a situation characterised by the violation of the Fair Labour Standards Act [FLSA] as opposed to whistleblowing laws. The FLSA emphasise the importance of adhering to minimum wage stipulations and record keeping. The behaviour by the two subjects, viz. Mary and Joey, amounts to robbing the company valuable working time and wages, which is not only unethical, but also illegal according to the FLSA.

On the contrary, whistleblowing laws are mainly applicable in reporting internal organisational issues to an external party (Mayer par. 3). However, this case only involves internal organisational stakeholders. In order to promote whistleblowing in the workplace, it is imperative for the organisation to ensure that all the company’s employees understand the significance of whistle-blowing laws (Chia par.3). The ‘whistleblowing’ act might be considered as treason in some cases (Secunda and Estreicher 257).

The significance of whistleblowing laws is to make the whistle-blowers feel protected from any form of reprisals by raising the unethical issues to the relevant authorities (Clarkson, Miller, and Cross 34). The Office of Attorney General in New York is focused on eliminating corruption and fraud activities in both the private and public sector (Department Of Investigation par. 8). One of the avenues that the State intends to achieve this goal is through the promotion of whistleblowing. In a bid to achieve this goal, the state has integrated a number of whistleblowing laws. Some of the laws implemented by New York include the Sarbanes Oxley Act, the False Claims Act, and the New York State Labour Law (Patrick par.4).

The state law further protects employees from being penalised or discharged from their respective workplace for disclosing or providing information on illegal activities (Mclnnis par. 3). For example, the New York Labour Law, Section 40 states that an “employer shall not take any retaliatory personnel action against an employee because such employee discloses or threatens to disclose to a supervisor or to a public body an activity that amounts to violation of law, rule, or regulation by the employer” (Thomson Reuters par.1).

In summary, the integration of effective laws is fundamental in promoting ethical conduct in the workplace. This assertion arises from the view that it promotes whistleblowing on unethical behaviour in the workplace by protecting ‘whistle-blowers’. Subsequently, organisational managers will be able to implement the necessary corrective measures, hence entrenching an ethical culture in their workplace.

Personal perspective and recommendations

The scenario presented by Calvin illustrates the existence of a significant violation of Code of Conduct in the workplace. Mary and Joey violated the concept of integrity, which is a fundamental ethical aspect. Joey facilitated the occurrence of unethical behaviour by colluding with Mary. Subsequently, Mary was in a position to engage in activities that amounted to a conflict of interest, hence robbing the company valuable employee time. Therefore, the two employees engaged in the misrepresentation of material facts in the payroll database, which amounts to the violation of the code of ethics.

As an assistant to the HR manager, Calvin was required to ensure effective adherence to the company’s code of conduct. Thus, in the course of undertaking his job roles, he should have ensured that Mary appreciates the importance of adhering to the set employee time by eliminating the conflict of interest in executing her job roles. Calvin’s reluctance to report Mary’s conduct to the senior management might arise from the fear of retaliation by Mary. Such instances might lead to Calvin experiencing job-related stress. The case further illustrates the lack of an effective code of conduct to promote whistleblowing in the organisation. Subsequently, this gap led to the existence of fraud with reference to reporting in the employee payroll, which is a contravention of the labour laws, as entrenched in the Fair Labour Standards Act (Pickett 54).

In order to deal with the issues faced in the workplace, the following issues will be considered.

1. Advocating compliance with the FLSA – the scenario at the workplace illustrates the existence of a gap with reference to compliance with the elements stipulated by the FLSA, viz. accurate and effective record keeping and adherence to the minimum working hours. In a bid to address this gap, the organisation should consider entrenching the elements outlined in the FLSA in its own code of conduct and ensure that all employees understand the stipulated guidelines and the implications for noncompliance.
2. Developing a strong ethical culture – the existence of misrepresentation in the workplace illustrates poor ethical culture. However, in order to promote positive behaviour in the workplace, it is imperative for the firm’s top management team to consider formulating a comprehensive code of ethics. The code of ethics should guide the employees’ activities in the workplace by outlining what is good and bad. Furthermore, the code of ethics should stipulate the implications of engaging in unethical practices. Thus, the likelihood of employees acting in the best interest of the organisation will be improved.
3. Protecting employees who provide information – the organisation should ensure that employees who provide information or report on unethical employee behaviour are protected adequately from retaliation. This goal can be achieved by ensuring that the source of information on unethical employee behaviour is confidential. Through this approach, employees will feel secure and identify with the firm.

Another approach that can be considered in dealing with the situation entails firing the involved in such behaviour. This approach would ensure that propagation of such behaviour is eliminated. Despite its effectiveness, this approach would make employees perceive the top management as being autocratic, hence destroying the working environment.

On the application of the code of conduct, the HR manager will avoid the element of bias, which means unfair and inequity practices are eliminated. Bias in dealing with the problem can be evidenced by treating some individuals unfairly, for example punishing others and leaving some.

Consequences of Personal Perspectives

Integrating whistleblowing laws in the company’s code of conduct will play a fundamental role in identifying unethical behaviour that might affect the organisation’s overall performance adversely. Thus, the organisation’s HR managers will be in a position to undertake effective corrective actions. Additionally, integrating the concept of whistleblowing will aid in making employees responsible. However, not all the employees might appreciate the concept of whistleblowing, which will make it ineffective.

Some of the notable cases of unethical practices in the workplace relates to the Enron Company and WorldCom cases (Fernando 222). Enron collapsed due to the existence of unethical practices with reference to financial reporting amongst the top accountants. Subsequently, the firm’s shares collapsed significantly leading to the loss of reputation amongst investors (Li 37). Similarly, WorldCom Company was delisted from the NASDAQ stock market due to the involvement in creative accounting amongst some of the employees in the finance department (Jennings 262).

Conclusion

The case study underscores the importance of entrenching ethics in organisations’ strategic management processes. The case illustrates the existence of a significant gap in the organisation’s implementation of ethical standards in the workplace. In order to entrench ethics in the workplace, the HR manager will promote the concept of whistleblowing by ensuring that whistle-blowers are protected adequately. Consequently, the organisation will eliminate any possible retaliation towards whistle-blowers. In a bid to resolve the issue encountered, I would ensure that Mary and Joey are punished for their actions. The punishment would involve cutting the benefits included in their reward package for three months. This approach will improve their appreciation on the importance of ethics in the workplace.

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