Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
Instructor Manual
Chapter 9: Ethics Reporting Systems
CHAPTER 9 LEARNING OBJECTIVES AND END OF CHAPTER QUESTIONS
After reading this chapter, you will be able to
9.1 Identify why some employees do not report ethical misconduct.
End of Chapter Question 1: Why do some employees refuse to report ethical
misconduct?
9.2 Assess if you have the qualities and skills of an ethically approachable
manager.
End of Chapter Question 2: What qualities and skills must a manager develop for
9.3 Determine the type of ethics point person that could best serve your
organization.
End of Chapter Question 3: How does the size of an organization determine the
CHAPTER 9 OVERVIEW
High-performance organizations depend on employees speaking honestly with their colleagues,
managers, and company owners when ethical problems arise. This chapter examines why
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
employees maintain silence when they observe ethical misconduct and what management
behaviors and internal mechanisms can elicit such essential information. Excellent managers are
CHAPTER 9 LECTURE OUTLINE
Suggested Time: 2 to 3 hours of class time is recommended to present this chapter.
I. Chapter Question 1: Why do some employees refuse to report ethical
misconduct?
Extent and Cost of Employee Silence
Reasons for Employee Silence
II. Chapter Question 2: What qualities and skills must a manager develop for
employees to feel comfortable approaching the manager about ethical issues
and unethical behaviors?
III. Chapter Question 3: How does the size of an organization determine the type
of ethics point person that could best serve an organization?
Ethics and Compliance Officer
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Collins, Business Ethics 3e
V. Chapter Question 5: What are some negative outcomes that many
whistleblowers have experienced?
The False Claims Act
CHAPTER 8 SUPPORTING MATERIALS
Textbook Inserts
Ethical Dilemma Analysis
• What would you do: Google Employee Dissent
Tables and Figures
• Table 9.1: Observed Misconduct Unreported
Self-Assessment
• Self-Assessment 9.1: Approachability
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Collins, Business Ethics 3e
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Thematic Boxes
CHAPTER QUESTION 1: WHY DO SOME EMPLOYEES REFUSE TO REPORT
ETHICAL MISCONDUCT?
Business ethicist Archie Carroll differentiates between moral, amoral, and immoral managers.
• Amoral managers consciously and intentionally decide “that ethics and business should not
mix… and believe business activity resides outside the sphere to which moral judgments
apply.”
TYPES AND EXTENT OF UNETHICAL ISSUES NOT REPORTED
Managers also rely on employees to take immediate corrective action when ethical misconduct
occurs or inform them so the manager can address the problem before the situation worsens, yet
sometimes employees are hesitant to share personally sensitive issues with their manager.
• Employee silence refers to an employee who observes ethical misconduct at work but
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
• Between 2011 and 2015, the SEC received 10,540 whistleblower tips.
• The False Claims Act includes a qui tam provision where citizens can sue the fraudulent
supplier on behalf of the government and be rewarded a percentage of the financial
REASONS FOR EMPLOYEE SILENCE
• In an Ethics Resource Center survey, employees primarily report misconduct when
• Table 9.3, Reasons for Employee Silence, highlights a wide range of organizational
factors, observer factors, and anticipated negative outcomes reasons for maintaining
silence about an observed ethical misconduct.
DISCUSSION ACTIVITY
Have students review the list of unethical behaviors that typically are not reported (Table 9.1).
Have the students observed any of those behaviors at work or school? Which of those behaviors
didn’t they report? Why? (Match with “Reasons for Employee Silence” in Table 9.3.) In small
groups, have students describe the situation and explain why they failed to do anything about it.
• Ethics Resource Center survey identifies various types of retaliation for reporting:
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o 69 percent intentionally ignored or treated differently by supervisor
DISCUSSION ACTIVITY
Tell students that the dean of the School of Business, college president, or boss has asked them
CHAPTER QUESTION 2: WHAT QUALITIES AND SKILLS MUST A MANAGER
DEVELOP FOR EMPLOYEES TO FEEL COMFORTBALE APPROACHING THE
MANAGER ABOUT ETHICAL ISSUES AND UNETHICAL BEHAVIORS?
The best ethics reporting system is a manager who
• Welcomes ethical discussions with employees and input on ethical misconduct
• Is honest and responsible
• Is willing to discuss his or her own ethical mistakes in a manner that humanizes the
manager without losing authority
DISCUSSION ACTIVITY
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
Have students think about a time when they approached a boss, teacher, or some other authority
CHAPTER QUESTION 3: HOW DOES THE SIZE OF AN ORGANIZATION
DETERMINE THE TYPE OF ETHICS POINT PERSON THAT COULD BEST SERVE
AN ORGANIZATION?
SMALL BUSINESS
• Mentor, owner, other senior employee—Ethics responsibility is assigned to someone who
is in the core management circle and well-informed about firm operations.
MODERATE SIZE ORGANIZATION
• Mentor
LARGE ORGANIZATION
• Ethics and compliance officer
ETHICS AND COMPLIANCE OFFICER (ECO)
The Federal Sentencing Guidelines (see Chapter 3) provide a judicial incentive for assigning a
high-level employee the responsibility of managing ethical performance. A growing number of
organizations assign this responsibility to an ethics and compliance officer (ECO).
• The position enables sensitive information to be shared without being diluted or stymied
by the chain-of-command.
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Collins, Business Ethics 3e
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• Organizations also differ according to the nature and scope of ECO activities.
o Some organizations are highly centralized and one person or office determines ethics
ECO DUTIES
• ECO duties include:
o Manage internal reporting systems.
o Assess areas for ethical risks.
o Offer guidance.
ECO SKILLS
• Best practices for best attributes of an ECO include:
o Insider status and well-networked with business unit managers
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o Independence from senior staff and freedom from internal political pressure
o Operational experience
DISCUSSION ACTIVITY
Have students review the lists of ECO duties and skills and give them the following prompts:
Assume you were employed by a small business or college. What advice would you give to
ensure that the duties of an ECO were integrated in management operations?
How best to communicate an ethics compliance strategy
• Establish presence in existing e-newsletters.
OMBUDSPERSON
• Another internal channel for communicating information about potential ethical and legal
violations is an organizational ombudsperson.
• The ombudsperson concept originated in government, and has spread to other types of
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Collins, Business Ethics 3e
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• An ombudsperson, similar to an accountant or lawyer, is held legally accountable to a
professional code of ethics. The International Ombudsman Association’s Code of Ethics
highlights four ethical principles and corresponding policies:
1. Independence. The ombudsperson is independent in structure, function, and
appearance to the highest degree possible within the organization.
CHAPLAINS
• Some businesses have contracted out with chaplain consulting organizations as a
mechanism for employees to confidentially share their personal and ethical concerns.
• Chaplains are members of a religious clergy trained in providing spiritual advice.
• 2017: The two most prominent providers of chaplains are:
o Marketplace Chaplains: 1,500 Chaplains served 739 clients with 470,000 employees
and family members in 46 states.
• The chaplains are on call 24 hours a day, 7 days a week.
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Collins, Business Ethics 3e
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• Workplace interactions between a chaplain and an employee are kept to a minimum.
CHAPTER QUESTION 4: WHAT ARE THE ATTRIBUTES OF AN EFFECTIVE
EHTICS ASSIST LINE?
ETHICS ASSIST LINES
• Assist lines, previously referred to as ethics hotlines, have long been popular with
organizations as a method of obtaining information about situations that may be unethical
or illegal.
• Nearly all Fortune 500 companies provide toll-free assist lines for employees from all
• Association of Certified Fraud Examiners report that 39 percent of fraud cases came from
tips.
• For colleges and universities, the EthicsPoint system highlights four categories of
wrongdoing. An “other” category is available for issues that do not fit any of these four
options.
1. Unethical financial abuse, such as fraud
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Collins, Business Ethics 3e
SAGE Publishing, 2022
• At Sears, whose assist line receives 16,000 to 18,000 calls a year from its 300,000
employees, only a very small percentage of the calls are about potential law violations.
o The largest group of assist line callers consists of employees asking for assistance to
• Confidentiality and false accusations are two central issues addressed by effective assist
lines.
DISCUSSION ACTIVITY
Have students describe a situation when they observed someone at work behave unethically but
did not do anything about it. Would they have informed an ethics assist line if one had been
available? Why or why not?
CHAPTER QUESTION 5: WHAT ARE SOME NEGATIVE OUTCOMES THAT MANY
WHISTLEBLOWERS HAVE EXPERIENCED?
BACKGROUND
Sometimes an individual concerned about ethics works for an organization that refuses to take
action against unethical or illegal activities. When this happens, an employee is faced with a
major conflict of values—should the employee remain loyal to the organization or inform
Instructor Resource
Collins, Business Ethics 3e
SAGE Publishing, 2022
• Three mechanisms for financial compensation for person blowing the whistle
1. False Claims Act
FALSE CLAIMS ACT
• Researchers estimate that 10 percent of federal government spending is lost to fraud.
• The U.S. Department of Justice encourages whistleblowing on fraud issues by offering
financial rewards for information that leads to successful recovery of funds.
• President Ronald Reagan’s administration strengthened the False Claims Act in 1986
following a series of defense industry frauds against the federal government.
o An employee who independently sues his or her employer for fraud can now receive
between 15 to 30 percent of the total recovery amount plus attorney fees and related
costs and expenses for successful lawsuits.