Business Ethics and Character
Education – A Congressional
Whistleblower’s Perspective
Dr. Mark A. Livingston
Management vs Ethics
Is Whistleblowing
Ethical?
The whistleblower is ultimately torn between
loyalty to their employer (or the subject of their
revelation) and their moral commitment to the
law and society at large.
TSA Whistleblowers Fault
‘Lord of the Flies’ Culture at
Agency.
NBC Nightly News
"If you tell the truth in TSA you will be targeted,"
Dr. Mark Livingston, a program manager with the
TSA's office of risk management, told members of
Congress. "I call it the Lord of the Flies — either
attack or be attacked."
Blowing the Whistle at TSA
 Transportation Security Administration whistleblowers
told members of Congress Wednesday that poor
leadership, a lack of oversight, low morale and
widespread retaliation has led to a culture of fear at
the beleaguered agency.
 And all of this ultimately undermines the mission to
help keep the nation's travelers safe.
Congressional Oversight at TSA
 The House Oversight Committee is investigating
allegations TSA officials gave hefty bonuses to
supervisors who ignored security warnings and
retaliated against employees who spoke up by
reassigning them and giving them negative
performance reviews.
 And all of this ultimately undermines the mission to
help keep the nation's travelers safe.
Whistleblower Testimony
 Transportation Security Administration whistleblowers
told members of Congress Wednesday that poor
leadership, a lack of oversight, low morale and
widespread retaliation has led to a culture of fear at
the beleaguered agency.
 And all of this ultimately undermines the mission to
help keep the nation's travelers safe.
Other Whistleblowers Come
Forward
 Dozens of TSA employees have come forward to
speak with congressional investigators about abuses
of power.
 Andrew Rhoades, an assistant federal security
director for the TSA said he was told to profile
Somali-American leaders and was accused by a
supervisor of "going native" after attending a meeting
at a Minneapolis mosque. Directions to profile
members of that community also appeared in his
midyear performance review with instructions to vet
potential visitors with the agency's field intelligence
officer.
TSA Leadership Failures
 The focus on TSA's practices comes as the agency
faces stark criticism for long lines at security
checkpoints, high employee attrition rates and
allegations of waste, fraud and abuse.
 In 2015, an inspector general testified that at TSA
there are problems with technology, procedure and
human errors and that "layers of security were simply
missing.“
 The insular attitude among TSA officials set the stage
for malfeasance and back-room dealings, giving
obscene bonuses to officials whose departments
were in utter failure.
Why do we even need ethics in
business?
 Ethics are moral principles that guide a
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person's behavior.
These morals are shaped by social norms, cultural
practices, and religious influences.
Ethical decision making is the process of assessing
the moral implications of a course of action.
Managers and leaders need to be aware of their own
ethical and moral beliefs so they can draw on them
when they face difficult decisions.
In business, as in government, we face these
decisions everyday – and there are consequences.
It is helpful to identify what
ethics is NOT?
 Ethics is not the same as feelings. Feelings provide important
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information for our ethical choices.
Ethics is not religion. Many people are not religious, but ethics
applies to everyone.
Ethics is not following the law. A good system of law does
incorporate many ethical standards, but law can deviate from
what is ethical. Law can become ethically corrupt, as some
totalitarian regimes have made it.
Ethics is not following culturally accepted norms. Some cultures
are quite ethical, but others become corrupt.
Ethics is not science. Social and natural science can provide
important data to help us make better ethical choices. But
science alone does not tell us what we ought to do.
The Ethics of being a
Whistleblower
 There is a price
Whistleblowers are rarely celebrated – until well after.
 Strategic Decision Process
 The process used affects information acquisition,
search, and alternative generation, thereby affecting
strategic decision effectiveness and firm performance.
 Types of Uncertainty
 Professional & Personal
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Whistleblower – A brief History
 1970s were notable for cases in which employees
who had known of product defects or hazards
decided to "swallow the whistle".
 As a result, consumers and other employees were
seriously harmed; and when the information went
public, so were the organizations that were damaged
by awards in the millions. (Firestone)
Whistleblower – A brief History
 In the late 1970s in the wake of the civil rights
movement, federal and state laws were enacted to
protect employees in private industry, including antidiscrimination legislation to regulate hiring and firing
policies. Many of these laws contained provisions
forbidding an employer to retaliate against employees
for reporting violations to public authorities.
Whistleblower – A brief History
 Attitudes toward whistleblowing have evolved
considerably during the past 50 years in corporate
America, from the early days of the "organization
man" ethos where loyalty to the company was the
ruling norm, to the present time when public outrage
about corporate misconduct has created a more
auspicious climate for whistleblowing.
 1960s, corporations had broad autonomy in
employee policies and could fire an employee at will,
even for no reason.
Character Traits Needed in Business
or Government Ethics
 Six Qualities / Pillars of character that are
needed for ethical decisional making:
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Trustworthiness
Respect
Responsibility
Fairness
Caring
Citizenship
Trustworthiness
 Be honest
 Don’t deceive, cheat or steal
 Be reliable — do what you say you’ll do
 Have the courage to do the right thing
 Build a good reputation
 Be loyal — stand by your family, friends and
country
Respect
 Treat others with respect; follow the Golden
Rule
 Be tolerant of differences
 Use good manners, not bad language
 Be considerate of the feelings of others
 Don’t threaten, hit or hurt anyone
 Deal peacefully with differences, insults and
disagreements
Responsibility
 Do what you are supposed to do
 Persevere: keep on trying!
 Always do your best
 Use self-control
 Be self-disciplined
 Think before you act — consider the
consequences
 Be accountable for your choices
Fairness
 Play by the rules
 Take turns and share
 Be open-minded; listen to others
 Don’t take advantage of others
 Don’t blame others carelessly
Caring
 Be kind
 Be compassionate and show you care
 Express gratitude
 Forgive others
 Help people in need
 Play by the rules
Citizenship
 Do your share to make your community
better
 Cooperate
 Get involved in community affairs
 Stay informed; vote
 Be a good neighbor
 Obey laws and rules
 Respect authority
Enron
 Sherron Watkins, a senior finance executive,
tried unsuccessfully to get Ken Lay, the CEO,
to address her concerns about the irregular
nature of the financial engineering which
ultimately caused its collapse;
Olympus
 Where the newly appointed CEO, Michael
Woodford, discovered that major losses had
apparently been concealed from
shareholders and confronted the board, only
to be fired – Olympus is currently being sued
for $273million and recently
GlaxoSmithKline, where an anonymous
whistle-blower reported corrupt sales
practices – the subsequent investigation by
the board blew up in their faces when the
investigator was arrested and
GlaxoSmithKline was itself accused of
corrupt practices by the authorities.
GlaxoSmithKline
 Where an anonymous whistle-blower
reported corrupt sales practices – the
subsequent investigation by the board blew
up in their faces when the investigator was
arrested and GlaxoSmithKline was itself
accused of corrupt practices by the
authorities.
Wells Fargo
 “At least 5,300 Wells Fargo employees have been
fired for ethics violations like setting up illicit accounts
without customers’ knowledge to meet sales targets.”
Another group of fired employees have filed a lawsuit
against Wells Fargo; claiming “that they played by the
rules and were punished for it.” They say they
remained ethical and refused to create unauthorized
accounts and were fired for doing so. “If you weren’t
willing to engage in these types of illegal practices,
they just booted you out the door and replaced you.”
This put a strain on many people who needed these
jobs and were unjustly fired.
Questions