legal issue

Posted: August 6th, 2013

Legal Issue






Legal Issue

Question One

RTL as a company tries to look into the interests of its employees and those of the business; therefore, they try to circumvent situations or circumstances that might seem to threaten to the interests of the company. The RTL Code states that a ‘Conflict of interest’ exists when personal interests encumber with the company’s interests. The code also suggests that a conflict of interest may arise when employee interests make it difficult for them to perform their duties impartially and efficiently. For example, a conflict of interest may arise when an employee of RTL decides to conduct business outside the confines of the company without the knowledge of the business executives. This is perceived as a conflict of interest because it provides competition to the company, which is unacceptable.

Conflict of interest is a common phenomenon in businesses, and it is usually brought about by selfish interests of the employees or business owners. It is a term used to depict a fiduciary, contrary to his duty to act for the benefit of or protect the interests of his employer, abuses that relationship for personal advantage. Activities that lead to conflict of interest are sometimes perpetuated and facilitated by both senior and junior officials in the organizational structure of an institution. Incompatibility of professional duties has most times led individuals to breach their code of conduct in the workplace and act for their own benefits, which develops into a conflict of interest. Most organizations punish or discipline those found to have been involved in conflict of interests against the companies.

Question Two

According to the Mitchell Jones scenario, Mitchell is the only one who is genuinely concerned about the company’s financial accounts. The manager of the internal auditing group is not being honest about the total amount of sales. The fact that he is recording the amount at 15 percent higher than they are in the invoices shows that he does not care for the company. In addition, the chief financial officer dismisses the reports made by Mitchell about the discrepancies of the auditing officer by claiming that junior auditing officers do not understand the complexities of the tax and rebate laws. This behavior displays a lack of professionalism and irresponsibility on the part of the auditing group manager and the chief financial officer. It also raises questions as to whether they are both working towards enriching themselves at the expense of the company.

According to the RTL Code Number Six, “the company requires honest and accurate recording and reporting of information in order to make responsible business decisions and provide an accurate of our performance” (Code). This code clearly states that all employees have to ensure that they do not infringe company policies. RTL Code Number Seven also affirm, “If you believe that actions have take place that violate this code you must bring the matter to the attention of the company” (Code). Concerning these Codes, the auditing group manager and the chief financial officer have both breached the requirements of the company. The auditing group manager did not provide accurate reports about their sales, and the chief financial officer failed in his duty to report the matter to the senior ethics advisor.

Question Three

Susan Johnson uses her company’s switchboard phone to contact her husband’s suppliers and retailers. This behavior is wrong and inappropriate on her part as an employee of RTL. The RTL Code Number 5.3 clearly states, “Employees shall not simultaneously engage in business activities for any other business enterprise” (Code). This demonstrates her breach of the Code of Conduct, as she took advantage of the company’s resources to benefit her husband’s business. As much as she does this when it does not interfere with her work, it still stands as a breach of conduct because she is operating against the rules and regulations of the company. RTL Code Number 5.1 asserts, “No employee shall work with a person or entity which competes directly or indirectly with the company” (Code). Susan breached this Code when she decided to engage in business with her husband behind the RTL’s back. As much as they both believe that their business does not compete with RTL, the fact that they are producing similar merchandise is against the code of conduct.

Susan also breached Code of Conduct Number Three, which says, “The use of company resources for personal benefit without proper authorization is prohibited” (Code). When she decided to use the company phone to call their suppliers and retailers, it displayed her lack of respect and utter disregard for the company rules and regulations. She used the phone for the benefit of her and her husband, and this is wrong according employee standards. Employees are expected to obey and follow the rules and Code of Conduct of organizations to ensure accountability and smooth running of business activities within and without the company premises.

Question Four

I believe that the corporate social responsibility theory motivated the creation of the RTL Code. Corporate social responsibility dictates that companies have to take responsibility for their employees and the surrounding communities. The Code of Conduct was created to help the employees and the company in general. The employees count as part of the community, and their contribution to the success of the company is determined by their abidance to the rues and regulations highlighted in the code of conduct. By doing what the company expects of them, the employees prove themselves responsible human beings in terms of safeguarding their company and the community around them. The fact that employees are prohibited from engaging in illegal business shows the company’s concern for their welfare. It starts with responsibility within the company before moving out to the community so that customers have an idea of the principles of the company.

I believe that the RTL Code is an excellent example of corporate social responsibility ethical duty because it displays the company’s concern for the society. Codes of conduct are developed to control the productivity of employees in an organization. It is the duty of employers and their employees to act according to the rules and regulations of the land, as this demonstrates that they are trustworthy and accountable for their actions within and without the work place. Ethically, it is wrong to engage in unscrupulous businesses behind the company’s back because these actions will eventually reflect on the reputation of the company. This selfishness is the reason why RTL came up with the code of conduct. It is also ethically acceptable to protect the activities within the company, as depicted in the code of conduct, by reporting any suspicious activities taking place or about to take place. Human beings are naturally selfish hence the importance behind reporting this unacceptable behavior so that the culprits are reprimanded.










‘Code of Business Conduct & Ethics.’ (2011). Rough & Tumble Ltd (RTL).

Beauchamp, T. L. (2012). Ethical theory and business. Upper Saddle River, NJ: Pearson/Prentice Hall.

Ciulla, J. B., Martin, C. W., & Solomon, R. C. (2007). Honest work: A business ethics reader. New York: Oxford University Press.

 Hartman, L. P., & DesJardins, J. R. (2011). Business ethics: Decision making for personal integrity and social responsibility. New York: McGraw-Hill/Irwin.

Kotler, P., & Lee, N. (2005). Corporate social responsibility: Doing the most good for your company and your cause. Hoboken, N.J: Wiley.

Shapiro, S. P. (2002). Tangled loyalties: Conflict of interest in legal practice. Ann Arbor: University of Michigan Press.

Templar, R. (2011). The rules of management: A definitive code for managerial success. Harlow: Prentice Hall Business.

Turner, C., Gamble, R., French, B., & Muurlink, O. (2012). Business law for managers. Pyrmont, N.S.W: Thomson Reuters (Professional). Print.




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