Rae & Wong Case

Case 1.1: Keeping Secrets

Case Summary - (Jessica)

Case 1.1 covers a major airplane manufacturing company that announced that many
employees will be receiving layoff notices due to downsizing. It is known that specific
employees are going to be laid off, but these names are held in strict confidence. Only top
executives and group managers are given access to the names of the employees who are being
laid off. A group manager whose department is now going to be affected by the layoffs finds
themselves in a challenging situation. They recognize the name on the list of people, and it
hits them a little too close to home. It is John, the computer system analyst, whose area and
level of expertise on his current project are critical to the company. John getting fired would
set the company back in several ways and could jeopardize future contracts with a major
airline. Not only is John critical to the organization's success, but he has also developed a
relationship with the group manager outside of work. The group manager and John are around
the same age, have growing families, and have daughters who play on a soccer team together.
One evening, at the daughters’ soccer game, John mentions to the group manager that he has
received a job offer from another company that he might be interested in. He asks if he should
accept it, considering the possibility of a layoff. The group manager remains quiet, but John
takes this silence as good news, assuming he is safe from the layoffs. The manager is torn
between loyalty to the company and the friendship made with John. The group manager is
now facing a moral dilemma pertaining to whether they should keep the information to
themselves or inform their friend.
This situation presents a challenging ethical dilemma that involves conflicting loyalties
and potential consequences for both the group manager and John. The decision that is made
will depend on values and ethical principles that are prioritized and the assessment of the
potential consequences at hand.

Section One___________________________________________________________________

1. What groups will be benefited by - (Alyssa)

Depending on the decisions made by John’s friend to tell or not tell would determine
which groups benefited. If it is decided to tell John about the layoffs, then he and his family
would benefit from this decision. John could accept the position and provide for his family during
an economic downturn. Instead of sticking with the company who is soon going to fire him but
are in dire need of his skills and efforts to reach their upcoming deadlines. However, if it is
decided not to tell John then the airplane manufacturing company would benefit. Therefore, the
company will utilize John's skills in the last few weeks of having him and meet its deadline.

2. What groups will be harmed by - (Alyssa)

It would depend on whether the decision is made to tell John or not. If John is not told
about being laid off soon after the project is over and misses the opportunity to take a higher
paying position, then he and his family will be harmed because they would lose their financial
security to raise their four children. If John is told about cuts the airplane company would be
 harmed, because without his skills on the project they’d miss their deadline. Potentially losing
their client since they have had deadline issues in the past with this company.

3. What groups will be able to exercise their rights by - ? (Carley)

In this situation, the manager is the one who can act in ethical conduct. He must decide
between honoring his commitment to maintain confidentiality within the organization or
attempting to protect his friend. Honoring the contractual commitment to his workplace is what is
decided here. Ultimately, managers get to make the call, even if it is the wrong one.

4. What groups will be denied their rights by - ? (Carley)

The employees who are receiving the layoff notice are not given timely notice. The
communication between authority roles and employees, like John, is not transparent about the
transition. John is then left with uncertainty, which can have significant personal and financial
implications for John and his family. Due to the lack of open and honest communication, the
company may suffer reputation consequences. Employees remaining after the layoff might feel
betrayed and caught off guard by the company’s actions.

5. Express the moral problem so that everyone involved will believe that their particular interests
(their well-being and their rights) have been recognized and included. (Carley)
For the employees facing layoffs, they must be treated with dignity and respect.
Employees like John deserve consideration and support as they endure this organizational
change. This not only protects John but the reputation of the organization as well.
The company is responsible for managing layoffs in a way that minimizes disruptions of
operations and protects their interests. This involves being confidential to prevent employees
from leaving the company early and avoiding sabotage or other actions by disgruntled
employees. Companies have a responsibility to their stockholders and investors to return profit.

Section Two______________________________________________________________

6. What are the economic outcomes? (Connor)

Informing employees about incoming layoffs prior to official announcement can have
serious economic consequences for a company. The first consequence, in the case of the airplane
manufacturing company informing John prematurely about incoming layoffs (Rae & Wong, p.
74), is employees may experience an increase in anxiety and reduced productivity. This is
especially the case for employees who learned early that they will be laid off; this will affect a
company’s bottom line because employees who know they are being let go will become
demotivated and even result to sabotage to “get back” at the company before they leave. The
second consequence is high turnover. High turnover can occur when companies tell employees
about impending layoffs too early which results in many employees seeking employment
elsewhere before the company has put the appropriate systems in place to deal with the loss of
positions within the company. This can cause a state of panic and chaos within an organization.
In John’s case, he will seek employment elsewhere if he learns he will be laid off, which will
hurt the company. The third consequence is the loss of key talent. If upper management informs
key employees about layoffs before they are supposed to be announced, then key talent may
leave too early, and the company will be stuck in a tough situation which can halt manufacturing
and cost the company a lot of money. The fourth consequence is company reputation damage. If
 the airplane manufacturing company has a reputation for leaking strict confidential information
to employees and to the public, they will struggle to attract future talent. Employees do not want
to work for a company that will leak sensitive information. In addition, customers may not want
to do business with a company that cannot keep confidential information confidential. The fifth
consequence in the case of the airplane manufacturing company is it could boost employee
morale for the ones who will not be laid off. Being informed of not being laid off in the coming
layoffs can create a sense of relief in employees and they can become more motivated to do their
job. In conclusion, informing employees prematurely about layoffs can have serious economic
consequences for a company and they should implement the proper controls and personnel to
keep confidential records and information a secret until the proper time for them to become
unsealed. If you find yourself in a situation as in Case 1.1 from Rae & Wong, you should
reference and go through the “Seven Principles for Living for God’s Glory” as laid out in John
MacArthur’s book Right Thinking in a World Gone Wrong on pages 18-22.

7. What are the legal requirements? - (Abby)

The policy requirements ensure the safety of the company from situations similar to what
they have faced in the past. The policy requirements of the airplane manufacturing company
require that the managers maintain confidentiality, in which case the manager of this case is
being held to. Though this is not a law for the majority of people, it is a policy upheld by the
company, and breaking it would mean termination. The airplane manufacturing company is
upheld to the laws of an act called the WARN (Worker Adjustment and Retraining
Notification) Act, requiring that any business that employs over 100 people must give a
minimum of 60 days' notice in writing to those employees being laid off in the occurrence of a
mass layoff or plant closing. If they fail to follow these guidelines, then they are required to
pay the employees. This case shows that they are only allowing four to six weeks to finish
their tasks and look for other employment, this does not follow the WARN Act, which
requires 60 days’ notice, about eight and a half weeks.

8. What are the ethical duties for each paradigm? (Jamie)

Self Interest – (Jamie)

If a self-interests ethical view is applied, then John’s personal life and how his career affects it
will be prioritized. He understood the responsibility and importance of confidentiality, but he
also knows the struggle his family may be faced with if he gets laid off. With a child on the
way and there at home, a relationship outside of work, and a sense of mutual respect, self-
interests are a momentous factor in this case.

Personal Virtues – (Jamie)

Personal virtues are usually defined as morally based inclinations of a human being.
Adjectives such as trustworthy, respectful, honest, diligence, and reliable are all associated
with success in the world of business. In case 1.1, the company is relying on the employee to
uphold these virtues. On the other hand, so is John in a sense. The potential loss for the
employee, and John as well, must be highly considered when deciding to tell the information.
With insightful reflection on the possible outcomes, a more ethical and moral solution will be
formed.
Religious Injunctions – (Jamie)
 The Golden Rule claims that we should treat others the way that we would want to be
treated. Considering this, we can consider two different perspectives from case 1.1. First, the
executives at the company and then secondly, Johns. The company would want the employee to
follow the appropriate rules and regulations when dealing with the layoffs and John’s situation.
However, John would want the truth about the change his life is about to potentially encounter. If
you put almost anyone in the same situation as John, they would most likely urge for the same
information he does.
The Silver Rule is applicable in the situation of filling John in on the information about
the current lay off plan and lists. We must consider whether the actions we are taking are what
we would want done to us if the roles were flipped. It is slightly easier to determine what actions
you absolutely would not like taken towards you which may be insightful when maneuvering
such a tough situation as presented in the reading.

Government Requirements – (Abby)

The government’s purpose (In this case Department of Labor) in this situation is to
protect employees from sudden layoffs by implementing the WARN (Worker Adjustment and
Retraining Notification) Act. The WARN Act was passed in 1988 to provide workers with a
sufficient amount of time to look for other employment or training. It became effective in
February of 1989. The WARN Act requires employers of over one-hundred employees to give
a sixty-day notice of layoff for any employees being let go during a mass layoff or plant
closing. WARN is not enforced by the Department of Labor but can be enforced through
private lawsuits held in Federal courts. The Department of Labor provides funding to states
and local areas to assist dislocated workers with the services ensured by the WARN Act. This
act requires that the company provide formal written notice to the employees affected by the
layoff, which should be provided to the employees in advance of the 60 days. The Department
of Labor suggests that it be delivered 65 to 70 days in advance of the layoff.

Utilitarian benefits — (Kalaina)

Regarding Utilitarian Benefits, Hosmer states, "Never take any decision or action that
does not generate greater benefits than harms for the society of which you are a part"
(Hosmer, 2011, pg. 99). In this dilemma, the two most significant choices are either tell John,
which could be detrimental to the company, as it would risk him leaving prematurely to find
other employment, or not to tell John, which could be harmful to his family, as he would have
missed the opportunity to take the new job offer at another company. As a group manager of
this company, the decision to not tell John about the downsizing would lead to greater
benefits to the greater society. It is noted that John's level of expertise and skill is crucial to
the project at hand, and his premature absence could jeopardize the project, as well as
jeopardize the relationship with the client and their loyalty to the company, which would
affect a large number of people within the company.

Universal duties — (Kalaina)

Hosmer states, "Never take any decision or action that you would not be willing to see
others, faced with the same or closely related similar situation, be free and even encouraged to
take" (Hosmer, 2011, pg. 99). Clearly, the project manager feels extremely torn between the
choice of whether or not to tell John. If the roles were reversed in this scenario, and John had
the confidential information, the project manager would likely not want John to share it.
 Sharing that information could jeopardize the project, the company's credibility, and the job
of the person sharing the information, which would cause the company to lose another crucial
employee.

Distributive justice — (Kalaina)

About Distributive Justice, Hosmer explains, "Moral standards are based upon the
primacy of a single value, which is justice. Everyone should act to ensure a more equitable
distribution of benefits because this promotes individual self-respect, which is essential for social
cooperation" (Hosmer, 2011, pg. 100). According to this principle, John should not receive a
warning about being let go. This would imply favoritism and would not be an equitable
distribution of benefits, as John would have the advantage of time to job search over his
coworkers. The company must provide adequate notice to their employees being let go, and this
same time will be given to all the employees affected by the downsizing, which would be an
equitable distribution of benefits.

Contributive liberty — (Kalaina)

Hosmer explains, "Moral standards are based upon the primacy of a single
value, liberty. Everyone should act to ensure greater freedom of choice because this promotes
market exchange, which is essential for social productivity" (Hosmer, 2011, pg. 100). John has
had the same freedom to leave the company since he first took this job. Whether to tell him or
not does not give him more or less freedom of choice. If John didn't have the opportunity to
leave the company before this information was shared, then telling him would give him more
freedom of choice and would be the morally right option.

Weaver Golden Rule of Love (Connor)

This principle highlights the importance of doing to others as you would have them do to you.
The Golden Rule is straight out of Matthew 7:12 and Luke 6:31. In this case, I would tell John
to take the new job to be able to provide for his family because if the roles were reversed, I
would like my manager to tell me to take a different job if layoffs are coming.

9. Please note ideas from the readings that relate to the case. Please site per APA.
In McArthur’s book, “Right Thinking in a World Gone Wrong,” he discusses the
importance of adhering to ethical principles and not violating one’s conscience (McArthur,
2009, pg. 11). Violating one’s conscience is seen as dangerous and potentially sinful. In this
case, the group manager is facing a moral dilemma between loyalty to the company and a
friendship with John. The manager’s conscience may be troubled by withholding information
that could impact John’s career and even his life. McArthur encourages the readers to act in
faith and to avoid actions that cause doubt. In the context of this case, the group manager may
need to consider whether keeping silent about the layoffs aligns with their faith and ethical
principles. The group manager’s decisions on whether to disclose information to John may be
influenced by their desire to keep a clear conscience in both their professional and personal
life. Overall, this expert mainly focuses on individual consciousness and faith, but it can still
be applied to decision-making dilemmas, such as the one presented in the case. It encourages
individuals to act in ways that align with their convictions and to avoid actions that may cause
internal conflict or moral doubt.
 References
Hosmer, L. T. (2011). The ethics of management. A multidisciplinary approach McGraw-Hill
Medical Publishing

MacArthur, John. Right Thinking in a World Gone Wrong Harvest House Publishing, 2009