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Ethics of Housing Allowance

According to Elaine Sternberg (2001), “business ethics is not a dispensable option: the choice facing business is not whether to confront ethical concerns, but how” (p. 11). The housing allowance problem presents difficulty when attempting to form a judgment precisely because of the intricacy of the problem faced by Wilson Mutambara and the seemingly humanitarian reasons he gives for acting the way he does. In assessing the problem of whether or not Mutambara acted wrongly, it may be necessary at one level to discuss merely the unemotional facts of the case.

Mutambara was given a $2000 allowance that was designated for a specific purpose, and he used the money for a non-specified purpose. This money given to him was over and above that designated as his salary, and he was not authorized to use that money for the purposes to which he allocated it. He was given specific reasons why the money was to be used for obtaining housing and related benefits that would place NewComm’s employees in a good light, and this was of immense importance to the corporate image that the company sought to maintain.

Therefore, in re-allocating the resources he was given, he not only disobeyed his employers’ orders, but he also compromised the corporate image of his company (Shaw, 2008). In addition to this, he falsified documents that were necessary for the accounting purposes of his company. These documents are likely to have been considered legally binding, as they represent an assurance of how company money was being spent.

Therefore, any audits done on NewComm by the IRS or other governmental revenue service operating in Rambia that may have found a discrepancy in the information provided and found the company liable of fraudulent behavior. As an employee supervisor of NewComm, Barbara Weston is obligated to take the company’s best interest into consideration. It is imperative that she consider the harm that might have accrued to NewComm as a result of the actions that Mutambara has performed.

The money allocated to him was used wrongfully, and this must be held against him, especially in light of the fact that it did not belong to him and was not left up to him to use at his discretion. However, Weston may also consider the reasons that Mutambara gives for doing what he did. He considered the path he took to be harmless, as the money (in his opinion) was being put toward better use. This consideration might prompt Ms. Weston to act leniently toward him (Shaw, 2008). As Barbara Wilson, the judgment I would make would involve a private reprimand given to Mutambara for what he had done.

He would be allowed to retain his employment at NewComm, but conditions for this retention would be that he provide a letter stating how and to what extent he had falsified the month receipts that he had been presenting to the accounts department of NewComm. In addition, he would be required to provide documentation of precisely how the money was being spent for the past months. This would include receipts for school fees and other expenses that he had been paying for the eight nieces and nephews he claimed to have been supporting.

It would also include a complete disclosure of precisely how much rent he does in fact pay for the accommodations that he has assumed. He would also be required to demonstrate the necessity that he provide for the nieces and nephews, by giving an account of the income of the other adults in his family, especially the parents of these children. Finally, he would be required to improve his living conditions by moving from that neighborhood and into one that more becomes the lifestyle of a person who works for the NewComm Corporation.

The arguments that Mutambara provides in his defense are in fact ones that justify at least the temptation to do what he had done. In fact, aside from the fact that he used the money given him for an undesignated purpose, his actions were quite noble as they involved self denial for the purpose of improving others’ quality of life. His actions are indeed understandable, and the extent to which Mutambara might be considered to have acted unethically must be tempered by the reasons that he does give for his actions.

The $2000 was, in fact, above that which he needed for his housing, and he was right in considering that he had as much right to that money as any other NewComm employee. Where he makes his mistake is in considering that he also had a right to determine how that money should be spent. In fact, he should have considered that in the even that he refused to spend the money as was advised by his employers at NewComm, he no longer had a right to it (Shaw, 2008). He does make a strong argument when he says that the manner in which he spent the money was more beneficial than the way he was told to spend it.

While the living conditions of NewComm employees does have an effect on the corporation’s image, the use of corporate money to finance education and otherwise improve the quality of life of children in Rambia might have an even greater impact on the company’s image. This, however, should have been left to the discretion of those persons who are empowered to make such decisions within the corporation. NewComm’s generosity in giving him the allowance in the first place is not to be disregarded, as not all companies are willing to offer those benefits (Federwische, 2006).

Mutambara should not have considered himself empowered to come to such a decision on his own. In fact, Mutambara may have found it more profitable (in the end) to have brought this up in the form of a proposal that requested that NewComm provide sponsorship for the relatives of the company’s employees. While this might have proven an added expense, media awareness of this would likely have been beneficial to the company’s image, and may also have been used in lieu of other advertising initiatives within the company.

Mutambara, therefore, should not have acted on his own but brought the needs of the Rambians to the attention of the company’s board, as no doubt these concerns would have been shared by other employees within the NewComm Corporation. Mutambara also presents in his defense the argument that he is “not just a NewComm employee [but] also a Rambian,” and this underscores the responsibility that he feels toward his country and its citizens—of which group his family members are a part.

He echoes the idea that the housing policy for NewComm employees in Rambia is based upon a snobbish and erroneous assumption that the housing facilities used my most Rambians is inadequate and “unseemly. ” While it is true that room for improvement does exist in the housing conditions of the typical Rambian, the point Mutambara makes is that employees should be given greater choice in selecting their housing. However, in acting in the stealthy manner he did, Mutambara also demonstrates his awareness that an employee who chooses not to abide by the housing standards of NewComm loses his claim to the housing allowance.

If, however, he acted as he did also out of a fear of losing his job, then it follows that to some extent NewComm does attempt to dictate how its employees should live to an extent that should be beyond the control of the company. As Barbara Wilson, I would also assist Mutambara in filing a querulous report that would allow him to make an appeal on this ground. As Barbara Weston, Mutambara’s supervisor, I would not recommend that his employment with NewComm be terminated. Because of an understanding of the reasoning behind his actions, I would not consider this to be the best course of action.

However, it would be stressed to Mutambara that the position or responsibility and obligation in which the considers himself is also shared by the majority of Rambian employees in the NewComm firm. He would be made aware, therefore, that he cannot be considered exempt from the rules and regulations as set forth within the organization’s code of operations. The problems he considers himself facing are also being faced by his fellow employees, and the fact that he was the only one discovered as having violated the housing allowance conditions means that the extenuating nature of his circumstances might have been overstated.

While Mutambara would not be required to reimburse the company for the amount that was re-directed toward his personal financial responsibilities, he would be required in the future to abide by all the rules that are attached to his receipt of the monthly allowance. He would also have to endure a probationary period of six months over which his housing situation will be monitored to ascertain that he is adhering to the provisions of the housing allowance contract.


Federwische, A. (2006). “The transformation of work. ” Markkula Center for Applied Ethics. Santa Clara: Santa Clara University. Available: http://www. scu. edu/ethics/practicing/focusareas/business/work. html Shaw, W. H. (2008). Business Ethics. 6th Edition. Belmont: Thomson Wadsworth. Sternberg, E. (2001). “The importance of business ethics. ” Business ethics: critical perspectives on business and management. New York: Routledge- Taylor&Francis.

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