The contract provides the basic framework governing the reciprocal obligations between the employee and the firm. Underlying this reciprocal relationship are certain ethical issues: company loyalty and conflict of interest.
a. Company loyalty is a long held concept. An employee is seen legally bound to be loyal to his/her employer, but extreme view argues that an employee-employer relationship, which is based on self-interest, does not qualify for loyalty, since loyalty is based on a relationship that warrants unconditional sacrifice: loyalty to loved ones or country. To view company loyalty as to safeguard and pursue the firm’s legitimate interest is morally acceptable, but not morally required. To other employees, company loyalty could be a consequence of group identification.
b. Conflict of interest is another common problem confronted even by loyal employees, since basically employees and employers operate from different plane and perspective. This occurs when employees at any level have their own self-interest that collides with their job duties and as such could substantially provoke them to undermine their firm’s interest. Financial investments made by employees with the company’s suppliers, customers or distributors are one of the most common sources of conflict of interest. Many cases of this type had been brought to court and had been proven detrimental to the interest of the company. Companies have their own policy regarding this to define what is permissible and impermissible. Since such policy affects the financial well-being of all involved, this should be subjected to open and free negotiations making it acceptable to all.
2. Abuse of official position ranging from making subordinates take on tasks unrelated to the firm to the use of position for personal financial enhancement, privileges and advantage, always raises ethical questions, as this undermines employees’ obligations