Mahmood is a junior employee of Tzo Company (a large, listed company). Tzo is a processor of food labelled as containing only high quality meat. The company enjoys the trust and confidence of its customers because of its reputation for high quality products. One day, when passing through one area of the plant, Mahmood noticed some inferior meat being mixed with the normal product. He felt this must be unauthorised so he informed his supervisor, the factory manager, who told Mahmood that this was in fact a necessary cost reduction measure because company profits had been declining in recent months. Mahmood later found out that all stages of the production process, from purchasing to final quality control, were adapted in order to make the use of the inferior meat possible.
The factory manager told Mahmood that the inferior meat was safe for humans to eat and its use was not illegal. However, he told Mahmood that if knowledge of the use of this meat was made public, it would mean that customers might stop buying the products. Many jobs could be lost, probably including Mahmood’s own. The factory manager ordered Mahmood to say nothing about the inferior meat and to conduct his job as normal. Mahmood later discovered that the main board of Tzo was aware of the use of the inferior meat and supported its use in seeking to reduce costs and maintain profits. In covering up the use of the inferior meat, the factory produced a fraudulent quality control report to show that the product was purely based on high quality meat when the company knew that this was not so.
When Mahmood heard this, he was very angry and considered telling an external source, such as the local newspaper, about what he had seen and about how the company was being dishonest with its customers.
Required:
(a) Explain how Mahmood might act, in each case, if he were to adopt either conventional or post-conventional ethical assumptions according to Kohlberg’s definitions of these terms. Your answer should include an explanation of these two terms. (8 marks)
(b) Construct an ethical case for Mahmood to take this matter directly to an external source such as a newspaper. (8 marks)
(c) Some jurisdictions have a compulsory regulatory requirement for an auditor-reviewed external report on the operation and effectiveness of internal controls (such as s.404 of Sarbanes Oxley).
Required:
Explain how such a requirement may have helped to prevent the undisclosed use of the inferior meat at Tzo Company. (9 marks)