December 2002

A matter of ethics | Essentials

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A matter of ethics

by Christina Koch
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In a struggling economy, business owners often must cut expenses to keep their businesses afloat. However, when cutting expenses or making other important business decisions, it is essential to determine who may be affected and how. By considering the effects of your business decisions, you also can determine whether your decisions are ethical.

For example, the owner of a California-based roofing company recently found himself in legal trouble because of several unethical business decisions. Rather than considering how his decisions affected others, the owner only considered the fastest way to earn a profit. Consequently, he was charged with involuntary manslaughter after a roofing worker fell from a four-story building to his death. The worker had removed his fall-protection equipment (a rope tied around his waist and attached to a roof joist) while installing plywood.

In addition, the company was cited for providing improper safety equipment on other jobs by the California Occupational Safety and Health Administration (Cal-OSHA). Therefore, Cal-OSHA proposed a $70,000 penalty for this accident. When a Cal-OSHA inspector emphasized the importance of safety to the roofing company's owner, the owner was quoted as saying,"Money first, safety second."

The owner faces additional felony charges because investigations into the roofing company's business records found gross sales were underreported by $4.3 million for five years, payment checks were cashed at a check-cashing company to avoid reporting income and employees were paid in cash. The company's owner now faces up to 19 years in prison and more than $3 million in...

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