Summary
Matthew Whitley, an accounting official with Coca-Cola for eleven years, filed claims with the Occupational Safety and Health Administration (OSHA) under the Sarbanes-Oxley Act that he was fired unethically on grounds of disclosing accounting discrepancies in the company’s records. He claimed that a marketing test of frozen Coke conducted by Burger King was unethically rigged by the company along with various other claims. Under this situation it is apparent that there are three major stakeholders in the case. First and foremost stakeholder in the case is the claimant- Matthew Whitley. Secondly, the claims are against the Coca-Cola Company.
Thus, the company becomes the defending party. Thirdly, as the claims involve major irregularities in business between the Coca-Cola Company and Burger King food chain, the later gets involved in the case automatically as the third stakeholder.
Ethical Analysis
In March 2001, Whitley discovered an abnormal outlay report while performing a scheduled audit. He revealed a plot to manipulate a Burger King marketing trial of Frozen Coke in Richmond, Virginia area which misleadingly was driving up the demand for the Frozen Coke merchandise after its bleak performance in the first phase of the trials. Whitley proclaimed accounting discrepancies in Coke’s iFountain venture.
Supposedly, Coke and equipment maker Lancer Corp. suppressed an iFountain slush subsidy by forging crucial financial records. Whitely asserted that over 80,000 frozen beverage machines on a national scale were faulty and tainted slush drinks with metal residue. Whitley mailed a comprehensive memo encompassing all claims to Coke President Steve Heyer. Without doubt, by doing so Whitley demonstrated ethical conduct. According to the deontological theory of ethical thought people should be loyal to their responsibilities and sense of duty when evaluating an ethical predicament. Matthew Whitley did just that and shouldered responsibility to inform the authorities of unethical scheme of operations. (Maclagan, 2008)
However, after a week, Whitley incurred a performance evaluation report which he claimed to be the most negative appraisal in his entire career. This meager assessment report came only one month subsequent to Whitley being honored by his manager, Brian Hannafy, as being an exemplar of a high performer for the whole firm.
On March 26, 2003, Whitley lost his job and his service contracts were terminated. Whitley subsequently filed an allegation for retaliatory damages in the Superior Court of Fulton County, for disparage, unjust termination, and deliberate infliction of psychological anguish. He further filed a claim against Coke with the U.S. District Court in Georgia, condemning Coke of inappropriate accounting, falsified marketing, promoting polluted Frozen Coke products and racial prejudice amongst other charges. (Maon, 2008)
In addition, on June 20, 2003, Whitley filed a Sarbanes-Oxley Act aver with the OSHA in order to be cosseted from any retaliatory actions regardless of having blown the whistle. By terminating Whitley, the Coca-Cola company exhibits complete unethical behavior. Even after carrying out internal investigation and finding at least to allegations to be true the company demonstrated retaliatory behavior. This is in direct violation of the Rights theory of ethical thought as all of Whitley’s actions were well within his rights. Nevertheless, the company did not value his rights and ordered his release. (Fisher, 2007)
Cost/Benefit Evaluation of Company’s Actions
During the hearing five claims made by Whitley were overruled by the judge in favor of the company. However, the ruling was in favor of the claimant when it came to unfair termination. The company reached a settlement for $540,000, which included $300,000 for legal fees. Matthew Whitley obtained a payout of $100,000 in addition to $140,000 in terms of separation benefits. Further, in order to uphold its association with Burger King, Coke decided to compensate Burger King with a projected $21.1 million to resolve the conflict in relation to Frozen Coke. Thus it incurred heavy losses over the issue. However, this lead to the company being more cautious in future and strengthening the company’s internal complaint handling mechanism.
References:
Fisher, Jim, Gordon Woodbine, Sam Fullerton; 2007; A cross-cultural assessment of attitudes regarding perceived breaches of ethical conduct by both parties in the business-consumer; Journal of Consumer Behaviour; 2, 4, 333-353; Department of Marketing, Eastern Michigan University, Ypsilanti, MI 48197, USA.
Maclagan, Patrick; 2008; Organizations and responsibility: A critical overview; Systems Research and Behavioral Science; 25, 3, 371-381; Centre for Management & Organisational Learning, The Business School, University of Hull, HU6 7RX, U.K.
Maon, François, Adam Lindgreen, Valérie Swaen; 2008; Thinking of the organization as a system: The role of managerial perceptions in developing a corporate social responsibility strategic agenda; Systems Research and Behavioral Science; 25, 3, 413-426; Department of Marketing and Business Strategy, Hull University Business School, Cottingham Road, Hull HU6 7RX, UK.