Question

Mary reports on a coworker’s misappropriation of funds to the CFO. A week later she is demoted. What effect is this incident likely to have on the company’s ethical environment?

Answer 1

Mary reports on a coworker's misappropriation of funds to the CFO, now this is known as whistle blower in common world of corporates. Now as a good corporate governance a whistle blower shall always be protected and praised so as to keep the company at good.

But in the given case a whistle blower (Mary) gets demoted which is very much unethical. Now this will create a negative impact on all the employees of a organization and no other employee will ever again report such fraud/mis appropriation as that will impact them in adverse manner and this also motivates such frauds, so this demotion will gave a great negative impact on company's ethical environment.