The issue is whether the employment contract where both parties, Mr Raavi and Agency Co can
terminate the contract without reason is fair to the employee and whether it would lead to
unethical behaviour. Mr Raaavi may be act unethically due to fear of termination as he was difficult
to find employment and fear of losing his job.
In competitive marketplaces, unethical behaviour is more likely to occur, especially if it benefits the
organisation. Ms Malgun obviously knew that the accounting was inaccurate but because it
benefited the company and helped the performance targets, she was prepared to overlook it. This is
because she might get higher pay as Ms Malgun is partly remunerated through profit related pay.
However, she disciplined Mr. Raavi, after the financial statements had been released in order to
maintain her job, demonstrating a lack of professionalism and integrity.
Next, work pressure can influence ethical behaviour. Difficult performance goals and time pressure
cause unethical behaviour. Therefore, Ms Malgun should not have left the preparation of the
year‑end financial statements to Mr Raavi as he is a student accountant and has only been with the
company for three months. She should allocate some time to assist Mr Raavi in the preparation of
the year‑end financial statements.
Lastly, competition can influence ethical behaviour. When unethical behaviour leads to a gain for a
company, managers choose less severe disciplinary measures for their employees. Thus, although
Ms Malgun knew of the error in the financial statements, she only reprimanded Mr Raavi after the
financial statements had been published and even then, she then offered him a full‑time contract
instead of his current temporary contract.